Verge editorial: Carriers are the biggest obstacle to mobile innovation

[pm]

While the article is a bit of a rant, and I don't agree with all of the points made, the core argument in my opinion is more or less correct.

http://www.theverge.com/2012/7/5/31...re-the-biggest-threat-to-innovation-editorial

"The cell phone market in the United States is not set up to encourage innovation," Vizio CTO Matt McRae says. "The inability to sell product directly to the consumer means that companies can't experiment and iterate quickly." After canceling its phone, Vizio instead decided to build its own PCs — products which it can sell directly to consumers without carrier interference.

"Companies build phones that the carriers ask for instead of taking risks and testing new concepts in the marketplace," says Vizio's McRae. "The result is a collection of handsets that are fairly homogenous from a small number of brands."

 

[shortylickens]

Thats what I think too.
When things are difficult and cumbersome they stand to make tons of money. As processes and equipment get easier they cant justify ridiculous prices.

 

[Cares]

We need to be like other countries where every phone we buy comes unlocked and usable on every band and carrier.

 

[Dumac]

I believe it. Why are carriers (phone and internet) so backwards?

 

[Mopetar]

Some good points, but are there really all that many phones that aren't seen in the US that are available abroad?

I think that for the most part, the US ends up getting the same phones, or at least similar models with different names and a few changes to the internals. The biggest difference may be that certain carriers (notably Verizon) have a tendency to lock down devices sold on their network and bundle them with their own apps.

I can't think of too many high profile devices that aren't available from at least one US carrier. The best example I can come up with off of the top of my head is the ASUS Padfone. Even still, if someone really wanted that device, I think they could probably just import it and use it. That may limit them to only getting service with certain carriers, but that's a different issue.

 

[Atomic Playboy]

I believe it. Why are carriers (phone and internet) so backwards?

Because they stand to gain billions of dollars by maintaining a virtual monopoly on phone service.

 

[Mopetar]

I believe it. Why are carriers (phone and internet) so backwards?

Money.

 

[Skurge]

Some good points, but are there really all that many phones that aren't seen in the US that are available abroad?

I think that for the most part, the US ends up getting the same phones, or at least similar models with different names and a few changes to the internals. The biggest difference may be that certain carriers (notably Verizon) have a tendency to lock down devices sold on their network and bundle them with their own apps.

I can't think of too many high profile devices that aren't available from at least one US carrier. The best example I can come up with off of the top of my head is the ASUS Padfone. Even still, if someone really wanted that device, I think they could probably just import it and use it. That may limit them to only getting service with certain carriers, but that's a different issue.

Well the US got a better performing HTC One X, but a slower SGS3.

 

[s44]

We need to be like other countries where every phone we buy comes unlocked and usable on every band and carrier.

There are carrier-locked phones and spectrum differences in lots of countries.

 

[Bateluer]

I believe it. Why are carriers (phone and internet) so backwards?

They have a Government enforced monopoly. Combine that with an uninformed customer base and its easy to see.

 

[ilkhan]

Contracts are *a* problem, but not the *big* problem. The spectrum differences in the US are the core problem, and its a hard one to crack at this point. Everybody uses different tech and/or frequencies, so switching carriers without a new phone is hard to do.

Contracts arose because people need a new phone to get a new carrier. The carriers didn't want to hand out phones for free to every new customer, so they agreed to subsidize. They added contracts so people wouldn't get a subsidized phone and walk off the next day. Fix the frequency issue to minimize switching costs, carriers can say "come get on our network, you don't even need a new phone!" and contracts go away.

 

[dagamer34]

Some good points, but are there really all that many phones that aren't seen in the US that are available abroad?

I think that for the most part, the US ends up getting the same phones, or at least similar models with different names and a few changes to the internals. The biggest difference may be that certain carriers (notably Verizon) have a tendency to lock down devices sold on their network and bundle them with their own apps.

I can't think of too many high profile devices that aren't available from at least one US carrier. The best example I can come up with off of the top of my head is the ASUS Padfone. Even still, if someone really wanted that device, I think they could probably just import it and use it. That may limit them to only getting service with certain carriers, but that's a different issue.

That's only true if you're willing to switch carriers to get a phone and you have equal signal with all the big 4 (which very often isn't true). But if you absolutely need Verizon because they're the only carrier that has good signal at your house or you're on a family plan which makes it a real bitch to switch all at once, it's not as easy as you think.

Case in point, the Galaxy S III is the first phone to launch on all 4 carriers (plus US Cellular) 100% unmodified in terms of design and functionality. You can genuinely buy the same phone for any carrier which is unprecedented. But people in Europe would laugh at such a notion since they've been able to buy a phone and take it to any carrier they want since GSM was first invented.

 

[T_Yamamoto]

Biggest problem is the fragmentation of phones....

 

[Suspicious-Teach8788]

Well the US got a better performing HTC One X, but a slower SGS3.

Well the issue to me is development. You're never going to have a large enough developer base with fragmentation. Sure the S4 was faster on the One X, but I'd rather have my Jellybean ROM out the door because there's a large group of devs working on it.

 

[lothar]

I believe it. Why are carriers (phone and internet) so backwards?

The carriers are actually forward looking.
It's the government that is backwards.

I blame our government and not the carriers for the situation that we're in today.
Monopolies are created by the government.

The reason we're much different than most of Europe is this simple tidbit:
In the US, the government sells the spectrum to the highest bidder. Once a carrier buys the spectrum, they own it.
In the UK, the government ultimately owns the entire spectrum through an entity. The UK carriers rent it.

FCC selling of various wireless spectrum range to telecoms instead of leasing them out which achieves nothing but essentially creating and fostering monopolies is the problem.

http://www.pbs.org/wnet/need-to-know/culture/video-high-fiber/9263/
Watch this video.
Read both AT&T and Verizon's responses after that.

 

[Suspicious-Teach8788]

Well there's the lack of government regulation in terms of what frequencies we should've been on. For that reason the Americas are separate. And why 700mhz LTE? Who knows. Once again we're departing from what the rest of the world uses.

The fact that Sprint and Verizon phones are not allowed to be interchangeable is a failure in regulation. Then there's the fact T-Mobile and AT&T use different 3G frequencies (WTF).

Anyway, this all results in carriers needing different phones. The phone manufacturers didn't step up and play hardball like Apple did and we had a fragmented world. Honestly, the US was like a 3rd world country in terms of phones during the era of feature phones. Things like camera flash, wifi on a phone didn't become popular til past the iPhone. Nokia N-series had wifi long time ago, and I was using camera flash in 2005.

The stupidity of the American market didn't really get unraveled til smartphones became mainstream and they're now a global tool. Now we are the ones scratching our heads wondering why certain phones don't come here and why there needs to be an HTC EVO 4G LTE EPIC WIN FAIL MAXX phone just for one carrier.

It's a multi point fail.

 

[MrX8503]

Carriers don't want to be dumb pipes.

If cell phone manufacturers can release any phone on any carrier, then carriers are forced to compete with each other directly for the consumer.

 

[silverpig]

No carriers = no phones.

No carriers = $800 smartphones that few people could afford.

Sure, maybe they could be better, but they are a hell of an enabler.

 

[Mopetar]

The carriers are actually forward looking.
It's the government that is backwards.

I blame our government and not the carriers for the situation that we're in today.
Monopolies are created by the government.

Pretty much the same situation with local governments granting cable companies a monopoly for the entire town. No incentive to get 50 Mbps connections in place when people can either buy your 5 Mbps connection or even crappier DSL or satellite connections if they're available.

 

[cbn]

Different cellular technologies and wildly mismatched spectrum among carriers makes creating universal devices extremely difficult. Patent licensing costs, especially for LTE devices, are enormous.

What about Super Wifi? (802.11af)

How soon could that be a disruptive technology? Maybe starting in less congested areas first and then moving towards the urban areas as technologies develop?

 

[Bateluer]

No carriers = no phones.

No carriers = $800 smartphones that few people could afford.

Sure, maybe they could be better, but they are a hell of an enabler.

The Verge article doesn't say there should be no carriers. It says that phone makers should make devices people want, not build exactly what the carriers tell them to. Things like WiFi, GPS, Camera flash, 3rd party apps, manufacturer software updates, etc, should not be blocked by the carrier in any way. Essentially, they should be little more than dumb pipes.

 

[destrekor]

No carriers = no phones.

No carriers = $800 smartphones that few people could afford.

Sure, maybe they could be better, but they are a hell of an enabler.

Paying a fair price for the phone, but then paying much less for service, is an entice option imho.

If carriers weren't force to recoup the subsidies, they wouldn't have to charge as much.
You tell them that now, and they'll laugh like a caffeinated hyena.
But if that route was encouraged, they'd HAVE to do that, because the carriers that saw they could do that, would laugh all the way to the bank. Charge less than they charge now, they could save us all a good amount on a yearly basis, AND still have comfortable revenue. They would surge with customers, other telcos would be forced to respond to keep a healthy customer base.

Of course, that entire concept is lost in the world of US telcos.

Bring your own device is such an alien concept, it'll require massive reforms to get it the way it should be.

Same way with cable companies, though at least "bring your own" actually CAN work... to a degree. CableLabs is still so royally fucked up, but there is hope on the horizon for that at least. Better CableCARD technologies, more certifications for consumer-owned hardware, hopefully more options in the future. It does help that the base technologies for cable are mostly universal, so the BYO route is a lot more feasible as long as the certifications and access methods between device and service mesh together.

Phones, though... it's ugly here.
Even when using hardware you paid in full for, we are stuck with insanely high rates they are jacked way up simply to help cover subsidies and continue to rake in profit as opposed to actually building up network capabilities at the rate they should be. Which, half of that problem is also geographical: we have a large geographical region to cover, with scattered population densities. It's far more costly to "build up" here, which is why, on that front, we will likely forever be behind the rest of the technologically-developed world, where population densities tend to be higher and overall land/air coverage zones are smaller.

 

[fahadmq]

If it weren't for carrier contracts and subsidies, undoubtedly the smartphone market would not be nearly as technologically cutting edge as it currently is. It doesn't take much imagination to see how many people would pay or can afford $200 w/contract for a superphone, vs. $700 -$800 without contract.

It's arguable that the carrier is not only directly subsidizing the consumer's smartphone desires, but also indirectly subsidizing the smartphone OEM's marketplace. Smartphone manufacturers have assured knowledge that within a year or two into a customer's contract, they will be looking to upgrade. This knowledge alone is invaluable to the carrier & smartphone OEM and provides for easier future business planning. This intertwined, win - win business relationship is why it will continue until consumers decide to refuse locking into long term contracts.

 

[lothar]

Pretty much the same situation with local governments granting cable companies a monopoly for the entire town. No incentive to get 50 Mbps connections in place when people can either buy your 5 Mbps connection or even crappier DSL or satellite connections if they're available.

Yup. Thankfully, I live in the county part and not the city, so I have FiOS.

In 2005, the City of Baltimore, Maryland entered into a 12-year exclusive contract with Comcast Cable, giving the company complete control of the city's cable-television franchise. What did the city get out of that deal? A pittance paid toward creating more "robust" public-access television programming, and an agreement that the city would have partial regulatory control over the company via a Cable Communications Advisory Commission. In March of this year, City Councilman William Cole (D-11th District) revealed that the commission, which should have 14 members, is not currently in operation. Which means that Comcast, which provides cable television, high-speed internet, and digital phone services in the city, gets to operate with little to no oversight. Ask around and you'll find that many of your friends living in the city have horror stories about bad customer service, incorrect billing, and myriad other problems--but nowhere to take those complaints but to the company itself, which has no real competitors and thus no incentive to improve. We know that Cole and other City Council members want to hold hearings on whether we can get Verizon's FiOS service in the city before Comcast's monopoly contract is up, but we'd settle for some assurance that someone, anyone, in city government would listen to our complaints about Comcast and put some pressure on the company to treat the city residents who are stuck with it with some respect.

 

[2timer]

I didn't read the article really but I definitely don't agree with the quotation. First of all, it's taken from one person, one guy at Vizio, which is extremely subjective and by no means universal. Secondly, we can't place all the blame on the carriers although they certainly are culpable. They may make certain demands, well especially in Verizon's case, but there is nothing that limits the way a manufacturer can design the aesthetics and style of a phone. What about the fact that Samsung, barring the SINGULAR exception of their flagship SIII, churns out hundreds of bland, uninspiring phones that all look like regurgitated rubber turds? Honestly. Have you done any phone shopping for single core Samsung Android phones, and had to look at the Galaxy Y, W, Ace, Mini, and Pocket side by side? They look HORRIBLE. Why can't Samsung infuse a little style into their phones, instead? It's because of their bottom line, that's why. It's not all the carriers fault, the manufacturers aren't exactly that great, either.