“Until very recently, carrier control in the U.S. remained a major problem,” Walt Mossberg writes for Re/code. “Even the biggest brands, like Samsung, had to make special tweaks to seemingly identical models to please the network operators, or produce superfluous special models altogether to remain in their good graces.”
“Only Apple, possessed of a massively powerful brand and the first modern smartphone, managed to retain real independence from carriers. And it bought that freedom at a steep price: A years-long exclusive with AT&T in the U.S.,” Mossberg writes. “For their part, consumers were locked into two-year contracts that trapped them with a carrier, lured by ultimately costly subsidies that made a $650 phone look like it cost $199.”
“Fast forward to today, and two important things have happened to raise hopes that smartphone design, pricing and marketing can be finally fully pried from the fingers of network operators,” Mossberg writes. “Apple, the country’s most important smartphone maker, took a huge step toward this future last week. It announced that it would sell new iPhones under its own installment plan, which will include a warranty — cutting out the carrier. The plan allows for an upgrade every year, which is obviously in Apple’s interests. And, ominously for the carriers, these will be unlocked iPhones, able to be switched from carrier to carrier at any time.”
Much more in the full article here.
MacDailyNews Take: As we wrote on Tuesday:
All we need now are Apple SIMs in iPhones. Game, set, match!
SEE ALSO:
Apple’s new subscription iPhones – September 15, 2015
Apple’s iPhone Upgrade Program may warrant higher earnings multiple – once Wall Street grasps what’s happened – September 15, 2015
Apple shares could rally 50% on new iPhone Upgrade Program – September 14, 2015
iPhone Upgrade Program: Apple’s brilliant strategy to turn carriers into ‘dumb pipes’ – September 11, 2015
Apple takes aim at the carriers with annual iPhone Upgrade Program – September 10, 2015
How Apple’s annual iPhone Upgrade Program works and how much it costs – September 9, 2015
AT&T is pure, unalloyed evil.
All the carriers suck…
Lets roll!!!!
See Huffington Post for article on the evil Apple installment plan.
It’s a snotty article with a bad attitude toward Apple. But if folks would like to read it:
Apple Could Trap You Forever With Its New ‘Upgrade Program’
The new monthly payment plan seems incredibly tempting — but let us talk you out of it.
Counterpoint, here at MDN:
The carriers had gained the upper hand in terms of the power in the relationship with the handset manufacturers, and they were starting to tell handset manufactures what to build. If Nokia and Motorola didn’t listen to them well than Samsung and LG would. The handset manufacturers were really getting these big thick books from the carriers telling them here’s what your phones are going to be. And when you bought a phone the carrier dictated what was on that phone.If you look at it Apple’s DNA, we are not one of the greatest of selling to the fortune 500 and there’s 500 of them, 500 CIOs that are orifices that you have to go through to get to the fortune 500. In the cell phone business there was five. We didn’t even like 500, we rather run an ad for millions of people and let everybody make up their own mind, you can imagine what we thought about five to get to the end-users.
Steve Jobs Bio: The Unauthorized Autobiography
An excellent article. I think Mossberg’s assertions and predictions will be proven correct over time.
At the same time, there may be a number of unexpected consequences from the untethering of mobile phone networks’ control over phone makers:
1. Not being beholden to toe the line laid down by Verizon, AT&T, etc., we could see Android fragmentation diminish dramatically. That could change the competitive landscape somewhat.
2. Untethering the telcos control over the handset market could set the stage for low cost Chinese manufacturers to finally gain entry into the US market. While most Chinese phones are cheap commodity phones, a maker like Xaomi could potentially take market share from Apple by poaching g its less committed customers.
Don’t get me wrong. I am grateful for the changes as a consumer. But with any change comes unexpected consequences. We should be aware of their potential implications.
I’ll be buying the 6S unlocked.
The bizarre thing about this is that to a large extent, the networks forced Apple’s hand by being so hostile to iPhones.
The tables have now been turned and before, if you went into a phone shop to get an iPhone, the salesperson was likely to try to switch you to an Android ( with financial incentives for the salespeople ). If you go into an Apple store for an iPhone, you can be certain that you won’t be sold anything other than an iPhone, but you may discover that another network offers a better deal for your purposes.
US cellphone networks have been fleecing their customers for many years. Hopefully they will now have to offer better value to customers in order to retain them. Once you have an unlocked iPhone, you can choose whichever carrier suits you best and can easily change to another if your needs change.
“Apple, the country’s most important smartphone maker, took a huge step toward this future last week. It announced that it would sell new iPhones under its own installment plan, which will include a warranty — cutting out the carrier.”
Correction Walt:
“Apple, the WORLD’S most important smartphone maker, took a huge step toward this future last week. It announced that it would sell new iPhones under its own installment plan, which will include a FREE EXTENDED warranty — cutting out the DUMB PIPE carrier.
Maybe so, but is the instalment plan available outside the US? I hope it’s here in Canada. I’m ready for a new phone, and I’m tired of being jailed to my carrier.
I believe they roll the AppleCare+ price into the installment plan. It’s not free.
It is
AppleCare is built into the monthly payment and marketed as free. Buying a new iPhone on AT&T Next is about $10 cheaper/mo, but you have to buy AppleCare separately, so it’s really about the same.
The only thing tethering me to AT&T is the unlimited data plan (Thanks, Steve) as I use a fair amount of mobile data.