We’re on the brink of an entirely new era in the history of the wireless industry, but to understand where we are, it’s important to know something about how we’ve gotten there. So today at Arteculate, we’re going to start you off with a couple hundred words of history. If you don’t want to bother with that and prefer to skip to our expert speculation, read the last two paragraphs after the jump. We’ll even be so nice as to include a little teaser video right here:
When cellular phones started becoming widespread among Americans in the late 1990’s, consumers sought the best plans at the best prices. Phone selection was an afterthought and usually based on cost alone since few devices had any features that set them apart. Yet as mobile devices began to improve far faster than mobile networks, the wireless industry began to move in a more phone-centric direction. That is, consumers started choosing their phones first and stopped caring so much about the details of their wireless plan. Nowhere is this more evident than AT&T’s iPhone, which brought millions of customers, especially those loyal to Apple, onto AT&T’s network, most with little initial concern for the quality of the network or the cost of the plan. Prior to the iPhone, other carriers had made headway into the phone-centric approach; TMobile’s Sidekick and Sprint’s wide selection of Palm and Windows Mobile products stand out as early examples of the practice, but these devices catered mostly to niche demographics and not the population as a whole (think about the Sidekick’s urban following and the Treo and Windows Mobile’s professional clientele). With the iPhone, everything changed, because carriers realized that attracting new customers would largely be a function of how well their phone lineups compared to the competition.
This led to a few years in which carriers launched exclusive phones that actually drove in customers, with touchscreen-touting smartphones serving as the snare. This isn’t to say that carriers hadn’t launched exclusive phones in the past; however, before the iPhone, exclusivity had a much smaller role in signing new contracts than it does now. But as much as AT&T customers like their iPhones, Verizon customers their Storms and Droids, TMobile customers their G1’s and myTouch 3G’s, and Sprint customers their Pres and Heroes, these exclusivity agreements are starting to become so short as to be meaningless. The latest smartphones, the ones so attractive and innovative that they lure in customers regardless of carrier affiliation, are starting to be released for multiple carriers. Google’s Nexus One is the first to test out this new model, and Palm’s release of the Pre Plus for Verizon and soon for AT&T shows that it’s a popular direction in which to head.
So how is any of this important you might ask? Well, no longer will your wireless purchasing decisions have to depend on the best carrier or the best device; you’ll get to choose both. It’s likely that this concept will only get more prevalent with time, and it’s indicative of the fact that device manufacturers have wised up to how important they are in the whole wireless ecosystem. The carriers used to have all the bargaining power, but after everyone saw the way Apple manhandled AT&T, the device manufacturers have begun to exert more control over their devices. They’re selling more phones, and they’re doing it by pushing them through more channels and advertising them without regard to any specific carrier.
While getting to pick your phone and your carrier seems quite intuitive, it looks like things could get a little more complicated than that. Our editing staff was alerted to this possibility by Sprint’s new ads that attempt to get iPad users to subscribe to its 4G WiMAX service (using Sprint’s new Overdrive device as the wireless modem) in order to connect to the internet (also, check out this post by our friends over at Engadget). Initially Sprint’s plan seems ludicrous, especially for those planning to spring for the 3G-enabled iPad in a few weeks – why bother having so many ways to get online? But what if we’re headed for a time in which rather than picking just one network, we have to pick multiple networks? Voice and SMS on AT&T, and data on Sprint? It could almost be like swapping between different neighbors’ WiFi networks based on speed or latency. While more complicated, this kind of pricing would promote more competition among carriers, which would end up being good for consumers so long as having separate contracts for separate wireless services isn’t too much of a hassle. Taken even further, what if certain networks became optimized for different kinds of service? Rather than having multiple services that are essentially identical, some would only deal with voice, others only data, etc. We’re not economists here at Arteculate, but creating natural monopolies in the wireless industry that allow for separate services seems dangerous, and Sprint’s latest move edges a little closer to that direction. That said, we’re still waiting on everybody to just get along already and implement spread spectrum.
