In the firestorm of speculation leading up to Apple's debut of its iPad device was a strong thread regarding the company's ability to further accelerate tectonic shifts in the media industry, especially the print industry. Now, following its unveiling, some have pointed to the structure of the relationship between Apple and AT&T and posed similar questions regarding the mobile industry and in particular operators' business models. The iPad deal is just evidence of changes that have been accelerating for the past several years. These changes include:
New pricing models. As the U.S. market has saturated operators have reassessed prepaid, elevating it beyond the 'choice of last resort' for consumers, and introducing unlimited voice, data, and messaging plans like Boost Unlimited. They have also enabled prepaid for laptop and netbook data connections — which plans the iPad will exploit. European operators have gone further and introduced session-based pricing, such as per day or week. Devices like Amazon's Kindle rely on a wholesale model to make the cost of transport invisible to consumers (for books and the like, at least).
In the last month the din of rumor and the clamor of speculation inspired by Apple’s expected announcement this week has risen in a crescendo that is about to peak. We’re all convinced this Wednesday’s “one other thing” will be some kind of magical tablet device. We all expect it will be a big deal. And in these past weeks we’ve witnessed a parade of writers, analysts, and consumers who have all published their “wish” or even “guess” (or, in some cases, “fantasy”) lists. But we have yet to see what we think really matters: an Apple “should” list that identifies the things Apple should do to ensure that its device is successful.
I wrote last year that phone-based navigation would overtake both the in-built car systems and the devoted Portable Navigation Devices (PND) made by the likes of Garmin and TomTom, and that it would happen by 2013. Certainly Google's introduction of Google Maps Navigation on Motorola's Droidremoved one of the primary barriers to realizing this shift: price. Unlike the turn-by-turn navigation services offered by US carriers (primarily powered by TeleNav) that cost $9.95 per month or are bundled with other services, Google's application is included with the Droid (and its Nexus One) and costs nothing to use.
As I wrote following the launch of Google's Nexus One phone and its online retail store, Google will be an influential retailer, but isn't today because what they offer isn't different from what's available from carriers or merchants like Best Buy or Amazon — it's only differentiated by its exclusive on a hot device.
Most people who buy phones today want to feel the heft of the device, play with its UI, get a sense of the experience of using it since they're making a long term commitment to it. As a result, most phones are sold at operators' retail outlets or at physical retailers. During the launch event I asked Google's Andy Rubin, the driving force behind Android, whether they felt that they may in the future need to expand to include physical retail (such as a carrier partner's stores). He said no, that consumers are increasingly going to buy their phones online just like they buy digital cameras. He is likely correct, but (again, as I wrote) that time is well into the future.
What wasn't explicit in my question, and which the initial flurry of Nexus One sales experiences has exposed, is the stark reality that being in the retail phone business involves a lot more than the sale itself. Today the news is full of stories of Nexus One owners frustrated at their inability to get access to a human being to help resolve problems or answer questions related to their new phone. (It hasn't helped that the device itself appears to have some problems accessing T-Mobile's 3G network, and that buyers may not have checked the presence of 3G coverage where they live and/or work.)
To the surprise of no one who pays even cursory attention to mobile phones, today Google announced the Nexus One phone and their new Google phone store. In case you were hiding out, here are the event highlights:
We've just gotten data back from our most recent US Omnibus Survey, fielded in October and November of 2009, and it provides a snapshot of the US mobile phone market pretty darn close to the end of 2009. Before examining the data, it's important to note that the term smartphone, while widely used, doesn't benefit from a uniform, industry-wide definition.