"To hear the carriers tell it, the iPhone is a major inhibitor to their profits as last year they were “only” generating wireless service profit margins in the 38% to 42% range."
It would seem pretty simple then - stop carrying and supporting the iPhone, and they would have higher profit margins. This is basic math. If they want higher profit margins, drop iPhone.
Wait... what? They want higher profit margins and higher revenues? Perhaps those days are slipping away, and they may have to deal with higher revenues and 'only' 20% profit margins.
Uh oh - what if that happens? We'll stop seeing all the innovations from carriers we've seen over the past 20 years like...
Oh yeah, we haven't really seen any. SMS spam? That's been the only change in my wireless life I can directly attribute to wireless carriers, other than wireless service itself. Is there anything else I'm missing?
We'll stop seeing all the innovations from carriers we've seen over the past 20 years like... Oh yeah, we haven't really seen any.
I don't want to be in the position of defending the cellphone networks too much, but things like 3G and LTE upgrades to cell towers aren't easy or free. Neither were the 4G auctions.
Not to be sour, but an innovation in what? The first cellular network was a radio tower with a backhaul supporting handsets. LTE is a radio tower with a backhaul supporting handsets.
Your analogy could just as well be used like: the first food preparation was mixing together ingredients, sometimes with heat. Modern cooking is mixing together ingredients, sometimes with heat.
I don't particularly love my carrier, but I have a choice of several and they bring me mostly-available mostly-quite-high-speed service for a small fraction of my paycheck. It would've blown me away 20 years ago to have such service on a wired connection.
That's my point, although I'm not sure my argument is illuminating much. Why do they request applause for selling what is essentially an unchanging utility? Data goes to and from the handset.
Lower latency, cheaper, wider range, higher volume, diffserved, sorted, tabulated, billed, whatever, sure: if you define implementation improvements as "innovations" then the carriers are innovating. But the thing the customer consumes is the same as the first day they lit up the first network: timely data to a computationally-capable handset.
This problem will solve itself (at least in europe) now that 'share your broadband and you can use other people's shared broadband connection' schemes are popping up everywhere.
The telco's have had a monopoly position for too long. The consumer does not care if his call is routed over the internet, skype, broadband or 3g, he just wants his connection, and wants it cheap.
Data limits and increased prices are not the way to solve this, evolving the infrastructure is.
And don't tell me they need to make huge investments. They've got a vastly automated infrastructure and millions of customers that they're leeching off monthly.
How can they prove it WAS you? This is why it makes sense to avoid locking down a connection. If someone breaks in and does something illegal, you'll have a much tougher time proving it wasn't you than with a wide-open network.
With that you have to balance the threat to your network. There are many widely-supported encryption standards that are incredibly hard to break, hard enough that no one will reasonably try. However if you leave it wide open, you're not only allowing your access to be used by everyone for everything, you're also allowing them free access to every device on your network.
If you're in a densely populated area, someone could spend the time to break your encryption from their own home. But if they're doing that, they're going to be doing worse once you let them in. Open wifi will only compound your issues. If you're not within range of your neighbors, you'll probably notice someone sitting outside for long enough (weeks/months/years) to break your encryption. Long enough to call the police.
Basically, if you're worried about a possible legal case involving the use of your network and your defense strategy is to open your network, you might be in much more immediate trouble by allowing people in. You'd still be on the hook for the activities on your network, but now your bank account has been drained by the guys who did nothing more than drive by your house with a laptop so now you don't have the money for a legal defense.
I suppose it depends if we are talking about a criminal or civil case. AFAIK in a civil case (say copyright infringement) they simply have to prove that it was likely to be you or that your negligence (i.e opening up your internet connection) aided somebody else.
It's certainly enough of a gray area that I wouldn't want to get involved.
It is so frustrating that these carriers continue to have such a strong hold on customers. They are true monopolies and their desire to have their bottom lines raised is obviously more important than any type of innovation on the technology front. Eventually I think we'll see the same breakup/restrictions of these large carriers in the same way AT&T's land lines were done.
It would seem pretty simple then - stop carrying and supporting the iPhone, and they would have higher profit margins. This is basic math. If they want higher profit margins, drop iPhone.
Wait... what? They want higher profit margins and higher revenues? Perhaps those days are slipping away, and they may have to deal with higher revenues and 'only' 20% profit margins.
Uh oh - what if that happens? We'll stop seeing all the innovations from carriers we've seen over the past 20 years like...
Oh yeah, we haven't really seen any. SMS spam? That's been the only change in my wireless life I can directly attribute to wireless carriers, other than wireless service itself. Is there anything else I'm missing?