

Why AT&T and Verizon Are Rooting for Windows Phones - mitchie_luna
http://bits.blogs.nytimes.com/2012/04/24/carriers-windows-phone/?ref=technology

======
amishforkfight
> The more the iPhone succeeds, the less leverage the carriers have, Mr.
> Kuittinen explained. All they have is bandwidth.

I look forward to the day when mobile carriers are nothing but dumb pipes.
Maybe then they'll focus on providing the most bandwidth and best coverage,
instead of crap apps that no one cares about.

~~~
diminish
in addition, i look forward to the days when mobile phones are nothing but
web/html5 browsers where apple/google.microsoft lost the control over the
stores. they'll provide the best web rendering and convenience; rather than
crap apps and monetization needs that no one cares about.

~~~
randomdata
I look forward to the day that the cellphone is just a generic computer, where
you can install anything you want, including the operating system. I want more
than a system locked down to only HTML/CSS/JS.

------
AdamFernandez
Things will go a lot smoother once the carriers realize that all they are IS
bandwidth. Unlike Cable, they didn't offer valuable content to begin with, and
don't have the same leverage to delay the inevitable. Charge users an
acceptable price for bandwidth based on infrastructure costs, and call it a
day. It is a fantasy of theirs that they can generate revenue in other ways at
this point. They don't know how, otherwise they would make their own phones
and app markets. It seems corporate executives with dying business models
often resort to delusional flailing strategies. I'm just not sure if they
believe this is the correct route, or have to appear to be doing 'something'
for the investor's sake.

~~~
ajross
This is largely true, but I think it paints the telcos as more irrational than
they are. They're using their "delusional flailing strategies" to "delay the
inevitable" because those strategies _are going to make them more money_ , at
least in the short term.

Long term, yes, running a network is not going to afford them the kind of
lock-in revenue they are accustomed to. I"m sure they know this. But still,
they have a duty to their shareholders to produce revenue now.

They're only irrational if you see an obvious course to a future of greater
profits. But you don't provide one, and frankly I don't see one either. The
phone industry is going to need to shrink, revenue-wise.

~~~
com
The carriers have "delusional flailing strategies" because they really are
delusional and flailing, at least in the parts of the organisations that are
capable to driving structural change.

The cost structures, swivel-chair automation, arthritic processes, lack of an
ability to rationalise their portfolios (many decision-makers on the
infrastructure side don't even know what a portfolio is, let alone what
rationalisation means, and why this might just help) lead them to panic every
time people start cutting their cords (first copper, but soon anything that
can be replaced by OTT services) and that is visible to their investors.

As someone (occasionally) on the inside, they are irrational, they are
flailing, and yet they have no real sense of urgency as their escape paths
from likely commoditisation are colonised by nimbler players.

[edit: I read the phrase "delusional flailing" as "delusional failing", but
the essence is similar enough]

~~~
AdamFernandez
I actually meant 'flailing' but obviously 'failing' applies as well.

------
roc
Simply: because the carriers want to be able to play phone manufacturers
against each other like the good old days. Android alone hasn't given them as
much ammo against Apple as they'd like and Android itself may be facing
consolidation.

There's a real chance that consumer acceptance of the incredible range of
Android phones is predicated on their belief that the Android brand makes
those phones largely comparable, if not compatible.

So if manufacturers go a more Amazon-ish route with Android in retaliation for
Google's buying Motorola, it's entirely possible that consumers may not be
willing to follow the smaller outfits. And that would mean a further
concentration of sales under the handful of manufacturers that do have some
individual pull with consumers (say, HTC and Samsung). Which would only
exacerbate the carriers' problem of not-enough-phone-manufacturers-at-each-
others-throats.

~~~
diminish
Rather: iphone financing is killing their cash flow, blackberry is lost as an
alternative, android has a too big winner-samsung. Carriers need a third
player, to push down financed device costs and microsoft is hopeless about
mobile and has cash to throw in.

~~~
masklinn
> Rather: iphone financing is killing their cash flow

Not sure why that would be, surely while Apple dictates their asking price
they don't dictate _financed_ price do they? So that's a self-inflicted wound,
and one which carriers could fix by financing the phone less.

On the other hand, the iPhone precludes almost all carrier control, they don't
control the initial load, they don't control the updates, ... Carriers control
some features Apple gives them hooks for (e.g. tethering), but that's about
it. And customers become loyal to the _device_ (and its manufacturer) rather
than the carrier, not hesitating jumping ships to a carrier providing the
device.

> Carriers need a third player, to push down financed device costs

It's not like Apple had much say in this back in 2007~2008, and BlackBerry was
still there...

I don't see sensible support for this narrative.

~~~
recoiledsnake
>Not sure why that would be, surely while Apple dictates their asking price
they don't dictate financed price do they? So that's a self-inflicted wound,
and one which carriers could fix by financing the phone less.

The fact is that margins are down at Sprint, Verizon and AT&T because of the
iPhone.

Last quarter:

[http://business.time.com/2012/02/08/how-apples-iphone-
actual...](http://business.time.com/2012/02/08/how-apples-iphone-actually-
hurts-att-verizon-and-sprint/)

This quarter, AT&T's and Verizon's profits are up because of lower iPhone
sales:

[http://www.reuters.com/article/2012/04/24/us-att-
idUSBRE83N0...](http://www.reuters.com/article/2012/04/24/us-att-
idUSBRE83N0KR20120424)

I think Apple won't be too happy with it's primary device more expensive than
$199 on contract as that's the sweet spot and any increase will cut into
sales.

Apple's stock is down about 13% in two weeks because the carriers are getting
tired of razor thin margins on iPhones while Apple laughs all the way to the
bank and are pushing back. Not to mention the lower sales of iPhones this
quarter.

[http://blogs.marketwatch.com/thetell/2012/04/23/apple-
slips-...](http://blogs.marketwatch.com/thetell/2012/04/23/apple-slips-on-
more-talk-of-subsidy-declines/)

[http://money.cnn.com/2012/04/24/technology/att-verizon-
iphon...](http://money.cnn.com/2012/04/24/technology/att-verizon-
iphone/index.htm)

~~~
maercsrats
Lies, damn lies and stats. "Apple sold 44% less iPhones last quarter" is
technically correct. But last quarter saw around a 150% increase in sales
because of pent up demand and the holiday quarter. If you compare this quarter
from one a year ago you'll see that sales are actually up.
[http://www.macrumors.com/2012/04/24/iphone-activations-
drop-...](http://www.macrumors.com/2012/04/24/iphone-activations-drop-43-at-
att-but-represent-60-of-total-postpaid-phone-sales/)

Also, I call bullshit on the "razor thin margins" that carriers are making.
They make plenty over the lifetime of the device contracts. Also, ask Sprint
if it would like to get rid of it's iPhone deal. They are getting plenty of
new subscribers thanks to the iPhone and are banking on making up their
initial loss over time on their new contracts.
[http://www.networkworld.com/community/blog/analyst-who-
downg...](http://www.networkworld.com/community/blog/analyst-who-downgraded-
apple-has-his-facts-all-wrong)

The problem comes in on their aggressive upgrade policies. In fact, I believe
Verizon just added a $30 fee for upgrades on 2 year contracts.

Apple's stock is down because the market is full of idiots. Analysts have bet
against Apple for years and every quarter Apple has come up on top. I'll bet
dollars to doughnuts that this quarter won't be any different and overall
sales will be through the roof.

------
saturdaysaint
How much technological leadership do mobile carriers have to throw around,
really? They're not exactly writing must-have apps or creating meaningful
services. Their salespeople are Best Buy-style hucksters at best. The bottom
line is they've fought the iPhone tooth and nail and it's still dominating
U.S. sales.

~~~
masklinn
> How much technological leadership do mobile carriers have to throw around,
> really?

Little to none, what they have is control of the airwaves and lobbying power.

Even the underlying tech generally isn't theirs, the network hardware is built
by NEC, Nokia or other such manufacturers.

------
vampirechicken
Dear VZW and AT&T. Figure out a way to make your money providing a fast pipe
at a decent price and we'll love you for it. Keep up the "Adversarial Value
Extraction" (data caps, usurious text message pricing) and we'll abandon you
like Blockbuster Video when a viable alternative arises.

Prediction: Google and Apple spin off a new, jointly owned company that enters
the wireless market by buying sprint and /or t-mobile, and they create the
wireless internet we need, not the one we deserve.

------
bshep
tldr version:

"The carriers are tired of Apple calling all the shots[...]"

IMO, with Apple's momentum right now it will take A LOT to eat into their
market, maybe that's why they are betting on Microsoft.

