Mama Apple, Please Don’t Take My iPhone Away

By  |  Thursday, June 18, 2009 at 1:34 pm

Apple iPhone 3G SAT&T is trying to make the case for exclusive deals for phones, saying they “stimulate” innovation. Yes, you heard that right: by sticking it to the consumer and forcing them to a certain carrier, we’re enjoying innovative products. I’m not exactly following this, and neither is Capitol Hill either.

The Senate Committee on Commerce, Science and Transportation held a hearing on Thursday in which AT&T made this exact case in front of bewildered Senators. Massachusetts Senator John Kerry was one of them, saying that why he understood the economic benefits, he wasn’t seeing a benefit otherwise.

Kerry said that he failed to see why a manufacturer would develop innovative products for a single outlet rather than build it for the biggest market possible, to paraphrase his statements.

AT&T retail sales chief Paul Roth responded that often, carriers and manufacturers will work together closely in order to bring phones to the market. However, it’s pretty likely given the way Apple operates that this wasn’t the case with the iPhone.

Opposition just wasn’t a Democratic thing — even Republican senators like Mississippi’s Roger Wicker expressed displeasure, saying the deal could harm rural residents right to choice.

In addition the AT&T/iPhone deal opened a new chapter in the debate over exclusivity contracts. Rather than the typical several-month period, the iPhone deal gave AT&T several years. This concerns regional carriers most as they typically can not compete for these exclusivity deals.

It’s high time the government got involved in this debate. There really is no benefit to allowing carriers to shut out others when offering mobile devices. Yes, I understand the iPhone does require some network changes in order for it to work to its fullest extent, however to me consumer choice trumps all others.

A lot of folks on AT&T right now sure as heck wouldn’t be there if the carrier didn’t have a stranglehold on the device here in the US. Count me as one of them — I’d rather be back with T-Mobile.

(Hat tip: PC World)


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5 Comments For This Post

  1. John M Says:

    Well, Senator Kerry (and Ed) its like this. When Apple took the iPhone idea to Verizon they were told to take a hike. Verizon, that most controlling of carriers, had no intention of granting Steve Jobs and Co. the freedom they wanted and needed to design and develop it (nor the revenue split). AT&T gave them total freedom. In return they got a multi-year exclusive. And we got the iPhone, without any of the usual design limitations insisted upon by Verizon and other carriers. A more than fair trade I’d say.

  2. Patrick Says:

    “Kerry said that he failed to see why a manufacturer would develop innovative products for a single outlet rather than build it for the biggest market possible, to paraphrase his statements.”

    Which is why politicians are in politics and not in business (unless they go into lobbying where they leverage their political contacts for money).

    Senator Kerry’s attitude (and the attitude of other senators, both Democratic and Republican) is more of the “I know best” posture that is bad for the country. All of these senators are free to quit their senate positions and go start their own phone company.

  3. Neil Anderson Says:

    AT&T wasn’t Apple’s first choice.

  4. Al Says:

    Apple’s recent success is built upon fewer models with fewer options for a more streamlined product line. It saves them lots of money. Just ask Dell if it’s not true.

    Making 2 different iPhones with 2 different storage options each, cuts into profits. Those cuts really add up when all products are taken into consideration. Apple didn’t want a second iPhone line after the deal with AT&T was struck.

    Eventually, everyone who will agree to Apple’s terms, will get the iPhone G 4. Those who want to maintain complete control (Verizon), will not.

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