Apple has been a blessing and a curse for cellcos. When it launched the first iPhone, the terms it demanded in return for operator exclusives were onerous and highlighted how a strong device brand would trump that of a carrier every time. However, as the world started to shift towards open access, its iPhone deals hugely …
Apple doing a proper 4G handset will shoot itself in the foot
Apple has become what it is by breaking the fundamentals of the operator model. Bundling, subsidies, etc are not the fundamentals in the financial model of a cellular network. VAS is.
Apple has built the iEmpire around its own VAS. The operator does not play or has an inferior role. The app is the king. The customer relationship is via iTunes, billing is through Apple, content is controlled via Apple, etc.
If it will release a fully compliant 4G handset it will surrender _ALL_ of that to the operator. 4G compliance means VAS model which works based on IMS, with the operator deciding in the PCRF function what services each handset will be allowed at any given time, recording service start stop via IMS and most importantly operator billing through IMS. Content is similarly via IMS, etc. Any service that may compete with an operator one can be denied at any given time via technical means as a part of the network standard.
Bye-bye iTunes content and billing, bye-bye Facetime and any other service potentially competing with the operator ones, bye bye.
Yeah, right. I do not see Apple playing ball with that. No way in hell. However, every app shipped via the App stores by iTunes and Android, every piece of content billed via iTunes and in-app billing erode IMS main business case as the basis of VAS/Content centric network.
Apple would be wise to stall and punt here with a HSPA+ handset. Doing a proper LTE handset today is clearly against its business interests and even Apple's market power will not be enough to finish off the delusional business ideas behind LTE by shipping a handset which uses LTE for access only and openly relegates the operator to a dumb bitshifter.
Case for becoming an MVNO?
Google is working on vertical and horizontal integration into 'the internet' - everything from the devices people use to connect, to the apps they use once connected, even to the routing hardware and protocols they use to communicate, all in an effort (i can only assume) to successfully sell these capabilities as positive differentiators.
Apple could be working on something similar - they have the OSes, the hardware, the app and content consumption platforms in place. All they need is the appropriate infrastructure on which to deliver these services, and i'm sure ONE of the current network operators would capitulate if Apple came knocking and said "Hey, we wanna be an international MVNO on YOUR network :D"
You have got to be kidding.
IMS is just an attempt to stuff the Internet genie back in the bottle by providing a telecom-like routing semantics to internet services. Any operator that tries to punt 4G as another walled garden will just lose. It's also a crap spec, so most handset manufacturers will treat it as the odouriferous horror that it is until forced to do otherwise.
Wasn't the whole point of the iOS to make carrier concessions?
I mean why else would you include some DRM system for your software? Why would you make a closed software distribution system an lock out VoIP applications? It's all just to make concessions to the carriers.
That's why Nokia introduced Maemo on a device without a GSM module. They just bypassed the carriers with that.
I think someone has it backwards.
Um, I think someone has it backwards.
The first iOS device (iPhone) launched without any carrier applications, customisation or hardware branding. That was incredibly rare at the time. It was also unsubsidised, so customers paid upfront for the phone. That model was abandoned for the 3G (for various reasons) although you can still get an unlocked, unsubsidised iPhone 4 directly from Apple if you choose.
Apple also separate out there updating mechanism from the carriers, so they can push out updates when they want. This provides Apple customers with new features and freedom from the carrier gatekeeper. Everyone gets their updates on the same day around the world, regardless of carrier.
Also Apple has iOS on two devices without a GSM module. One is the iPod touch, one is the iPad. These neatly bypass carriers operators as well.
So it terms of carrier control, Apple has gone to great lengths to get away from it. So your conclusion is deeply flawed. The whole point of iOS is to build a great ecosystem for customers, not to kowtow to carriers.
Fairplay DRM does the following:
 Cuts down piracy. Before mobile applications could easily be shared. This brings down pricing for everyone because everyone is paying a little rather than a few honest people paying a lot.
 Let's Apple put movies on the phone from the big six movie studios. And some television content as well. This is pragmatic. It will be a cold day in hell when they convince the big studios to hand over content DRM free.
So Fairplay helps to achieve certain goals, none of which benefit carriers in any way.
Just need to unlock the Monopoly on the App Store now
Otherwise it will be "Mac vs IBM PC" 2.0 with Google Android Mobiles playing the part of the MS-DOS PC.
I haven't read a good article from Rethink yet. Almost everything in this is wrong or based upon erroneous speculation backed up by zero facts. Not what I'd expect from real consultants.
And where is the evidence of consumers demanding 4G (even if it isn't really 4G) now. Coverage is still patchy in the US, 4G phones sold so far have not been spectaculary popular. I think most users will opt for a decent battery life first -- just ask HTC how they're getting along with the Thunderbolt. Apple recognise this, and only ship new technology when it's sufficiently power efficient.
First Gen LTE device battery life
Wait until you see the battery life on LTE with these first gen chipsets.
The only one you can play with now is the Samsung Craft - which only manages to get two hours (and that's without a smartphone OS)
The Xoom and HTC Thunderbolt will be out soon and they will demonstrate why Apple has chosen to avoid first gen LTE chipsets. Second gen chips, like Infineon's SMARTi LU2 will be a different story - providing LTE with far less battery life penalty - and less board space. Such chips are available next year from both of Apple's baseband suppliers.
It's unlikely that Apple will offer an iPhone with LTE until voice over LTE is rolled out. The current solution requires powering both radios at the same time, making an already bad battery situation even worse. I expect Infineon's new low power HSPA+ baseband to be in the iPhone 5, which uses even less power (25% less) than the current iPhone 4 solution while bringing even greater speeds than the current device.
PS: Motorola is being a little dodgy, claiming decent battery life while shipping the device without Flash and LTE.
I thought this was iPhone 4 only. Is there a cite for it being an iPad 2 feature?
Too US centric and missed the point on 4G
This article misses a massive point. Apple have NEVER competed on wireless speeds. Have you forgotten the first iPhone was laughed at for not having 3G and yet was a massive success. It also neglects that the 4g networks rollouts are not as advanced in Europe.
Network connectivity will not be where the tablet battle is fought with the majority of sales of tablets wifi only.
No account is being made of the apple halo effect. I don't believe there is any of the current brands of tablets including moto whose brand strength enables them to compete at the same or higher price points.
Expect a lot of apples competition to come from disruptive players with "almost as good" tabs at lower price points such as Advent/Pov, Archos and similar.
Expect most of the major players to price themselves out of the Market as as Samsung have done this season.
Android tabs will have to be both better and cheaper. The main battleground will not be fought on tech specs. We will see another race to the bottom on android with high end players value quickly eroded at some expense of apples market share but with a much lesser effect on revenue share as the overall Market will still be growing.
The most successful brand players are likely to be HTC as the android king, or those with their own OSes like Rim or HP although I would expect at least one of those 2 to fail spectacularly - probably HP as they have never had a credible CE division outside printers.
The article misses the point that networks aren't selling the iPad in any quantity in the first place, so Apple are not beholden to the carriers for distribution.
But will the carriers turn down an iPad subscriber because they didn't get their way? Definitely not, because there will always be another provider who will pick up the service and the $$/££.
Apple can divide and conquer the networks all day long because people want iProducts. If carrier x does something daft, it's an opportunity for carrier y, and so forth.
Also, Apple have very cleverly got away with software sim cards. Dual network devices, and iTunes can set the sim.
And no carrier is going to pass up ££/$$ if the device requires connectivity.
Apple will divide and conquer every single time because people want Apple devices.
Share of 3g iPads?
Have Apple released any figures for how iPad sales break down? I'm seeing a lot of iPads around but no-one I've met has bought a 3G model.
The use cases for the iPad seem to be indoor and static rather than on the move and nearly everywhere I'd use one is likely to have Wifi (work/cafe/home/friends homes) or be out of useful 3G coverage anyway (London Underground, train). Tether it to an existing iPhone contract and the additional cost of the 3G model pays most of the tethering charge for a year.
Lock my device to one service provider?
more anti-Apple nonsense
quote "This factor alone makes the Motorola Xoom, which will be upgradeable to LTE soon, the most dangerous rival to the iPad 2 in the US, and goes some way to justify the high price tag."
I was under the impression that the yet to be released XOOM! HAS! TO! BE! SENT! BACK! TO! MANUFACTURER! TO! ENABLE! LTE!
so is this a viable argument to make? Especially considering that having to send something back to the vendor for an advertised feature should surely justify a LOWER price, not a higher price.
Try writing an article like this; at least it's intentionally funny….
Too right. As soon as I read this, I thought: "Not an actual iPad and more expensive too? It's so dead it's unbelievable!". That was before you told me it was a return to base upgrade for LTE as well.
Might be worth buying a Xoom, they could have rarity value in a few years' time.
That won't work!
"More seriously, in Canada...there are now specific models tied to each of the three supporting operators. This is likely to be repeated...particularly in Europe"
I can't see Jo Punter going for this is Europe. From what I gather, it is the norm for the US, but while we're used to phones being locked-in to a carrier here, everyone knows that unlocking them is a formality. And a phone is perceived as a very different animal (in terms of "value") to an iPad. Would you buy an iPad knowing is was locked into a specific carrier? I know I wouldn't - it would be like having your home PC only work with a specific ISP.
is 4G such a big deal? 3G was crappy for a long time because of coverage, 4G won't be the same but also use more battery?
I thought it wasn't possible to do this in Europe because of the gsm requirement for swappable sims?
At least they are trying to prove that carriers are indeed the dumb pipes, yet the whole malarkey goes on.
Paris, cos she's not that dumb.
"Superphone"? I'm not buying it.
My current PC has a bit faster CPU and GPU than the last one I had, with more memory and storage, and my monitor is a bit bigger. Is anyone calling what I now own a supercomputer?
Incremental improvements in smartphone features does not a "superphone" make.
LTE is not even born yet
Call me when LTE coverage reaches 1%
Not so fast
A lot of the recent network kit is software upgradeable to LTE and the core of the network is going the same way. So in terms of coverage all operators can deploy a considerable chunk any time they want. Most of the elements required to do so are there already.
However if they do it now it will be eaten by dumb data which will result in all of that investment not paying back. The money invested in the LTE network will pay back only if the clients use the LTE VAS. It does not pay back on dumb data alone.
So they are quite wisely waiting for compliant handsets which will use the operator services before flipping the software upgrade switch. However, as Apple has no interest in doing operator VAS, Apple is not going to be one such handset (at least in the first wave). Neither will Android. If they do so, they cannot monetise their development.
In fact the hopes of the operators are centered on guess what - WM7 being infected by the IMS and "Operator VAS" malaise through its liaison with Nokia. Cough... cough... That one will be verrrrrrry interesting to watch... If the stack works (cough, cough), Apple and Android will see a push from operators they have never seen so far and we will see a long lineup of Win7 handsets being rammed down our throats by every salesman out there.
The reg definitely needs a "popcorn" icon here...
I'd think that Apple has some breathing space with 4G
It will take the networks some time to roll it out sufficiently that it makes a big difference.
I'm still wondering if pads/slates etc are going to be a long term prospect or if their lack of ability in content creation and lack of a fast keyboard is going to mean they fizzle out into the same sort of niche product that netbooks are now in.
iPad locked for Canucks?
I read this and thought 'How much more can we be ripped off for cellular service?' Fortunately it looks like a bad copy/paste job on the iPad 2 web page - Rogers have confirmed that it will be unlocked in Canada.
Wrong on so many levels
It amazes me how many people - analysts in particular think Apple is a tradition tech company - where those who have the newest tech are "the best".
Apple has always been about consumer led tech. ie What works for the average Joe - not what the geeks like.
Apple have never been a technological leader on wireless tech. Look at the 1G iphone - everyone predicted a flop due to lack of 3G - how wrong they were.
Apple only act as a tech leader when they think it will help them corner the market or get a quantum leap ahead. Look at thunderbolt for example. All the 4G technologies will bring is slightly faster data and more expensive tariffs. Nothing specifically that Apple can gain from - hence Apple showing little interest in 4G yet.
Apple are masters at taking old tech and making it seem new. Eg Facetime. iphone 1G with Edge.
Also you may want to check your carrier locking assumptions - there are a lot of postings today refuting that there will be carrier locks on ipad2.
Yes Apple will own as smalller percentage of the tablet market this year as the rest of the competitors finally get their "me too" products out of the door. However Im willing to bet that will be a smaller percentage of a BIGGER market - as the market is still growing.
I am also willing to be that those manufacturers who use appples price points are going to fail and fail big - especially those with Android based Tabs as they will face dozens of clones running android and providing 90% of the user experience for 60% of the cost. Eg Advent Vega/POV & Archos 10.
Even Samsung - who if anyone should be able to price beat Apple with a better technical product as they manufacture half a tablets components in house - have said they will struggle to beat Apples prices. If the 7" Galaxy Tab had been launched at $100 under the ipad it would have been far more sucessful - but they priced it out of the market.
My predictions for biggest tablet losers :
HP because they are crap at CE and thats what a tablet main purpose is. Shame because I want Web OS to succeed.
Moto - because they are overpricing the Xoom and think tech bells and whistles will be enough in the face of a Android race to the bottom from every tablet maker and their dog.
Will be ok
Have proved themselves past masters of riding the bandwagon and knowing how to get the best of it and when to jump off. Plus in Sense they have the best Android UI on the market.
If they sort their pricing they will be ok - otherwise add them to the Moto Camp.
These are the dark horse - I expect them to do well as they plough their own furrow and concentrate on mixing the business and consumer market - providing the Playbook has enough functionality and Apps on Launch.
You said: "Apple has always been about consumer led tech. ie What works for the average Joe - not what the geeks like."
Reality says: "Apple has always been about consumer led tech. ie What bling appeals to the wealthy - not what the geeks like."
Fixed it for ya. You said it ("consumer led"), but you missed the target market completely.
Apple makes toys for rich people. Period. Of course, in an article about tablet computers, anyone who would purchase such a thing clearly has too much money, so any discussion of tablet computers and anything else made by Apple must, by definition, be applicable only to the wealthiest among us.
Let's hear no more about "average Joe" in these comments, shall we? They are at work right now trying to put food on their family's table, not figuring out how to throw away that "extra" $700 on a new gadget.
this is only for the iPhone 4, as stated in the keynote.
this is the second time a site hasnt checked its facts,
4g you say? most people dont even know what 3g is! i think its just a fuss over nothing.
Difficulty with cool
I think that Apple will have to start bolting on things like USB, memory card slots, etc. Everyone else will, and it is difficult to make a thin, featureless black slab 'cooler' than everyone else's thin, featureless black slabs whilst not beating them on functionality.
On top of all that, it won't be hard. The new OMAP from TI is just the sort of CPU that will get used in tablets. It has SATA, USB2, even USB3, memory card interfaces plus shed loads of other I/O. And so do/will all the other SOC ARMs from everyone else. So it won't be hard for everyone else to add these things. Argueably it will cost Apple more because having set itself along the road of doing its own CPUs it will also have to 'out-ARM' the likes of TI, Marvell, Qualcomm, etc. That will be very difficult indeed.
The only thing Apple have in their favour is that they control their own OS, iOS4.3. That means that they could offer a more reliable, well thought out software experience for users. They sort of do, but then go and spoil it with a range of pointless restrictions. Those restrictions may appeal, or at least not matter, to US and European customers, but there's surely many times more potential customers worldwide who do actually want their devices to inter-operate.
The coolest thing to do...
... is simply to not shower the befuddled customer with ten different kinds of slots for twenty five and a half different card types. That's not what an iPad is for.
The iPad is for easy access to networked information. So those flash cards from your digital camera and usb sticks you stick in your desktop or laptop and send the contents to... wherever you'd like to send them, like facebook, some online photo gallery or maybe some cloud-flavoured service or other. Then you use that apple device as a nice portable window on the networked world. That's what it does.
Not adding all those bells and whistles that frankly don't fit in the concept means more focus for making sure what it does it does better than everybody else. And that is what apple does best.
That you --and probably me though I haven't tried and possibly every other techie on the planet-- don't like the restrictions doesn't mean that the crowd with more money than tech sense won't like it. On the contrary, it appears that they do. Where we say "overpriced" they say "reliable service delivery in a nice gloss; worth it".
That apple leaves room for others to race to the bottom but refrains from doing that themselves including in markets they've single-handedly created, just means they have to come up with better concepts now and then. Guess what they've been doing?
My biggest beef with apple --and possibly their biggest weakness-- is that there's basically only one deep tech designer of their quality in the market today. There are other, equally valid, avenues of /user experience/ that deserve to be explored that isn't happening because of that. Even a whole China full of wildcats doesn't make up for that lack.
@AC, "The coolest thing to do"
I can understand your point of view. Delivering the iPad concept very well is certainly what Apple is hoping to achieve (though my personal experience of their products' reliability is poor), and their commercial success thus far is certainly powerful confirmation of that.
"Not adding all those bells and whistles that frankly don't fit in the concept means more focus for making sure what it does it does better than everybody else. And that is what apple does best."
Indeed. But other companies can deliver that concept too, but they're likely to extend it to allow people to plug in USB devices, SD cards, etc as well. Apple's software superiority (I'll ignore it's apparent unreliability for now) is not something that Apple will be able to maintain forever. Microsoft and Google will one day (there's an 'if' there of course) match Apple's software completeness and user friendliness. When they do so but also offer additional things like USB Apple might have to think again about their concept.
I think that the moribund state of OSX on desktop / laptop Macs might be a sign of things to come. Having used both Win7 and OSX in various guises I subjectively think that Win7 is certainly on a par (and superior in certain apsects - taskbar in particular) with OSX. MS have caught up, and are cheaper. I know that Apple have been busy with their iSomethings, but really. Have Apple run out of ideas for OSX?
Microsoft may be this huge great slow moving beast, and Google's Android is laden with many severe problems, and Apple can currently run rings round the pair of them. But if and when Apple have run out of new ideas in the mobile areana too (are both Steve Jobs and Jon Ives on the way out?) it's likely / inevitable that others will catch up, and simply surpass Apple by adding USB, SD, etc.
Content, however, is another matter. iSomethings thrive on content. But what if that content is Facebook, or Flickr, or whatever and all those services and apps all become available on any half decent tablet (even an MS slab)? What exactly would Apple then be bringing to the party other than a cool looking slab that can't even read the SD card out of my camera?
Apple know this full well, hence their very restrictive model for deploying apps and music on to iSomethings which serves very nicely to make it hard for developers to support someone else's platform at the same time. Current market share + restrictive practises does serve to lock developers (and hence content) in to the iPlatform.
Their mistake, in my humble opinion, is to limit their current market share by cutting out those people who would quite like very simple and otherwise inconsequential things like an SD slot and maybe just maybe a USB interface. Even I might buy one then! Not doing so just leaves a hook for someone else to build a market share. But their commercial success thus far means that such user demand can not raise even a tiny blip on future-scope.
I just had a quick gander at apple's site.
And turns out, they do sell an sd card adapter next to the camera adapter thingy. So it's not a built-in slot, which I'd expect them to think would clash horribly with the aestethic, but you can do it. The iphone has a similar proprietary expansion connector that nonetheless does see use with third parties.
As to the rest, well, I haven't really kept up on stability and such, but everybody's got beef stories to share, on just about every platform. I guess we'll have to see how it pans out. The thing with osx is probably more that apple is getting a lot of revenue from "other" devices right now. It isn't because of the platform itself: The hardware still gets regularly updated (including things like "thunderbolt", which isn't unlikely to flop but who knows), as does the software, including new features and things.
But right now it's very much incremental updates, even though their laptops are of the few (the only ones?) shipping with sandy bridge right now. That is also an incremental update, albeit with problems--that may even have put a damper on the amount of promotional effort put into the new apple kit.
The problem is that it doesn't get huge amounts of buzz. I'd speculate apple aren't really trying because that's just not where the buzz is right now. They won't get much new customers just because of the OS itself but new hardware comes with the new OS. And they'll sell updates to the usual fraction of the installed base anyway. Why try and hype something when they get it elsewhere for free?
As to macosx, well, they still have a user experience that's much better integrated across the apps, something that redmond has trouble even touching, for various reasons. Then again, maybe macosx will go, and soon, if iOS proves up to the task of taking over. Jobs has never been shy making sweeping changes, but he's isn't about to burn his bridges if he doesn't believe the alternative isn't worth it.
The tension between Ive and Jobs and Jobs and his health are valid concerns, but I haven't the faintest what to think of that right now.
"4G" as a brand
still spells promises depicting a phantom future to me. But then again, it is possible to thrive on such promises even if you'll only make good on them with version 3.0. It just takes a lot of marketeering strongarming.
This will be interesting.
In the developing situation Apple is now (in order to maintain and evolve its position) going to have to be much quicker on its feet than it has had to be in the recent past. The company has had time between each iThingy release (because of the lack of serious competition) to get things right from the marketing point of view. As the pace of development in the market now begins to heat up they will not only have to be quicker, they will be under more pressure to avoids missteps. More importantly from their shareholders point of view the era when Apple could price their products as they liked and dictate terms to distributors (telcos etc..) is likely drawing to a close. The developments in the mobile market (phones and/or tablets) over the next couple of years are likely to make it a bumpy ride for all the majors - Apple included.
I'd have thought the most interesting hardware feature would have been the multi network wireless capabilities given the thrust of your argument but whatever.
Anyone who thinks there is any threat to iPad atm
Is living in absolute dream world. The iPad feels like a refined finished product whilst the doom is virtually regarded as a prototype released just to give some competition. The killer blow, who do they think is going to pay for the xoom when you can have THE tablet computer for less.
Also, it is very much clutching at straws to suggest 4G is the killer feature. It currently only covers about 2 cities in the US doesn't it? And we dont even have good 3g coverage in the uk, never mind 4g. The end result is apple hasvages before it needs to take 4g seriously.
On a final note. Didnt someone make the point you could use up the mobile usage allowance in little over 30 minutes. Mobile operators certainly have a long way to go before 4g is a viable selling point!
"and started to experiment with more disruptive ideas"
Shoorli shum mishtake hoshifer?
Some alternative words spring to mind such as "innovate" or "improvisation" or maybe even "creative improvisation with an innovative spirit"?
The teco/cellco organisations seem to be run by fuddy-duddies and don't seek or want to evolve unless, of course, there is money in it for them.
Now that they see there is indeed opportunity and growth whereas other parts of the market are declining or stagnant in the least well, ... at the very least they can provide a futuristic business plan to Board and shareholders?
You seem to attribute the lack of a single product that covers multiple networks to a decrease in Apple's perceived power over telcos. It could very well be a feature that could be implemented due to technical reasons before the intended release.
But sure, I guess it's more fun to continue to predict Apple's doom.
Anything that disrupts the carrier stranglehold on roaming charges is OK by me.
A smartphone is not a smartphone without services, as soon as you step across the border my extremely expensive smartphone dies, you don't even have an option to upgrade or select another network.
Figuring out the labyrinth of plans and charges you need to use it any place is just crazy, and if you do want to communicate organise it in advance don't go at short notice and expect to sort something out when you get there.The mobile phone suppliers/carriers deliver appalling service and value in this regards.
So if Apple can figure out a way to drill some sense into this section of the market, good luck to them.
I guess the USA is different in this respect,
On a general point in this context
A point which applies to all such companies (carrier or producer), ie attempts to create or maintain some kind of lock-in. They all do it, we can all think of many examples and many companies. The common factor is of course the desire to avoid be subjected to any greater degree of genuine competition that can in fact be avoided. All such strategies *whoever* is deploying them are aimed at evading competition without risking a direct confrontation with the competition authorities. In other words they all see OUR interests as the very antithesis of theirs. A thought to be born in mind when one feels the impulse to post defending ones favourite company - whoever they are. The only side they are on is their own.
There are 7 mentions of Android in this article about the iPad.
Not one mention of Windows/Microsoft tablets.
This is unacceptable as makes it sound as if Windows tablets are irrelevant. Which is so untrue.
"in Canada – where users could previously switch between the cellcos with a simple microSIM swap"
Might be simple but dam expensive for the large cellco's costing around CAD$50/SIM.
Wind is the cheapest at $15.
SIMS are too high priced
In Cambodia I only pay about a USD$1 for a SIM, the very same type as you pay CAD$50 for.
There should be a law ....
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