I don’t normally have much of a problem with single source supply. It allows a distributor/seller to specialise and concentrate on the product, however when that exclusivity turns into a monopoly because the product is popular, there is always the danger the supplier will use that monopoly to squeeze their customers’ last shekel from their hands, just because they can.
This is bad for the customer of course but also for the manufacturer because the product gets a bad name which results in reduced sales of ‘it’ and by association the manufacturer’s subsequent products.
Where monopolies are concerned they don’t come much bigger or longer standing than AT&T in the US and O2 in the UK.
AT&T were originally part of Bell (which was broken up into a bunch of smaller companies by the US government because they were officially a monopoly) and O2 (now part of communications giant Telephonica) were originally owned and created by British Telecom.
Apple’s use of O2 in the UK and AT&T in the US is long standing. We are now on the third iteration of the iPhone and one can still only buy through these service providers – because they have an exclusive contract with Apple in that country – other sales organisations such as Carphone warehouse in the UK are merely resellers for O2 and don’t really count in this argument.
The recent release of the new iPhone 3G S model (incidentally, you can tell Steve’s not around at the moment with that product name!), has prompted a lot of moaning about pricing, especially about the tethering feature in iPhone OS 3.0 which allows the phone to be connected to a Mac or PC (normally a laptop) and share it’s internet connection to the computer.
When we all bought our phones from o2, one of the brilliant things about it was that we didn’t have to worry how much internet bandwidth we used on the phone because an ‘unlimited’ connection was included in the deal – everyone knows that ‘unlimited’ doesn’t really mean unlimited and was in fact about 3GB ‘fair use‘, but who is going to use 3GB on a mobile right? – this was almost worth the price of entry on it’s own.
We always pined for tethering, some of us (me included), signed up to another contract for an HSDPA dongle (and associated contract) to get the same mobile internet connection on our laptops instead, tired of waiting for Apple to deliver it on the iPhone.
The reason it took so long of course wasn’t technical, the hackers who jail-broke their iPhones had been doing it for ages, it was that the service providers who carried the iPhone (primarily AT&T but also O2) make huge amounts of cash each month from saps like me with the HSDPA dongle and didn’t want Apple to enable it on their phones because it meant less sales.
AT&T and others including O2 exercised their monopoly over Apple and reduced the customer experience because of it.
Apple have finally worked out a mechanism to keep their service providers fed while appeasing their customers. It means however you have to buy an extra package from the SP to pay for tethered data use – in O2’s case that’s either £15 (for that 3GB we got for free on the phone anyway) or £30 for 10GB. This is exactly the same price (of course) as O2 charge for their HSDPA contracts that include a hardware dongle.
I am sure some people will buy it, however personally, I’d have the dongle – it means you can loan it to other people (my kids use mine more than I do) and it means you can walk away from the machine to take a call without the thing losing connection.
The point is, these service providers know that they can do what they like with their customer base, they have us and Apple over a barrel and are whipping us for all we are worth until we or the product breaks under the strain. It is not good for us and it is not healthy for Apple to be beholden to these companies. It’s time for a change.
Apple, please change to using other multiple local service providers when the current contracts expire.
Give your customers a choice.