Apple tilts the scales away from carriers

John Shinal · May 6, 2008 · Short URL:

 Apple is doing for handset makers what upstarts like mig33 and Thumbplay are doing for mobile software companies -- tilting the balance of power in the wireless applications market away from the big carriers.

The maker of the iPhone today gave the scales a good nudge with two announcements. First, that it had signed up more carriers to distribute the world's hottest handset in 10 more countries. Second, that in one of those, namely Italy, it would let two separate carriers battle it out for iPhone sales.

Perhaps no other handset maker other than one led by Steve Jobs could have pulled off a roll out of a device into a new market without having to agree to exclusive distribution, but the Italian market is a robust one, according to this report.

That the iPhone will now be available to the emerging middle class in India, which is filled with young, early-adopting tech lovers flush with cash, should go a long way in helping Apple hit its goal of 10 million iPhones sold this year.

The fact that Jobs was only able to win that point in Italy shows that the carriers still have some sway.  But the day will soon be history when a network glitch or other operator fumble can torpedo sales of a handset, as happened to Research In Motion two years ago when two European carriers hurt the rollout of a new BlackBerry.  

The trend which sees more mobile services like Buzzd and Vringo distributing their applications over the Internet directly to consumers is one we've been reporting on since last fall.

Benefits of doing an end run around wireless carriers' platforms include keeping a bigger chunk of the revenue pie and not being dependent on the wireless carriers schedule for new handsets.

The trade-off is more hard work on the marketing side. Rather than get subscribers by being on the operating system of a carrier, upstart wireless app makers have to get the word out themselves.

But with the viral marketing capability of the Web, a lot of small companies are gaining traction this way. 

The wider the market opens, the better for all those mobile startups out there who don't want their revenue growth -- or maybe any revenue -- to be at the mercy of getting a piece of the scarce and expensive real estate on a carrier's platform.

Other recent good news on this front was the release by Apple of its iPhone software developers' kit and the creation of a $100 million iFund by Kleiner Perkins to fund iPhone app developers. 

Now, if handset makers can put aside their differences and agree on an open-standards platform, rather than forcing app developers to port different versions of their applications to multiple operating systems such as Windows Mobile, Symbian and others, we might see an even bigger explosion in mobile applications.  

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