By Adam Doud | June 26, 2013 7:00 AM
When you’re vacationing in Disney World, the self-proclaimed “Land where dreams come true” you start to think about some crazy stuff. What if we had a colony on Mars? What if we had a universal language? What if I could train my dog to not pee on the floor every time someone comes over?
You know, crazy stuff.
What if Apple and now Samsung could flex their considerable muscle with US carriers and take them down a notch or two. What if they could get them to back off their power-grabbing maneuvers, such as holding back updates. What if they could get carriers to work on an even level with all OEMs and morph the relationship into the more symbiotic relationship it actually is.
You want exclusive? I’ll give you exclusive!
What if Apple’s threatened to release its iPhone 5S2 on Virgin mobile exclusively unless the carriers backed off of everyone? That could legitimately throw fear into the hearts of carriers such as Verizon and AT&T and could literally drive the final nail into the T-Mobile and Sprint coffins. Then Apple or Samsung could improve things for all mankind, or at least phone OEMs in the states.
Leveling the playing field for all OEMs would help ensure a more positive relationship in the future, should anything change in the phone popularity standings. It’d be a nice insurance policy should anything tank going forward. It would set great precedents going forward for future dealings between carrier and OEM.
One prime example would be establishing a willingness to release phones across all carriers without different branding. This is something that both Apple and Samsung already enjoy. But to extend that same deal to other OEMs would be huge, both now and in the future.
But Apple and Samsung won’t do that. No chance.
Never going to happen
Samsung and Apple have a pretty good thing going with carriers. Their phones are picked up without question and their updates roll in a timely manner. Basically, the two most popular phones in the United States put the carriers over a barrel with their pants around their ankles. Even more unfortunately for Nokia, Blackberry, HTC and everyone else, Apple and Samsung recognize the juice they have and have absolutely zero incentive to proactively help out their competitors, even if it would mean a better relationship for everyone long term.
In a world where smartphone popularity is growing in leaps and bounds, Samsung owns the leaps, and Apple owns the bounds. This clout is currently being used to establish and maintain their own relationships with the carriers. Any shift in the wind might jeopardize those relationships.
Even worse, a push by one of the giants to change a carrier’s relationship with other OEMs might cause a disastrous effect. The carriers might suddenly circle the wagons and start pushing back on the giants. After all, if carriers don’t sell phones, Samsung and Apple stop making money too. Heaven knows there are plenty of other Android fish in the sea, which would make Samsung particularly vulnerable.
Of course, this is all US-centric. Overseas, OEMs and carriers seem to have a much more distant, hands-off relationship. It seems to me, the bulk of the problem is subsidization. With carriers picking up a bulk of the check in exchange for 2 years of your mobile surfing life, it’s difficult for any OEM to take a hard-line stance. After all, to the OEM, the carrier is as much the customer as the consumer.
The power of ebay
This is another area where Apple holds a distinct advantage over even Samsung – resale value. Apple’s high end build quality and market demand often mean an older iPhone can come close to paying for a new iPhone. Ain’t ebay great? Apple’s product prices remaining high even approaching the end of a 2-year contract make carrier subsidization less necessary – after the first iPhone purchase that is. The initial iPhone purchase is a pretty high hurdle without carrier subsidization. After that first phone though, generally an ebay listing plus $100-$200 will get you a new iPhone with no contact, and thus no subsidy.
Not exactly buds either…
And let’s not forget, Apple and Samsung aren’t exactly sending each other Christmas cards either. A move like the one I’m fantasizing about would almost certainly take a combined/coordinated effort between the two. Sadly, the only times these two contact each other is to serve court documents. Not exactly the building blocks of a team effort.
But if Samsung and/or Apple could get carriers to take a step back and just provide services while OEMs focus on the hardware and software, all of our lives would be easier. We would no longer have carriers determining when and if devices get upgraded. They would simply provide the infrastructure for devices to run on, while OEMs provide the devices themselves. Everybody
makes money is happy.
That’s crazy, right?