Imagine you buy a car that comes with a 2 year warranty on defective parts and 3 free servicing trips. But what if those were valid only if you filled fuel from a specified provider — say Indian Oil or Shell? Or you buy a DVD player or home theater that can only play movies produced by Universal? Sounds ridiculous, right?
I’ve always been surprised how Apple gets away with its restrictive policies while Microsoft gets dragged into court over anti-trust laws for anything and everything. Until recently, you couldn’t run Windows on a Mac, while you could always run even Linux on a PC. You could choose whether you wanted an Intel or AMD processor to power your PC, but no such choice with the Mac, until recently. iPod doesn’t work with anything except iTunes. And the iPhone doesn’t work with any cellular service provider except AT&T.
It was one thing with computers, but another with cell phones. The cell phone market is much, much bigger. How long will this restrictive practice of binding you to a specific service provider work? The reasons why Apple did it are clear. Apple gets a monthly revenue cut from AT&T for each iPhone user. Though some say that there are alleged benefits to this restrictive policy, it just doesn’t cut it for me. After all, these revenues are not comparable to what Apple gets from the actual sale of iPhones.
Well, the inevitable has already happened. The iPhone is now unlocked. What this means is that anyone anywhere in the world can buy an iPhone in the US (or get their friends to buy it for them) and use it in their country. Yes, so you can now use the iPhone in India. Read the original Engadget news here. The second image below shows the iPhone working with the T-Mobile service provider in the US.
Is it illegal in the US to unlock your iPhone? Engadget says no, as long as you’re doing it for your personal benefit, and and agree to forego your warranty and Apple support. Predictably, the second team developing such an unlocking software has already received threatening calls from AT&T’s legal team. Being one of the worst service providers in the US in terms of quality, they need to get their act together quickly!
How will the iPhone be marketed outside the US? How can Apple force consumers in Europe and fastest growing cellular phone markets like India to select Apple’s choice of service provider? I just don’t think it’s possible. And if that’s true, can Apple have different marketing strategies for the US and outside the US?Can the iPhone withstand competition if an equally sophisticated telephone were to offer users their choice of providers?
The Business Standard has just broken a story that has made headlines all over cyberspace. It says the Google Phone, or GPhone, is just two weeks away from an international launch:
Talks are believed to be taking place with Bharti Airtel and Vodafone Essar, respectively India’s first and third largest mobile telephony operators, and state-owned Bharat Sanchar Nigam.
Sources close to the development said a simultaneous launch across the US and Europe is expected, and announcements would be sent to media firms in India and other parts of the world. US regulatory approval, which is expected soon, is the only hurdle that Google is waiting to cross, they added. Google plans to invest $7–8 billion for its global telephony foray.
TechCrunch gives a nice summary of the history of the GPhone rumors and says that a 3G GPhone worldwide release can be a strong competitor to the iPhone. Also see this ComputerWorld article that quotes the Wall Street Journal. If you’re skeptic about whether Google will indeed foray into consumer electronics, or simply want to know how studying a company’s job listings is being used for competitive analysis, I’d highly recommend this Forbes article.
So, will the GPhone kill the iPhone? I believe it can, provided Google comes up with something comparable to the iPhone. And just like Apple eased its restrictive policies with other products, I think it will soon have to warm up to the competition in this case.
Photo Credits: CNET, Engadget.
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