{"id":3541,"date":"2012-02-08T21:12:21","date_gmt":"2012-02-09T01:12:21","guid":{"rendered":"http:\/\/adam-jackson.net\/blog\/?p=3541"},"modified":"2012-02-08T21:12:21","modified_gmt":"2012-02-09T01:12:21","slug":"the-iphone-is-a-nightmare-for-carriers","status":"publish","type":"post","link":"https:\/\/adamchandler.me\/blog\/2012\/02\/08\/the-iphone-is-a-nightmare-for-carriers\/","title":{"rendered":"\u2605 “The iPhone is a nightmare for carriers”"},"content":{"rendered":"

CNN Money<\/a>\u00a0describes how US based mobile operators are suffering from slimmer margins following the iPhone:<\/p>\n

AT&T (T<\/a>,\u00a0Fortune 500<\/a>) and Sprint suffered an even worse fate. AT&T posted a stunning 28.7% EBITDA service margin last quarter, compared with 37.6% a year earlier. One contributing factor:\u00a0AT&T sold nearly twice as many iPhones<\/a>\u00a0as Verizon last quarter.<\/p>\n

After selling nearly 2 million iPhones last quarter,\u00a0Sprint’s adjusted wireless margin<\/a>\u00a0fell to 9.5%, down from 16% a year ago. The company said Wednesday morning that its margin was significantly lower than it would have been without the iPhone subsidy.<\/p><\/blockquote>\n

Purchasing wireless spectrum, setting up a nation-wide wireless system and keeping that system up to date as consumer demand increases is very costly. The carriers who take on this risk deserve to make money and remain profitable. The same goes for the power company and cable TV \/ Internet operators. These companies invested money to bring a utility to each home at a loss and then give consumers the option to utilize the utility or not. I’d say that’s a risky move. Spending millions to setup towers in a town that may not use the wireless company’s service is a risk and one that must be repaid some way.<\/p>\n

However, I’d prefer utility companies to operate like the power company. Power companies are profitable without interfering with how you use the power. Imagine how absurd it would be for my local power company to only allow a selection of 5 televisions for my home. Each of those TVs is custom made to work on my power company and no other. If I move to another state or county and thus get a new power company, I’m forced to buy all new hardware. Sure, I get that hardware at a subsidized rate but if I want to buy a new TV, blender or microwave, I’m asked to pay an early termination fee or upgrade fee.<\/p>\n

There would be riots in the streets if power companies held their customers that way with fees,\u00a0exclusivity, 2-year term contracts and only offered a slim choice of hardware on top of a monthly service price.<\/p>\n

Wireless and Cable companies have been doing this for YEARS and yet people just sign on the dotted line and accept $8 pay-per-view movies and crappy handsets with a 50 cent fee for every text message you receive whether you want to receive it or not.<\/p>\n

Apple may be squeezing mobile operators and soon, cable companies’ margins and there are arguments that less earnings equal lost jobs and now Apple is killing America and blah blah blah. The truth is, Apple’s devoted fan base and leverage on these middle-men to agree to terms that are fair for consumers is our only hope in a world crowded with insane practices in how the customers are treated. If Apple can make AppleTV a box that requires a $20 a month Cable connection + $50 a month Internet connection and a $100 a month cell phone bill and provide an experience we LOVE and not hate, I really don’t care that the operators feel squeezed by that. These guys have enjoyed great margins for years.<\/p>\n

MG Siegler weighs in with a similar argument<\/a>:<\/p>\n

Boo-fucking-hoo. The carriers have raked consumers over the coals for years with things like SMS charges, which have a near-infinite margin.<\/p><\/blockquote>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"CNN Money\u00a0describes how US based mobile operators are suffering from slimmer margins following the iPhone: AT&T (T,\u00a0Fortune 500)…\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_custom_appearance":"","csco_disable_excerpt_posts_layout":false,"csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[17],"tags":[],"class_list":["post-3541","post","type-post","status-publish","format-standard","category-technology","cs-entry","cs-video-wrap"],"apple_news_notices":[],"jetpack_publicize_connections":[],"jetpack_shortlink":"https:\/\/wp.me\/pb3IC4-V7","jetpack-related-posts":[{"id":3006,"url":"https:\/\/adamchandler.me\/blog\/2011\/08\/31\/how-apple-unintentionally-revolutionized-corporate-it\/","url_meta":{"origin":3541,"position":0},"title":"\u2605 “How Apple (unintentionally) revolutionized corporate IT”","author":"Adam Chandler","date":"August 31, 2011","format":false,"excerpt":"Forbes: So while Apple isn't intentionally leading an enterprise technology revolution, its products are nonetheless catalyzing one. For instance,\u00a088% of the Fortune 100 are testing or deploying applications on the iPhone\u00a0last year. The downstream effect of more iPhones and iPads in the enterprise is more sales of Apple's flagship products,\u2026","rel":"","context":"In "Linked"","block_context":{"text":"Linked","link":"https:\/\/adamchandler.me\/blog\/category\/linked\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3194,"url":"https:\/\/adamchandler.me\/blog\/2011\/10\/10\/its-cheaper-to-change-carriers-for-att-iphone-4-users-than-upgrade-to-the-iphone-4s-on-att\/","url_meta":{"origin":3541,"position":1},"title":"\u2605 “It\u2019s Cheaper to Change Carriers for AT&T iPhone 4 Users, Than Upgrade to the iPhone 4S on AT&T”","author":"Adam Chandler","date":"October 10, 2011","format":false,"excerpt":"BrooksReview: Let\u2019s just state this again: for many others and for me, it is $50 cheaper to break the AT&T contract and switch to another carrier. Yeah, I'm seeing the same thing and a lot of friends are doing just that. Luckily, I have other means of getting iPhones for\u2026","rel":"","context":"In "Linked"","block_context":{"text":"Linked","link":"https:\/\/adamchandler.me\/blog\/category\/linked\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3226,"url":"https:\/\/adamchandler.me\/blog\/2011\/10\/12\/atts-coverage-area-and-their-early-termination-fee\/","url_meta":{"origin":3541,"position":2},"title":"\u2605 AT&T’s Coverage Area and their Early Termination Fee","author":"Adam Chandler","date":"October 12, 2011","format":false,"excerpt":"I'm trying to switch to Verizon this Friday for the iPhone 4S release. After being a loyal AT&T customer since my very first mobile phone in 2002 and after waiting in line in front of AT&T stores in 2007, 2008, 2009 and 2010 for new iPhones I am finally going\u2026","rel":"","context":"In "Rants"","block_context":{"text":"Rants","link":"https:\/\/adamchandler.me\/blog\/category\/rants\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3149,"url":"https:\/\/adamchandler.me\/blog\/2011\/10\/05\/weighing-in-on-iphone-4s\/","url_meta":{"origin":3541,"position":3},"title":"\u2605 Weighing in on iPhone 4S","author":"Adam Chandler","date":"October 5, 2011","format":false,"excerpt":"Marco Arment: Would as many people be disappointed if Apple had released the same device but called it the iPhone 5? MG Siegler: I think having the iPhone on three carriers in the U.S. is ultimately going to be a very good thing for consumers. Instead of taking features away\u2026","rel":"","context":"In "Linked"","block_context":{"text":"Linked","link":"https:\/\/adamchandler.me\/blog\/category\/linked\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":557,"url":"https:\/\/adamchandler.me\/blog\/2009\/10\/06\/are-iphones-push-notifications-killing-sms\/","url_meta":{"origin":3541,"position":4},"title":"\u2605 Are iPhone’s Push Notifications killing SMS?","author":"Adam Chandler","date":"October 6, 2009","format":false,"excerpt":"For the first time in a very long time, I used a title to rope you in. Congrats and thanks for clicking through and you won't be disappointed. Push has been around for a while. In the mobile space, it was popularized by RIM's Blackberry devices as a way to\u2026","rel":"","context":"In "Ideas"","block_context":{"text":"Ideas","link":"https:\/\/adamchandler.me\/blog\/category\/ideas\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2551,"url":"https:\/\/adamchandler.me\/blog\/2011\/06\/13\/only-50-iphones-have-been-synced-at-least-once\/","url_meta":{"origin":3541,"position":5},"title":"\u2605 “Only 50% iPhones Have Been Synced At Least Once”","author":"Adam Chandler","date":"June 13, 2011","format":false,"excerpt":"One FPS: A little birdie says that about 50 percent of Apple Store customers who need to get their iPhones swapped have never plugged them into iTunes after the initial activation and sync. This is a big reason, according to this birdie, for why Apple Store Geniuses are excited about\u2026","rel":"","context":"In "Linked"","block_context":{"text":"Linked","link":"https:\/\/adamchandler.me\/blog\/category\/linked\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/posts\/3541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/comments?post=3541"}],"version-history":[{"count":0,"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/posts\/3541\/revisions"}],"wp:attachment":[{"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/media?parent=3541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/categories?post=3541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adamchandler.me\/blog\/wp-json\/wp\/v2\/tags?post=3541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}