April 13, 2007

The Economist Misses the Point Entirely

The Economist snerks that Apple has 'missed' by making the iPhone an EDGE device as opposed to, say, EV-DO. They say that the age and slow speed of EDGE (AT&T/Cingular's data service) is such that it is easily eclipsed by offerings from Verizon and future WiMax rollouts, and that the iPhone is crippled by design for relying on GSM cellular and EDGE.

Well, there are a couple of problems with that analysis. First, Apple didn't originally pitch the iPhone to an EDGE provider, if we recall - they pitched it to Verizon, who has (ta-daa) that same EV-DO that the Econ is so hopped on. Verizon, however, didn't like Apple's terms and took a pass. No doubt The Big E would tell us that Apple's arrogance blew its chances of having a modern data network.

The second point is that the iPhone is only at most tangentially about the radio platform. The technology at that level is entirely irrelevant to the iPhone as a market strategy. Apple users don't want to know what frequency the gizmo works on- they just want it to work well, and smoothly. If AT&T/Cingular was willing to make the investments to make some of the cooler UI bits work (random-access voicemail, finally) then going with them was the right choice, by this philosophy.

Third, as I've muttered about before, the iPhone offers Apple a chance - if it works - to give the entire cellular industry (and not just EV-DO) a sharp stick in the eye. By moving to a WiMax/WiFi radio handset in a later model, and moving to a VoIP framework for voice transmission using a routing, billing and management (not radio) back-end infrastructure that Apple controls itself (and bills for) they can change the entire game. They can do that without violating any exclusivity agreement with AT&T, if that agreement describes 'cellular handsets.' Want to take bets?

Posted by jbz at April 13, 2007 6:10 PM | TrackBack

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