Big changes take time in the global communications industry, for good and not so good reasons. Still, it's important to recognize that Apple has succeeded where others have failed. It has wrested some significant degree of control away from normally powerful wireless carriers. But not in the way many disrupters prefer. As Apple tends to do, it demanded a great degree of creative control because that's the only way to ensure the sort of user experience it wants to provide. And the iPhone is no exception.
at&t agreed to leave its brand off the body of the phone. at&t also abandoned its usual insistence that phone makers carry its software for Web surfing, ringtones and other services. The deal also calls for Cingular to share with Apple a portion of the monthly revenues from subscribers, says the Wall Street Journal.
In another break with standard practice, the iPhone will have an exclusive retail network: The partners are making it available only through Cingular and Apple stores, as well as both companies' Web sites. The deal points the way to how service providers can balance control and freedom, vertical integration and horizontal innovation.
Cingular executives were willing to cede control to Mr. Jobs for the privilege of being the exclusive U.S. provider of one of the most highly anticipated consumer electronics devices in years, and to deny rivals a chance to do the same. Considering the number of music-capable mobile phones now being sold, a wise move.
Not many companies will have the bargaining power to do the same, but it will be better for mobile providers if they can learn to do this on a wider scale. Some things have to be controlled, for technical reasons. Some things have to be controlled for user experience reasons. But not everything has to--or should be--controlled by the carrier.
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