In a business with true scale and scope economies, ownership of a global network can be a key advantage. Consider network support for the Amazon Kindle book readers, which now are sold internationally.
The U.S. version of the Kindle 2 has used the Sprint 3G network. But both international and U.S. versions will henceforth use the AT&T network globally. Existing U.S. Kindle owners will continue to use Sprint, but all new devices will be powered by the AT&T network.
Of course, there are other ebook readers. Barnes & Nobles sells the Nook, Sony sells the Daily Edition and Plastic Logic sells the Que. All of those readers use AT&T's network.
Verizon will provide service for the upcoming iRex e-reader.
The financial impact to Sprint might be a relatively minor issue. Sanford Bernstein analyst Craig Moffett estimates the Kindle will drive one million Kindle users a year to AT&T that Sprint would otherwise have gotten.
Moffett estimates that Sprint makes about $5 for each subscriber addition and $2 per every e-book downloaded onto Kindle over its networks, according to Business Week writer Olga Kharif.
The real issue is whether other upcoming devices and services have enough of a global angle, and enough sales volume, that providers such as Sprint are unable to compete in those new lines of business as well.
Saturday, October 24, 2009
Kindle Connections Now Go to AT&T
Labels:
apps,
att,
mobile broadband,
Sprint
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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