Tuesday, January 11, 2011

Why Verizon’s iPhone spells the end of the golden age for carriers | VentureBeat

Some argue the Verizon iPhone points the way to the carriers’future: They’ll be no more than dumb pipes for smartphones. Agree or disagree, favor or not, there are lots of important implications. A "dumb pipes" business would have to be smaller. Precisely how much smaller is hard to say.

The implications for quality, ability to invest, customer service and other important issues are hard to fathom. But some observers think consumers and businesses would be better served by "dumb pipe" providers. Much would depend on the unstated qualifiers. Does "dumb pipe" presuppose "low margin," "low gross revenue" or "commodity services"?

Or, if you like, consider a different future, where "dumb pipes" also come with the adjectives "high gross revenue, high margin, high profit." Would "dumb pipe" still be so attractive? Or is the real issue something other than whether the pipe is "intelligent" or "transparent?"

2 comments:

Dan Young said...

The term "dumb pipe" has been very damaging to the industry and really hasn't done much to encourage innovation in smarter connectivity services.

I don't think there is anything wrong with being a plumber, if you have a cool toolbox:

http://wp.me/pLN1x-52

Dan

Gary Kim said...

Agree with you, with the caveat that some "transparent" access services can coexist with value-added apps.

But limiting providers to "transparent" access only does limit the ability to create new services. Some people seem to want that: "creativity and revenue for me; not for thee."

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