Are Handset Vendors Service Providers?

There used to be a clear division of labor in the mobile business. Handset vendors and device manufacturers focused on designing the best possible hardware, using specifications provided by the mobile network operators. More recently, software has emerged as a key differentiator. But the "service" was provided by the mobile operator.

But all that is changing. Handset vendors are trying to shift in the direction of providing an "experience" for their end users that necessarily has handsets providing some "services."

Think about Apple iTunes, App Store, MobileMe, iAd and FaceTime. All are services provided directly by Apple to end users, irrespective of network.

If you are thinking there is an inevitable shift of value and revenue towards the "over the top" services and apps delivered over broadband access services, you are right. That's what a loosely-coupled network, such as the Internet, implies. That is not to say fixed or mobile operators do not have a role in the value chain. They always will. The inevitable point, though, is that there is no reason why most of the newly-created value will remain in the "access" part of the ecosystem.

Mobile operators will have an easier time of this than fixed operators, but no access provider can hope to capture much more than a fraction of the new value and revenue created by application providers. That's what "layers" mean. Applications do not have to know much about the physical layer to "work." Nor will future application provider business models need to "know" much about the physical and lower layers of the software stack.

In the evolving ecosystem, even devices will become application providers.

Are Handset Vendors About to Become Service Providers? | VoIP SurvivorVoIP Survivor