Jan 142009

I do really like my Palm Treo (700p). It does almost everything I want, although not necessarily as well as later devices do. The web browser, for instance, can’t view pages without heavily adapting them, and I can’t see attachments or Flash. (Note to restaurateurs who insist on building their websites with Flash: hungry people out and about will not go to your restaurant unless you provide a text-based alternative they can see on their phones.) It also, as I long ago lamented, doesn’t have WiFi, which, after my recent trip to London where I had the use of a phone that did, is a conspicuous oversight.

But it does have certain advantages over other, even newer devices. The PalmOS, which has an API others can develop for, is a nice non-Microsoft alternative. The phone I recently got to use in the UK provided my first experience with Windows Mobile, and while it wasn’t awful, it wasn’t as smooth. I can pretty much drive my Treo without the stylus, but even with relatively small fingers that wasn’t always possible on this other phone. Also, unlike an iPhone, Palm supports cut and paste, and it, too, offers a fairly elegant and hardy hardware design not overly encumbered with extraneous buttons that can fail.

But nice as the Treos are, they are getting long in the tooth and iPhones and Androids and Blackberries are saturating the market Palm had once pioneered. The company is in desperate need to make a possibly last stand with a new product that is everything the old Palms were and more, and, by many accounts, the Pre is unveiled at CES this month may just be that.
But its launch announcement declares it to be tied to Sprint, whom is not at present my carrier in either the US or UK, and thus, despite the phone appearing to technically sate all my cell phone needs, it won’t. And were it to hit the market right now, I would likely not be a customer.

There is something very wrong with the cell phone industry when building better products won’t guarantee you business. While it may be true that if you build a better mousetrap the world will beat a path to your door, it will not be true if it is locked to a single exterminating service. For the sake of the cell phone industry and consumers, this situation needs to change.

As already discussed, Palm is in desperate straits. But it’s not the only such company. Motorola is threatening to lay off much of its cell phone division, a terrible tumble for a manufacturer that has produced some popular phones. Meanwhile, others are noting that Nokia, a cell phone forerunner, may be all but locked out of the American smart phone market. All the carriers, you see, all have exclusive deals with a smart phone manufacturer who got to them first: AT&T for the iPhone, T-Mobile for the Android, Sprint for the Pre, and apparently Verizon is sewn up by RIM. (Although I wonder to what extent that’s really true — my 700p after all was a Verizon phone, and only lesser Treo models were available with other carriers).
In theory, what’s bad for the manufacturers may at first seem good for the carriers. After all, if AT&T is the only game in town for the iPhone, and people really want an iPhone, they’ll have to be AT&T customers and prisoner to AT&T rates. Which might be good for AT&T to the extent customers want iPhones, but not if customers want Pre’s instead. AT&T will have to gaze longingly at the customers heading over to the Sprint shop in order to use that phone. Given the market share of the iPhone, AT&T might not care. But the other carriers will need to care, as they potentially lose customers to their competitors simply because they can’t provide the handsets they want. And consumers will need to care, because they can either shop around for the device they want or the carrier they want, but not both — at least not without incurring great cost in contract termination fees and/or devices purchases.

The counter-argument is that customers can still buy devices more cheaply due to this arrangement because they are subsidized by the carrier. Buying a phone straight from the manufacturer is always much more expensive than buying it from a carrier. But such subsidies are hardly dependent on exclusivity between carrier and manufacturer — any carrier could offer a deal to subsidize a phone in exchange for a two year contract. And any consumer might find that a deal worth taking. But right now that’s not the deal they’re getting, for once the contract ends the phones are still locked, meaning that they are bound to the carrier not for one or two years but the very life of the phone.

Meanwhile, people like me have another problem: I travel abroad, and my US phone won’t work over there. Well, it might. The complicating factor in this discussion is that Verizon and Sprint both use CDMA networks, which are not compatible with the GSM networks of AT&T, T-Mobile, and most of the rest of the world. But engineering multiple bands into phones seems like a solvable problem, just one that needn’t be attempted as long as the phones are stuck with but one carrier.
And even so, network compatibility hardly seems an operative factor. Many US phones can connect to European networks thanks to the international roaming agreements struck by the home carrier, but except for the advantage of ensuring that the American phone number stays operational, the roaming rates are normally much more expensive than a local plan would offer. It would therefore be much better if, when abroad, the SIM (or embedded software) could be swapped for something local, but, alas, with locked phones that cannot happen. (You cannot even swap a SIM from a T-Mobile US phone into a T-Mobile UK phone.)

Instead people have to own multiple devices, which, in the case of smart phones, unless you are Stephen Fry, is particularly absurd. Smart phones offer the ability to support one’s entire life, to potentially supplant the entire need for a laptop, and provide a full suite of information infrastructure to the user. Their advantage is that one device can do everything, so the idea that you’d need to own two very expensive such products is insane.

Ah, but then you’d need to buy two! And wouldn’t that make the manufacturers happy? Hardly, because once a user has invested so heavily in one manufacturer’s products they’ll be a lot less likely to come back to another’s. Suddenly if you are a manufacturer the landscape just got much less competitive. All those incompatible cables? Accoutrements? Desktop software? Beware the network effects…

No, locking phones may seem like an easy win for certain carriers and manufacturers but in the end it is a disaster for all involved: for the hardware manufacturers, for the carriers, and definitely for consumers. They should be able to buy the right device for their life, shop around for the right carrier offering the right price, and be able to do so again and again in whatever market they want to. One life, one phone — that’s the point of a smart phone.

Of course it would also be nice if there were more affordable roaming agreements to supplant the need to keep swapping out SIMs, but there’s no market pressure to cause that because the rest of the cell phone market is so broken. In fact, it should hardly be called a market because what it really reflects is monopoly. Tying a phone to a carrier, and prohibiting it to be unlocked through force of law, does not a free market make.

Everyone would be better off without those prohibitions. Carriers could still negotiate for discounts and subsidies to make the consumer want to do business with them, and manufacturers could be free to develop a product that could appeal to the larger market. Then they could finally get to build the better mousetrap and see the world finally beat a path to their door.

Update 1/16/09: As if reading my mind, the EFF has launched FreeYourPhone.org, a petition drive so that the US Copyright Office will allow for “jailbreaking” one’s phone.

 Posted by at 10:03 am

  2 Responses to “Calling for better mousetraps”

  1. Windows Mobile is a truly dreadful experience: be thankful your exposure was limited. The G1 is good, bar the catastrophic battery life, but it needs more devices.
    From what I have seen the new Treo Pre looks most impressive. Hang on for 6 months before swapping & use a burner in the meantime.

  2. I’m a bit concerned my Treo will die before the Pre emerges, but the larger problems are that it won’t work with my current carrier, whom I think I’d like to keep, and also won’t be GSM-capable.
    The US cell phone terrain is messier than that of the UK, I think, because of the various non-GSM network technologies. But locking messes up all cell phone markets everywhere.

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