More dispatches from the smartphone wars

Well, it was fun carrying the most advanced smartphone on the planet. For a whole 32 days. But the Sprint EVO 4G launched today and its specs – especially the larger OLED display and WiMAX capability – put the Nexus One in the shade.

The bigger story today, though, is the ripple effects of AT&T consigning its unlimited-data plans to the dustbin of history. Gizmodo’s take, AT&T Just Killed Unlimited Wireless Data (and Screwed Everybody in the Process), is pretty representative.

Because I understand how network costs scale I’m more sanguine about the longer-term prospects than Gizmodo is. Unlimited flat rate will return when someone – probably Sprint, given the nature of their network buildout – decides it’s a useful competitive weapon. That will force others to follow suit; the market-equilibrium condition will be all flat rate, same as it is in voice calling today and for exactly the same reasons.

In the short term, though, AT&T’s move kicks Apple square in the nuts. The simplicity of unlimited-flat-rate data was a significant part of the appeal of the iPhone and iPad; this change takes a significant part of the shine off both devices, especially the iPad. Understanding this, Apple has suspended Web-store sales of the iPad 3G. Indirectly, this is good news for Android and should help it maintain the upward momentum from Q1, in which it surpassed the iPhone in unit sales.

This also means the stakes for Steve Jobs’s talk at WWDC in three days have gone way, way up. The iPhone is reduced to #3 in unit sales; it’s lagging Android in features like Flash, voice-to-text, and WiFi-hotspot capability; developers are near revolt against murky app-store policies; and now it’s got higher total cost of ownership! The product looks stale and tired. Jobs needs to pull a rabbit out of his hat, and fast.

35 thoughts on “More dispatches from the smartphone wars

  1. You write so insightfully on every other topic that reading all this Android fanboy disinformation lately is almost physically painful.

    An example of what I mean: “Understanding this, Apple has suspended Web-store sales of the iPad 3G.” This is, as far as I can tell, completely untrue. I just put one in my cart, and it says it will ship in 7-10 business days, like every other iPad. The delay is just due to demand, same as the non-3G iPad.

    You used to be better than this.

  2. Hah! Your Nexus One is so yesterday! ;^)

    Of course, it beets my Moment, which I dropped yesterday and shatter the screen. Eh Gads! I’m back to using Palm!

  3. I actually prefer the new rate plan. I likely, on the average month, would use less than 2GB of data, so the $5/month cut saves me some money. I don’t have a smartphone now, but am probably going to get one within the next month — I’m waiting for better phones to be available subsidized on ATT. T-Mobile is just too spotty in my area coverage-wise, and Verizon is a full $15/month more than ATT. I want the phone primarily for email, SSH client, calendar, and occasional Google or Wikipedia search, and listening to music.

  4. ALmost everything in this post is factually wrong.

    Apple has suspended Web-store sales of the iPad 3G.

    No they haven’t.

    the market-equilibrium condition will be all flat rate, same as it is in voice calling today

    Voice plans are tiered.

    developers are near revolt against murky app-store policies

    Disquiet? Definitely. Near revolt? Hardly. This is basically wishful thinking. Many thousands of developers are still happily making many millions of dollars selling iPhone apps.

    now it’s got higher total cost of ownership!

    Huh? If I don’t expect to use much data, I can now get into a real smartphone for just $55/month, which is almost down into dumbphone territory, and far cheaper than the other options. Granted, monitoring data usage sucks, but for most people, this is a cost savings.

    Jobs needs to pull a rabbit out of his hat

    He often does.

  5. Without going fanboy on you, this is also a US centric view of a global market, in the UK we still have our unrestricted tariffs. I’m all keen to play with android but I’m not suffering from operator infrastructure panics over here… The US market is obviously still in play but in the UK we have the iPhone available on all networks and serious competition in giving data access.

  6. @esr:

    Apple has suspended Web-store sales of the iPad 3G.

    Fair is fair, this doesn’t seem to be true unless it lets you get all the way to requiring a login before telling you it can’t happen (picked the most expensive wifi+3g model). What is gone is the $30 unlimited data contracts, but you can still get the base device.

  7. (Not that i’m suggesting that this does anything more than add a redundant support beam to your argument. You could delete that entire sentence and not really damage the argument any)

  8. Having an unlimited plan doesn’t make the plans non-tiered. It makes the highest tier unlimited.

  9. I’m essentially predicting that market conditions will continue to push lower-and-lower all-you-can-eat plans. My prediction is that when prices settle in at about $40/month — and they’re already headed in that direction now — tiered voice plans will go the way of the dodo.

    ESR says: Yup. If only because VOIP clients will put brutal price pressure on the voice carriers.

  10. Sure, I wouldn’t bet against that prediction. But it’s still wrong and inaccurate to say that flat-rate voice is the prevailing market condition right now. On the topic of phones, ESR apparently doesn’t care at all about facts.

    ESR says: Don’t be trollish. When was the last time you paid extra for a long-distance voice call?

  11. @JF Sebastian: You know that video was probably inspired by Steve Jobs’ statement that if users want porn, they should buy an Android and probably by Ryan Tate’s now famous e-mail exchange with Steve Jobs?

    The funny thing is that it has often been said that the reason VHS won over Beta is that Sony refused to allow the porn industry to produce movies on Beta. Furthermore, that the porn industry ironically favored Blu-Ray over HD-DVD has been attributed to Blu-Ray’s victory. If those theories hold any water at all, then it spells even more gloom and doom for iPhone, which has refused to allow porn in the App Store along with Flash, which is being used by an increasing larger percentage of porn sites.

  12. The funny thing is that it has often been said that the reason VHS won over Beta is that Sony refused to allow the porn industry to produce movies on Beta.

    It has also been said that titles like Custer’s Revenge contributed to the videogame collapse of the early eighties and enabled Nintendo to clean house — and clean up the business — by imposing strict quality filters and a game approval process.

    To speculate about the failure of Apple’s business model without considering the enormous success that closed-down gaming platforms have enjoyed over the past 25 years is the height of folly. Consoles are a boon to end users because they require minimal setup and “just work”; they are a boon to developers because they offer minimal platform variation and additionally hinder piracy to the extent that turning a profit becomes feasible. Surprise: these are also advantages the iPhone and iPad have, making them perfectly positioned to do to the PC in other applications what consoles did to it in gaming: make it a niche player. (Android devices have some of these benefits; not all. For instance, platform fragmentation is a real problem and it’s probably more infuriating to developers than Apple’s Steve-Rubell-like capriciousness in approving apps.)

  13. Don’t be trollish. When was the last time you paid extra for a long-distance voice call?

    My voice is capped at 450 minutes; moreover, while I don’t have a landline, I know that my parents pay extra for long distance on AT&T’s voice-over-coax service. As for the strong words, I’d give you some benefit-of-the-doubt if you corrected the other factual errors in this post–especially those that are unambiguous and easily verified, like the alleged suspension of iPad sales.

  14. And if you made your WordPress stop eating dashes, for goddess’ sake.

  15. @Jeff Read: Sure. If you’re going to ignore the entire computing industry for at least the last 30 years which suggests that commodity hardware, stable, open and accessible application and device APIs, open standards and an open marketplace with many competing vendors win over closed, proprietary walled-garden solutions every time. Oh yeah, and pissing off your developer base is a surefire way to kill any platform. That, too.

    BTW–Apple fanboys really should drop the ‘it just works’ meme because it really, really makes you guys look silly. Maybe I’ll blog about that.

  16. Morgan, in my experience the Apple stuff does Just Work, straight out of the box. No fiddling required. Now, if others have achieved that, that’s great – but it doesn’t mean that Apple stuff doesn’t still Just Work.

  17. Sure. If you’re going to ignore the entire computing industry for at least the last 30 years which suggests that commodity hardware, stable, open and accessible application and device APIs, open standards and an open marketplace with many competing vendors win over closed, proprietary walled-garden solutions every time.

    These things matter to nerds, and they matter to business IT managers.

    They do not matter to the end user.

    What you say is true in the general case, but when it comes to exclusively end-user-oriented devices, if you can constrain more variables — like the types of hardware and software that developers for your platform will interact with — the better the end user’s experience will be, and the more positively they will think of your device. The only way I’ve seen to do this effectively is with a tightly controlled market.

    Oh yeah, and pissing off your developer base is a surefire way to kill any platform. That, too.

    A few loud, butthurt bloggers do not constitute the entirety of the iPhone developer base. They’re not even a representative sample.

    Look at the sheer size difference between the App Store and the Android Market. The Apple platform has been enormously successful in attracting more developers than its competition.

  18. @Jay: I’m not intended to to imply that stuff doesn’t “just work.” But “just works” on a computer system is still somewhat of a misnomer because “just works” only works in very specific cases.

    In the open source community, it’s become somewhat en vogue to make software that “just works” and doesn’t require any configuration. In the other thread, I pointed that SANE, for example, will auto-detect what scanner you’re using and attempt to communicate with it. Most Linux distros are using things like hal and dbus to automatically detect and configure printers and lots of other devices.

    There’s nothing wrong with this until something new comes along that breaks the standard way of doing things. Or user wants to do something that doesn’t fit in the standard box. “Just works” is simply deceptive because it implies that configuration should be automatic. And it may work in 99% of cases. It’s the 1% where it doesn’t work that causes people headaches.

    Zeroconf is a really good example of this. Zeroconf “just works” until you want to do something fancy or use some networked application that doesn’t support it. Major implementations include Bonjour on the Mac and avahi on Linux. Many sysadmins wind up turning zeroconf off on servers for both security as well as for various practical reasons.

  19. In the open source community, it’s become somewhat en vogue to make software that “just works” and doesn’t require any configuration. In the other thread, I pointed that SANE, for example, will auto-detect what scanner you’re using and attempt to communicate with it. Most Linux distros are using things like hal and dbus to automatically detect and configure printers and lots of other devices.

    There’s nothing wrong with this until something new comes along that breaks the standard way of doing things. Or user wants to do something that doesn’t fit in the standard box. “Just works” is simply deceptive because it implies that configuration should be automatic. And it may work in 99% of cases. It’s the 1% where it doesn’t work that causes people headaches.

    That’s only a problem in a completely open marketplace. :) Again, if you constrain these variables and restrict the space of devices or software components that talk to you, you end up with known quantities and hence a product that “just works” 100% of the time, no deception involved. That’s Apple’s goal, and if you want to make an omelette you have to break a few eggs.

    There’s a reason why Apple has taken this approach, and it’s not because Steve Jobs is an asshole, or rather, not just because Steve Jobs is an asshole. :)

    And Apple isn’t the only company that does this, and this isn’t the only industry where it happens. If you buy certain types of diesel engine, you have to tell the manufacturer what you intend to use it for, and the manufacturer reserves the right to approve your application and refuse to sell you the engine if it doesn’t. (There are safety and environmental hazards in play here, especially for marine applications, which the engine manufacturers don’t want to be liable for…)

  20. They do not matter to the end user.

    @ Jeff Read: Not directly. But constraining the types of hardware and software simply isn’t necessary if your hardware and software are written to support open standards, open APIs and open source. Look, Jeff, in the end even Apple itself conceded this point in the PC marketplace. An Intel-based Macintosh is nothing more (and nothing less) than an industry-standard PC running the same cheap commodity hardware that Dell, HP/Compaq, Lenovo and everyone else are building PCs with. Commodity PC hardware won, whether you want to admit it or not.

    The only way I’ve seen to do this effectively is with a tightly controlled market.

    The free market always prevails; the freer, the better. I would have thought that with the fall of the USSR and the westernization of even China’s economy this would have been obvious. Guess not.

  21. Look, Jeff, in the end even Apple itself conceded this point in the PC marketplace.

    And I never denied it was true — in the PC marketplace. But that’s not what the whole spectrum of computing devices looks like; and I cited a specific example — gaming — where the PC laws don’t apply. The smartphone and internet tablet space looks a lot more like gaming than it does like the PC.

    The free market always prevails; the freer, the better. I would have thought that with the fall of the USSR and the westernization of even China’s economy this would have been obvious. Guess not.

    You’re awfully close to running afoul of Godwin’s Law. Participants in the Soviet economy were barred from having any choice in the matter whatsoever. No one’s taking away your free market. There are other, more open smartphone platforms including Android. But Android isn’t attracting the developer mindshare that Apple is.

    The analogy that I like to use is Studio 54 during the disco days. Steve Rubell would come out and personally admit or reject partygoers according to arbitrary and capricious criteria subject to nothing besides his personal tastes. If you bitched about not getting in, there were plenty of other NYC hangout spots that would welcome you with open arms. Yet Studio 54 was still the coolest hangout spot and it was cool because of, not in spite of, Rubell’s capricious selections.

  22. I see your wifi sharing, raise with a 640×960 screen and video conferencing.

  23. [blockquote]The analogy that I like to use is Studio 54 during the disco days.[/blockquote]

    A more apt analogy than you would probably care to admit.

  24. A more apt analogy than you would probably care to admit.

    Har har har. Why do you think I chose it? I’m not some RDF-blinded fanboy; I’m well aware at the high levels of douchiness that pervade the Apple ecosystem. And to be honest, I want the free and open solutions to win.

    But the sobering reality of my fifteen years as an open-source enthusiast has been that we can’t make our products easy and appealing enough to those who just don’t give a shit about software freedom to win them over. And that’s Apple’s core competency.

  25. @Jeff Read

    But that’s not what the whole spectrum of computing devices looks like; and I cited a specific example — gaming — where the PC laws don’t apply.

    It’s not that they don’t apply — far from it. Today’s video game consoles are very much like PCs, built from commodity hardware.

    But the sobering reality of my fifteen years as an open-source enthusiast has been that we can’t make our products easy and appealing enough to those who just don’t give a shit about software freedom to win them over.

    Sure we can. I can give you a list of major products right now that are widely used by people who “don’t give a shit about software freedom.”

    - Mozilla Firefox
    - Audacity
    - OpenOffice.org
    - MySQL
    - Apache
    - Linux

    That’s to name a few, without counting more plumbing-oriented stuff like development tools, languages, libraries, etc. (In fact, in libraries and development tools, open source is so pervasive most people aren’t even aware they’re using it.)

    Why did I include Linux on that list? Well, let’s see: every Android, WebOS and Maemo phone runs Linux, Linux is still embedded in lots and lots of networking devices like NAS devices, routers and print servers, Digital Video Recorders, settop boxes, etc. In fact, it could be said that open source basically owns embedded computing.

  26. The free market always prevails; the freer, the better.

    OK, but selling something proprietary in a free market isn’t a violation of the free market. Is it really the ideal to have a world of generic, indistinguishable products?

    Today’s video game consoles are very much like PCs, built from commodity hardware.

    But isn’t developing for them so proprietary and restrictive that they make the App Store look like Linux project?

  27. The free market always prevails; the freer, the better.

    It’s oftentimes desirable to isolate something from free-market forces. Consider what’s happened to journalism: honest, independent journalism is virtually a lost art. The only media outlets conducting it in the television realm are the BBC and Al-Jazeera, and they have been isolated from market forces: the former by the British TV tax, the latter by being backed by a rich sheik.

    Meanwhile, the players in the free-market news spectrum, having to resort to ever more desperate measures to hold viewer attention in a world of round-the-clock news coverage, are deploying disgusting tactics like this

  28. Why would you put the phrase “honest, independent journalism” in the same sentence as the initials BBC or the name Al-Jazeera without some kind of limiting or negative qualifier?

    Yours,
    Tom

  29. BBC and Al-Jazeera may have their own biases, but they aren’t the same biases as CNN or Fox News and, therefore, provide news from a more independent viewpoint than any of what passes for television news in the United States.

    Personally, I get most of my news these days from the Internet.

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