This has been bugging me for years.
I watched a documentary a few weeks ago. The documentary was about the birth of the mobile telecommunications. It correctly attributed the birth of one of the earliest networks as such as MTS, a US technology, developed by Bell. It went downhill from there. From the 40s into the 50s into the 60s into the 70s into the 80s and 90s.
The only companies you’d see interviewed above single lines were AT&T and Motorola. The revolutionary NMT system was skipped over as an aside in two sentences. There were about 40 seconds in the entire documentary about how japanese phones were different - not better, just different - than US phones.
I’d like to introduce the Waffle Scale of Mobile Phone Cluelessness to explain this phenomenon. You see, Asia - Japan and South Korea in particular - has the most clue of all. Then comes Europe - Scandinavia, the UK, Germany and France in particular. Rank bottom come the US. Sometimes, the places shuffle a small bit, but no more than temporarily.
Asia has always been at the leading edge, getting flip mobile phones with color displays into everyone’s hands at a time when we the rest of us were cheering for another one-bit line in our screen, and providing internet services (or something resembling them) ahead of WAP. Europe has had a bunch of good manufacturers (Nokia, Sony Ericsson, Siemens), a hand in the defining standards (like NMT, or the same GSM standard that introduced SMS, the standard behind ‘texting’) and above all healthy competition when it comes to network operators.
The US, however… I’m not sure I can say this nicely. In a country divided into 50 states, you decided to not go for operator coverage across the entire country or across the entire state, but in distinct cities. Your only mobile phone manufacturer worth mentioning is Motorola, a two-hit pony (StarTAC and Razr) with a history of distinctly useless phones.
This is not anti-americanism. I am not anti-american (though I’m scared at times at how isolated some of you are). No, there’s an important lesson to learn: mobile phones have failed in the US until just recently. You’re still miles after the rest of the world on most planes. Motorola is not all that and a bag of chips.
This is how I dare feel confident in laughing my ass off at some people’s startling lack of mobile phone industry suave - like the 900 analysts (armchair and regular asshole flavor) telling me $500 is too much for a smartphone. $500 may be a lot in the american market due to the insane bonding between operators and phones - which, don’t get me wrong, the rest of the world gets too, but sees as completely obnoxious even in smaller doses - that stops people from getting what they want. But while the big country in the west was having fun just discovering SMS, the rest of the world was selling smartphones - and higher-end regular mobile phones, I might add - for fees approaching $1000 to people who were already having sensible contracts. And they sold.
In fact, people who don’t bind their mobile phones up to contracts still buy their phones separately. If anything, $500 is where it starts for smartphones. The by far best selling mobile phone (and in my opinion one of the genuinely best phones ever) a few years back was Sony Ericsson’s brilliant T610. In Sweden, it sold for around $400, and it was worth it, and everyone knew that.
(I am sure this whole post will earn me the ire of a few rabid US nationalists - as if I was pointing out that if you name your national league of a sport the “world series” of something, you’re an asshole - but so be it. I am not trying to poke my US readers in the eyes, just describe how the world looks. If you’re upset, please untie the stars and stripes from your chest, sit down and assess reality for a second.)
So true. The lack of innovation on the part of US carriers and their ability to use phones that exist in other parts of the world has always astounded me. In the late 90s, all I could hope for was a phone with a larger screen. It didn’t even have to be color.
In thinking about the lack of motivation on the part of US carriers to diversify, compete and attempt to attract new customers, I think the primary confounding factor that most other countries do not have is geography. The US is big, and it costs a lot to build out cell sites that cover, at best, a few square miles. (Is that right?)
Let’s not mention that adding 2.5G and then realizing that was dumb because they should have gone straight to 3G. Doh.
They (the carriers) lack vision. They lack vision because they found an artificial barrier they could erect in the marketplace to ward off the competition: contracts. Contracts dilute competition and give us the tepid market that we have today.
Do US carriers want VoIP-WiFi-Cell spanning on their networks? Hell no. Do they want to offer high-bandwidth services? No way.
The most egregious is the 15 cents for a text message. A text message consists of 160 characters. That equates to $0.94/KB! But many forget, it costs 15 cents to send and another 15 cents to receive a message, so in reality, a single message costs $0.30 (split between you and the receiver). So a carrier is making nearly $2/KB in text messages. Progressive? Hardly.
By http://kyle.rove.myopenid.com/ · 2007.05.27 14:30
You’re right about area being a big issue. But guess what? The population density of Sweden is 20 people per km². The US’s number is 31 people per km². The US is populated to a higher density, yet has way worse coverage than Sweden. (The Swedish coverage is generally given as around 99.95% of the population and above 95% of the area.) And then the carriers are wondering why their customer base is so piddly.
Get expanding, now! People who buy a mobile phone want to be able to be reached anywhere they go, not just in Big City A, B and F. That’s half the point of mobile communication. Expanding to really cover an entire state isn’t so you’ll be able to reach 40,000 more people - it’s so the rest of your customers can go there and still spend money with you! They won’t stop going there, they’ll just switch to another carrier.
By Jesper · 2007.05.27 14:45
I am stunned by your observation that it costs money to receive an SMS message. Jesus. You’re even further back in the stone age than I thought.
By Jesper · 2007.05.27 14:57
Let’s not forget that $500 is the US price, and Apple typically charges more in other countries, so only the US market matters to the $500 price’s level of fairness. We don’t know yet how fair the price from Apple Japan or Apple Europe will be.
By Peter Hosey · 2007.05.27 17:17
Sure, but right now the dollar sucks. I have a feeling the price will be fair regardless, or at least actually land in the range of other smartphones.
By Jesper · 2007.05.27 17:21
Apple doesn’t charge more. Import taxes (VAT) in other countries, like France, hike the price 20% above what we pay in the US. Plus, as you mentioned the dollar sucks right now. Apple isn’t trying to make extra profit off of non-US sales, they just don’t want them to dilute their gross margins, so they charge what they must in order to maintain 25-30% margin.
When AT&T Wireless was around (AT&T wireless begat Cingular begat AT&T), receiving text messages didn’t cost anything, and sending was only 10 cents. Once Cingular came to be, 10 cents for sending and receiving. Then about 6 months ago all US wireless carriers raised their text messaging to 15 cents to send a receive.
Rip. Off.
By http://kyle.rove.myopenid.com/ · 2007.05.27 18:48
Swedish VAT: 25%. Swedish MacBook price: 9995 SEK. Swedish MacBook price minus VAT: 7996 SEK. 7996 SEK = 1168 USD. US MacBook price: 1099 USD.
There’s still a premium, but they have made it much smaller since I last checked a few years back. 6%. I should add that I don’t have an enormous problem with some of this. In the MacBook example, the swedish/finnish-specific keyboard keys (we have the same layout) cost money to make and can’t operate on the same economics of scale as the rest of the machine, not to mention the swedish documentation included. I just don’t think it costs them an extra 6%.
By Jesper · 2007.05.27 19:10
Import duty (importtull)? I tried understanding Tullverket’s site, but my eyes glazed over. 6% sounds about right, though. Of course, the Swedish price won’t be updated to follow the exchange rate on a daily basis.
By Ahruman · 2007.05.28 13:13
That could be it and had passed me by completely.
By Jesper · 2007.05.28 18:07