Two More Dirty Little Secrets About the Phone Business

By  |  Monday, August 23, 2010 at 2:08 pm

The Dirty Little Secret About Google Android.” That’s the provocative title of a TechRepublic post today by my friend Jason Hiner. Jason points out, correctly, that for all Google’s talk of openness, Android hasn’t done much to open up the experience of buying and using a wireless phone. In nearly all cases, you’re buying an Android phone that’s tied to a particular carrier–and oftentimes one that the carrier has preloaded with so-so applications, crippled by removing the ability to install unauthorized apps, or otherwise made worse, not better, than a phone with a virgin install of the operating system.

Android, in other words, mostly seems “open” to whatever decisions hardware manufacturers and carriers want to make. Sometimes for better, sometimes for worse.

But even if Google used the OS as a battering ram to smash current assumptions about the phone industry, there are plenty of other Dirty Little Secrets standing in the way of an era in which we can all buy cool, crud-free phones from any manufacturer we like and use them with the carrier of our choice.
Such as these two:

Dirty Little Secret #2: Our addiction to cheap phones. Americans like to pay $199 (or sometimes much less or nothing at all) for phones which are increasingly sophisticated consumer-electronics devices. So we buy our phones from carriers rather than manufacturers and agree to long-term contracts in return for a price break. That puts the carrier in control in a way that would never be the case if we bought phones the way we buy PCs.

Dirty Little Secret #3: Other than Apple, I’m not sure if any there’s any phone maker whose untampered-with work would be a masterpiece. The existence of the iPhone proves that it’s possible to buy a subsidized phone that’s (mostly) unsullied by bad ideas forced upon it by a carrier. But it may be a unique situation.¬†With the Nexus One, Google got the chance to do an Android device its own way. It designed a good phone, but not one that’s transcendently better than the best Android handsets that carriers have a say in. And Android, for all the things that are right with it, is still rife with usability issues you can’t blame on anybody but Google. Basically, most platforms other than the iPhone’s iOS (and maybe HP’s WebOS) have more severe problems than carrier interference.

I could go on, but do you have any other Dirty Little Secrets to add to the list?

 
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15 Comments For This Post

  1. David Says:

    In other words, they talked a good game. For an open phone, Android appears to be no better than the iPhone. You:

    1) Pay the same
    2) Get the carriers name on the phone
    3) Don't get all the features
    3) Pay for the extra features you do get
    4) Get Carrier-ware you *easily* uninstall
    5) Have the vendors summon the lawyers if you try to upgrade the phone.

    That's open?

  2. cfleury Says:

    The iPhone is not a "Masterpeice". It's a good phone with lots of restrictions and limitations and is "hobbled" by Apple itself, in terms of their control over the apps you can install, among other things.

  3. Harry McCracken Says:

    Good point that Apple hobbles the iPhone in some ways. (I wrote about one earlier today–the company's refusal to approve Google Voice.)

    I do think, however, that the basic iPhone user interface is a work of wonder–one of the most important things ever invented in the whole world of personal technology products. If it's not a masterpiece, it's ways closer to being one than anything else, with the possible exception of WebOS.

    –Harry

  4. Christopher Bailey Says:

    well, I think the "crapware" is kinda a necessary evil. the phone market is no different than the PC market, we complain about distributors doing the same thing as the carriers but thats how we get better prices and since it can be removed (maybe not easily) I'm ok with it

  5. @thekylekramer Says:

    The problem with Dirty Secret #1 is Apple has not done nothing to help customers get free from the carrier. The power they took was for them, not customers. Sure, the iPhone ships without any AT&T logos, but that is only really good for them and fanboys who go gaga for Ives' design. Apple still defers to AT&T on a lot of things. Google Voice? You'd be lying if that was not AT&T's handiwork. Facetime over WiFi only? Yeah. And their unsubsidized plan worked just as well as the Nexus One. Android doesn't give back the power to the carriers, cause the carriers always had the power. Dirty Secret #2 is the real dirty secret. The carrier will always have the power as long as we want cheap phones. So, basically, forever.

    As for #3, I'd disagree, but that is just personal opinion.

  6. thepeng Says:

    There is a difference between open source software and open source business… Crapware you say? In fifteen minutes I stripped my android phone of everything I didn't want, and customized it to include everything I do. Just because the average user is too stupid or lazy to flash a new rom or learn some basic unix commands doesn't mean the ability isn't there. The operating system source code is available to take and edit(albeit without proprietary google apps which can just be reinstalled after). It doesn't get more open than that.

  7. Hamranhansenhansen Says:

    > The carrier will always have the power as long as we want cheap
    > phones. So, basically, forever.

    No. If you have 2 or more open carriers, even if you have subsidies, the other carriers can buy out your contract.

    So, for example, you could buy an iPhone locked to Carrier A for $199 with $80/month bill, with a $375 cancellation fee that doesn't go away until you pay that $375, either all at once, or over time as you finish the contract. Then, 3 months later, Carrier B offers you a $50/month bill with better services, and instead of subsidizing your iPhone purchase, they simply pay your $375 buyout to AT&T, and give you a new SIM and now your same iPhone is on the second carrier, and you're paying $50/month, and your $375 cancellation fee is now owed to the second carrier.

    The subsidy is just accounting. It's just a deferred payment. It's like a credit card is all. In the same way you can move your balance from a VISA to a MasterCard, you can move your balance from one carrier to another. Carriers don't care if the $375 subsidy pays $375 to Apple to make an iPhone into a $199 device, or $375 to another carrier to pay off your cancellation fee. They are just loaning you $375 that you pay off month-to-month on your phone bill.

    The key is the phones have to be open standard SIM phones so the user and their phone can switch wholesale to a new carrier at any time by replacing the SIM in their handset. The closed, proprietary Verizon and Sprint phones are what keeps the US carrier market structured as overlapping monopolies instead of competition, because you have to get a new phone to switch, and often the selection of phones is different, because Verizon and Sprint only sell their house phones. That is where their power comes from. Droid X runs only on Verizon no matter what. EVO runs only on Sprint no matter what.

  8. David Says:

    No one is smart or robust because they have enough time on their hands to root a phone. A surgeon is nether lazy nor stupid. He or she just has better things to do with their time than screwing around with a phone. I'd rather my lawyer spend his time knowing the law, my financial guy watching my finances. Heck, I'd rather spend time learning better programming techniques or some useful framework. Rooting a *phone* doesn't put an extra dime in my pocket.

    I think people who don't fix their own tranmission in their cars, drill their own teeth, wire their own electrical system in their homes(or their own plumbing) are lazy. What? Can't build a deck? Stupid and lazy. Can't design a CPU? Stupid and lazy. Can't…blow glass, mix concrete, stupid and lazy.

    That's why the iPhone is popular. It gives all the flexibility, power and usability without the need to spend time learning 30+ year old command line commands to remove stuff on a phone that no one wanted anyway. I believe that Google is selling people a huge bill of goods. Android isn't open. That's why Motorola issued cease and desist orders to stop upgrades. Open so carriers can do what they will isn't open.

  9. Reece Tarbert Says:

    > In nearly all cases, you’re buying an Android phone that’s tied to a particular carrier–and
    > oftentimes one that the carrier has preloaded with so-so applications, crippled by removing the
    > ability to install unauthorized apps.

    Maybe in the US, but this isn't the case here in Europe — as long as you're willing to pay full retail, of course. For instance I could either get an HTC Desire unlocked, pop in my SIM card and be up and running, or buy into an offer from some of the carriers offering it (e.g., any).

    In other words, exclusives are mostly unheard of over here and this started with… why, the iPhone of course! ;-)

    RT.

  10. Ryan Patterson Says:

    Your secrete #2 is totally wrong (at least for me). I would gladly pay full price for my phone and not sign a contract. But then I would expect to pay less for my monthly service (because I shouldn’t have to repay the non-existent subsidy). But no carriers offer service like that (maybe tmobile but they don’t offer service in my state).

    If you pay full price for a phone and full price for the service you are getting screwed. So I choose to buy a subsidized phone because it is the most attractive option available.

  11. DarkHorseMBA Says:

    Here's a dirty little secret that has bugged me for years!

    We (consumers) buy a phone, an iPhone in this example, the contract free price is $599, so we opt for the contact price of $199, and carrier claims to make up the difference over the 2 year contract, not to mention the profit from billing calls and data. Then comes the rip off…

    2 Years are up yet we still pay the same voice/data rates as if we were under contract even though we now “own” our phones.

    I recently though I’d just bite the bullet and pay full price for my phone $599, and be free of a contract, but guess what I don’t get any better service price (voice/data) than the next guy that paid $199, BUT I can change carriers at any time, but to who? iPhones are locked to ATT.

    Seems like only a fool would pay $599 for a contract free phone.

    P.S.
    I’m not a jail breaker I have no time to keep up with the jailbreak cat and mouse game.

    DarkHorseMBA

  12. thepeng Says:

    rooting takes less time than typing your post. I have no idea how you managed to infer that I was calling people who hire electricians to wire their house lazy. It still doesn't negate my point anyways, which was this: just because it's not readily accessible doesn't mean it's not there.

  13. David Says:

    Rooting took you 15mins. You possess some knowledge that others don't have and frankly, probably don't need. That doesn't make them lazy or stupid. Conversely, it doesn't make your vigorous or smart.

    Just because you have the time or inclination to learn to root your phone doesn't mean that others have the time or the inclination.

    Perhaps you are lazy and stupid because you cannot change a transmission or set a bone.

  14. David Says:

    BTW, I have been writing software for ever 15 years. I majored in Computer Science and have years of experience with various Unix flavors and Windows. I have coded in C and C++(straight gcc and Visual), java, C#, various scripting languages, and have worked on a variety of RDBMS. I'm a technology expert by any reasonable definition and get paid as such. I've got 6 physical PCs running VMWare with a variety of systems.

    And I still don't jailbreak my iPhone or iPad. Could I? No doubt. It doesn't make any one lazy or stupid if they don't take the time to learn to root their phone. It is more likely that they have better things to do with their time. Far too often, tech guys use terms like "joe sixpack" because they have some amount of technical knowledge all the while ignoring the things they *don't* know. A good car mechanic can rebuild an engine. Can you? If not, that must make you lazy or stupid.

  15. swd Says:

    Hamranhansenhansen,
    very well written, but you must include iPhone as a "house" phone in the US.
    Apple does not share it iOS to other phones.