Stefan over at IntoMobile has a very interesting post on what is ahead for phones/carriers as new phones begin casting nets into the net and begin to pull in more and more content from the net. His view seems to be at odds with what I see: this is an amazing time to be alive and into tech.
His view
Stefan sees the manufactures of devices calling the shots, picking platforms, picking the spec and building the phone to it. The problem here is the manufacturers are usually not the ones figuring out how to charge for it all. Carriers have trained consumers to expect it for free - a very hard habit to break. Their “unlimited” plans, Stefan would contend, are short-sighted and will make it tough to add on features that otherwise customers would want to pay for.
In the new world services are built for virality and terms like monetization are on the bottom of the todo list. This new way of thinking is not being fully embraced by the old rulers in their respective kingdoms, but more importantly it is causing the people to become accustomed to everything being free or supplemented by advertising.
His post heads down a road that seems to suggest the manufacturers and carriers will become victims of their own success and the endgame will be devices neither can control, thanks to the web. And at that point “…the money will not start flowing as quickly as anyone hoped and panic will set in.” These funds, Blackberry Fund, iFund, Android, etc have signaled a shift in power from the carrier to the manufacturer and carriers will quickly become yes-men, agreeing to give the customer (and manufacturer) anything they desire. A gloomy outlook, for sure.
But I disagree, I believe we are seeing something else. The iPhone is showing us people are willing to pay for applications, music, movies, anything that breathes more life into the device. Heck, I even bought the applications for my iPod touch, rationalizing the $20 fee as an “upgrade” to the current device. Apple has cleverly found a system that allows consumers to pick and choose the functionality they desire.
Can you imagine Apple selling a blank iphone for $50? For $50 you can download the ipod app. For another $50, you can download Safari and make it a MID (mobile internet device). For another $50 you can get the GPS app or the you-get-the-idea app. Or you can drop the original $50 and let it just be a phone. You decide and you build it to your spec. All the while, you are training customers that if you wanted added functionality, it will cost you.
blackberry takes another route, we’ll build something and you’ll pay for it because it is a quality service. It works every time and works extremely well. And we’ll charge you for it every time. To me this is the old route, the game carriers have played and thanks to competition have whittled down their monthly charges and quality of service to compete with one another. I am sure they know something I don’t but I see this as headed down a path that gets tougher and tougher to turn into black ink.
So the elephant in the room is Android. Open and free as the day is long. Will it mean trouble for the iPhone model where each addition won’t add cost? How do you monetize free and open? Who collects it?
Stefan and I agree, we hold no answers to these questions and know for sure that the mobile industry will look radically different in 3 years. As we scoop more and more from the net and into our phones, I say it is amazing to witness. What is your say?
Read [IntoMobile]
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