Alternate Title: Carrier Exclusivity Still Sucks.
For the purposes of this article, let’s assume the reports are correct and Verizon gets the iPhone in “early 2011” (i.e. late January or early February). Several things will happen immediately. First, a death knell will sound for AT&T. Perhaps that’s a bit too melodramatic; the company isn’t going anywhere just because it’s no longer the exclusive carrier of the iPhone, but its subscriber growth for 2011 will shudder to a halt. Many of the “switchers” who ditched Verizon to get an iPhone will switch back. (That’s not just my disdain for AT&T’s wireless department speaking; Credit Suisse estimates 1.4 million AT&T iPhone users will jump ship in 2011 if the iPhone is released for Verizon in mid-February). Second, Verizon’s subscriber base will swell for all of the reasons AT&T’s will not. Third, Verizon will stop attacking the iPhone. In fact, we’ve already seen this happen with the Droid campaign. iDon’t was dropped, and the Droid Does ads actually started promoting the Verizon phones rather than merely attacking the iPhone’s “missing features.” And finally, Verizon customers will finally have a phone that doesn’t come with pre-packaged programs they don’t want and can’t uninstall.
That’s enough speculation about the launch. My real question is whether it’s too late for Apple. I wan’t surprised when the iPhone launched on a single carrier–many phones have done this. I was surprised when it was revealed that AT&T had attained multi-year exclusivity, or lifetimes in the tech world. The iPhone is now in its fourth generation, and it’s still only available from one carrier. This foolish fealty has already enabled Android’s rise. Google filled the void left by the iPhone’s absence on other carriers and silly Blackberry designers at RIM who still think a physical keyboard, not functional software, is the must-have feature. Apple had the market cornered, and while they haven’t lost it completely, they probably won’t enjoy the same dominance they achieved with the iPod, which brings me to my main point: carrier exclusivity is stupid.
One could argue that Apple was able to squeeze out some extra concessions by granting AT&T an exclusive contract, but how many of those benefits have proven lasting? That the phones quickly became subsidized despite Apple’s original demands is just one glaring example. As for AT&T, they’ve certainly benefited, but they’ve largely drained their advantage. Those people who want an iPhone either have one, or they’ve proven their resolve and won’t be switching to AT&T to get one. Eventually, the market is saturated, and I think we’ve long since hit that point with the iPhone and AT&T. If that’s true, then exclusivity actually hurts Apple’s sales. By avoiding Verizon, they’re willingly depriving themselves of the largest carrier market in the United States and limiting the device’s potential. I’m not suggesting that carriers and hardware vendors eliminate exclusivity completely. It is a marketing strategy and it can still be effective, but it should follow a radically different paradigm. Rather than competing for long-term exclusivity, carriers should compete to be the first to launch a new device or release the newest iteration. Exclusivity in terms of months probably wouldn’t bother most people; in years, it’s just annoying and alienates future customers.
To answer my own question, I won’t be rushing to get an iPhone when it comes to Verizon. I probably would have if not for Android, but now that I’m comfortable with Google’s OS, I’m inclined to stick with it. That is, at least until the iPhone gets 4G, Swype, and a promise that Verizon will keep its hands off the software. I suspect that many of Verizon’s smartphone customers share similar feelings; in which case, Apple has already done irreparable damage to its potential market-share. AT&T should thank the company for its unwitting sacrifice, and Google should thank them for making Android a success.