I like to imagine that it happened this way: One day the computer guys in Silicon Valley looked over at the mobile-phone industry and realized those carriers have figured out the ultimate racket. They sell you a phone, lock you into a two-year contract, and anything you want to buy for the phone -- accessories, ringtones, games -- you have to buy from them. They control the whole thing, from top to bottom, and instead of getting a one-time sale, they get a recurring revenue stream. "Wow!" the computer guys said. "Why aren't we doing that?"
Well, now they are. Slowly but surely, companies like Apple and Google are wresting control away from the mobile carriers. Instead of a world where the companies that make the phones are just dumb hardware makers -- silent partners who never get to touch the customer -- Google and Apple are using the transition to smart phones as a way to flip the mobile-phone business model on its head.
Going forward, the phone makers will be the ones who deal with the customers and sell all the software and accessories. The carriers will be the silent partners, relegated to connecting calls and collecting a monthly fee.
Eventually, this means that we'll all be able to buy a phone and run it on any network we want, which is what we should have been able to do all along. There's a risk, however, that we're fleeing one cage only to run straight into another, and the only thing that will change is the name of our jailer.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
