Sprint Needs Help

Sprint just announced their newest "It" thing in mobile, the Kyocera Echo, a dual-screen Android smartphone.

At this point I have to seriously wonder just what the leadership at Sprint was thinking last month when they sent out invites to their media even at Times Square in New York City complete with David Blaine to announce this device.  As if the company did not already have enough problems loosing subscribers, dealing with the Nextel side of their business, and not making all that much money they decided to add this thing?  At a media event?  Really?!?

Click the link above to see a quick hands on review, some video, and pictures of the device.  You'll see what I'm talking about.  The Echo doesn't even use WiMax, Sprints 4G network, and they seem to be billing this thing as some sort of flagship product.

Here is what makes this sad to me.

I actually like my service with Sprint.  I've had them for over three years and considering just how fickle I am about stuff like this that should say something about what I think of their service.  In three years with them I've owned six smart phone devices.  I still love my latest one, the HTC Evo 4G!  However I have to admit that once again I'm starting to get a bit bored and I was hoping for something new to get me excited and instead I'm left wondering just what the heck is going on at their company.  The Echo almost feels insulting.  No, wait.  It IS insulting.

Other US carriers such as AT&T, Verizon, and T-Mobile all made several impressive mobile device announcements at CES last month not to mention the Verizon iPhone launching on Verizon this very week.  There are indicators online that over the next four weeks at MWC and CITAA we can expect to see some more impressive announcements from those carriers.  Where is Sprint?

Can you hear me now?

Sad as it may seem to me personally I have to admit I am a bit of a gadget hound and right now Sprint is leaving me high and dry.  

To that end I am setting a personal deadline of June 2011 for something to grab my attention from Sprint.  If nothing from them has created a "WOW, I've just GOTTA have THAT," moment then I will look to pack my mobile bags and head to one of their competitors during the summer.  By that time my ETF with Sprint on the two lines of service I have with them will be below the $150 mark which is an acceptable amount to me.  Based on the usage patterns on my two lines I could actually get a plan with Verizon that would save me around $40 per month (1 smart phone device and 1 feature phone device) considering that the monthly minutes usage for my two accounts is less than 300 minutes per month and that I typically use less than 200 text messages per month.

You can probably guess by my already having hard numbers handy this is something I've been debating for some time anyway.  It looks like LTE 4G technology is really going to be where the "action" is over the next three or four years and if one wants a nice gadget experience one must follow the majority of the pack.  My only concern is the tiered data pricing structures that are taking shape but I can learn to live within those limits if I have to.  I'll start tracking my monthly data usages to get a handle on what works best for me.

Verizon iPhone

Coming up on January 11 Verizon has scheduled a large press event in New York City and just about everyone already knows that it will be to announce a CDMA version of the iPhone.  Too many signs are pointing to just such an occurrence.  This will break the monopoly on the device that AT&T has enjoyed here in the United States since the iPhone first launched in 2007.

So, will Apple bring the iPhone to the other two large US cellular carriers (Sprint and T-Mobile)?

Probably not right away.

There have been some unsubstantiated rumors floating around the tech sphere that Verizon wants an semi-exclusivity period with the iPhone in that they and AT&T would be the only carriers.  The rumors state they are willing to either give up a large chunk of revenue or outright pay Apple for this perk.  Verizon has some deep pockets so I can see this happening in the short term.  In the longer term though it behoves Apple to start bringing the device to all US carriers if it wants to stem the Android tide and further marginalize RIM and the Blackberry platform.  Right now there are two phone operating systems that are ahead of Apple in phone usage in the US:  Blackberry and Android.  The metrics company comScore shows that in August of 2010 24.2% of smartphone users were on an iPhone and 19.6% used Android.  Fast forward three months and Android is sitting at 26% with the iPhone at 25%.  In both months Blackberry had the most users but slipped from 37.6% of users in August to 33.5% in November.  If Apple wants to win the race in this fast growing market they need more users.  There will be a large spike by adding Verizon to the mix but a lot of those will probably dedicated iPhone users who are fed up with AT&T and jump ship as well as current Verizon customers who are upgrading their devices.

Here's what I think will happen.

Every year since 2007 a new model iPhone has been released in the summer, typically mid-to-late June.  The CDMA powered iPhone for Verizon looks to go on sale sometime during the first week of February, just a few weeks away.  What happens in June this year?  Will Apple announce the iPhone 5 for only AT&T while Verizon is stuck with a modified CDMA iPhone 4 until next year sometime?  Verizon is ending its early device upgrade program in what looks like a way to keep people on a set device and locked in a set contract.  How happy will all the new Verizon iPhone customers be when in just five months a brand new iPhone that will more than likely be better shows up for AT&T users?  Heck, even if the thing comes out for Verizon also it would still leave a rather large number of ticked off users who will have to wait even longer.

What I think Mr. Jobs has up his sleeve is something a little more crafty.

Verizon gets the modified iPhone 4 in February and gets to have a period of semi-exclusvity shared with AT&T until this summer.  Then there will be the typical Apple press event to talk about the new iPhone and near the end will be another of those Steve Jobs "And One More Thing" moments when behind him on the big screen will be the logos of all four major cellular providers.  It's a no brainer.

Apple gets access to several million new customers and Verizon gets another feather in its cap for the first five or six months.  Then come summer open the doors a little wider and add several million new customers on other carriers and the coup is complete.  Maybe throw in the second generation iPad that is compatible with Verizon as well as AT&T like the original first generation 3G iPad and the installed user base of iOS devices leap frogs ahead of Blackberry and Android users.

Personal iPhone Thoughts

I thought I would touch a bit more on my most recent post about the prospects and logic behind a CDMA version of the iPhone.

If the improbable happened and a version of the iPhone 4 became available on the Sprint network I think I would be tempted to buy it.  Now before you all go and call me an Apple Fan Boy let me point out that I have been a fan of Apple products going back to my first computer back in 1984 which was an Apple IIc.  I am still a fan of Apple products.  The ones that I would use I like and this includes the iMac that I'm using to write this post, my iPad that I use daily around the house, and other products such as the iPod.  And this does not mean I would give up on Android.

See, I'm eligible for a phone upgrade from Sprint come February (just four months away) and being able to snag up an iPhone for new customer pricing would make sense to me.  I could then have a second phone handy which would then free up my Evo for the testing of custom ROM images.  In fact, I like having more than one phone handy for those "just in case" moments.  At one point I had a Blackberry 8330, the HTC Touch Diamond, and Palm Pre at the same time.  I sold the first two eventually (I wanted rid of that damn Blackberry so bad I sold it so dirt cheap it wasn't even funny!).  If Cole from work reads this he'll probably start drooling thinking about buying my Evo from me the second I buy a second phone.

I'd been toying with the idea of picking me up another Android phone for a couple of weeks ago just for the above stated reason of being able to play with some custom ROMs anyway.  Now I'm thinking I may hold off on a second phone until my February upgrade.

So, just why would I consider an iPhone now of all times.?

First off, being an iMac and iPad owner I'm closely tied to the Apple eco system.  Right now there are a bunch of downloaded TV shows purchased via iTunes in HD as well as a few HD movies I either purchased on limited sale or that I just plain wanted versions of in HD (I admit to being a picture quality snob).  As for my music purchases I still prefer the Amazon MP3 music store over the iTunes music store.  I honestly prefer my music in MP3 format over the AC format that iTunes pushes and for the past three or so years DRM protection via both stores is a moot point.  Having an iPhone would give me some more options in my Apple only content.

The second reason for an iPhone 4 is a simply one aesthetics.  I really like the way the iPhone 4 looks and for me in some instances looks do matter.

This may all be a moot point anyway until we know if Apple will expand beyond AT&T and possibly Verizon with their iPhone.  I'm not prepared to leave the nice rate plan I have with Sprint any time soon.

CDMA iPhone (Verizon/Sprint)

Recently I had to explain to a couple of people why the iPhone was only on AT&T here in the United States and why rumors of an impending release of a "CDMA iPhone" on Verizon was so hard to do.  Simply put, AT&T (and T-Mobile) uses a standard called GSM while Verizon (and Sprint) use a standard called CDMA.  Both are not compatible with each other.  This is just for "3G" type service at the moment and I will not even get into the hodgepodge that is "4G", at least not right now.

Look back about five years.

Reading the various tech blogs and rumor sites I've come across many entries talking about Apple producing a CDMA version of the iPhone for both the US and overseas markets.  I had one other Apple fan tell me it just wasn't possible and then I reminded him that back when Apple was first developing the iPhone they approached Verizon first.  Verizon did not want to meet the demands of Apple for so much revenue sharing and loss of control so Steve Jobs and company took the show to what was then called Cingular (later purchased by AT&T).  This means that at some point Apple either had CDMA prototypes or plans for a CDMA version of the iPhone back then and shelved them when they found a GSM carrier that would meet their demands.

I'll take this moment to also point out that back in 2005 when Steve Jobs first announced the transition of the Mac computer line to Intel chips he stated that since the VERY FIRST version of MacOS X there had been versions of the software written and developed at Apple HQ for Intel (x86) based CPUs as a hedge against the PowerPC CPU architecture.  In other words Jobs and Apple have a history of having black projects under wraps for those sort of "just in case we need it" moments.  I personally would not be surprised to find out one day that just such a CDMA iPhone program had been underway at Apple from the very beginning. 

Fast forward to 2010.

Currently GSM is pretty much the standard for most of the world, but not all.  Many developing markets such as India, Asia, as well as Latin and South America use the CDMA (or a variant) standard.  I'd be willing to make a bet that if Verizon had originally agreed to the demands of Jobs and Apple that we would have seen CDMA iPhones around the world and not GSM versions. 

In a few of the European countries that carry the iPhone there have started to be more than one carrier for the device (the UK, Germany, and France so far).  Ditto for Canada.  Just about anyone who follows tech news knows that this is the last year of AT&T exclusivity for the iPhone here in the US which means that come 2011 we can expect to have such carrier diversity here in the states.

What's so profitable about this thing?

Let's go back a few years again to right before the announcement of the iPhone.

Back then Apple was making a name for itself in the digital music and video download world with its iPod line of players and the iTunes music store.  The iTunes store laid the ground work for everything that Apple did after that as far as delivered content.  It was a proven working model of how digital delivery could be done and for a considerable profit.  This is important later.

Also remember that for the first year after the iPhone was released there was no such thing as an App Store (I know, hard to believe now).  Instead Jobs and Apple pushed the idea of web based apps.  That really didn't pan out and a year later both the second generation iPhone was launched along with the new App Store and that's when the profits really started rolling in for Apple.  All those users buying apps every single day adds up after a while and Apple got a 30% cut of the take.

This year Apple purchased a mobile advertising company and there are now more free apps that have embedded advertising to generate profit.  I'd be willing to bet there is some kind take for Apple in this as well (I've not been able to find it yet).  People love free apps and in a lot of cases are willing to overlook that small little ad thingy in one corner or another.

Also consider that Apple announced last week that Mac sales make up 33% of their profits now.  The other 66% come from iOS devices such as the iPod, iPhone, and iPad.  Opening up to more networks opens up more profit margins.

Enter the iPad.

Earlier this year Apple launched the iPad and it has since gone on to become the fastest selling piece of consumer electronics, ever, even surpassing the iPhone and iPod in adoption by people.  Hell, I swore I wouldn't buy one and then after having a few minutes with a demo unit at the local Apple store had one the very next week!  People who had maybe never had or used an iPod or iPhone got to see this new ecosystem for the first time and that can create a new demand for Apple products.  I can remember when the Mac commanded a measly 5% market share of PC sales in the US.  This past week Apple announced they now command 20% of the market share for PC sold in the US.  That's a huge jump in just a little over a decade.

And the key is the two versions of the iPad that were released.  There was the 3G enabled one that worked with AT&T's network and the WiFi only version (which I own).  It's not tied to any one particular cellular network in other words.  This shows that if it's available people will buy it, network agnostic.

Why add CDMA now?

It's pretty clear that Apple sees Google (Android) and RIM (BlackBerry) as it's main competitors in the growing mobile space and while it's true that there are literally tens of millions of iPhone users in the US who are AT&T customers the one weakness that Apple has against its competitors is the lack of multi-carrier agreements.  Android and BlackBerry handsets are literally available from every single cell phone service provider in the United States, even the pre-paid carriers such as Boost, Cricket, Virgin Mobile US, and others.  That's literally hundreds of millions of potential customers right there.  It would be insane for a Fortune 100 company like Apple to turn their backs on such potential buyers!  I don't think you'll see an iPhone on one of the smaller regional or pre-pay carriers, at least not yet, but I can see Apple looking to hook into the four top dogs of the cellular market here in the US if they want to seriously compete.

At some point Apple is going to hit a wall that it will not be able to break through by staying with AT&T as the only carrier for the iPhone in the United States.  At some point the amount of people will to sign up with that particular carrier will plateau, and possible even begin to decline when people become dissatisfied with the service provided by AT&T.  There are so many stories on the internet about AT&T frustration that all you have to do is do a Google search for that phrase, "AT&T Frustration", to see how many there are.  There is a limit to how much profit a company can generate from exclusive agreements.

The bottom line.

If Apple is truly serious about wanting to take on Android and BlackBerry in the mobile space they have to diversify their availability.  Speaking from personal experience the only reason I never purchased an iPhone when they first came out was how much I dislike AT&T.  I had a few too many bad experiences with that company.  I know many others personally who say similar things.

From a purely business standpoint it makes more since to the bottom line to make your product available to more people to get more sales.

Future Of Wireless Data?

AT&T has announced some recent changes to how it handles data for smartphone devices and the iPad that are set to go into effect next month.

The long and short of it is that "unlimited" data on your smart device is a thing of the past, unless you get grandfathered in.  The real hit will be for those who purchase a 3G enabled iPad.  The much lauded unlimited $30 per month data plan will now be $25 for 2GB of data.  That's not bad if you only surf the web but I can see this becoming an issue for those who stream a lot of videos via the Netflix or ABC applications.  That alone removes any temptation I may have had to spend that extra $130 for a 3G enabled iPad.  I'll stick with getting the wi-fi only version and using the Evo 4G hotspot capabilities.