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The Carriers’ Rebellion

Sep 28, 2010, 17:02 (4 Talkback[s])
(Other stories by Jean-Louis Gassée)


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"Before the Steve Jobs hypnosis session, AT&T ruled. Handsets, their prices, branding, applications, contractual terms, content sales…AT&T decided everything and made pennies on each bit that flowed through its network. Then the Great Mesmerizer swept the table. Apple provided the hardware, the operating system, and “everything elseâ€: applications, music, ringtones, movies, books… The iTunes cash register rang and AT&T didn’t make a red cent on content.

"In the eyes of other carriers, AT&T sold its birthright. But they didn’t sell cheap. The industry-wide ARPU (Average Revenue Per User per month) is a little more than $50. AT&T’s iPhone ARPU hovers above $100. Subtract $25 kicked back to Apple, and AT&T still wins. More important, AT&T’s iPhone exclusivity in the US “stole†millions of subscribers from rivals Verizon, Sprint, and T-Mobileâ€"more than 1 million per quarter since the iPhone came out in June, 2007.

"(Legend has it that Jobs approached Verizon before AT&T, but Apple’s demands were deemed “obsceneâ€. If the story is true, Verizon’s disgust lost them 10 million subscribers and billions in revenueâ€"much more than it would have made in content sales putatively under its control. Another theory, unprovable but preferable, is that Apple went for the worldwide “GSM’’ standard, hence AT&T.)"

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