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Saturday, June 11, 2005

Wireless Carrier, Technology & Innovation!!

(Via WSJ) Walter Mossberg writes,the high-tech industry has been able to create so many innovative products due to intimacy with with the individuals and companies that used its products. High-tech companies could quickly determine whether their software, hardware and online services were meeting user needs, and they could revise and improve these products rapidly and continuously. The internet accelerated the direct feedback loop (through online purchase, electronic comments forum etc.) between the high-tech industry and its user base became even better and faster in the past decade because of the Internet. Recently, as the high-tech industry has begun to offer wireless-phone products, this connection between technology producers and users has been blocked by huge, powerful middlemen. The wireless phone carriers have used their ownership of networks to sharply restrict what technologies can actually reach users .Like the real Soviet ministries, these technology middlemen too often believe they can decide better than the market what goods consumers need. While the cell phone carriers have spent billions of dollars to acquire and build their networks. They have every right to want to manage these networks carefully and to earn a fair return on their investments on behalf of their shareholders & subsidize the cost of the phones consumers buy, so they feel they have a right to decide what products reach consumers.
Mossberg alleges,in the name of valid business goals, the carriers are exercising far too much control over the flow of new technologies into users' hands. In an ideal world, any tech company with a new cellphone, or with software to run on cellphones, should be able to sell it directly to users. These customers would then separately buy plans from the cellphone companies allowing those devices to work on the networks. In most cases, manufacturers must get the network operators' approval to sell hardware that runs on their networks, and carriers don't allow downloading of software onto phones unless they supply it themselves.
Some carriers are reported to have balked at allowing customers to buy a new phone, jointly designed by Motorola and Apple Computer, that would let users synchronize and play back music from Apple's iTunes computer program. One possible reason: They want to sell music themselves.AT&T and several landline companies in the world used to insist on using their preferred handsets. But when the ban was lifted the phone network was just fine, even though consumers were plugging in millions of less expensive, more innovative phones. Just as consumers benefited from that change, they would benefit if the service providers loosened their grip.

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