Apple Seems to Hold Most of the Cards

By Don Reisinger  |  Posted 2012-02-09 Print this article Print


5. More data usage is a problem

When the iPhone comes along, carriers need to invest in more infrastructure to accommodate the increased number of customers accessing the cellular and data networks. More data usage is costly, and can set carriers back. The iPhone is great and all, but if it costs a company more money than it should, it€™s a liability. Too bad carriers don€™t remember that.

6. All other devices suffer

Let€™s not forget that carriers offer more than just the iPhone. Everything€”from Android-based smartphones to feature phones to BlackBerrys€”is on store shelves. However, most of the other devices suffer from poor sales when the iPhone is available. Apple has made its device the only major seller on any carrier€™s network.

7. There€™s no discontinuing it

So, let€™s say one of the carriers decides that offering the iPhone is financially infeasible. Chances are, however, they won€™t get rid of it. Deciding against selling the iPhone would result in a massive stock price decline, millions of subscribers leaving the service and the possibility of outright closure. Once a carrier has the iPhone, there€™s no getting rid of it.

8. There€™s no leverage

All these items might help illustrate one important point: There is absolutely no leverage in dealings with Apple. The iPhone maker determines what the future holds and will not allow carriers to have any input. It€™s a poor position for carriers to be in.

9. Things get worse over time

Over time, it€™s impossible for carriers to get better terms from Apple. The company€™s iPhone continues to sell exceedingly well, and as noted, the carriers need Apple€™s device. And as data costs and subsidies build up, trying to control expenses becomes all the more concerning. Unfortunately, when working with the iPhone, things can get worse over time for carriers.

10. Apple won€™t budge

Try getting Apple to change and see what happens. The company doesn€™t give in to carrier demands, and will not provide better terms as both companies benefit from offering the iPhone on a particular service. In China, for example, the company has been hoping to bring the iPhone to China Mobile, a carrier with more than 650 million subscribers. But after China Mobile requested a piece of the App Store revenue generated through its network, Apple balked. That doesn€™t sound like a company that will play nice with a carrier like Sprint and its 55 million customers.

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Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Since then, he has written extremely popular columns for, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at

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