Just a few years ago, the mobile phone market was a different place than it is today. Back then, the carriers, especially Verizon Wireless, AT&T and Sprint, were controlling the marketplace.
Customers, looking to find the best deals for the best coverage, were forced to consider the carriers as differentiating factors. It was a time when the carrier name on your phone mattered about as much as the phone itself.
Fast forward to 2007 and all that changed. With the release of the iPhone, carriers took a backseat to the phone. People who were upset with AT&T or those that had never considered moving to the carrier were compelled to do so out of their desire to have an iPhone. It was a monumental change in the marketplace. It was also the beginning of what has caused those carriers to become dumb pipes.
Since then, the iPhone has become a staple on AT&T's network. Although rumors have suggested it will eventually be made available on multiple carriers, it has yet to happen. And until that happens, it will be one of the main draws to AT&T's service. The same is true for those who want to try out the Palm Pre on Sprint's network or HTC's myTouch 3G on T-Mobile. In order to get their hands on the product they want most, they will need to make a deal with the carrier.
Of course, becoming a dumb pipe isn't necessarily a bad thing for most carriers. The better the phones they offer, the greater the chances that they will attract more customers. It has proven to be an extremely powerful combination for AT&T and the iPhone. It has also helped Verizon Wireless through the BlackBerry Storm and the BlackBerry Tour- two BlackBerry devices offered exclusively on Verizon Wireless' network. In essence, the carriers are capitalizing on the shift in the market just as much as the vendors that are creating the devices and inking deals with those carriers.
But that doesn't mean there aren't serious risks at play. Google's Android platform could have up to 20 phones available to users by the end of 2009. Many of those phones will be offered on multiple carriers.