22 Oct 2007

Walter Mossberg on the State of Cellular

As reported by a large segment of the Technorati crowd, Walter Mossberg recently wrote a nice piece on the current state of the U.S. cellphone market, and why it, for lack of a better word, sucks so much. The key is all in the subsidized phone racket.

[The] whole cellphone subsidy game is an archaic remnant of the days when mobile phones were costly novelties. Today, subsidies are a trap for consumers. If subsidies were removed, along with the restrictions that flow from them, the market would quickly produce cheap phones, just as it has produced cheap, unsubsidized versions of every other digital product, from $399 computers to $79 iPods.

I think he’s the first mainstream journalist that I’ve read who has really gotten this. Phone locking, enforced mutual incompatibilities, application restrictions – the entire culture of control – all springs from subsidies. If people just bought their phones outright, they’d probably be significantly cheaper (not to mention more full-featured), there would be a greater secondary market (meaning less waste), and they’d be more prone to shop for networks based on price, service, and quality.

Perhaps as it becomes more obvious that the iPhone is, despite being (in Mossberg’s words) “the best-designed handheld computer ever made,” a costly white elephant because of carrier-mandated restrictions, there will be greater national conversation about the state of cellular telephony.

As Mossberg points out, we’ve been through this with landline phones before, prior to the disassembly of AT&T as the national monopoly carrier. It took almost a century for consumers to get first comfortable with the technology, and then impatient with the restrictions placed upon it: I don’t think cellular will take that long.

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