iPhone Crashes the Regulated Industry Party
It is great the way industry leaders sometimes charge into different but related industries. The free-wheeling computer industry doesn’t suffer from the dense regulations and Congressional lobbies that blanket the phone, cable, and cell phone industries.
Verizon, the leading wireless firm, has its roots as a heavily-regulated Baby Bell (Bell Atlantic). It is a pain to deal with (at least it has been for me). Having “the most reliable” cellular network, neither Verizon nor any other major cell phone company allowed their phones and users to switch calls to free wifi networks when available.
Apple enters the cell phone business with a phone that automatically switches to wifi. Apple’s iPhone is partnered with the weakest cellular network, which, being in last place, was willing to cede more control to Apple. Instead of standing in a cell phone store giving your address to a Verizon employee, iPhone buyers activate their cell phones at home using iTunes. That saves somebody money, and allows Apple to sell the iPhone online from their own company store (though with a four-week wait for now).
Just as the most innovative electric cars will likely come from outside the established auto industry, the most innovative cell phone comes from outside the cell phone industry.
The Apple TV device is a similar push to compete with the endlessly irritating services of local cable monopolies.
It is interesting that Apple’s latest ventures are into long-regulated cable and wireless sectors. Apple’s close integration of hardware and software gives them an advantage entering such fields. Hewlett-Packard, Samsung, Sony and Dell lack the software expertise, just a Microsoft lacks hardware and design expertise to match Apple.
What felled Apple and Jobs the first time around, according to Jobs and others, was that they got a bit complacent and greedy. They had great products and high-margins with early Macintosh computers. But they kept their prices too high for too long. Anyone serious about a personal computer in those days, it was believed, should be willing to pay $3,500 and above.
Microsoft developed (and licensed) many of the best Mac features and offered their Windows operating system cheap to dozens of personal computer companies.