When the word iPhone appears in Apple press releases, the word revolutionary is rarely far behind. But what counts as revolutionary? In Apple’s case, the bar is high. Since the 1970s, the firm has changed both the personal computer and music industries. Will the iPhone fundamentally alter the structure of the wireless world as well?
Not yet. [...]
[...] It is in some ways astonishing that AT&T and Apple are partners at all. AT&T is the oldest of the old school—the most ancient major high-tech firm in the United States, founded in 1878. Unfazed by spending the last 23 years in suspended animation (after the great breakup of 1984), AT&T is back to its classic business model: own the largest networks and everything on them. Apple, meanwhile, is the original hippie computer company, a child of the 1970s, not the 1870s. At least in its origins, Apple is an ideological foe of IBM and AT&T. (Remember that 1984 ad?) Considering that these firms were born on the opposite sides of the tech Kulturkampf, the iPhone cannot help but be a little strange.
Most obviously, the iPhone is locked, as is de rigueur in the wireless world. It will work only with one carrier, AT&T. [...]
If Apple wanted to be “revolutionary,” it would sell an unlocked version of the iPhone that, like a computer, you could bring to the carrier of your choice. An even more radical device would be the “X Phone”—a phone on permanent roam that chose whatever network was providing the best service. Imagine, for example, using your iPhone to talk on Sprint because it had the best voice coverage in Alaska, while at the same time using Verizon’s 3G network for Internet access. Of course, getting that phone to market would be difficult, and Apple hasn’t tried.
[...] If you’re an optimist, the more intriguing possibility is that Apple’s iPhone is a Trojan Horse. The iPhone is fatally attractive to AT&T, since it gives the firm a chance to steal tens of thousands of new customers from rivals like Verizon. But Apple may be betting that, once it has its customers, they’ll be more loyal to Apple than AT&T. With its foothold in the wireless world, Apple may be planning to slowly but inexorably demand more room. If iPhone 2.0 is a 3G phone that works with any carrier and supports third-party apps, then industry power will begin to move away from the carrier oligopoly and toward Apple and other Silicon Valley firms. Now, that would be a revolution.