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What's Keeping US Phones In the Stone Age?

Posted by kdawson on Thu Jul 26, 2007 10:05 AM
from the too-much-for-not-much dept.
knapper_tech writes "After seeing the iPhone introduction, I was totally confused by how much excitement it generated in the US. It offered no features I could see beyond my Casio W41CA's capabilities. I had a lot of apprehension towards the idea of a virtual keypad and the bare screen looked like a scratch magnet. Looks aren't enough. Finally, the price is ridiculous. The device is an order of magnitude more expensive than my now year-old Keitai even with a two-year contract. After returning to the US from Japan, I've come to realize the horrible truth behind iPhone's buzz. Over the year I was gone, US phones haven't really done anything. Providers push a minuscule lineup of uninspiring designs and then charge unbelievable prices for even basic things like text messages. I was greeted at every kiosk by more tired clamshells built to last until obsolescence, and money can't buy a replacement for my W41CA." Read on as this reader proposes and dismissed a number of possible explanations for the difference in cell-phone markets between the US and Japan. He concludes with, "It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight."

I finally broke down and got a $20 Virgin phone to at least get me connected until I get over my initial shock. In short, American phones suck, and iPhone is hopefully a wakeup call to US providers and customers. Why is the American phone situation so depressing?

Before I left for Japan about a year ago, I was using a Nokia 3160. It cost me $40 US and I had to sign a one year contract that Cingular later decided was a two-year contract. I was paying about $40 a month for service and had extra fees for SMS messages.

After I got to Kyoto, I quickly ended up at an AU shop and landed a Casio W41CA. It does email, music, pc web browsing, gps, fm radio, tv, phone-wallet, pictures (2megapixel), videos, calculator etc. I walked out of the store for less than ¥5000 (about $41) including activation fees, and I was only paying slightly over ¥4000 (about $33) per month. That included ¥3000 for a voice plan I rarely used and ¥1000 for effectively unlimited data (emails and internet).

Perhaps someone with more knowledge of the costs facing American mobile providers can explain the huge technology and cost gap between the US and Japan. Why are we paying so much for such basic features?

At first, I thought maybe it was something to do with network infrastructure. The US is a huge land area and Japan is very tiny. However, Japan would have lots of towers because of the terrain. Imagine something like Colorado covered in metropolitan area. Also, even though places like rural New Mexico exist, nobody has an obligation to cover them, and from the look of coverage maps, no providers do. Operating a US network that reaches 40% of the nation's population requires nowhere near reaching 40% of the land area. The coverage explanation alone isn't enough.

Another possibility was the notion that because Americans keep their phones until they break, phone companies don't focus much on selling cutting edge phones and won't dare ship a spin-chassis to Oklahoma. However, with the contract life longer, the cost of the phone could be spread out over a longer period. If Americans like phones that are built to last and then let them last, the phones should be really cheap. From my perspective, they are ridiculously priced, so this argument also fails.

The next explanation I turned to is that people in the US tend to want winners. We like one ring to rule them all and one phone to establish all of what is good in phone fashion for the next three years. However, Motorola's sales are sagging as the population got tired of dime-a-dozen RAZR's and subsequent knockoffs. Apparently, we have more fashion sense or at least desire for individuality than to keep buying hundreds of millions of the same design. Arguing that the US market tends to gravitate to one phone and then champion it is not making Motorola money.

At last I started to wonder if it was because Americans buy less phones as a whole, making the cost of marketing as many different models as the Japanese prohibitive. However, with something like three times the population, the US should be more than enough market for all the glittery treasures of Akiba. What is the problem?

I'm out of leads at this point. It's not like the FCC is charging Cingular and Verizon billions of dollars per year and the costs are getting passed on to the consumer. Japanese don't have genetically superior cellphone taste. I remember that there was talk of how fierce mobile competition was and how it was hurting mobile providers' earnings. However, if Japanese companies can make money at those prices while selling those phones, what's the problem in the US? It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight.
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  • American's are more willing to pay for their techy gadgets. If the overpriced stuff here was perceived as that overpriced, no one would buy it, and the cell companies would be forced to sell their gadgets cheaper or with more features. I don't see this changing in the near future because we are accustomed to the pricing companies like Cingular and Sprint give us.
    • by cwgmpls (853876) on Thursday July 26 2007, @10:31AM (#19997235) Journal

      Are you suggesting that if a carrier came out with a lower price, people wouldn't flock to it because people are okay with the prices they pay to Cingular and Sprint? The problem isn't that people are buying what is currently offered, the problem is that there is no disruptive provider coming in to challenge the established market.

      Industries won't change until they are challenged by a disruptive competitor. That has been true with automobiles, computers, agriculture -- all across the board. The same is true of mobile voice and data services. Nothing will change until disruptive technologies [wikipedia.org] are allowed to enter the market.

      • by AK Marc (707885) on Thursday July 26 2007, @12:04PM (#19998895)
        Are you suggesting that if a carrier came out with a lower price, people wouldn't flock to it because people are okay with the prices they pay to Cingular and Sprint?

        Yes. Most carriers offer a "free" phone (with sufficiently long contract). People shop networks/providers first, then phones. Oooh, Sprint is a PCS not a cellular network, Verizon has "the network", Cingular/AT&T has wide coverage and rollover minutes. Once someone picks a network, they shop phones. There are 3 kinds of people, those that want the free phone, those that want to spend $99 to $100 on something with some extra features (MP3, camera, whatever), and those willing to pay $200+ for lots of features. They pick from the phones available at the carrier they selected and are done. This means that if someplace offered a Razor V3 for $0, they wouldn't get a large flocking there. I've seen such offers, while the Razor isn't usually at such a low price with the major carriers (not that I'm checking on a daily basis).

        There are a few times when phones have driven the market. The initial release of the Razor did it. The initial release of the iPhone did it. There will be more, but these are one-product-per-2-years kind of events. But again, that isn't a matter of who has it cheaper, but just who has it at all. Price is not as big of a driver in cell phones (both phone and carrier) as is stated. People rarely choose carriers based on cost, they pick what they like best (often coverage, but other factors count as well, like friends and family plans and such), then pick the phones and service plans they can afford. I'm not saying it doesn't happen, but it is rare when someone compares all their choices' plans and picks the plan that makes the most sense, counting TCO and phone costs and such.
        • by cayenne8 (626475) on Thursday July 26 2007, @11:41AM (#19998473) Homepage Journal
          "As long as the people behave like that, the American cell phone market will suck. Thank goodness we have Asia to drive the market forward and trickle down the innovation to North America. ;-)"

          Well, it is probably a difference in attitude towards cell phones too. In the US, a phone is considered pretty much a commodity item, and use pretty much ONLY for one thing.....calling and talking to people.

          In other countries they seem to want to use the phone for everything..paying for purchases, gps systems, mobile computer.

          I also find it a bit amusing. Most of the world chides the US for having the 'disposable' mindset on everything. That we buy things, use them a short while, and then throw them out and get a new one.

          But, now in this article it is being frowned upon...the Americans buying cell phones and hanging on to them till they quit working. It would seem to me to be the 'green' thing to not buy a new cell phone every year or so...keep them out of the landfills, eh?

    • by Lumpy (12016) on Thursday July 26 2007, @10:40AM (#19997423) Homepage
      Incorrect. Americans do not know that we get shafted by Cellphone company collusion to keep prices high.

      Americans on the whole are incredibly uninformed and blissfully like it that way for the most part. The news doesn't dare report that Americans on average get shafted hard for internet, cable, satellite and Cellphone service as they don't want to upset the bread and butter advertisers.

      America lives and dies by the Boob-tube (TV) we do what it tells us to do.
      • by orclevegam (940336) on Thursday July 26 2007, @01:51PM (#20000625) Journal

        America lives and dies by the Boob-tube (TV) we do what it tells us to do.

        As a younger American I'm part of the generation that's just now beginning to take control of the marketplace, many of my friends are moving into management positions, and maybe 10 or 20 years from now will likely be CEOs or VPs. I, and many of my friends, do not on the whole watch television (I haven't had a TV with a cable connection for 2 years now), and I wonder how this is going to impact our economy. I get almost all my news from the internet, and all my video entertainment is either downloaded or I buy on DVD. As the generation that is less dependent on television comes into power what kind of effect do you think that will have on the American economy? Will we see more competition from foreign vendors?

  • It's the carriers (Score:5, Insightful)

    by blackdefiance (142579) on Thursday July 26 2007, @10:09AM (#19996833) Homepage
    No two ways about it. Especially the old-school players like VZW, who have that MaBell attitude.
    • Re:It's the carriers (Score:5, Interesting)

      by UbuntuDupe (970646) * on Thursday July 26 2007, @10:13AM (#19996919) Journal
      One interesting comparison someone pointed out to me is this: people think of Microsoft as a monopoly. But can you imagine them charging you for a "loading Windows sound" the way telecoms charge you for ringtones?

      For the closedness and proprietarity of MS, they actually give you quite a bit of freedom with your machine ... when compared to a cell phone.
      • Re:It's the carriers (Score:5, Informative)

        by GeckoX (259575) on Thursday July 26 2007, @10:26AM (#19997129)
        No doubt.

        Not in the US, but being a Canuck, we get the same treatment really.

        I have a Sony-Ericsson w810i (Which I do really like a ton, but that's beside the point), through Rogers. The phone supports custom ring tones and the like, but Rogers locks this out and tries to force their users to buy every little darned thing through Rogers. I had to wipe Rogers proprietary installation and 'update' the phone with the original installation software to 'unlock' features that the phone inherently supports!!!

        The providers are blood sucking leaches, nothing more, and certainly nothing less. And see how well you fare if you decide to try a different approach...the big boys eat your lunch.

        What's the solution? I'd love to know...any ideas anyone?
        • by pthor1231 (885423) on Thursday July 26 2007, @11:17AM (#19998051)
          Except companies like VZW intentionally cripple your phone so you can't do things no it without paying them. My Motorola E810 or whatever it is, has full bluetooth capabilities....if you don't buy it from Verizon. If you do buy it from Verizon, you can only connect a bluetooth headset, can't move files via bluetooth, and can't move files to and from the transSD slot either. Thankfully I was able to load a custom firmware and re-enable those features support. This is kind of similar to the iPhone not being capable of using a mp3 as its ringtone. I'm sorry, but the capability is there, its a fucking iPod. I'm sure att has some plan in the future to roll out some sort of ringtone buying plan.
    • by OctoberSky (888619) on Thursday July 26 2007, @10:19AM (#19997017)
      100% true, mod parent up until his minutes expire.

      I just got my first phone in 4 years, maybe 4.5. I went with Verizon (whom I absolutely despise) because my girlfriend gets a big discount (39%) from work, so it's too cheap to pass up.

      Putting aside all the BS the "salesman" tried to sell me, I left with a phone that had a warranty for 4 hours. It seems, that this piece of Motorola hardware will have it's warranty voided if I go home and sync the phone with my computer in means other than Verizon's service (which is around $6 a month + a $29.99 Mini USB cable). Motorola makes the software I used it get into the phone, I put songs on it and pulled photos off it. I didn't "hack" anything the computer (once the drivers were installed) recognized it immediately.

      I can understand voiding the warranty if I modded it or did things that may or may not have harmed the OS but all I did was pull the photos off of the memory chip, rather than send them to myself for $0.25 (that's like $85.94 in Verizon math).

      These providers have you by the balls. It's much like when MaBell would only sell their equipment (somethingsomethingmonopolysomething), expect here it's not even their equipment.
  • by Anonymous Coward on Thursday July 26 2007, @10:10AM (#19996843)
    Q: What's Keeping US Phones In the Stone Age?
    A: State of the "Free Market" in the USA
  • by djupedal (584558) on Thursday July 26 2007, @10:11AM (#19996863)
    One word: copper

    As long as some telco clings to legacy phone lines (paid for long ago), the stone age is all the US is going to get...
    • by DrDitto (962751) on Thursday July 26 2007, @10:42AM (#19997443)
      I hate talking on my cell phone with voice data compressed down to 9.6 kb/s. The POTS copper lines devote 56 kb/s to voice data. I can actually have a conversation without straining to pick up overly compressed speech. Yup, the U.S. has a well-developed copper telephone system and I prefer to use it whenever I'm in my home or office.
  • I buy all my phones from Australia or Hong Kong -- unlocked and ready to roll. I currently run the HTC Trinity with a cooked WM6 rom, and I love it. $600 from Hong Kong.

    My friends can't believe I shelled out $600 for a phone I'll use for a year. But the phone saves me between 10 and 15 hours a week (additional productivity) and I do a vast majority of my web browsing, blogging, and e-mailing from it. Why did I pick it? All the features I want, with nothing locked out.

    Why do manufacturers lock phones and reduce features? Because consumers in America want free or cheap phones with long contracts. It's ridiculous. I haven't had a T-Mobile contract for years -- but we have 12 phones on my corporate account (maybe more, not sure). All our phones are imports with the features that are important to us.

    All my friends are locked into contracts and have NO negotiating ability. If they're co-op together (cheap LLC, let's say) they could get a better corporate rate, and even negotiate it (T-Mobile Corporate Customer Care/Retention is really fantastic) based on their needs. Instead, they want a "free" $250 phone, and they pay 10c for text messages over a specific number. Idiotic.

    People have to realize that "free" is not free, and it is usually wiser to just pay for a great phone -- and save on your monthly bill -- than it is to do what they're currently doing.

    The market is providing exactly the crappy service, and pricing, and hardware, that people want.
    • by jedidiah (1196) on Thursday July 26 2007, @10:25AM (#19997109) Homepage
      It's a phone. Yes, a PHONE.

      It's supposed to do one thing and one thing well.

      Everything else is just stuff to distract you from the fact that your phone network quality suddenly degraded to 3rd world levels.

      If I want to do something else. I will do it with a device that was designed for that purpose rather than that function being frankenstein'ed into a device that's supposed to be dead simple and dead reliable.
    • by ericlj (81729) on Thursday July 26 2007, @10:34AM (#19997313)
      How can one phone save you 10-15 hours a week over another? What are you doing? Did you previously have no phone, so you had to drive across town several times a week to see if people were home to talk to?
    • by Gryffin (86893) on Thursday July 26 2007, @10:39AM (#19997413) Homepage

      Why do manufacturers lock phones and reduce features? Because consumers in America want free or cheap phones with long contracts. It's ridiculous.

      Well, you're half right: American consumers don't "want" long contracts, but they *do* want a "free" phone.

      Americans are basically cheap. I'm always amused by the people who will spend $10 in gas to drive to four different stores to try to save $5 on some item. Or spend 40 hours on the internet to save $25 on plane tickets. And of course, a "free" *anything* is always better, not matter the costs down the road. It's a false savings, but a lot of people will fall for it every time.

      American wireless carriers know this, and so they play the "give away the razor and sell the blades" game: pad up the monthly bill to subsidize a "free" phone, but lock out the useful features to force customers into spending extra money for simple things like SMS, internet, IM, BlueTooth, etc.

    • by Solandri (704621) on Thursday July 26 2007, @11:13AM (#19997969)
      And I don't mean that the people in these countries want different things. I mean they have different expectations of what they can get for their money. The U.S., despite being in the forefront of analog cell phone development, was last with a digital cell phone network. Japan (and Asia) were first, then Europe, then the U.S. This had one major consequence with serious ramifications for the market here: providers knew in advance which features would sell.

      The phone service providers in the U.S. took this advance knowledge, and attached hefty fees to everything that was popular in Asia and Europe - text, ringtones, photo uploads. When these features were first rolled out in Japan, they didn't know what people would find popular. So every phone manufacturer and service provider took the shotgun approach and bundled as many of these features as they could for as low a flat fee as they could. This was unbridled competition. By the time they figured out what was popular, they couldn't jack up the price because everyone expected it to be a flat fee, and raising the price would send your customers to your competitors.

      When the digital cell network rolled out in the U.S., the providers here knew text messaging, ringtones, and photo sharing would be huge. So they attached a per-item fee to them to maximize profit on it. Every one of them did it, nobody broke ranks and offered a flat fee service (at least not without an additional fee). Kind of an implicit agreement to collude to fix prices to maximize everyone's profit.

      Americans simply don't know that these things are free or a flat fee in the rest of the world. For them, a text message has always been 10-15 cents each. A ringtone has always been $1-$2. The cost per each one isn't that much, so they pay it. The same thing happened the other way around with landline telephone service in the U.S. vs. Europe. Most Americans (whose phone industry was deregulated in the 80s) pay a flat fee for unlimited calls. Most Europeans (with nationalized phone monopolies) pay per phone call. That's just the way "it's always been" and people don't know to ask for more.

      Normally the market would correct this situation with a new company offering these services for less money. But the cell phone service market requires you to own bandwidth, which was auctioned off back in the early 1990s. There's no way for a new company to join the market (which is why the upcoming auction of the 700 MHz spectrum is so important, yes the one Google has been making noise about).

  • by EveryNickIsTaken (1054794) on Thursday July 26 2007, @10:12AM (#19996899)
    To answer your question, US consumers are keeping phones in the "stone age." The *vast* majority of US cell phone users buy the phones and use them as - get this - phones . Sure, teens love to text and techies love wireless... but most people use cell phones for their original, intended purpose. Manufacturers have seen this and responded accordingly.
    • by Anonymous Coward on Thursday July 26 2007, @10:26AM (#19997127)
      I agree.

      Let me also say, I work as a programmer in Japan, and I work on mobile phones here. It sucks big time. Japan is not a model we want to adopt. But for better or worse, the main reason things are different in Japan is that cell phones are many (probably most) peoples primary portal to the internet. Hard as it is to believe coming from the states, but many people like (I guess) to browse the web, shop, and post to forums, using phones.

      In the US, we have laptops ;)
  • Featuritis (Score:5, Insightful)

    by Amiga Lover (708890) on Thursday July 26 2007, @10:15AM (#19996955)
    It offered no features I could see beyond my Casio W41CA's capabilities.

    You're making the mistake of counting features, ignoring *how* they're used. I remember back in the early 1990s, when this new world wide web thing popped up. Plenty of comments then from people who couldn't see the forest for the trees, that were much like yours - "The world wide web offers no features I could see beyond downloading .txt and .gif files like I've been able to do for 10 years already."

    Sure, the web can be seen as just text and image files, but oh boy... did the presentation and access difference ever change the world. How things work really is important.
    • Re:Featuritis (Score:5, Interesting)

      This is possibly the most insightful comment in this entire thread. Everyone is so busy considering why American telcos "suck" that they're not stopping to actually carry through on the comparison made. For those of you in the dark, this is a Casio W41CA:

      http://www.trustedreviews.com/mobile-devices/news/ 2006/01/20/Casio-Mobile-Rocks-For-Movies/p1 [trustedreviews.com]

      An impressive phone? Certainly. It's on the order of something like the Motorola Q phone [motorola.com], but with a better form factor. At the end of the day, though, the Casio is still just a phone. The iPhone, however, is a complete hand computer and digital assistant that hits a sweet spot in the market's needs. The iPhone may appear to have a similar feature list, until you actually get down to the nitty gritty of it:

      iPhone - Casio
      128MB - 70MB
      4-8 GB Hard Drive - 2GB SD Slot
      Visual Voicemail - ???
      Auto-Landscape Mode - Manual Swivel
      Phone Numbers from Webpages - No
      Integration with Movie/Music Service - No
      Easy "Pinch" and "Spin" Navigation - Phone Keypad
      Auto-Threading of SMS Conversations - Standard SMS Mailbox
      On-Screen Conferencing options - Play on-hold games with the phone
      Safari Browser with "Zoom on Element" Features - Opera Mini with imprecise Zooming
      Rich email client - ???
      Smooth Integration with Google Maps, Youtube, and Mac Widgets - Some functionality through Opera. No Flash [intomobile.com]

      Basically, it comes down to usability. The iPhone is a modest step from a pure technology and feature-set perspective, but it's a quantum leap from a usability perspective. While the iPhone's design does not meet everyone's needs, it meets the largest cross-section of users on the market. i.e. The people who are not technophiles and have little to no idea how to use all the bizarre and excessive features of a smart-phone. For the most part, people just want a phone. The iPhone gives them a phone + a comprehensive feature set that easily performs other daily tasks that people do (e.g. check whether, look up maps, etc.) and handily replaces several other devices that they might carry around.

      Folks around here tend to laugh at Taco's initial assessment of the iPod. ("No wireless. Less space than a nomad. Lame.") Yet they turn around and make the exact same mistake with the iPhone. It's an interesting trend to behold.
  • Paired Competition (Score:4, Insightful)

    by dahwang (973539) on Thursday July 26 2007, @10:17AM (#19996987)
    I think one of the problems with the US market is the way that it was initially set up. When cell phones started breaking out into mainstream use, service providers such as Sprint, AT&T, the Bell's, all had contracts with specific cell phone manufacturers such as LG, Samsung, Motorola. Alot of phones are sold exclusively by one provider and are not available with another service. In asia, this is usually not the case. Many phones use a SIM card (similar to cingular), which really allows the phone to be connected to a network. The phones are sold separately and are not associated with only one service provider. Thus, you can use almost any cell phone with any provider. In this way, it makes the cell phone manufacturers compete with the design and functionality of their new phones, and for service providers to compete only with their quality and cost of connection service. You can buy a phone separately and choose any service provider. If you choose to leave that provider, you can keep your phone and go to another service provider. it's that simple. In America, if you really want that specific certain phone, you have to buy it from Verizon or other. In the same way, you have to buy a NEW phone if you decide to switch providers. The fact that American companies do not do this, is an injustice to the american people. For America to claim to be the archetypical capitalistic economy yet still stifle innovation for the accrueing of profit is something we shouldn't stand for. I doubt anyone here is happy with their level of service.
    • by tppublic (899574) on Thursday July 26 2007, @11:31AM (#19998307)
      The fact that American companies do not do this, is an injustice to the american people. For America to claim to be the archetypical capitalistic economy yet still stifle innovation for the accrueing of profit is something we shouldn't stand for.

      While I understand that people love black and white/good and evil stories, this isn't that simple.

      CDMA is often deployed in the United States because the technology has been developed for larger cell sizes than the GSM/GPRS/EDGE systems deployed in Europe. This is highly beneficial in areas where population density is low (think suburbs). Deploying GSM across the United States would be significantly more expensive than deploying CDMA.

      GSM systems using SIM cards were highly advantageous in allowing users to keep a single (expensive) phone and to purchase multiple SIM cards in different countries if they were moving around Europe. The political boundaries and separate companies operating the networks almost demanded the GSM design. The lack of a contiguous network (back when GSM was developed - universal Europe roaming is now relatively common) drove the separation of the phone from the connection identifier (part of the SIM card). This situation doesn't exist in the United States, because the FCC auctions off frequencies in extremely large geographic blocks, and the wireless providers were very quick to provide nationwide coverage (even if it did have large roaming fees 5+ years ago)

      There are also other subtleties. CDMA is a US-developed technology, while GSM/GPRS/EDGE was developed in Europe. If you don't think that makes a difference to other countries deploying the systems, then you're wrong. These volume differences at the manufacturing level then impact price of the basestation systems... and the advantages of GSM drove countries with large population densities (think most of Asia) to deploy it. It is areas with larger rural populations (Brazil and parts of India, where CDMA is successful)

      The net effect of using CDMA makes it much more difficult to separate the phone from the network. The system wasn't designed for it. Yes, there are identifiers in the phone that would allow it, but having separate SIM devices (the GSM model) is much more flexible and much of the basis for the difference in corporate behavior on the network (it's easy to not activate a phone due to a certain policy, but very hard not to allow use of a device where the only authentication is from a SIM card, so the service provider doesn't know what the hardware is)

  • Size matters? (Score:4, Interesting)

    by andy753421 (850820) on Thursday July 26 2007, @10:21AM (#19997055) Homepage
    I don't know how true this is, but I've always assumed that the United States has a harder time upgrading to new technologies than places like Japan because of size and population density. In some place like Japan or Europe a cell phone tower will cover quite a few people, in Montana however.. not so much. This doesn't have anything to do with new cell phone designs, but more with prices for text messaging and such. Does anyone know how united states technology compares to places like Russia/Canada/China/Brazil/Australia?
  • Broken Premise (Score:5, Insightful)

    by njfuzzy (734116) <ian.ian-x@com> on Thursday July 26 2007, @10:37AM (#19997371) Homepage
    The premise underlying most iPhone criticism comes down to judging every device as merely the sum of its parts. People (pundits and punters) look at the bulletted feature list and say "other phones can do more". Try sitting down with an iPhone, and really using it. The added value is in usability-- not just slick and attractive interfaces, but ones that let you use the device quickly and easily.
  • by mattis_f (517228) on Thursday July 26 2007, @11:19AM (#19998077)
    Now, first I thought the poster was clueless, but then I saw some of the replies here, and jeez, guys, you're usually sharper than this.

    I'm European, but I'm currently living in the US (San Francisco) and I've also lived in Japan for six months. Let me dispel some myths for you.

    First, this is not a new phenomenon, these outdated cell-phones in the US. When I first came here in 2000, people looked at my phone (an Ericsson T28 World) like it was from outer space. Tiny, and with a standby time that lasted for two days. I stayed at a hostel the first few weeks, and the other room-mate there with a cell was amazed that I didn't need to recharge my phone every night... In general, the phones on sale in the US are two years behind Europe.

    Second, the cell phone market in the US and Japan is very different from the one in Europe. In Japan and the US there are several different technologies used, in Europe it's all GSM, mandated by law. This means that in Europe you can almost always bring your phone from one provider to the next - all you need to do is change the little sim-card inside the phone. This is much harder, and in many cases impossible, in the US and Japan.

    Third, in Japan, people have horrendously long commutes on public transport systems. This is why internet on tiny phone displays took off first there. Many people have 12-hour work days (or, at least, 12 hours away from home) - there isn't really time to sit down at a desktop computer and browse for fun in the evening. Americans, in contrast, commute by car. Maybe it's not such a hot idea to be reading your emails or checking out the latest slashdot story there...

    Fourth, just a side comment - I've seen several people here comment that "Europe is more densely populated, that's why cell phone coverage is better". To this I say: BS. Sweden or Finland are two of the least densely populated countries in Europe, way less populated than California, and still the cell phones are a couple years ahead of whats available here.

    Hope that helps. :-)
  • by Fallen Kell (165468) on Thursday July 26 2007, @11:31AM (#19998301)
    You have the answer right there. The US market is not competing for the customers. They are more then happy to keep business as usual, and are not pushing the technology, just like their wired relatives. To them, there is no reason to roll out costly network upgrades to support the new technologies, because they control what technologies connect to their networks. This is unlike many other countries where the consumer decides what connects to the networks, the cell phone companies simply provide a SIM card that the user transfers to their different phones. Here the phones are locked down and stripped of their features. Look at Europe where many people own one phone but have several different "local" cell phone plans for the different areas where they frequently travel, they simply swap out the SIM card to use the other networks.
  • Japan vs West (Score:5, Informative)

    by Anonymous Coward on Thursday July 26 2007, @12:27PM (#19999233)
    The author's story and stories like it are only half true.

    We always hear about how much better the devices in Asia are, and generally it's true.

    However what's certainly not true is that service plans in Japan are anywhere as good a value as in the USA or Canada.

    Having lived several years in Japan, I can tell you that although the author has a 3000 yen "voice" plan, it probably includes something like 20 to 40 minutes. Japanese rate plans are not measured by minutes however, rather time is priced according to a draconian function of time of day, location, day of the week, and destination network, and deducted from your voice pool. Once the author exhausts his base 3000 yen (about 30 minutes say), another formula kicks in charging upwards of 70 cents per minute if used on a weekday during the daytime to a cell on another network. 30 minutes use for a $40 plan? Would that work in the USA or Canada?

    By the author's own admission, he never uses voice so he may not have noticed. However, attempting to use a phone for professional purposes, where the majority of work is done via voice, you can see how the Japanese carriers' ARPU is astronomical compared to the USA, where competition may not improve devices but it certainly drives down price.

    Surely it's this increased ARPU that allows Japanese carriers to monstrously subsidize flashy, impressive handsets for both business and personal users.
    • Re:An Explanation (Score:5, Insightful)

      by dahwang (973539) on Thursday July 26 2007, @10:20AM (#19997033)
      I think you're missing the point. This isn't a rip on the iPhone, but on the American cell phone industry as a whole. There are many things lacking here.

      If you've ever been overseas to a developed Asian country, you'll understand. If you haven't, I don't blame you for your shortsightedness.
        • Re:An Explanation (Score:5, Insightful)

          by CogDissident (951207) on Thursday July 26 2007, @10:40AM (#19997419)
          Please stop and read your own posts before you write them. You're saying that american consumers "do not want more do-dads"? Are you certifiably insane? We'd attach a spork to a blender if we thought it would be beneficial.
        • Already there. I don't need my mobile doing everything under the sun. I don't want to be able to surf the web on my phone, don't need it to be my electronic organizer, or even take pictures/video. I need it to be a reliable communications device, which it most assuredly is not. When my reception is not failing the phone is exhibiting all sorts of quirks that make it the electronic equivalent of a schizophrenic.

          And face it -- the average consumer only buys these things because marketers tell them they should. I suspect if you took a random sample of 1 million cell phone users in the US, you'd find a good chunk of them don't use most of the functions their phone offers, and a subset of them probably don't even know they have certain capabilities in their phone.

          • MANPHONE (Score:5, Funny)

            by tempest69 (572798) on Thursday July 26 2007, @01:04PM (#19999857) Journal
            yes someone needs to build the manphone, a brick of a device that is hardened enough to be hit to deep middle filed with a baseball bat, while not losing signal. With battery power for a 3 day weekend of fishing in remote parts of Montana, where the tower is a ways away. Automatic replies to texts and voicemails saying that the service is unwanted and will not be used. It would keep a few reminders on hand such as the wifes B-day and anniversary (which it prompts for at purchase time). The ringtone is a bear growl no options. The recent calls list would automatically change any womans name to Todd except for the wife and mom, no need to help a snooping wife

            Storm

          • Re:An Explanation (Score:5, Informative)

            by Ngarrang (1023425) on Thursday July 26 2007, @12:32PM (#19999275) Journal
            "If more people were thinking like you, we would still be living in the stoneage and thinking that god created everything because you say that there is no reason for advancement..."

            Incorrect. I am a big fan advancement. But I cannot stand by idly while some nit-wit berates a population for not all being alike in the writer's opinion on the features of our phones. Should everyone drive a BMW? They are nice cars. They contain a lot of features. But not everyone an afford them. Maybe a Hyundai Accent offers exactly what you need. Should the Hyundai buyer be shamed for not wanting car with wiper blades on the view mirrors? "It's a feature, you luddite, buy it! You know you want it!"

            And so it is with phones. Personally, I just want a phone to be a phone. I want it to be very good at sending and receiving my phone calls. Some other features make for logical company, like, storing the numbers of your friends, showing the current time and date. Other features are just fluff that waste battery life and add needless complexity.

            Let the consumers of the market determine what they want. Let the market be filled with products that fill every niche.
    • Re:An Explanation (Score:5, Insightful)

      by kamakazi (74641) on Thursday July 26 2007, @10:21AM (#19997057)
      He didn't say his phone was better than an iPhone, he said the features which are touted as new on the iPhone are not as novel or original when compared to the phones on the Japanese market.

      In fact, I think his actual question was more like "Why are the features of the iPhone exciting, when the U.S. market should have been providing those or similar features already"

      He doesn't dis the iPhone (other than implying it and all other U.S. phones cost too much).

      In fact, his question is not low level enough. What he should be asking is why can't I buy a phone from any vendor, then a SIM card from a service provider, and plug it in and go?

      Why do we in the U.S. have to even deal with ATT to get an iPhone? Why can't I just put a Verizon SIM card in my Nokia 3200? Why is the U.S., arguably the technology forerunner for a lot of the 20th century, falling so far behind so quickly? I mean, "No Child Left Behind" shouldn't have done that much damage yet!!

      I think that what is happening is a stratification of economy. In the U.S. we have "evolved" past the customer is always right business model, and entered the age where a companies most important job is pleasing stockholders, not customers. Europe and Japan were quick to adopt (and improve) many of our technological advances in manufacturing, etc. over the past hundred years, I just hope they have the wisdom to avoid adopting our economic "advances" now.
      • Re:An Explanation (Score:5, Insightful)

        by evel aka matt (123728) on Thursday July 26 2007, @11:06AM (#19997869)

        He didn't say his phone was better than an iPhone, he said the features which are touted as new on the iPhone are not as novel or original when compared to the phones on the Japanese market.

        In fact, I think his actual question was more like "Why are the features of the iPhone exciting, when the U.S. market should have been providing those or similar features already"
        The features of the iPhone are *not* really exciting. I've been doing just about everything the iPhone does on my US market cellphones for years now. What makes the iPhone exciting is the IMPLEMENTATION. Browsing on my MDA, my Treo, or any one of the numerous devices I had in the past was a miserable experience at best. Browsing on the iPhone, even on EDGE, is 400000x better. That's just one example.

        I don't think any meritorious argument for the iPhone is based on the feature list.
      • Re:An Explanation (Score:5, Informative)

        by oliderid (710055) on Thursday July 26 2007, @11:21AM (#19998115)
        I have visited the states several times now. And seriously the gap isn't so big (for Europe at least). You can find most (if not all) European models in the states.

        I'm sure if you look around you, you will find most of the IPhone features. The trick
        - A genius launched this product. A true marketing masterpiece.

        There are several factors to explain the current "relative" gap IMHO
        - Mobile phone users aren't as "mobile" as their European counterparts. For example I can leave in 48 hours a network for another and I keep my mobile phone number. All I have to do is sign a new contract with my new telco. It does mean that competition is higher. Nobody can protect itself behind outrageous contracts.

        - It is illegal in a lot of European countries to sell locked device. A lot of European consumers buy their mobile phone by their own.

        All in all It means that there is a vibrant economy (independant phone sellers, etc.) keeping costs down and services high.

        So i'd say, with the proper legal framework, it would take one year or two to reach Europe. The problem is not technologic, you've got everything you need. for Japan I don't know, never been there.

        Olivier

          • Re:An Explanation (Score:5, Insightful)

            by Trails (629752) on Thursday July 26 2007, @11:44AM (#19998539)
            Because the north american gov'ts are too bedazzled by arguments of "free market forces" to realise that they need to legislate standardisation for the common good.

            Standardisation isn't really meaningful to the consumer unless everyone is doing it (the gain to the consumer is mobility and interoperability, but this only happens if everyone is standardised). Hence, there is no competitive advantage to be gained by standardising (essentially a variation of the prisoner's dilemma). Hence, it will not happen unless forced on the industry, it's too happy providing shitty, dated, overpriced services to consumers and claiming "difficulties in interoperability" between wildly different formats and protocols as an excuse.
        • Re:An Explanation (Score:5, Informative)

          by Quikah (14419) on Thursday July 26 2007, @12:14PM (#19999055)

          There are 3 different competing technologies in the US. Europe (and presumably Japan) mandated GSM.
          Japan does not use GSM, they use PDC (TDMA), CDMA and WCDMA.
      • Re:An Explanation (Score:5, Informative)

        by DDLKermit007 (911046) on Thursday July 26 2007, @11:25AM (#19998179)
        Seriously, take a trip to Japan sometime, and use a cellphone there (ketai means CELLPHONE). US phones can't even begin to compete with Japan's offerings. I'm in the country right now with a POS rental, but I'd seriously love to use it back in the states over my Nokia N95 (too bad it doesn't support GSM, or US 3G signals). I highly doubt you can hold your cellphone up to dedicated pad to pay for things in the US. Hell most phones in Japan now have awesome built in OCR capabilties (getting Kanji readings seriously is AWESOME for someone learning the language). Theres a whole laundry list the OP doesn't go into that I'd kill for in the US market. Would go on about it, but it's almost 1:30am, and I needs sleep (Hokaido to Saporo in a few hours, 15 hours FTL!!!).

        The sad thing is that none of this has to do with competition. Japan actually has next to zero competition between companies (they are all owned by the same people for the most part). Now if you wanna see competition between cellular companies goto Hong Kong. $13 a month for what I pay in the US at $70 a month without the ability to call international most places you wanna call without extra crazy fees. No contracts required to boot (5 cellular companies).
          • Re:An Explanation (Score:5, Interesting)

            by firewort (180062) on Thursday July 26 2007, @06:43PM (#20004307)
            I know why I want OCR on the phone.

            I want to snap a picture of a business card and have it OCR'd and added as a vcard in my phone's phonebook, and when it syncs with the computer, it will be in Address Book. I can discard the stacks of business cards and not carry a goofy card scanner to conventions.

            I want to be able to photograph receipts and OCR them, have them compile into an expense report and email them, so that I don't have to fool with losing a receipt or leaving it off a report.

            Sure, I have manual ways of addressing both problems currently, but devices are meant to make my life easier and geekier. A 2 megapixel camera is sufficient for OCR. These things should be possible.
    • by Animaether (411575) on Thursday July 26 2007, @10:38AM (#19997385) Journal
      Exactly.. which is why I kept my desert storm gear.

      Let's see, I have pockets for my...
      - phone (calling + directory)
      - TI calculator (durr.. I can do math, me)
      - PDA (calendar / planning, of course)
      - iPod (music)
      - FM radio (talk radio)
      - blackberry (vroom-vroom e-mail for the hasty world)
      - Treo (web)
      - two-way (walkie-talkie for you 80's kids)
      - flashlight (what? it gets dark!)
      - camera (digitized *click-CLICK* included)
      - GPS unit (on the road again... lalala)

      Okay, so a single device could conceivably do all of the above and many a current 'smart phone' will cover practically all of the above.. but then what excuse would I have to wear my patriottism on my sleeve? :D HOO-RAH!
    • Re:unlocking ... (Score:5, Insightful)

      by arth1 (260657) on Thursday July 26 2007, @10:58AM (#19997717) Homepage Journal
      I think you by accident have managed to mention the REAL problem here: The binding between phone and provider, a.k.a. "locking". No US phone company will sell you a phone that hasn't been locked to them, and usually also crippled. And almost no customers know that they can buy phones that haven't been locked in the first place. And the few that do know that tend to ignore it, because in the US, shopping for the /cheapest/ and not the best is the way of life.
      So customers buy whatever phones the phone company makes available. Which is whatever is cheapest for the phone company -- either by the phones being old models that the manufacturer will sell them for a pittance, or by them not having functionality that might cut into the phone company's own revenue stream (like uncrippled file transfer over BlueTooth, WiFi or USB).
      Worth noting here is that a great many Americans are poor, and can't afford anything except the cheapest available. While there's plenty of rich people here, they're not nearly as plentyful as the less rich, who have to turn the penny over before spending it. The median income in the US is way lower than other Western countries. This too drives what's being made available.
      Combined with an unwavering belief Americans have that we're the prime nation on earth with the most technologically advanced equipment god and money can buy, they really THINK that what they're getting is state of the art, when in reality it's so obsolete and limited that the average European or Japanese wouldn't take it for free.

      The overall mentality of corporate control and buying based on price more than anything else is also reflected in other ways in the US. Look at TV and radio, for example. Where many if not most western countries now have all the programming in wide screen, and radio broadcasts are digital, in the US, you still can buy low-res 4:3 TVs and people still listen primarily to FM (and even AM!). They still sell cassette tapes here, for crying out loud! 10+ Mbps internet which is common in Europe? Can't even get it most places, and Americans consider a crippled 0-256 kbps shared DSL line "broadband".

      Back to the reasons why the US is such a technological backwater: I think it's mostly due to the demographics, with the median income being so low (meaning that most people don't have a lot of money), but also the capitalist system's propensity for ending up with very few and very large companies with near-monopolies or oligopolies in their areas, making it possible for them to sell their customers whatever makes the most profit, and where the customer's only real choice is to take it or leave it.

      Where I live, I have the choice between Verizon for mobile phone (T-Mobile works in good weather, but with spotty coverage), Comcast for cable TV and AT&T for phone. Thus they can offer whatever makes the most profit to /them/ and not me, and I have the choice between buying from them or not buying at all. Cause a free market doesn't imply that there will be competition, but almost always causes monopolies and oligopolies to form.
      • Re:unlocking ... (Score:5, Informative)

        by bnenning (58349) on Thursday July 26 2007, @11:33AM (#19998345)
        The median income in the US is way lower than other Western countries.

        No [wikipedia.org].

        also the capitalist system's propensity for ending up with very few and very large companies with near-monopolies or oligopolies in their areas

        That may be a necessary condition for poor options, but it's not sufficient. Intel and AMD are essentially a duopoly, but they compete fiercely and we benefit from better products and lower prices as a result. For some reason that doesn't happen with telecoms.
    • by Albanach (527650) on Thursday July 26 2007, @11:00AM (#19997749) Homepage
      Europe is full of less densly populated areas that have far better coverage than similar areas in the US.

      Almost every village in Scotland has cell coverage from multiple providers. 3G coverage is spreading rapidly into the larger towns. Scotland has a population density about the same as Virginia or North Carolina yet has much better coverage. When it comes to ADSL, every telephone exchange is enabled, and 99% of the population has access to broadband. Absolutely not the case in the US.

      Whatever the reason for the lack of these things in the US, the population density argument isn't it.