What's Keeping US Phones In the Stone Age? 925
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.
The consumer is at fault for a lot of it, too! (Score:5, Informative)
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.
Maddox (Score:1, Informative)
Great example of the reasons why the iPhone sucks
Re:An Explanation (Score:3, Informative)
Re:It's the carriers (Score:5, Informative)
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?
Re:It's simple suppy and demand.. (Score:5, Informative)
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.
Re:Poster is Clueless Himself (Score:3, Informative)
mod as troll (Score:3, Informative)
aside from the lack of smaller cars do you care to back that up?
"US houses and apartments are often shoddily built and poorly maintained such that after 30 years they are ready to be torn down."
again, do you care to back that up with any real statistic or do you just want to keep blowwing smoke up peoples asses?
"Roads in the US are often full of potholes, poorly patched pavement, dangerous angles, and cluttered with hideously ugly advertising signs and strip malls."
uh, yeah. what part of the us were you in? i've seen areas that are with dangerous roads but it's not nation wide by any means.
"Major intersections in cities are occupied by 8-way stoplights that meter cars through at about 80 vehicles per hour so they can fly ahead to the next 8-way stoplight in the next block. Europe uses......"roundabouts" that are about 100x more efficient than stoplights."
while roundabouts may be a better method i must say that i've never seen an 8-way traffic light.
"It's not surprising, then, that the market penetration of Linux, Firefox, and OS software in general is much higher outside of the US."
os software in general? what are you talking about?
Japan's phone monopoly is a cause (Score:2, Informative)
Meanwhile in the US, just the opposite was true. Getting a phone line in your home costs about $20 with no contract, due in part to federal subsidies. Cell phone companies had to compete with a market where people already had phone lines AND were using computers (by contrast, Japan had virtually NO DSL as of 2000 and promoted ISDN). Cell phones were an obvious choice in Japan whereas they were an "additional" service in the States.
And you were right that geographically, Japan is much easier to cover. Over 90% of Japanese live on the coastal areas. The internal sections of most of the islands (especially Honshu) are scarecly populated. Makes setting up a network pretty easy.
Re:An Explanation (Score:2, Informative)
How about the touchscreen? The Casio doesn't have one, let alone a multi-touch. Its exterior is instead covered with buttons of varying types, which most of us have grown to dislike.
Why the hell would you want an MTI on a phone? What happens 5 months from now when it starts to wear out? Or when your fingers are too hot/cold/wet/dry and you start to misdial? Sorry, but this is a major complaint I've had about the iPhone all along.
Your phone runs Opera Mini. iPhone runs full blown Safari. It has a shell.
This is just wrong. iPhone does not run "full blown" safari, it runs a stripped version of Safari. And furthermore, it doesn't have a "shell": it's missing the goddamn 'ls' utility for fucksake. and the finisher in my combo:
Third party apps will soon be hitting the web in droves.
Except the iPhone is a closed platform; given, it's for security reasons, but they don't even have a J2ME implementation that you get on, say, the motorola v551 that was released four years ago. So you miss out on Google Maps (won't run on mini-safari), Gmail (might run on safari), and x, y, z J2ME app, which google is actually tending to pursue pretty seriously.
And lets not talk about the UI. Apple did this one, show me anyone who can do them better.
Two words: maximizing windows
And iTunes support, you do not have that.
I carry my iPod in my pocket and my phone on my belt. It's not that hard.
It has built in WiFi.
And it can't call over Skype... can you say crippled platforms?
FLAME ON
Re:An Explanation (Score:2, Informative)
Re:It's simple suppy and demand.. (Score:4, Informative)
Anyway, the point of my rant is that without a decent plan, no one is going to be able to use these phones anyway. I was looking for a fairly full-featured phone, and ended up with a piece of crap because basically all they sell. It's not so much the phone prices that are the problem - personally, I'm ok with spending a few hundred on a phone if its good. It's the fact that they so BLATANTLY rip you off with everything else that changed my mind.
Re:An Explanation (Score:5, Informative)
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
Let me clarify... (Score:3, Informative)
Except out west where Telus is a major player, but yes, Rogers and Bell are the only truly national carriers.
2) Other smaller players with even worse service (Virgin, Fido, Telus etc.)
Fido and Telus aren't so bad. It really depends on which service package and phone you choose, ultimately.
3) Cannot get a phone without a contract (pay as you go is 15 cents-25 cents per call for the first minute and then a little lower for the next used time)
You absolutely, positively can get a phone without a contract, but you will have to pay full price for the phone. Why would any carrier just give you a phone for free without a contract?
4) Extra charges for receiving and sending SMS, as well as for having 911 and voice mail
Well, of course. There are plenty of service plans that include voice mail and unlimited incoming and outgoing SMS. The 50 cent 911 fee was mandated by the federal government a few years ago to recoup the costs associated with municipalities providing 911 service. Actually, if all you want is 911 service, any deactivated or inactive phone on any network will dial 911 for free, so long as you are within their service area.
5) Incoming call charges (I Wish I could find a Bell or Rogers executive, put him on a plane, and take him Pakistan where even the worst Telco does not charge for incoming calls, and then shoot him!)
It's always been this way in North America, but Fido and Rogers (and probably the others, I haven't looked) do offer particular service plans that do not charge airtime on incoming calls.
I really don't find any of these complaints all that genuine, especially considering that there are two truly egregious money grabs you haven't mentioned: Long distance and the notorious "system access fee". Long distance rates for all the wireless carriers in Canada are ridiculously over priced compared to wire line rates and those of wireless carriers in the United States, and the "system access fee" all of the carriers (except perhaps Bell) charge is nothing less than a blatant cash grab.
Re:An Explanation (Score:5, Informative)
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:Maddox (Score:3, Informative)
iPhone's screen is bigger. Visual Voicemail. The fold-out keyboard makes you look like a dork when you use it. Typing with your thumbs is awkward slow.
And last but not least: some of us *prefer* software buttons to hardware buttons for several reasons. What happens when the "Z" key breaks? You can't type the letter "Z" anymore: this functionality isn't duplicated anywhere. Also, what happens when someone writes an application with a great new feature that you want a shortcut to? Oh noez...I don't have a button for that. Or even better, I have to remember a whole bunch of alt/ctrl/function+key combos for things...that's soooooo much better.
Re:Paired Competition (Score:5, Informative)
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)
You are clueless... (Score:1, Informative)
iPhone might have a better user interface...but thats not what this discussion is about.
Reading Slashdot and few other web magazines do not give you a clue about the rest of the world...you need to get out and see the world.
Re:unlocking ... (Score:5, Informative)
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.
Re:It's simple suppy and demand.. (Score:2, Informative)
Re:An Explanation (Score:5, Informative)
Japan vs West (Score:5, Informative)
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, Informative)
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:It's the carriers (Score:3, Informative)
what about my treo 650? (Score:3, Informative)
iPhone - Treo
128MB - 64MB
4-8 GB Hard Drive - 2GB SD Slot
Visual Voicemail - No, thank god.*
Auto-Landscape Mode - Unnecessary (square aspect ratio)
Phone Numbers from Webpages - Yep
Integration with Movie/Music Service (iTunes) - No, thank god.*
Easy "Pinch" and "Spin" Navigation - Actual keyboard and a touchscreen
Auto-Threading of SMS Conversations - Yep
On-Screen Conferencing options - Yep
Safari Browser with "Zoom on Element" Features - So many browsers I can't be bothered to list them here.
Rich email client - Yep. Dozens.
Smooth Integration with Google Maps, Youtube, and Mac Widgets - Yes, no (thank god), and no (thank god).
Next, I'll point out the price of this phone.
Price of the Treo 650 (which stacks up to the iphone except for itunes and youtube): $150 on eBay. Unlocked.
So, youtube and itunes. Worth a couple hundred bucks to you?
* Items with asterisks require proprietary service agreements to be useful. Try getting "visual voicemail" on any carrier but at&t. Also, AKAImBatman refers to "Integration with Movie/Music Service" as though it can be other than iTunes, which isn't the case. It's iTunes or gtfo, and I consider it disingenuous not to specify that.
Phone specs compared (Score:2, Informative)
W41CA: 400x240 screen
iPhone: 480x320 screen
W41CA: 70mb of memory
iPhone: 4 or 8gb of memory
W41CA: 49 x 103 x 22mm, 126g
iPhone: 61 x 115 x 11.6mm, 135g
But the specs alone don't tell the story; the real story is in the implementation. It's arguable that the iPhone does nothing new, but the way it does it is really the key. Try using one, you'll see what I mean.
I've been to Japan on a number of occasions, and I'm actually returning there at the end of August. The Japanese certainly do love their gadgets, but the idea that they are any more than at best 6 months ahead of the US market is just not accurate.
Re:The iPhone is nothing new (Score:2, Informative)
There is wifi available for it
Are you being obtuse? Palms have had a touch screen since they came out over ten years ago.
I don't know what you are talking about, but TCPMP [wikipedia.org] seems to play my OGGs just fine from any of my SD cards, which I've been using since I had a Palm m500. It's also handy to take the SD card from my digital camera and upload the pictures to my webserver via my Treo.
No; that's one of the reasons I like it :)
Yeah, it's about 75% the size of the iPhone's screen. Not too shabby, especially considering that it came out on the market years ago.
I do, with the aforementioned TCPMP, which I have source to. "HitchHiker's Guide to the Galaxy" is my current favorite. I also play NES and GameBoy games [yoyofr92.free.fr], keep track of my car's mileage [sourceforge.net], keep track of my finances [sourceforge.net], keep track of my passwords [sourceforge.net], administer my servers remotely [sealiesoftware.com], read books [plkr.org], get directions [google.com], browse the web, etc, etc. Hell, I can even write and run software [lispme.de], right on my Treo! I haven't been paying attention, is Apple allowing people to even *load* third party software on the iPhone yet? How about that battery, can you swap it out with a spare like I can on any of my Palm devices and cell phones? Can you expand the memory? $600 is a lot, but I can buy a Treo 650 and 15 1GB SD cards for that much money. Plus I wouldn't be locked into a single provider. Or I could even wait three months and get a fully open-sourced phone with even more features [openmoko.com], and port all the software that I use to it.
You're "does it run OSX" bit gives you away: you're an Apple fanboy, and the only reason you replied was because you didn't have points to mod me down. Face it, the only thing new that the iPhone brings to the cell phone world is Apple's marketing power.
Re:Simple answer price fixing (Score:3, Informative)
I just bought a standard bar phone from t-mobile, 100$ gets you 1000 minutes.
Since I don't really use my phone all that often, it's great for me.
Re:MANPHONE (Score:3, Informative)
The range is a bit better than a cell phone, though, so it's probably a better choice for fishing out in the middle of nowhere anyway.
Re:An Explanation (Score:3, Informative)
Wrong. In Europe, the GSM standard effectively means you could switch out SIM cards to just switch providers. Since telephone manufacturers and telcos have a mutual contract, usually you buy a phone that is subsidised by a fixed term contract, enforced by locking the SIM to the phone.
However, there is enough competition that contract terms rarely go above one year, and in cases they do, the standard term is 2 years. I have not seen a longer-term contract and attendant sim-lock in 10 years.
So no, that argument won't fly.
MartRe:what about my treo 650? (Score:3, Informative)
Congratulations, you've stated the obvious.
BTW, a brand new Treo is ~$250-$300 with a service plan. $250 (Treo) + $250 (iPod) = $500 (iPhone). Using the low-end of variable eBay prices on used goods is far more disingenuous than my not stating the blatantly obvious tie-in with iTunes.
Re:It's the carriers (Score:4, Informative)
By now i've lived in 3 countries, had 4 mobiles phones and 5 different providers.
Except for my first mobile phone, i always bought the phones unlocked, free of any contract and at full price.
Never had any problem changing countries/providers and take my phone with me. All i have to do is get a SIM from my new provider (tipically costs about $10 with quite a lot of free minutes) pop it in the phone and it just works.
Even beter, ever since the number portability laws came on, i can even keep my number when i change providers (in the same country, though).
To top it all up, the best deals out there are SIM-only offers, aimed at people like me that bring their own phones.
So what's the big difference to the US/Canada:
Re:An Explanation (Score:3, Informative)
Comment removed (Score:3, Informative)
Re:An Explanation (Score:3, Informative)
A Carrier's Perspective (Score:2, Informative)
In the US, when a customer buys a device + service plan, a certain business relationship is formed between user and carrier, and most Americans tend to associate their carrier to everything about their phone. Therefore, if something breaks, whether it was the fault of the carrier or the phone manufacturer or the developer of the application... the customer always calls the carrier first! To put it another way, the carrier always takes the blame. Reread some of the posts above, you'll see what I mean.
I don't know about the other carriers, but this one therefore spends A LOT of time testing handsets and certifying applications. If there is a particular feature that can't be certified, it will probably be "locked down." Not because there is a desire to hamstring the customer, but because the customer will get pissed when it breaks. And the carrier gets to clean up the mess.
Re:It's simple suppy and demand.. (Score:2, Informative)
We in Lithuania had a stalemate in GSM operators.
Up until Tele2 came in to the market we had one of the highest prices for services, now they are 10 times lower.
And the fact is that we now have 15% more phone numbers issued than the resident population.
Re:unlocking ... (Score:2, Informative)
Source? Comparison to other countries?
And this is before paying for what other countries have already paid for, like healthcare and schooling.
Most Americans don't pay directly for healthcare either. (It's provided through employers which is truly idiotic, but that's a separate rant). Are the higher taxes for the "free" services accounted for?
There's little left for paying for things like advanced technology for most Americans.
That's just silly. iPods, broadband, and Xboxes are not remotely confined to upper classes.
Here in the US, 40% of the population gets distributed less than 1% of the wealth (while the top 1% controls 38% of all wealth).
Irrelevant; if the rich get richer, that doesn't change the median.
Re:It's simple suppy and demand.. (Score:3, Informative)