Why carriers still matter

Bloomberg reports that iPhone sales are slowing because some carriers are refusing to agree to Apple’s terms to carry the iconic handset. Huge service providers such as China Mobile and NTT DoCoMo, among others, have opted not to carry the iPhone because of the steep upfront costs and other factors. That’s a major reason why Apple has announced fewer than a dozen carrier deals since September 2011, leaving the total number of Apple’s carrier partners at 240 — roughly one-third the number of operators that carry Samsung phones.

Meanwhile, The Verge notes that some U.S. carriers are forcing manufacturers to lock the bootloader on some of the most important new Android handsets on the market. The bootloader is locked on the Samsung Galaxy S4 sold by Verizon Wireless and AT&T , for instance,  preventing users from installing other operating systems or firmware that can extend the life of the phone. The carriers claim their mandates are necessary to ensure security “guarantee device performance,” but it undermines the efforts of HTC, Motorola and others to sell unlocked devices.

Both developments highlight the fact that carriers continue to enjoy immense power in the smartphone era. Carriers no longer dominate the mobile industry the way they once did — the iPhone and App Store changed that forever — but they still control which handsets to carry, how those devices are provisioned and how they’re marketed. Which is why carriers still hold the key to handset sales.

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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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