How Apple intends to keep you from installing software on the iPhone?
(Photo by protohiro)
Watch Steve’s demo of text messaging on the iPhone from his keynote address. The Mercury News has posted their bootleg version. It was shot with a camcorder over the heads of the Apple fanboys like a pirate DVD, but at least they indexed it, so you can jump straight to the bit about texting.
Forgive the crowd their cries of pleasure and awe. It’s a packed house, it’s the most anticipated product launch ever, he’s had forty minutes to soften them up by now, and this Reality Distortion Field goes to eleven.
But come on, that’s just iChat, Apple’s instant messaging client, running over SMS. What’s the point of that?
The point is price discrimination.
Steve typed "Sounds great. See you there." 28 characters, 28 bytes. Call it 30. What does it cost to transmit 30 bytes?
- iChat on my Macbook: zero.
- iChat running on an iPhone using WiFi: zero.
- iChat running on an iPhone using Cingular’s GPRS/EDGE data network: 6 hundredths of a penny.
- Steve’s ‘cool new text messaging app’ on an iPhone: 15c.
A nickel and a dime.
15c for 30 bytes = $0.15 X 1,000,000 / 30 = $5,000 per megabyte.
"Yes, but it isn’t really $5,000," you say. It is if you are Cingular, and you handle a few billion messages like this each quarter. (1)
Short of launching your own private satellite network, on a per byte basis SMS is the world’s most expensive way to communicate, and the most profitable product ever introduced by wireless operators.
On Tuesday, I found this part of the demo irritating, but assumed that I would be able to install iChat myself. Or better still Adium, which supports AIM, MSN, ICQ, and Jabber. (2)
But I will not be able to do that because … it will not be possible to install applications on the iPhone without the approval of Cingular and Apple.
It could get worse. Cingular has ‘not yet determined’ service pricing.
Right now, Cingular charges $19.99 per month for unlimited data; unless you have a Treo or Blackberry or Blackjack, in which case the price is $39.99 per month. Why?
Just because.
Smart customers sign up for the cheaper plan, buy an unlocked smartphone, and install their own email app, saving $200-$300 over the life of the contract (depending on the cost of the smartphone).
What if Cingular introduces an ‘iPhone date plan’ and charges $59.99 per month? I will not be able to do anything about it, because … it will not be possible to install
applications on the iPhone without the approval of Cingular and Apple.
I will not be able to make free phone calls over WiFi on my home or
office network because …
I will not be able to install Skype because …
I will be able to ‘touch my music’ - thanks Steve - but I will not be
able to use my own music to create free ringtones because …
It’s not just about Jobs being a control freak (although that may explain why we have to use Safari, a browser that some major web sites do not support, and why we won’t even be able to buy Java games). It’s not about the ludicrous claim that a third-party app could take down the network. It’s not about preventing other manufacturers from copying the iPhone. It’s about the money.
Fair enough. None of this changes the fact that the iPhone is a remarkable new product. Cingular and Apple exist to make money, and if they can persuade consumers to pay this kind of premium, congratulations.
But as a consumer, I have a choice. And for now the ability to install any application that I want leaves phones powered by Windows Mobile, Symbian, Linux, RIM, and Palm OS with some major advantages over the iPhone.
***
1. Even if Steve bought the biggest bundle of text messages that Cingular offered and used exactly that number every month, this message would still have cost him $250 per megabyte. But he’d have to send 100 messages a day to keep his average that low. On the other hand if he signed up for one of Cingular’s pseudo-unlimited data plans, iChat via GPRS/EDGE would cost him essentially zero.
2. Yes, I know that most people don’t have IM on their phones, so I still have to use SMS to send them a message. And where carriers do offer IM, it generally runs over SMS. But this is circular reasoning. Other carriers refuse to offer IM-over-data out of the box for the same reason Cingular and Apple do: so that you and I have to pay a premium for SMS.
