Thursday, September 17, 2015

Why Carriers Should Stop Selling Phones

So Walt Mossberg says that AT&T should close all its stores, stop selling smart phones, and basically get out of the way of customers and smart phone manufactures.  Agreed:


Key to his piece is Apple's latest announcement that it is going to start offering unlocked iPhones under an installment plan, which Walt correctly suggests is a great way to push carriers out of the retail market for smart phones all together.

Of course, this all comes about because the bozos at AT&T hate Apple and keep trying to think of ways to punish customers that want iPhones.  Despite the fact that AT&T owes it's entire cellular service to having been lucky enough to have a monopoly on the early iPhone, they hate the popularity of the iPhone because it gives Apple too much power.  Power AT&T wants.  So historically, AT&T stores have done everything they could, including having salespeople lie, to discourage customers from buying iPhones.  They punished early iPhone customers who had unlimited plans by throttling them, and they dismissed the iPad as not needing a cell connection.

Recently, they abandoned subsidized iPhone sales, forcing customers to pay full price on installment plans.  The idea was to make customers realize how darned expensive iPhones were compared to Android phones.  "So you still want an iPhone?  It's going to cost you an extra $18 a month."

Of course, like all of AT&T's anti-Apple moves, it completely backfired.  Apple now has it's own installment plan.  It's not cheap, but it's likely to be a big hit anyway.  And guess what, now that Apple has loaded that gun, it could lower prices, create incentives, or offer other perks that would make getting your iPhone from Apple a no brainer.   If Apple got serious about it, there is no way AT&T or any other carrier could compete in selling iPhones.

Meanwhile, AT&T still offers marginal service at the worst prices in America, and terrible prices compared to services around the world.  Maybe, instead of thinking of "clever" ways to undercut Apple, they should work on providing good service at a good price.  While they still have the time to do it.

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