simoncoles.org   Simon Coles Personal Blog

The iPad is certainly causing people to think, and this post from Matt Gemell with thoughts on How to Compete with iPad really hits the nail on the head in terms of what the iPad represents.

For students of the Innovator’s Dilemma you can really see it at work in the reaction to the iPad. Matt’s comment:

If you’re going to put a desktop operating system onto a tablet device, you’re going to immediately alienate the vast majority of your potential customers. Note the word “potential”. Paradoxically, you may temporarily placate most of your existing customers, but you’re not innovating and you’re certainly leaving a lot of money on the table.

The iPad is really interesting, both as a device in its own right and also in how it will change our perception of how people interact with the computing world. I’ll also be interested in how other manufacturers react – I fear it’ll be rather similar to their reaction to the iPhone which is pretty much “Look, we know you think the iPhone is cool but it really isn’t because it is so limited. Here’s our phone which has all the features and complexities of our normal phones, with a few choice bits from the iPhone, and a load more stuff squidged on top”.

And of course, we all keep buying iPhones.

As an aside, the first views of Microsoft’s “Courier” Booklet have appeared. My initial impressions are:

• By the time it gets to market, the iPad will have set our expectations for this category of device.
• Wow, it looks powerful/complex – but in a way that I don’t really care about. If I want that power, I’ll use my Laptop.
• A pen! Wow that feels old fashioned now… (I know there are lots of good uses for a stylus, but…)
• Microsoft and their partners have a history of making a mess of this space.

The next 18 months will be interesting, both from the perspective of the cool tools we’ll all have at the end of it, but also watching the market dynamics play out. I’m sure there’s plenty of MBA case study material that will come out of this phase of the market.

Good analysis in this TechCrunch post about the changing Cellphone market.

Is there any question what Google is doing here? They’re taking the traditional mobile model in this country, where you first choose your carrier, and then choose your phone, and turning it upside down. It’s what Apple started with the iPhone.

The networks have always been used to being “The Brand” – traditionally you picked your network and then saw what phones you could get. Yet in essence they’re just providing a commodity (the connectivity) and most of the user experience is dictated by the phone the user holds in their hand.

Sadly the carriers seem completely unable to adapt to this changing world, and are still stuck in an old mindset of:

• Long term contracts with punishing penalties even if you want to upgrade your phone but stay with them.
• Completely opaque pricing so you can’t actually compare them properly.
• Bills which seem to bear no relation to what you were expecting to pay looking at their price list (which seems to be a Vodafone speciality in particular, but they’re all bad).
• Usurious roaming rates.
• Very restrictive conditions around data use (although this got better when Apple forced o2 to do the right thing for the iPhone)

Hopefully someone deep inside one of the carriers will realise there’s a competitive advantage to be had by stepping away from the old outdated model, and come up with a plan that:

• Has reasonable lock in period
• Allows you to upgrade as you wish for reasonable rates
• Transparent pricing
• Reasonable roaming rates (e.g. almost the same as normal domestic use)

It has got to happen at some point, surely?

Carphone Warehouse have a table of UK iPhone Tariffs on their web site. Which is kind of useful, although it takes a lot to figure out what’s best.

As far as I can see, O2 and Orange are nearly the same except for the lowest pay monthly plan, which is slightly more generous from Orange, for the same price.

Vodafone is less generous in their monthly plans, unless you are seriously addicted to texting.

But then when you get into the additional stuff, it all becomes as clear as mud. For example, the o2 bolt ons mean you can get unlimited texting just as you can from Vodafone, for no extra charge.

And then there’s Tesco’s iPhone plan which is apparently provided by o2.

Of course, it is all so complex that no one really takes advantage of their cellphone plan, do they?

For work, what I really care about is the International Roaming charges, which again are as clear as mud.

I suspect this is one of those decisions where you could spend hours analysing it to save the grand total of 10p in the year. But you’ll never know.

So it’s down to an emotional decision – I’ve always had a bad customer experience with Vodafone (although their network is apparently better), O2’s been ok although they’ve been a bit cynical in their exploitation of iPhone users and their network is apparently not as good as the rest, and then Orange – my first phone was with Orange, and I’ve had no complaints, but that was years ago.

Shouldn’t this be easier?

So I tried to upgrade my iPhone and wasn’t that happy that O2’s attitude was a flat “Non!”. Now it seems O2 have finally relented and if we’re good enough customers we can upgrade our iPhones early.

Apparently there’s an “O2 Priority List” (is this new?) which I’ve never heard of before. Here’s what it means apparently:

• All customers continually spending over a minimum of £80.00 a month, receive a 6 month early upgrade
• All customers continually spending over a minimum of £50.00 a month, receive a 3 month early upgrade
• All customers continually spending a minimum of £35.00 a month, receive a 1 month early upgrade

I travel a lot and my phone bill is regularly over £100/month thanks to roaming charges, so I assume I’m at the higher level. Not that O2 has mentioned anything to me.

So let’s review.

• I wasn’t a valued customer until there was competition. O2 were happy to hold me captive and screw me for as much as they could.
• Now I have choices for my iPhone carrier, apparently I am a valued customer. Although they haven’t bothered to tell me.
• My contract ends in 3 months – so the “6 month early upgrade” would have been useful when I first tried to get an upgrade but now it’s just insulting.

Thanks O2, I think I’ll wait until January. I already know you don’t value my business and whilst I know the other carriers are probably as bad, at least I’ll have some choices about plans and probably cheaper International Roaming charges.

There’s a real market opportunity here for a carrier that treats customers as customers, not prisoners.

There’s an interesting article on Gizmodo talking about the persistent downward pressure on prices at the Apple App Store. The way the thing is structured, prices just keep getting lower which obviously impacts the attractiveness of the iPhone to developers. Apps which are available on multiple platforms are much cheaper on the iPhone.

There’s some interesting economics here, as well as social effects. Apple have clearly done an excellent job enabling developers to write and sell applications, and iPhone customers have clearly taken to it. However, this makes for a very competitive market which is almost entirely sculpted by Apple’s design choices in the App Store and iTunes.

Watch this space…