Apple suffers from Big Bell Dogma

On Tuesday, I participated in the Connected Planet 4G Salon. My first slide showed two paths the mobile operators could pursue. The starting point was 2006 (specifically chosen as the end of the pre-iPhone era).

One option is what I refer to as the “Big Bell Dogma” path. This path involves making every decision with one goal in mind – maximize control over the ecosystem which allows the operator to maximize its share of the revenues in the ecosystem. This path forces innovation to happen at “carrier speed” and the result is constrained ecosystem growth. As I’ve described before, Big Bell Dogma is named to represent the mindset that telcos have held onto ever since Alexander Graham Bell invented the telephone in 1876 and was really at its prime in the old monopoly AT&T days. However, all carriers suffer from Big Bell Dogma to some extent – some more than others.

The second option is the one I referred to as the “Open Enablement” path. This is the path that Sprint has chosen, perhaps as best represented by our hosting of our 10th annual developers conference this week in Northern California. On this path, every decision is considered with the goal of maxmizing ecosystem growth. Operators must ensure that they’re adding value, both to accelerate growth but also to make sure that our added value translates into an earned share of the revenue in the ecosystem. Along this path, innovation happens at “Silicon Valley speed.”

Later, during the Q&A, someone from the audience asked how Big Bell Dogma was different from Apple’s approach to managing the ecosystem.

That’s an excellent question and the reality is that Apple suffers from Big Bell Dogma. They want to put constraints on how innovation can happen so that they dominate the ecosystem and extract the most value.

The difference is the starting point. Unlike mobile operators, Apple really is an innovative company. They understand the “hits-based” nature of the software industry and therefore the need to enable lots of apps to enter the market so that a few can really make a difference, so they gave application developers the basic capabilities that had previously been missing to allow the app ecosystem to explode. However, on every other dimension, Apple has kept the clamps on, constraining innovation to happen at “carrier speed.”

Unlike Apple, Google has allowed the Android ecosystem to innovate in all dimensions, and even in the app ecosystem, Google’s lack of constraints is winning over developers.

Think about it – Apple makes great handsets. But they introduce one new iPhone handset a year. How much real innovation is represented in that one handset? Only as much as one company can imagine and productize. Now think about all the different Android handsets you’ve seen and the level of innovation that handset OEMs are bringing to market. Consider just the HTC Evo: kickstand, front and rear facing high resolution cameras, HDMI output, 4G network connectivity… Now multiply that by the innovation that Samsung, Motorola, LG, Sanyo, and all the other innovative handset manufacturers that are out there can bring to the table.

Think about it – here in the U.S. Apple has limited the iPhone to one carrier. How much innovation has that operator delivered to customers since 2007? In that time Sprint alone has rolled out 4G nationwide (in 2 months, Sprint 4G will cover 120M people), introduced the first all inclusive unlimited plan (Simply Everything), Ready Now to help customers actually make full use of their advanced devices, Any Mobile, Anytime, and the Sprint Free Guarantee, just to name a few. I imagine T-Mobile and Verizon have each had some innovations as well. The Android ecosystem benefits from these innovations, but the iPhone ecosystem doesn’t.

And even within the application segment, the Android ecosystem can enjoy growth-accelerating innovations, like Sprint ID, which would never be allowed by Apple as they seek to rule the app ecosystem with an iron fist…

Apple makes great products and back in 2007 they gave the entire ecosystem a fast start with the (previously unmatched) enablement they provided to application developers, but they are definitely playing the Big Bell Dogma game.

2 Responses to “Apple suffers from Big Bell Dogma”

  1. Very good article, Russ, and one that I, as a Bell System engineer for a quarter century, can certainly understand.

    The old Bell System did build very solid infrastructure, much of it designed with a minimum 40 year life. That makes for wonderful reliability, but one doesn’t innovate rapidly if one’s equipment is designed to last 40+ years. :)

    These days the speed of change is much faster since everyone has some sort of competition, but a side effect is a bit less absolute quality.

    Depending on one’s needs, sometimes a small number of stolid but solid devices is still better than a vast number of innovative but flaky devices.

    Another thing that will count for some users, again depending on needs, is continuity. Look at the businesses that use the heck out of the Blackberrys. Constant hardware improvement, constant software improvement, admittedly at a slow pace, but with absolute continuity over the years. Use one Blackberry, and one can probably use any other.

    The same cannot be said for the plethora of other models, each with unique kinks in their hardware and software designs, in the rest of the market.

    I use an original model Palm Pre. I have become familiar with and used to the hardware and software.

    Changing to any other hardware/operating system (Android, Microsoft, RIM, etc.) would not only require me to relearn from the basics up, but would also mean that the money spent on applications, accessories, and spares would be lost, and that I would have to buy all new because of near zero compatibility.

    Also the external support in the way of back-ups and computer software would be lost moving between platforms.

    Some customers are not willing to start over every year, despite the lure of diversity and innovation.

    Speaking of Big Bell Dogma…

    Allowing compatible hardware from another carrier or direct from a manufacturer instead of locking customers into a limited and highly controlled set of devices, available only from each carrier, would be a nice thing, but the CDMA carriers (including Sprint) shudder at the thought.

    There are devices that currently work on the Sprint network that Sprint will not allow to be used on actual Sprint branded plans.

    There are Verizon branded products that would work fine on Sprint, Virgin devices that would work fine on Sprint, Alltel devices, Boost, iWireless, and many others that would (and do) work fine on Sprint’s network, but Sprint will not allow it. At least not on a Sprint plan.

    THAT, sir, is Big Bell Dogma at work, up front and direct.

    Will it take a Carterphone like decision to change it, or do you really believe that Sprint will eventually actually allow non-Sprint-branded devices on their plans as they hinted at a couple years ago?

    The CDMA carriers in the US need only to look in the mirror to see the Big Bell Dogma at work.

    (…and yes, I would buy a Palm Pre II from Verizon and put it on my Sprint plan if I could, if that is the only way I could get one.)

    Have a good day, Russ!

    Tom

  2. Russ says:

    Tomas,

    Thanks for your comments. As I said, all of us suffer to some extent from Big Bell Dogma, some operators more than others. I tend to think that Sprint tends to be more on the “Open Enablement” path more of the time.

    It was interesting my co-panelist at this session was from metroPCS. As I’m sure you know, metroPCS has been more aggressive than most in accepting phones from other CDMA carriers onto their network (they offer a metroFlash service to enable it). But all this guy wanted to talk about was their metroStudio services, which are all about metroPCS being in the middle of the content you access – very Big Bell Dogma-ish. Point being, all operators suffer in some way from the symptoms.

    Getting back to the issue of bringing non-Sprint CDMA phones to our network. Believe it or not, we would LOVE for customers to bring phones to our network that we don’t need to subsidize. As I think you know, we pay the handset OEMs a lot (typically $100-$300) more than we charge customers for new handsets. Taking that cost out would do wonders to our financials.

    For GSM carriers, it’s pretty straight forward – simply switch out the SIM card. But CDMA has to be different. Each device is customized for each carrier with different core software and in some cases modified hardware made to work optimally for each carrier. At the very least, the phone needs to be able to talk on the same frequencies as the carrier you’re bringing it to (generally not a problem when moving phones between US carriers, but a big problem with phones coming from overseas).

    But even if the hardware all works fine, the core software still needs to be switched out and this isn’t a simple thing (as I’m sure you know, but many of my other readers probably don’t). And even if you know exactly what you’re doing, there’s a decent chance things won’t work. Voice mail runs a pretty high risk of not working. It can be really tricky getting data to work, or maybe you’ll only get 1x data, but not EVDO. In fact, when metroPCS does it, they’ll only do it for voice and text, no data. Bottom line, “your mileage may vary” – significantly. In fact, if you search the forums, you’ll find lots of horror stories of folks that tried to flash to metroPCS and it didn’t go well and they’re stuck with a phone they can’t take back to the old carrier and they can’t really use it on metroPCS.

    Given the years it’s taken for us to improve the things that were broken within Sprint to provide a great customer experience, and the years that its taken for folks to recognize those improvements and for our customer satisfaction to rise to be back in line with the best of the rest, we’re not anxious to introduce things like this that are likely to create horrible customer experiences. metroPCS can get away with it because folks say “my phone barely works, but hey, I’m saving a lot of money, so I can live with that.” Sprint provides the best value in wireless for those that want to do more than just talk and text – we can’t get away with an experience that fails for all the other stuff.

    So, even though we’d love to enjoy the financial benefits of accepting phones from other carriers, we don’t think it’s worth it in terms of the customer experience. (I think that kinda fits with your explanation above of why the Bell System moved slowly in some areas – to ensure reliability and continuity.)

Leave a Reply