I want to first start out by venting my frustration with my BlackBerry Tour that I purchased less than 6 months ago. Every single person that I know who has a BlackBerry has had problems with it. Either the trackball breaks, the keys stop working properly, the phone randomly crashes, the phone gets wiped out during upgrades, and or some combination of these problems (and others).
My trackball first showed signs of not working properly within 2 months of getting my phone. As the weeks wore on, it got harder and harder to use. Eventually I got fed up with it and called Verizon. They shipped out a new BlackBerry Tour for me. I restored my backup onto my new device, and when I went to upgrade the phone, everything got deleted. And the BlackBerry software on my computer stopped working. Long story short: after spending a good chunk of my day doing multiple uninstalls-installs, restoring data, and updating everything, I finally got my replacement phone working again. Even with my insane amount of optimism, I am confident that my new device will break down or cause me a headache shortly.
Now on to the business model of cell phones. Right now, in the USA, cell phones are mainly sold through a razor blade model. The carrier gives away the phone (or heavily subsidizes it) and in return, you sign a long term contract with heavy termination fees. And many devices are only available on certain carriers — the perfect example being the iPhone on AT&T. I expect and hope that this model will be disrupted shortly. What we need is more competition between carriers and device manufacturers — no more exclusive contracts on devices or forcing people to sign long term contracts. Competition breeds innovation and lowers prices. I want to be able to buy any phone and use it on any carrier with no contracts required. Some important highlights:
- On January 5, 2010, Google released the Nexus One phone. This phone can be purchased unlocked and can be used on any carrier.
- Rumors are that this Wednesday, AT&T will lose exclusivity over the iPhone
I am hopeful that such developments are the start of a longer term trend where consumers are given more options in devices and carriers become commoditized.