Comment by halostatue | Hacker News Reader

Comment by halostatue | Hacker News Reader

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You may not know where to begin with your comments about the Apple and AT&T relationship, but that would mostly be because you Don't Get It. It's not just about control and money; these matter, but less than you think.

By choosing AT&T, Apple chose GSM, which gave the iPhone compatibility with most of the world. They looked at CDMA and realized that it was a dead-end technology; they looked at the expense of having to maintain two different radio chipsets; they looked at a lot of things and made the decision that, at least up until now, they didn't want to deal with it. Apple has relationships with three GSM carriers in Canada (Rogers/Fido, Bell, and Telus) and many more elsewhere in the world. If T-Mobile had used the more common GSM frequencies, Apple might not have gone with an exclusive deal with AT&T. Maybe.

On the other hand, my immediate reaction on seeing the story title was "who is Brad Feld and why should I care that he's switching?"

Seriously. Looking at his CrunchBase profile, I can see that he does VC stuff now and built a fairly large consulting company, but I am still not sure that I should care about his opinions about consumer electronics. So I do think that his opinion has less merit because he got this particular device for free. (Money isn't credibility. To me, he's just some random guy with a platform. A blogger with no relevance to anything that I do.)

IMO, a consumer who has loyalty to a particular device or technology is a fool. If someone really comes up with something that I can unequivocally say is better than my iPhone, I will switch. So far, Android is "close but no cigar".

You are completely wrong. The expense of maintaining two different radios is nothing compared to the extra millions of devices they would have sold. This is so wrong that it is embarrassing that people use this as a point.

How much do you think it costs to buy a standard part, and hire a dozen engineers to get it all working??

How much do you think it costs to buy a standard part, and hire a dozen engineers to get it all working??

My experience with embedded hardware type startups would lead me to think you would pretty much double your FCC registration process/expenses, add about 50% overhead to your QA budget to basically test everything twice, add about 20% to your hardware layout budget (unless the two chips are highly pin and form-factor compatible), and a few other incidentals. On top of the other extra basic engineering code to "get it all working".

Then of course you also have to WANT to have the unit on the carrier that you added the CDMA chipset for in the first place.

The harder part to gamble on in a situation like this is: how many people will switch carriers to get a truly hot device? If you get it right (as Apple has appeared to), a large majority of people will pick the phone over the carrier. I'm sure they would have sold more iPhones to date than the current number if they had a CDMA version, but I'm not convinced it would have been a truly significant number overall.

Anyway, that's my rough experience with hardware design. What's your perspective on the added costs?

It's so expensive, they're not coming out with a CDMA iPhone this year.

Oh wait. They are? Huh. They must just have decided that the masses want iPhones. If they have to lose money on them... oh wait, you mean that isn't how business works?

I'm not wrong, though. Sure, the engineering costs are fairly small as a percentage of the cost of the device (a quick search suggests $18/chipset), but that's not the only costs involved. The power consumption of that chipset is not clear compared to the GSM chipsets that they use; battery life matters.

The extra SKUs matter: if Apple is selling these phones directly (always a key part of their strategy, at least in the U.S.), how do they make sure that the customers buy the right one for their preferred carrier?

Training in carrier plans and pricing matters: How much training do they have to do with their employees about the different rate plans for different carriers? Configuring a CDMA phone on the cellular network is also more work than plugging in the correct SIM. The training differences involved are substantial and fundamentally against the way that Apple works: as simple as can possibly be done.

The quality of service/experience difference matters: would you care to explain to a customer why their buddy's iPhone on AT&T can browse the web while talking yet their "exact same iPhone" on Verizon can't?

There are lots of other extra costs that may or may not be covered by having a CDMA version that could reach a few million extra CDMA subscribers. Worldwide, there's ~142M CDMA EVDO subscribers as of 4Q 2009 (via cdg.org) and ~506M GSM 3G subscribers. The worldwide market for CDMA phones is ~500M, whereas the equivalent GSM one is ~4B. Apple made the right choice.

Here in Canada, Rogers's service doesn't suck (at least in the big cities), although their pricing sort of does (not enough competition). Bell and Telus switched to a shared GSM network (they're running both GSM/HSPA+ and CDMA until they can get enough of their customers switched to GSM phones to make it feasible to kill the older network). This was done mostly because they were preferred carrier for the Olympics this past year, and they didn't want all those Europeans roaming on the Rogers network, but it was done.

I personally predict that when Verizon has a major LTE rollout (which is essentially GSM), there will be a Verizon iPhone.

Where are you getting your GSM 3G subscriber data from?

GSA (http://gsacom.com); roughly equivalent to the CDG for GSM.

Nokia spent millions trying.

The problem is that very rarely is a platform "unequivocally" better than another. If you're waiting for that expect to wait a long time. We have to make subjective assessments. Loyalty is one of those subjective things. I don't think we are fools for it. In fact it seems like you are pretty loyal to Apple.

I'm not loyal to Apple, though.

Yes, I currently am heavily invested in the Apple ecosystem with an iPod touch, iPhone, iMac, iPad, and a few other devices floating around.

Yes, I could be charitably called an Apple fan-boy at this point.

No, I won't stay with Apple if their build quality and/or experience quality goes down and someone has a viable alternative.

I don't have the money to throw around on lots of different devices, so I need to figure out what I'm going to buy that's going to last me 2 - 5 years (depending on the product and purpose). Right now, that's Apple.

When I'm ready to replace? We'll see then what the answer is. Five years ago, my answer wasn't Apple (it was leaning toward it, and the switch to Intel made it easier, but it wasn't there yet). Five years from now, my answer may or may not be Apple. It's up to Apple to convince me that they remain better than their competitors for me to stay.

When Palm OS came out, it was better than the others (which I guess were those old e-diaries). When Windows CE came out, it was better than Palm. When iPhone OS came out, it was better than anything else that was out there.

Now, things are a lot harder. iPhone is still great, Android is doing really well, clearly catching up. Palm Webos is also good, and Windows Mobile 7 would probably be a worthy contender when it appears. BB is getting more consumer friendly, and Nokia have some great OS as well. Looking at Mobile OS, it seems you are right now, but in the past it was a lot easier.

No copy and paste on the Windows Mobile 7? What kind of worthless device is that!

/joke

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