M1, StarHub, and Apple’s iPhone exclusivity

Using network growth to fight Android’s ubiquity

Earlier today, StarHub announced their plans to offer the iPhone before the end of the year. Set aside for a moment that feeling of deja vu, when it does happen, Singapore will be one of few countries (if not the only?) to have the iPhone on all its nationwide carriers.

I’m not interested in the telco strategy here, which is obviously to prevent bleeding customers over to the other guy with the iPhones. Apple seems to be doing this all across its international markets. In the UK, O2 lost its exclusive rights after about two years, and you can now get the smartphone from Vodafone too. AT&T loses its three-year rights next June. I see that as the deadline for these expansion plans. Apple appears to be expanding its reach in anticipation of June, which will likely bring a new iPhone model that could possibly work with another major US carrier’s network. Or two.

The iPhone’s current greatest weakness isn’t the lack of a physical keyboard, camera flash, multitasking, or all those other things Verizon’s first iDont (sic) ad pointed out – it’s the network exclusivity. Many people want one, but won’t switch to AT&T/Singtel/etc. for countless personal or practical reasons. Verizon sees its rival’s weaker 3G network as the button to hit, and hits it three times with these new ads, also launched today. The Android platform has catered largely to people wanting an alternative to the iPhone on other networks by making itself available on a (promised) raft of devices. In Singapore, M1 and StarHub have spent the last cold, quiet year pushing Symbian, Windows Mobile, and Android smartphones to customers in lieu of the iPhone. I don’t believe Apple sees the first two as threats. Android is beginning to look like competition, which is a good thing.

But it’s clear that people hate AT&T’s service quality. Unreasonable tariffs have also inspired similar feelings of animosity around the globe, towards Singtel, Rogers, and so on. Continuing the way they were, iPhone sales might have stalled. This latest round of international market expansion, culminating in a new US carrier next year, is probably their most visible play at limiting Android adoption.

What I mean is this: Given the choice between an iPhone and an Android phone in the same store, the data shows most people will choose the iPhone. What further kills Google’s mobile OS is the fact that I can’t see either M1 or StarHub, having blown a huge wad of cash to secure the iPhone in 2009, spending too much time or money promoting alternative phones in 2010. The long wait has made them hungrier and more eager to extract gains from this last-minute victory, and they’re going to be pushing the iPhone as hard as Singtel did when it was given exclusive rights last year, if not harder. Apple is notoriously good at playing suppliers against one another to get better deals, so it’s no surprise that they’d do it to their retail partners too.

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