Light Reading

Apple Launches Evil Plan to Steal Carriers' Customers

Mitch Wagner

Apple's upgrades to the Mac, iPhone, and iPad, announced Monday, are focused on tightening integration of those three products into a unified universe. That's both an opportunity and a threat for carriers.

The more useful Apple makes its mobile products, the more customers use them. That makes money for carriers.

The threat is that customers are loyal to Apple, rather than the carriers. Customers think of themselves as Apple customers, and the carrier is just a provider of the dumb pipe that connects their Apple devices to each other and the world.

It's kind of like the way customers think of cars. You have strong feelings about the car you drive. Even if you're not a car buff -- even if you just think of your car as a box to take you place to place -- you know whether it's comfortable, whether it runs well, whether it needs much repair.

You probably don't care what kind of tires are on the car.

In this metaphor, Apple is the carmaker. The carrier is the tire manufacturer.

This strategy is nothing new. Apple has been following this plan since at least 2001, when it introduced the iPod and started calling the Mac the hub of a digital world, rather than just a PC.

The turning point was 2007, when Apple introduced the iPhone. Until then, mobile consumers bought whatever phones their carrier was selling. Beginning in 2007, millions of customers wanted an iPhone. And they'd do business with whatever company would sell it to them.

Apple stepped up that game Monday. Now, the Mac, iPhone, and iPad are peers on a digital network that includes cars, health devices, and the home. It's a network that carriers can play on -- with Apple's permission. (See Apple Launches Biggest Changes Since iPhone and Apple Joins Home Automation Wars.)

Says Re/Code's Walt Mossberg:

    The biggest new features were about making iPhones, iPads and Macs work seamlessly together, so that people on Planet Apple have no reason to leave, and those toting other brands might be tempted to fully join the Apple tribe.

He adds:

    The overwhelming purpose of Apple’s latest software is to make it irresistibly attractive to use all of its devices and services as a unified digital ecosystem, not to mix and match.

A big part of that strategy is to make the Mac work better with the iPhone and iPad. With a new feature called Continuity, you can start a task like composing a mail on your Mac, and then pick up where you left off on the iPhone. AirDrop is extended to share items across the iPhone, iPad, and Mac -- to let you clip content to the Mac clipboard and throw it to your iPhone or iPad. You can answer or place calls on your iPhone with your Mac.

Apple is primarily fending off Android, of course. Apple is fine if you want to buy an Android phone and use it with your Mac, but Apple is trying to entice you to use an iPhone with your Mac. (The same applies to Windows on the desktop, though Apple is increasingly seeing Windows as irrelevant rather than a threat.)

Indeed, Nilay Patel, writing at, detects a new tone to Apple:

    What Apple was really announcing was the next version of itself -- a playful, relaxed, hyper-competitive giant that wants the next generation of products and services to be built on its platforms. That's the game now, after all -- the mobile revolution is over, and the war is now between Apple and the Google / Samsung alliance for the hearts of developers.

    That's why Apple spent fully one-third of its presentation today on new developer features, including an entirely new programming language called Swift. That's why iOS is opening up in entirely new ways, including previously forbidden things like letting apps talk to each other and even share interface elements with the system. That's why Apple is building out the foundations of both health-tracking and home-monitoring platforms that big companies like Nike and Honeywell can tap into alongside smaller players like the smart lock maker August and speaker companyiHome. And that's why Apple is adding all sorts of little features to its systems that only power users really want, like widgets in the notification shade and replacement software keyboards. Make the developers happy, and they'll stick around to write great apps that rely on the iPhone as the center of the universe.

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User Rank: Light Sabre
6/4/2014 | 6:08:40 PM
Carrier customers will always be there?
Everyone still has to pay for their internet connection... but maybe Apple can pick up on customers who are willing to pay more for services delivered over those pipes.

I wonder if the health apps that Apple is working on is a step towards another way to identify users -- so that Apple can start pushing apps to targeted individuals, not just iTunes accounts... Apple needs to go beyond iTunes accounts and be able to sell apps to every member of a family connected to a single iTunes account.
User Rank: Light Sabre
6/4/2014 | 6:03:01 PM
Re: Threat
Apple doesn't control the last mile, either.  It can provide a good interface, but I don't think AT&T/Comcast/Verizon/etc will go down without a fight. 

The instant messenger wars of the 90s didn't seem to kill off any carriers. And WhatsApp's acquisition was more about gaining more international users for Facebook than it was about getting any leverage over carriers.

Will phone calls over WiFi really be any different...? 
User Rank: Blogger
6/4/2014 | 1:12:36 AM
Re: Threat

At this point, carriers must be getting used to future visions that suggest they will be nothing more than dumb pipes. Hasn't quite happened yet though.

There's a reason for that:

"He who controls the spectrum controls the universe."


Apple doesn't control the spectrum. 
User Rank: Light Sabre
6/3/2014 | 8:25:53 PM
Re: Overthrowing Carriers
@Joe, exactly, it is a "friendly", but "fatal" competition for the carriers.

I love Mitch's focus on the real competition with platforms.  Apple is definitely focused on the heart of competition.  They stand to come out strong.
Joe Stanganelli
Joe Stanganelli,
User Rank: Light Sabre
6/3/2014 | 4:58:24 PM
Overthrowing Carriers
Called it.

User Rank: Blogger
6/3/2014 | 3:58:40 PM
I agree this is the same sort of threat Apple has posed to carriers over the years, though not sure it is becoming more of a threat now than it seemed in 2007, unless Apple wants to revert to working with just one carrier. At this point, carriers must be getting used to future visions that suggest they will be nothing more than dumb pipes. Hasn't quite happened yet though,
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