Apple and Google, telecom's new stars
It was Apple and Google—not the traditional phone companies AT&T and Verizon Communications—that took center stage in the telephony market in 2007. — In January, Apple announced the iPhone and named AT&T its exclusive carrier in the U.S. For almost six months …
Context & Ripple Effects
The iPhone launch reframed who leads telephony. When Apple unveiled the device in January 2007 and handed AT&T exclusive U.S. distribution, the question analysts asked mid-year was whether the phone could carry AT&T's subscriber ambitions — the Wall Street Journal framed it in June as whether the iPhone was AT&T's magic bullet. By December, the answer had broadened into a verdict on the industry itself: year-end retrospectives like Salon's 2007 technology roundup treated Apple and Google, not AT&T or Verizon Communications, as the companies that defined telephony this year.
First-order effects
- AT&T holds a differentiated handset no rival carrier can match, converting Apple's brand pull into exclusive subscriber acquisition — while Verizon Communications and other operators face customers comparing their lineups against a phone they cannot sell.
- Apple has set the terms of its carrier relationship rather than accepting them, an inversion of the traditional operator-led handset negotiation.
Second-order effects
- Rival carriers must now compete on which device makers and software platforms they can attract, shifting bargaining power toward handset and OS vendors and away from network operators.
- Google's prominence in the 2007 telephony story signals that internet companies see carrier-controlled distribution as the opening to enter mobile on their own terms, pressuring every operator's walled-garden model.
Third-order effects
- If the pattern holds, the strategic center of the mobile industry migrates from network ownership to platform control — the device maker and operating-system vendor capture the customer relationship while carriers risk becoming commoditized bandwidth providers.
- Carrier resistance to that shift sets up a longer fight over openness and gatekeeping in wireless, with regulators and developers as the constituencies whose alignment will decide how far the platform players' leverage extends.
The trend: Control of the mobile market is migrating from network operators to device makers and software platforms, with 2007 as the year the inversion became visible.