iPhone Carriers
Before the iPhone, AT&T and Verizon dictated phone specs to Nokia and Motorola. Apple flipped it. Carriers kept the pipes, Apple kept the experience, and experience won. Distribution power became commodity bandwidth.
Before the iPhone, carriers designed phones. AT&T and Verizon determined features. They dictated specs. Phone manufacturers like LG, Motorola, and Nokia obliged. Carriers had distribution power and controlled everything. Then Apple showed up with a phone designed by Apple. The iPhone was beautiful and intuitive. But Apple needed distribution. Carriers initially refused. They didn't want Apple designing phones, but the iPhone was undeniably cool. Customers wanted it. Carriers realized they could negotiate with Apple, or watch customers switch carriers offering the iPhone. Apple negotiated from strength. They wanted revenue share on data plans, not just subsidies. They wanted to control the user experience. Apple apps would have priority. Carriers capitulated. For the first time, a hardware manufacturer dictated terms to carriers.
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