Apple, Google, AT&T: The Perfect Crucible

August 23rd, 2009 by · 2 Comments

Every now and then, what should be a minor commercial dispute becomes something more.  Apps for the iPhone have been rejected by Apple for less reason with less uproar, but they just don’t touch all the bases that this one does.  Watching the dance has been fascinating.  So now Apple hasn’t actually rejected the Google Voice app, it just hasn’t accepted it yet because it needs more time to study it.  Right…  In other words, they realized after the fact that claiming the power of gatekeeper will be complex.  And AT&T supposedly had no role in the rejection, which of course depends on how you define the word ‘role’.  The whole setup is a perfect crucible, a triangle of love, hate, and honest commercial competition.

In one corner we have the telecommunications giant AT&T (NYSE:T, news, filings), which has more cash flow than it knows what to do with and doesn’t need anyone.  Well, anyone except the iPhone from which it has lately depended on as a growth engine in this recession.  And except for a healthy internet from which it derives the other half of its growing revenues, which would be almost unthinkable without Google’s contributions.  They fear network neutrality, but they also risk commoditization if the device trumps the network.

In the second corner we have Apple, the only company in the world that can make any device cool, fashionable, and desirable.  They don’t need anyone either, except for a healthy, fast wireless network to run on.  Oh, and a healthy vibrant internet for all its customers to actually use.  The iPhone can’t even exist without those details, but it sure would be nice if they would just stay out of the way.

And in the third corner we have Google, which has been the corporate and technological phenomenon of the decade and without which the internet would not be even a shadow of what we have gotten used to.  Their only needs are for carriers to keep growing their networks so they can push more bits, oh and for devices that will get consumers to consume more of those bits.

Three powerhouses who are each simultaneously self sufficient, self confident, and indispensible.  Each needs the others but also wants to control the relationship, but none of the three can overpower the other two and even if they could or if two should gang up on the third then the FCC would slap them down.  Outright victory here is impossible, so the protagonists will probably fall back to what society always falls back to in such situations: the smoke-filled back room where the power brokers work something out.  What comes out of that room could be a model for the rest of the industry going forward.  Or it could ignite open war.  Pass the popcorn.

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Categories: ILECs, PTTs · Wireless

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2 Comments So Far

  • anon says:

    Rob, you’re right. and somewhere (in detroit ?!) ed whitacre is cackling… how lovely that apple and google with no debt and high ROE would like faster service… ha ha ha.. att has outlandish cash flows but also debt load. networks that funtion perfectly everywhere are possible in theory, just not in the real world because they cost alot of money. no “cloudsourcing” and “app dev communities” here — just trucks, backhoes, gear, lawyers, nimby, muni fees, etc. also, they are fighting the cableco’s and sat guys.

    my guess is att will crunch the numbers and fix backhaul in nyc, chicago, la, etc where they get paid to do so and will let iowa and new mexico subscribers yell to vz, who also doesnt care about them… easier to sell another $3 ringtone or other high roic opp…

    google is especially at risk, if you ask me (you didnt). apple has an os, and installed base of true believers, etc. google has a search engine and poked someone in the eye called microsoft. that hasnt worked out before for the other pokers. maybe they can have a seance with netscape, rightfax, wordperfect, firewall vendors, et al and discuss ways they will “beat” microsoft). ha.

  • Clevus says:

    Sort of a Rock,Paper, Scissors sort of relationship

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