iPhone to open networks, embed WiMAX?

iPhone to open networks, embed WiMAX?

The Fourth of July week would have been dead for news if it wasn't for the barrage of iPhone stories that continues to come down the pipe. Have you ever seen anything like it? I just conducted a Google search for the iPhone. It came back with 170 million results. iSigh.

Of course, after the initial hype factor, much of the news turns negative. Chief among them is the bevy of iPhone hackers coming out of the woodwork. The most popular hack so far allows users to bypass a contract with AT&T and use the device's iPod music player and Web browser on a WiFi network [1]. Without a contract with AT&T, none of the iPhone's features, including the Web browser and iPod music player, are supposed to work. Tell me why I would spend $600 on a device to use it as an iPod and a pure Web browser?

Anyway, according to blogs and consumer websites, hackers are also working on other sneaky things, such as finding ways to enable the iPhone to work on the networks of other carriers, something that would be desirable overseas. Others are working on ways to download unapproved applications off the Internet and use the iPhone as a WiFi phone.

The Wall Street Journal reports that these customers feel entitled to bucking these restrictions [1] because, after all, they spent the big bucks on the device. And that is the difficult spot AT&T finds itself in. It's harder for a subscriber to raise a stink when your carrier is greatly subsidizing the device in exchange for a two-year contract. Make customers pay full price, and sign and two-year contract, and you have another problem: Customers actually have the gall to think that they should have some say over how they can use a device, and they'll probably keep searching for ways to make sure they do.

I suspect those are the issues Europe's operators are grappling with. Last week we saw a plethora of speculation that Vodafone, then Orange, then T-Mobile and then 02 would be the first to launch the iPhone in Europe. An Apple/AT&T-type of set-up in Europe would be a major step back given the fact that most European consumers are accustomed to buying a device first and then deciding which operator to sign up with.

This whole notion of unsubsidized devices and allowing customers to do whatever they want with them is what Barry West, CTO of Sprint Nextel and president of the company's WiMAX business, has been trying to drive home. The biggest imperative to the success of Sprint's WiMAX initiative, which aims to provide truly open mobile Internet access, is unsubsidized devices, he keeps telling us [2]. "Subsidized devices are why we have walled gardens. They're why operators have to have contracts," West said during FierceMarkets' recent WiMAX Strategies conference.

We're already seeing Google, Yahoo and others like Virgin Mobile calling for open access to the mobile network. The missing piece has been outrage from customers over the issue. The iPhone could very well be the catalyst in that area. Couple that with some Sprint WiMAX launches, and customers will be wondering why they can't have open access anywhere else. That's why a WiMAX-enabled iPhone would be a marriage made in heaven. iStop now. --Lynnette [3]