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If software developers are telecom's new kingmakers, then smartphone manufacturers are the kings. Telecoms, increasingly, are becoming paupers.
Apple (Nasdaq: AAPL ) has demonstrated the power shift in recent weeks by signing non-exclusive deals with China Unicom (NYSE: CHU ) and KT Corp. (NYSE: KTC ) in their home countries of China and South Korea.
But that was just the beginning. The Mac maker this week inked new deals with Vodafone (NYSE: VOD ) and France Telecom's (NYSE: FTE ) Orange network to sell the iPhone in the U.K., ending what had been an exclusive deal with Telefonica's (NYSE: TEF ) O2 network.
If carriers aren't happy with Apple's dealmaking, they aren't saying so. Well, not explicitly, anyway. "We have a long-term partnership [with Apple] that will last for several years," a Deutsche Telekom (NYSE: DT ) spokesperson told The Wall Street Journal.
I'm sure that's true. I'm also sure that's a passive-aggressive way of saying, "Yes, we know Apple and its peers are in control -- we're hanging on to our deal as long as we can."
Carriers have good reason to be worried. Pricing is easier when your customers are captive to your network. Trouble is, customers don't like to be captives. Lawmakers aren't big fans, either. Letting go of exclusive deals means either (a) figuring out new ways of creating competitive advantage, or (b) competing on price.
Neither prospect is attractive for telecoms. Far as I can tell, carriers were last considered innovators in the 1970s, during the heady Bell Labs days. And competing on price in a commodity business is ... well, you've seen what happened to the auto industry.
Carriers need the iPhone. They need smartphones. They need the data freight to boost margins that are suffering from years of price cuts. Now, thanks to the iPhone, they're going to have to compete for it.
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