Bob Lesfetz, among the best music industry analysts out there (famous for his cranky yet incisive writings in The Lefsetz Letter”) sent out a note today about the iPhone announcement and hit the nail on the head with the reason behind why Cingular needed this: “You can’t play by the rules, Cingular knows this. While Verizon and Sprint are trying to build a business selling overpriced, copy-protected musical tracks, Cingular essentially just abandoned that game, to go into business with the hottest consumer electronics company in the world, not Sony, run by a bureaucrat, but Apple Inc., run by a technologist.
And Steve Jobs didn’t give a shit that you’re supposed to SUBSIDIZE handset sales. Be beholden to the provider, giving him what he wants, often crippled, just to meet your numbers. In an era where cell phones are oftentimes FREE, Apple is going to charge five hundred bucks. And probably sell each and every one it makes.
Cingular knows it’s in a dogfight. It’s got an inferior high speed network and a bad rep re service, both connections and help. By throwing in with Apple, the wireless company burnishes its image in the short term, and gains valuable time in its race to catch up with the EV-DO boys.”