Will domestic and global mobile operators like AT&T, Vodafone, Telefónica and others “play ball” with Apple? Many in the U.S. were surprised six years ago when AT&T capitulated to Apple’s terms to become the first carrier to offer the iPhone six years ago. Conventional wisdom is that the struggling operators compromises, not a leading operator like AT&T. But Apple makes everyone “think different.”

And in hindsight, the first iPhone deal was a brilliant strategy that has continued to pay huge dividends to AT&T. In the last quarter just reported, four out of five smartphones AT&T sold were iPhones.

Apple changed the formula of the relationship between operator and handset vendor, with Apple having more bargaining power than the operator for the first time in mobile history. And that’s the point.

Apple will make an offer carriers can’t refuse

Today, mobile operators would have a hard time saying “no” to the world’s largest and fastest growing company, which builds the devices everyone wants. Apple tends to have its way with operators. Any reluctance on the carrier’s part to offer Apple a sweetheart wholesale deal would be outweighed by the huge business opportunity presented. It’s a classic case of “The Prisoner’s Dilemma.” The carrier’s biggest fear is that if it says “no”, the business and growth would go to a competing carrier and it would be kicked the curb.

It’s no secret that Apple has been thinking about this strategy for some time. Apple filed a patent for “Dynamic Carrier Selection” on October 10, 2006, just a few months before Apple announced the first iPhone. The diagram in the patent application portrayed Apple as the wireless service provider connecting to multiple carriers. This would allow Apple to make wholesale cellular agreements with and connect to multiple carriers so it could offer its customers choices in carriers, plans and services. Apple has clearly put a lot of thought into its dynamic carrier selection architecture.  And lest anyone think Apple isn’t serious about this, last June Apple extended the filing in what many considered confirmation of its plans.

Adding further fuel to the fire, Apple recently has been fighting with other handset vendors, including Nokia, over a new, smaller-sized SIM card for GSM and LTE handsets. According to some, such a SIM would allow Apple to bypass carriers entirely, and activate a new customer through the iTunes Store. Whether it uses the NanoSIM, virtual SIM or other variant, Apple could have the ability to activate and sell voice, data, messaging and roaming subscription plans before the ink dries on a carrier wholesale agreement.

Apple has all of the pieces necessary to offer wireless service directly to customers. They have the world’s leading brand, a loyal following who will pay a premium for Apple’s products and services, and 363 retail stores around the world, growing to 400 by the end of the year. And with iTunes, it has the digital content and billing platform to offer service with one-click simplicity. The infrastructure is in place today, with the patented architecture ready for Apple’s next big move.

iPhone customers typically spend as much as twice or more the U.S. national average monthly wireless bill, which was about $44 in the last year. So these are high value customers. And they buy apps and content – music, videos, TV shows and movies – through Apple today. By offering mobile service with iPhones and iPads, the company could provide the full Apple experience to its users.

How likely is this to happen? Given the patent filing more than five years ago, it wouldn’t surprise me if Apple is already talking to mobile operators, nor would I be surprised if the mobile operators initiated the conversation.

And what about Google?

Might Google offer mobile service directly to its customers, for the rumored Google Android Tablet or any Android smartphone? With Google acquiring Motorola Mobility, it, too, will be able to manufacture handsets to its own specifications. But it won’t be nearly as easy for Google to follow Apple’s likely path. While Google has a great brand — number two in the world and second only to Apple — it doesn’t have the retail stores, the experience with subscription services, and the customer care that Apple offers. Nor does it have the elegant ecosystem that enables single-click app and content purchasing that Apple has through its iTunes Store.

Whitey Bluestein, a 25-year telecom veteran, is a strategic advisor and corporate development specialist focused on prepaid, applications, payments and services. For more information, go to http://whiteybluestein.com

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Winning the Game It Created

Right now, claiming that Apple is dominating the tablet market is a little like saying Alexander Graham Bell dominated the telephone industry in 1876. By almost all accounts, the iPad forged its own niche, and left competitors scrambling to catch up. But, as with the telephone, that doesn’t mean competitors won’t catch up.

Slaying the Dragon

The situation is similar to (but not the same as) that faced by other device manufacturers when the iPhone was first introduced. Like the iPad, the iPhone was widely embraced by tech enthusiasts and consumers for its ease of use, design and App Store. For a long time after its introduction, the efforts of other handset makers was widely framed as the quest for an “iPhone killer.”

Many of those same companies are now faced with creating an iPad killer, but the climb seems much steeper still since Apple isn’t entering an already dense and competitive market, as it was with the iPhone. But is it really a higher mountain to climb?

The Rest of the Field

The iPad is well-placed to remain the leading tablet device for some time to come; I’m not disputing that. But I do think we’ll see a much more wide open field at this time next year. Whereas with the iPhone, competitors had to worry about both hardware and software gaps between themselves and Cupertino, this time around, device manufacturers have Android. With a growing built-in software distribution platform, and the weight of Google behind it, Android offers something the first companies making prospective iPhone killers didn’t have available to them.

As soon as Android-powered tablets can find the right hardware mix, and refine production practices and parts sourcing to bring prices down, we’ll see a boom in business in their favor. Android accounted for just two percent of global tablet shipments last quarter, but think about what was available. Considering the caliber of Android devices that were on the market, I’d say that’s a success in itself.

Android won’t be the only one elbowing for room in the tablet market, either. BlackBerry is set to release the PlayBook, which will be popular among enterprise customers. Hewlett-Packard, Microsoft and ViewSonic look poised to grab a piece of the action, too.

The Stage is Set

Apple has done an amazing thing with the iPad. Its sales to date are tremendous, and it led to consumers embracing tablet computing in a big way. But talking about its market share at this early stage isn’t really saying much of anything at all. The interesting discussion isn’t around where the iPad currently places among its competitors, but about where it will be a year from now.

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The recent threats are at least twofold, one of immediate concern and one potentially dangerous down the road. First, there’s Android’s continued growth in terms of mobile marketshare, compared to Apple’s shrinking slice of the pie. Second, there’s Sony’s potential expansion of its mobile operations into direct competition with the iPhone.

Web analytics firm Quantcast released figures this week that show iPhone OS is still the dominant force in terms of mobile web usage, but the trend is working slowly against it. It lost 3.2 percent of its market share last month, while RIM and Google’s Android both gained ground. Over the past quarter, Android has gained a whopping 44 percent, while Apple has lost between five and 10 percent during the same period.

That’s only market share percentage, though. Apple is still showing positive growth in terms of mobile users and pageviews, but Google is just doing it that much faster. Which should be worrying to the current king of mobile web. The Nexus One may have been a relatively innocuous volley in the ongoing war, but Google is gaining steam, and quickly.

Another competitor is said to be waiting in the wings, too. According to the Wall Street Journal, Sony is gearing up to offer an iPhone competitor that could have one key advantage: the ability to play PSP and PlayStation games downloaded directly to the advice. That would be in addition to music, video and e-book content that it would also offer for sale through digital distribution.

Sony is not inexperienced in the cell phone market, and it already has a successful digital distribution framework operating as the PlayStation Network store. A PSP with smartphone features could be a very attractive proposition for young customers just entering the market.

Long story short, Apple has enjoyed a lengthy head start in the mobile web generation of smartphones, but after many, many failed attempts, a few competitors are beginning to realize exactly what it will take to catch up to Cupertino. And at this crucial point, Apple is focusing on jumpstarting a brand new market that many aren’t sure even has much potential.

The danger is that the iPhone isn’t being given sufficient attention thanks to the iPad’s imminent launch. If the next generation iPhone only gets some minor incremental updates, like the iPhone 3GS did, then I will seriously begin to question Apple’s sense of prioritization. Resting on its laurels for another year won’t help the company widen the closing gap between it and its competitors, whether or not the iPad succeeds.

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Quattro Wireless is the advertising company in question, and while it is much smaller than AdMob, which is by far the industry heavyweight in the mobile space, it will allow Apple to stay in competition with Google in this increasingly lucrative market.

Apple is said to be paying around $275 million for Quattro Wireless, according to several sources speaking to Kara Swisher of BoomTown. That’s considerably less than the $750 million bid that won Google the AdMob acquisition. Quattro is still by far the smaller company, though it still caters to high-profile clients like the NFL, Ford and Disney.

Swisher claims the acquisition is a done deal at this point, and will be announced as soon as this afternoon. Even counting this and the AdMob acquisition, there are still many players in the booming mobile ad field, and Swisher expects many more similar deals to take place in the future between other major hardware and telecom companies and the advertising startups.

The acquisition will have an immediate impact on the smartphone economic ecosystem, since both companies are now set to become major players on the hardware, software and advertising side of Internet-connected mobile devices. But the real boon for consumers will come as the overall competition between Google and Apple continues to deepen.

As much potential as there is in a continued close working relationship between the two companies (the Maps alone should be the only example you ever need, though there are many more) for iPhone users, I still believe even more exists in a widening gap between the two tech industry stars.

The Nexus One is a great example. By all accounts, it will at the very least be the best Android device available, and best of all, it seems like it could bring in a new ultra-competitive pricing model that will shift the uneven balance of service contract power away from cell service providers and towards consumers. Contracts likely won’t go away, but telcos will have to offer much more significant incentives to get people to sign on, like truly unlimited plans.

Apple’s position at the top of the smartphone heap won’t be nearly as comfortable as before, and a position of discomfort is much more likely to breed innovation than the alternative, both in terms of hardware and sales strategy. So pull up a seat and watch the sparks fly. Can’t wait to see what new goodies are forged in the heat of battle.

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Each Grand package will consist of:

• 1 MacBook computer (MB467LL/A: 2.4GHz)
• 1 LED Cinema Display 24 inch
• 1 Apple iPhone (8GB)

It’s a fairly comprehensive set of prizes and, with entering as simple as sending an email, it’s definitely worth a shot. Obviously, the odds of winning depend on the number of eligible entries received. As you’d expect, you can only enter once.

Users that purchase any Yazsoft product during the period of this giveaway will automatically get their entries doubled as a thank you. For example, if you purchase 1 license, you will get 2 entries in the giveaway (and so on). Their product line consists of Speed Download and ShareTool.

Speed Download is a download manager for Mac OS X, and ShareTool lets you access all of the Bonjour services on your home network from anywhere in the world, securely. We recently covered ShareTool in a review.

In addition to the giveaway, you can also save an additional 20% on all the above prices during December. All Speed Download 5.x and ShareTool 1.x updates are free, so you won’t need to pay to upgrade in the near future.

Good luck with the competition, and obviously let us know if you end up winning the MacBook and Display!

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A sad side-effect to the news of Spaces however, was the announcement that a former favorite in this space – Virtue Desktops – would be shutting down further development. The story of Apple taking the best ideas and applications and baking them into the Mother Ship isn’t anything new – but generally the developers of these applications hang in there a bit before throwing in the towel. The most unfortunate part however is that competition is good for the consumer, typically resulting in better quality, more features, and plenty of options to fit any user. I completely understand being busy and not wanting to make time for a side project that would most likely be Apple’s victim, however I do wish the competition against Apple’s Spaces would make a fight out of it.

I don’t want to rehash all the gripes with Spaces that have accumulated around the internet these past couple of weeks, but let’s just say I agree with basically all of them. Mostly the issues stem from the ridiculous lack of configuration options. But the whole zooming me from one Space to another when I OPT+TAB is gonna send me over the edge one day in the not too distant future. Seriously. Why on earth would I want be bounced back and forth amongst my Spaces each and every time I want to work in a different application? My personal workflow has me using the Virtual Desktop concept as a division for my projects, not my tasks…But I digress. I do get it though – Spaces is meant to bring Virtual Desktops to the masses in a way that they can all get it. Unfortunately that leaves the rest of us starving for more.

The real shame here is that some great applications have faded into the background as Apple has released their own replacements. So those of us who loved those third party apps are left wanting when Apple’s solution doesn’t cut the mustard. When those great developers forsake their code – and consequently, their users – the spirit of competition and innovation in that particular application space is generally lost…Or at the very least, left up to Apple and their timeline to update. I’m fearful that Spaces is a prime example of this.

I’m greatly saddened by the fact that my two favorite [Pre-Leopard] Virtual Desktop apps are no longer getting any love from developers. Desktop Manager hasn’t been touched for a couple years, and Virtue Desktops (which hatched from the Desktop Manager code base) which – as I mentioned earlier – was the first casualty upon Spaces’ announcement. (I do however feel that I should point out that Tony Arnold – former Virtue Developer – is working on a companion to Spaces, called, HyperSpaces.) So the two freeware options are no longer. How about the shareware side of the house?

I sent a couple of quick emails off to CodeTek (makers of CodeTek VirtualDesktop) and You Software (makers of Desktops) to see what their intentions were on this front. Being that they’re selling their wares and have a user-base that has invested in them, I was glad to get responses that they will continue to bring the fight to Apple’s door with updated versions of their applications for the Leopard platform.

While the forthcoming enhancements to CTVD 4 will bring Universal stability to the application, Bill Goldstein from CodeTek informs me that CTVD 5 will be when the real enhancements and features become available. Meanwhile You Software sees this opportunity as a great one to capitalize on the new visibility that will be brought to the Virtual Desktop concept and will definitely be working to bring more advanced feature-sets to those seeking more than Spaces can offer. At $40 and $30, respectively, they’re clearly not free options when compared to Spaces, but those looking for more control shouldn’t mind too much I suspect.

I think this is a better time than ever for these developers to be coding their hearts out (and encourage any other enterprising and talented developers to jump on the opportunity as well), as Spaces will indeed bring Virtual Desktops to the masses. And when those masses become accustomed to the concept, my guess is that many of them will undoubtedly be hungry for more… Not to mention that fact that the continued competition will hopefully serve as a prodding to Apple to bring added functionality and configurability to their own Spaces application within OS X.

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