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AT&T Crushed by Choice, Learning from Apple

An AT&T executive said that the company plans a "dramatic consolidation" of its mobile platforms over the years, leading up to 2014. The credible and likely candidate, he said, is Symbian. However, the decision doesn't affect the Apple iPhone. This announcement says a lot about too much complexity and choice in the mobile phone market.

It seems like every time I watch an AT&T commercial on TV, they're promoting a new and different mobile phone. One can hardly keep track of them all. What started out as a slavish devotion to choice, or perhaps concessions to wannabe partners, AT&T has found itself in a customer support tangle.

It seems that AT&T has discovered what Apple has known all along: too much consumer choice leads to confusion, buyer's regret, and massive customer support training expenses.

The Trap for Big Companies

Mr. Jobs could have told AT&T that, but large companies with large revenues always get away with making mistakes that seem like a good idea at first, and then, over time, come back to cost them dearly. (For example, GM proudly bragging about their Hummer sales a few years ago.)

Companies with great wealth always feel as if they can do anything -- until the forces of Mother Nature, physics, or economics start to take toll.

This isn't good news for Microsoft either. Some expert observers have predicted that Windows Mobile would eventually die, folding under the weight of iPhone, Android, RIM and Symbian. It's no accident that Nokia bought Symbian, and it's now clear that obtaining and refining first class development software, unlike the old days, is the new Holy Grail for smart phones.

In fact, Apple knew all along that the software on smart phones was abysmal and drove a truck through the defenses of the mobile phone industry. Clarity of purpose, elegance of the software, great UIs, and compelling software were enabled by the ARM processor, Cocoa, OpenGL and OS X iPhone. Looking back, one has to wonder what Nokia and Motorola were thinking in 2006.

Developer Nightmares

Perhaps more importantly, and I can't emphasize this enough, the developers hate having to develop for multiple hardware platforms. They'd rather poke a stick in their eyes than rewrite their beautiful, almost bug-free code for some new platform promoted by their company. With no business incentive and funds always limited, it was always a crazy thing to write in-house software for mobile phones.

Finally, as the reference article at PC World points out, in this economy, pulling more revenue from each subscriber for services is increasingly unrealistic. The alternative is adverting revenue as that "third screen" gets more and more frisky on the Internet and with Video. [The first two screens are the computer and the TV.]

Smart Business Models Work All The Time

Not only has the Apple business model made sense when times were booming, it makes even more sense in a depressed economy. While AT&T has been spending millions to support too many phones that aren't compelling enough, Apple and its developer partners are raking in big bucks in the App Store with 10,000 applications.

We're familiar with the Apple culture, but the lesson is clear for other large companies who think that their size and wealth will automatically lead to prosperity when group-think embraces an idea that looks good on the surface. AT&T went under once before because it severely hosed up its customer service software. Old AT&T customers had parties during which they threw their phones into the fireplace and drank to the occasion.

Darwinian Evolution

The new AT&T, who has a wise partner in Apple, hasn't been thinking smart about consumer choice. This Symbian decision may be the first glimmer of a reversal of that trend, and by the forces of economics, will lead to a further reduction in the universe of smart phone OSes. The weak will die.

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