The PhoneBoy Blog


Simplifying Telecom, Mobile Phones, Gadgets, and More!

Mobile Phone Manufacturers Have One Customer, And It’s Not You

“We are Apples largest customer in Australia, yet with Apple we are still working through some areas in how to work,” [Telsra chief executive David] Thodey told a lunch held by the Australia-Israel Business Council last week.

via Cracks form in Telstra-Apple relationship – Business – News.

Having spent 10 years observing the mobile phone market from inside Nokia, I know that manufacturers basically have two types of customers:

  • The end users who buy the handsets
  • The operator customers who buy the handsets and resell them through the operator channel.

In most countries, the operator represents a larger percentage of overall sales than the individual customers who purchase a given device “unlocked, unbranded.” In North America, roughly 90% of the handsets are sold through an operator channel.

When faced with those kinds of economics, it’s no wonder that most phones sold through operator channels are “different” from the generic variants sold outside of the operator channels. It also explains why the handset makers are content to ruin perfectly good handsets by loading operator crapware on them. They are only satisfying their customers.

So far, Apple has been the only handset maker to have the sack to stand up to the operators and tell them “no.” That said, they have to make some concessions, as they do have to be able to sell in the operator channel–a necessary evil. However, they will not compromise on the overall user experience of the device for an operator.