All I want for Christmas is a new iPhone which works with my choice of VOIP carriers so I can make free calls anywhere there's wifi. I figure that adds an immediate $150-$250 to the price as skype phones start at $150. But it's way more than that in long term benifits. The convienience of VOIP on the iPhone will make it even more compelling still over the long term. And this is just ONE application that can be brought to the iphone overnight. Once apple opens the doors to the long tail of innovation the network effect takes over. The true value of the iphone will skyrocket blowing the value curve/ value proposition for all other cellular companies. They will eventually have to stop playing favorites with controling services and features on phones on their networks with bullshit service charges like text messaging, and streaming video feautres and accept that allowing others to create and market these feautres which will run on these phones will cause the value of their cellular networks and the utlizization of their cellular networks to skyrocket, just like web services created value for internet service providers to sell broadband.
It's rumored that some major players already have been given the iPhone development kit. The list is said to include gaming software maker Electronic Arts (ERTS) and Google (GOOG), which has already built versions of Google Maps and its YouTube video site for the iPhone. Electronic Arts declined to comment, while a source at Google indicated that the search company hasn't been give early access to the iPhone kit.
Meanwhile, companies that specialize in software for wireless phones are jockeying for Apple's attention. "We've been working with the Web interface for some time but would love to embed our technology on the iPhone itself," says Brian Bogosian, CEO of Visto, a privately held software outfit that specializes in e-mail software for mobile phones. Similarly, a startup named iSkoot, which offers an application for making Skype (EBAY) phone calls on mobile devices, says it's eager to adapt its software for the iPhone platform.
The problem is *sshat cellular companies still think we're in a cable tv paradigm where they can block millions of innovative services and instead opt to sell you one or two like text messaging at ridiculously inflated prices. That paradigm is dead or dying. User perceptions in the market are changing rapidly. Customers will no longer be willing to pay greatly inflated prices for a very limited selection of services. They will come to expect on cell phones as they have on the web best of breed apps regardless of who the cellular carrier intends to favor. The iPhone is perhaps the greatest symbol of that change. If cellular carriers don't respond to this shift in paradigm from service provider to common carrier access provider innovation will route right around them, just like VOIP on WiFi.