Rumoured Rogers-Apple tiff

Rogers, and for that matter all cell phone service providers, are on every consumer’s ‘most hated’ company list.

Yet people can’t seem to put their cell phones down, which gives the carriers no end of pricing power (for now) which of course only serves to frustrate consumers further. (Customer service is another story but I digress).

Rogers fanned the flames of carrier hatred two weeks ago when it told prospective iPhone users they’ll have to take a three-year contract and oh by the way, no unlimited data plan for you.

Apple, apparently, isn’t amused either. The company, according to one blogger, is now going to limit iPhone shipments to Canada as some sort of retribution for the expensive data plans.

I am dubious of this rumour for a number of reasons.

1) Apple may very well be upset with Rogers. Carriers and handset manufacturers enjoy a contentious relationship at best. It is also true that Apple doesn’t often play well with others but limiting shipments to a rich country like Canada where iPhone demand is latent would be a downright stupid and self-limiting move.

It’s akin to cutting one’s nose off to spite his or her face. Apple is a large, publicly-traded company focused on top-line growth. It is also locked in a battle with Research in Motion, Nokia and others for dominance of the nascent smartphone market. It’s also a company full of very bright people. The bright minds at work at Apple HQ in Cupertino were no doubt painfully aware of the cartel run by the wireless providers in Canada before striking a deal with Rogers. It doesn’t mean Apple is now willing to sabotage the relationship.

2) Apple’s manufacturers have finite capacity. Remember when Apple first rolled out the iPhone to Americans last year? Supply was limited to 10 or 20 units per AT&T store. Anyone who’s ever bought a product from Apple soon after its initial release knows it nearly impossible to get your hands anytime soon launch date.

It is entirely possible supply may be limited for the short term as Apple’s manufacturing partner(s) ramp up manufacturing of the 3G iPhone. Canadians will get the short end of this stick if true. Remember Apple will be rolling out the same models to a number of countries simultaneously. Many of these nations are far more densely populated than wee l’il Canada. It is therefore smart business sense to divert more shipments to other rich countries where demand is also latent. This rumour may very well be a case of broken telephone or information taken out of context.

Finally, this rumour says more about the demand and fascination with the iPhone than it does about the Apple and Rogers relationship. Canadians and for that matter tech followers worldwide will pounce on any morsel of iPhone news whatever the source or level of credibility.

I am done.

Technorati Tags: Apple, iPhone, Rogers

July 7, 2008 | Filed Under News Items and Commentary

Comments

2 Responses to “Rumoured Rogers-Apple tiff”

Roberto Rocha on July 10th, 2008 3:46 pm

Good analysis, Kevin. Seems like any rumour about the iPhone these days is enough to stoke the nerd’s inner flame, and it’s good to hear a cool-headed voice in the din.

I heard grumblings that Rogers didn’t improve its iPhone rates to appease Canadians, but that it was a clever marketing ploy all along. Get ‘em angry and excited, then lower the prices in the last minute. What do you think?
Kevin Restivo on July 10th, 2008 3:54 pm

Hi Roberto,

Thanks for the note.

The short answer to your question is: “I highly doubt it.”

I’ve never been a proponent of conspiracy theories.

More to the point, it would be a foolish company that wants to enrage its customers with hopes of exciting them later. Seems counterintuitive to me.

The most likely scenario is that Rogers didn’t anticipate the backlash it has encountered in recent weeks. Mind you, the howls of protest I firmly believe are a vocal minority.

Rogers will sell a lot of iPhones and everyone in due time will forget about the wing flapping of the past two weeks.

Kevin