@Terence: I do not see why Amazon could not have used AT&T and just had international roaming blocked. The only reason I suspect is that Sprint gave a better deal. The network is also better than ATT 3G implementation (speed, coverage) as I have used both.

HI,

An interesting article. I’ve played with a Kindle and as a bibliophile I love it.

A few of points about your post.

Firstly, “why can’t it be the device makers who go to the operator, buy network access in advance, and then sell their devices directly to the consumer?”
That’s the MVNO model. Admittedly, in the UK we’ve not seen a large number of device manufacturers do it directly. But I’m sure it’s only a matter of time before Tesco starts manufacturing hardware.
This means that, if you join the Amstrad network, you’re stuck with an Amstrad phone – in today’s mix & match world, that might not go down so well.
Of course, MVNOs require lots of back-end kit to make everything work – so a dumb pipe model doesn’t work there.

Secondly, you say “there should be software on the operator side that can only allow a SIM to be used in only one device”.
Again, that sounds rather like the behaviour of a smart pipe – not a dumb pipe.

Thirdly, regarding “free” access to data. The data isn’t free – it’s clawed back through the charging for content. Now, I’ve not used a Kindle in the wild, but it’s my understanding that (most of) the content is chargeable. So when you buy a 1MB eBook for £6, you’re really paying for the data for that & other transactions as well as the for the book itself.

Fourthly, the Kindle works so well because Amazon is a big, trusted company. Would it work so well if it were HTC, ZTE, or even Nokia? Huge companies which sell loads of devices, sure, but they don’t have a particularly strong customer focus. Would you trust them with your credit card details to buy their content? Would you rather go through PayForIt, or your Operator’s billing mechanism?
Would they even have any content that you’d want other than plain web surfing?

Finally, roaming. I know that roaming data is coming down in price, but it’s still prohibitively expensive. I’m sure that’s part of the reason that the Kindle is only on a CDMA network; it can’t be used abroad. So no spur-of-the-moment holiday book purchases.

The Kindle is a great product, and it makes a very innovative use of the network – and I for one would like to see more devices like it. At the moment, it’s restricted to very big players who can buy in bulk and can assure the customer that not only are their details are safe with them but that their investment is safe. No one wants another ITV Digital experience where, all of a sudden, a company goes bust and you’re left with no or reduced functionality.
Take a look at the student MVNO “Dot Mobile” as an example.

Great article, really got me thinking.

Terence

@Ben Smith: It’s not really unlimited with 20 hours a month surfing, and 6 pounds a month for real unlimited. Super gluing a SIM card seems like a stupid idea since there should be software on the operator side that can only allow a SIM to be used in only one device, tied by IMEI of course. Didn’t know about the Pocket Surfer, thanks for the information!

@James: Will keep you in the loop for sure! Operators don’t want to change, same with newspapers don’t want to change, same with any industry. Shame.

@Jesslyn: One day I hope it isn’t a dream!

But, comparing the iPhone’s features to the Kindle’s back-end business model is kind of unfair to the iPhone, me thinks.

Still, I totally agree that the wireless telecom industry needs to take a huge step back and reevaluate their business models from a foward/future-looking perspective. Well thought out argument, bud. Glad to see you back in action!

Datawind launched the Pocketsurfer2R in July 2007, several months before the Kindle. It’s a low-budget device but comes with an ‘unlimited data for the life of the device’ option (it doesn’t do voice) and even extends that option to roaming across Europe, unlimited for a fixed fee: http://www.pocketsurfer.co.uk/

Datawind told me they’d secured a good-price for bulk-buying the data from Vodafone, but the operator isn’t doing the ‘unlimited’ bit – it’s the device manufacturer who’s taking the risk on whether the cost of supply exceeds the one-time bundle cost. Such a risk, in fact, they super-glue the SIM cards into the devices to ensure no-one can use them in devices which have higher data usage.

Superb post and a line of thinking I am completely and utterly onboard with.

Recently, at the Mobile Web 2.0 Summit here in the UK, I mentioned to a few guys from various backgrounds that data should not be a ‘bolt on’ or an ‘additional extra’ – it should just be there, out of the box. If you don’t want it, switch it off.

Opt out, not opt in. Much like how I think company pension schemes should be run too actually… but that’s another story.

You make some fantastic points and drawing comparison with the kindle puts the whole industry in a new light. It was said by Mark Curtis – at the conference above – that Vodafone, for one day only gave all their PAYG ‘free data’. On that day, flirtomatic saw its sign-ups boosted by 13 times.

13 x MORE signups because of ONE DAY of free data.

If we make a bigger pie, we all get a bigger slice.
The networks need to make a bigger pie.

Great post Stefan, good to see you writing again.
Keep me in the loop.

James.

His response, “why isn’t it included? I don’t need another monthly bill.” He also did not want to have to be dependent on finding a hot spot. Dell/HP should put their $ behind their word partnership. How cool would a netbook be with builtin/prepaid wireless? One can only dream

I think that a lot of companies don’t actually realize the value of “its included”. Had wireless not been on the Kindle, competitors would not be searching for the “Kindle Killer”, it would just have been a competitor to the Sony.