[raganwald]

+1

In the book "Marketing Warfare," Reis and Trout emphasize that a strategy should attack a competitor's strength, not its weakness.

Weaknesses will all be fixed over time, so attacking a weakness is simply making hay while the sun shines. Of course you should do it, but it shouldn't be a cornerstone of your strategy. It costs your competitor nothing to fix a weakness, they simply fix it and get better.

When you pick a competitor's strength and attack the strength, your competitor has a problem. Fixing the strength will cost them customers.

For example, it's a strength of Apple that they control the hardware and the software, so having Android run on multiple hardware devices from different vendors is attacking iPhone's strength, much as Windows attacks Macintosh's strength by running on commodity PCs.

Offering iPhone on other devices would cripple the user experience, so Apple can't respond without weakening itself. The AT&T deal, OTOH, is just a wekness. When it expires Apple loses nothing by offering iPhone through other carriers.

[mattmaroon]

Is it just a weakness? They presumably get a lot from the AT&T deal. The right to exclusive Apple branding on the phone. Visual voicemail, some untold but presumably high % of monthly contract fees (allowing them to plow tens of millions into ads, creating the virtuous cycle of users and app developer growth), an unprecedented degree of freedom over app distribution, commitments to building out the cell network, etc. Building the hardware and software themselves gives them better quality control over the end product, having tremendous upper hand in an exclusive deal with a national carrier performs a similar function.

I'm guessing that had they given in to whatever the hell Verizon requested, and has no reason to discontinue requesting, you'd be looking at a much different phone. That's why I still don't believe we'll ever see a CDMA iPhone.

[raganwald]

Well they got a good deal, but it doesn't strike me as an intrinsic strength in the product itself. I think they traded a product weakness for making money, just as if they had used cheaper materials or lower-quality processes.