Procurement News Notice |
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| PNN | 10538 |
| Work Detail | Included in the fine print with the iPhone 7 is the fact that consumers who buy the AT&T and T-Mobile version of the new phone are getting a version that doesn’t fully work with Sprint or Verizon. That’s a bit of a head-scratcher, given that with the iPhone 6s, Apple had one model that worked across all U.S. carriers. Even though most consumers don’t change carriers during the life of the phone, why would Apple seemingly take a step backward in terms of flexibility and simplicity? The reason has everything to do with the way the company does business. Apple loves to have more than one supplier of any key component. And while it designs the iPhone’s A10 processor (and that chip’s predecessors), it has long relied on Qualcomm exclusively for the iPhone’s modem chip. Exclusivity gives a supplier more leverage, and Apple likes to bargain from a position of strength. So there has been talk for a while now that, with the iPhone 7, Apple was going to split the modem business between Qualcomm and Intel. But Intel’s latest modem chip doesn’t support the old CDMA standard still used by Sprint and Verizon. By creating a separate version for Sprint and Verizon, Apple is able to use Qualcomm exclusively on that model while using chips from both Intel and Qualcomm for the GSM model used by AT&T and T-Mobile as well as many carriers in other parts of the world. Sources familiar with the situation as well as outsiders agree that the modem diversification effort is the likely reason for the separate phone versions. Apple and Intel declined to comment on the matter, and a Qualcomm representative was not immediately available for comment. While having separate models is a win for both Intel and Apple’s effort to gain more power over its suppliers, it’s a modest loss for customers, who now have to make a technological commitment to a carrier even in a world where many are no longer signing long-term financial contracts. As noted above, though, it’s a flexibility that few consumers take advantage of. The vast majority of people who change carriers do so at the same time they get a new phone. There are often switcher deals that make it more financially attractive to do so, and it’s just the way most people think about their cellphone service. For those who really want maximum flexibility, Apple offers the Apple Upgrade Program through its stores. With that program, you finance your phone over two years, but have the option to upgrade phones and change carriers each year. |
| Country | United States , Northern America |
| Industry | Information Technology |
| Entry Date | 15 Oct 2016 |
| Source | http://www.recode.net/2016/9/9/12863302/apple-iphone-7-intel-qualcomm |
