Is Samsung’s Defeat Bad News For Carriers?

So the big news late last week, of course, was Apple’s victory over Samsung in its patent lawsuit to the tune of $1.05B. While there are still more rounds to go before that victory is set in stone, it will roil the handheld device sector bigtime and may even just be a skirmish that leads up to a fight with Google. But I’ll let the gadget blogs take that on. What I’m wondering is whether this is something network operators really did not want to see.

The rise of Apple’s iPhone and iPad has coincided with a shift in power away from networks and into the devices. The possible hobbling of Samsung may weaken the carriers’ ability to bargain with Apple over the terms of having new devices on their networks by marginalizing the alternatives. There has been talk of smaller subsidies, but it could be that this turns the tide back.  In other words, patent violations aside, is Samsung’s presence as a counterweight to Apple an important underpinning of the current balance of power between device and network?

But I don’t just mean for the mobile carriers. If Samsung and other Android devices start coming off the shelves, then surely Apple will feel less pricing pressure and they’ll be able to raise prices and make more money selling fewer devices to customers who then have fewer dollars to spend on data plans for carriers trying to make back subsidies with higher prices. That could mean slower bandwidth growth for fiber builders and operators who have been placing their hopes on having that mobile data tidal wave everyone keeps talking about finally slam on through.

On the other hand, if the device makers now put all their efforts into lawyers, perhaps the loss of focus will give carriers in various parts of the food chain the chance to innovate their way back into the game from some other angle.

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Categories: Telecom Equipment · Wireless