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How to buy a smartphone

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A friend sent me this question (capitalization isn't her favorite part of the English language):

i'm considering purchasing an iphone, but those are EXPENSIVE, so i wonder if you would help me do a cost/benefit analysis?

i wouldn't even consider such a purchase except i was given the go-ahead yesterday to do an interview series/column, so i need a recording device. a dictaphone seems sort of expensive for a one-use gadget, so it seems that a smartphone that would allow me to do such recording as well as take photos and gps and play music (which look like the main features i would use aside from texting) might make sense. it's a large enough expense that it would be a major purchase for me, and i'm not sure what questions to ask (other than, hey verizon, will you please not charge me full price for the upgrade or i'm going to have to switch to sprint which totally makes me shudder).

thoughts? ideas? etc?

It's a great question, and one that's shared by many people. Here are some observations that might help:

If you're truly only buying a device so you can record interviews, a smartphone isn't necessary. Lots of budget-priced MP3 players have a recording feature built-in. The Sansa Clip, for instance, is usually about $30 or $40 in stores, and it produces a satisfactory recording. There are also dedicated digital voice recorders available for similar prices.

If you're looking to take advantage of using a smartphone for other reasons, too (and there are many), consider some of these matters:

1. Pick your network first. Nothing will make you more miserable than dealing with a bad cellphone network, no matter how nice your phone is. I've known people who couldn't get reception in their own kitchens. A great phone that doesn't ring and won't let you call out isn't worth any price.

2. Pick the form you like best, starting with the keyboard. You can get keyboards on the face of the phone (mainly from BlackBerry), slider keyboards, and virtual keyboards (they only appear on the screen when you're in a typing mode). The main advantage to a smartphone over a classic cell phone is the ability to do things like surf the Internet and send email -- the kinds of things that require a keyboard. If that isn't convenient for you, you're not going to get the experience you want from the phone.

3. After you've narrowed down your options based upon those first two questions, you may be ready to compare operating systems. People who like a hassle-free experience tend to rave about the iPhone because it's pretty seamlessly compatible with other Apple products. But it's also usually noticeably more expensive than comparable phones running the Android operating system, because there are lots of manufacturers competing to make Android phones, versus Apple's monopoly on the iPhone. If you get an Android-based phone, you will probably get more features than in a comparable iPhone (for instance, some Android phones can use 4G networks, which the iPhone presently can't), but the trade-off is that there remain more bugs in the Android system. There isn't a lot of customer support for the Android operating system -- but, offsetting that, there are so many other users now that any problem you have is probably one someone else has already addressed somewhere on the Internet. Android supposedly has 53% of the US smartphone market share. That's a pretty large number of fellow users troubleshooting the same problems you might be having, and it's also a very attractive market for developers creating applications.

4. From this point, some of the major distinguishing factors remaining include screen size, memory capacity, battery life, and camera quality. By this point in the process, you're probably down to just three or four remaining options anyway.

Should the iPhone be exclusive?

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Larry sends us this question:
Don't you think that the world would be a better place if smartphone manufacturers would allow their phones to be unlocked and useable with any service provider? The problem with iPhone is that it can only be used with AT&T. My experience with AT&T is that there are many places in this country where their cell service is not available. Other carriers have better coverage. But by only allowing the iPhone to be available through one carrier precludes me from owning one. That's why I have the Motorola Droid. It's usable nearly every place life takes me. Do you think there should be laws passed, similar to anti-monopoly laws that would open the marketplace to a more beneficial level playing field for users?

Brian's reply:
I'm with Larry all the way up until his very last sentence. I think the deal struck between Apple (maker of the iPhone) and AT&T is pretty silly. Imagine if Henry Ford and Alfred P. Sloan had spent their time negotiating agreements whereby you could only drive a Ford or a Buick on certain roads, but not on all the rest. If they'd been that ridiculous, then today, all Americans would be driving Packards or some other vehicle.

Exclusivity makes a little bit of sense up-front: Instead of building phones to work on America's two segregated cellular networks, Apple only had to focus on one (the GSM band). The agreement drew a lot of users to AT&T Wireless who probably would have shopped around otherwise, and that allowed Apple to split the costs of marketing and promoting the phone with a single dedicated partner that had all kinds of incentive to make the product work.

And it's not as though Apple and AT&T were the first to strike an exclusive deal. Cell phones are subsidized heavily by the wireless-service companies, who pay for some of the cost of the phone in order to lock customers into (usually) two-year contracts with hefty fees for early termination.

But the exclusive agreement undoubtedly cost AT&T a lot of customers in places -- like rural Iowa, for instance -- where GSM coverage is lousy. Geographically speaking, AT&T's 3G network (their broadband Internet data service) covers perhaps 5% of the entire state, and excludes Mason City, Waterloo/Cedar Falls, Dubuque, and Sioux City, among other major cities. No problem if you never leave metro Des Moines. A big problem if you plan to hit a football game at any one of the three state schools and want to stream anything to your iPhone when you get there.

The answer to this problem, though, isn't more government regulation. The market has already solved the problem, just as Larry has discovered: Competitors to the iPhone -- some of which are probably even better than the iPhone -- are available, and they work on networks everywhere. I took a vacation in December and was able to get Internet access on my phone both on the cruise ship and walking around places like Grand Cayman, using a Palm Centro. A friend who also went on the trip got nothing from his AT&T iPhone. Now, maybe you want to be cut off from your e-mail while on vacation. But I'm a partner in a business, and I can't be unreachable for that long. So I'll never be a customer of a wireless network that doesn't allow me to travel freely. I still want a smartphone, though, so I represent a ready-made market for smart wireless providers and phone makers. And there are a lot of us.

Why do I oppose government intervention in this market? Because I think it's costly, intrusive, and ineffective:

  • Costly, because you may recall the days when Ma Bell had a government-regulated monopoly on phone service. You got a rotary-dial phone and you paid mightily for long-distance service. All of the real innovation in telecommunications has happened ever since government got out of the day-to-day regulation of telephone service. Ma Bell never gave you text messaging, free voice mail and call waiting, or wireless 3G service, did she?
  • Intrusive, because we all instinctively seem to want everyone else to be regulated, but never ourselves. That's because we recognize the harm of over-regulation when we pay the costs, but we tend to ignore it when we think someone else is paying. For instance, if I told you that the government was going to regulate what chair and microphone I had to use on the WHO Radio Wise Guys, you probably wouldn't care. But if I told you that the government was going to regulate which presets you could use on your car stereo and which stations had to be programmed in, you'd probably revolt. If I were running a wireless-service company or a phone manufacturer, I wouldn't want government telling me what deals I could cut any more than I want them telling me how to run a radio show.
  • Ineffective, because Apple has been down this road before. They had a choice in the 1980s to allow open development on their computer platform, or to try to control the operating system and the manufacturing of the computers themselves. Microsoft, on the other hand, licensed its operating system to any manufacturer who would pay for it, and allowed programmers to build as many useful tools around their OS as wanted to. Microsoft controls a crushing share of the OS market today. Opening up to different computer manufacturers and outside programmers did far more to allow Microsoft to become a near-monopolist than trying to tightly control the system, like Apple did. In other words, we shouldn't be surprised if we look back ten or twenty years from now and marvel at how dumb it was for Apple to go with an exclusive deal with AT&T, as 85% of us end up using smartphones built on some other platform.
So, do I think Apple's exclusivity deal is a loser over the long-term? You bet. I think the smarter business move for them would have been to offer a CDMA version of the iPhone and a GSM version, and offer unlocked versions to the public and non-exclusive deals to every wireless provider who would've wanted it. In some parallel universe where they followed that path, 90% of us are using iPhones and everyone's wondering why the government isn't breaking Apple's monopoly on the smartphone market. I much prefer this version of reality.

Cell phone service overseas

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Listener question:
My wife and daughter will be going to Europe on a cruise, primarily in Italy, Greece, Turkey, and Ukraine, and various locations getting to these countries.  They want to have a cell phone that they can use, and I don't think US Cellular has a tower there.  Where do we get information about a phone that might actually work in these countries?

Brian's answer:
You're right: US Cellular doesn't work overseas. That's because many American cell phone companies, including US Cellular, use CDMA. The European mobile-phone services use GSM. Do you really need to know the technical details? Not really. Just understand that it's a lot like the problem you'll encounter when you try to watch a Region 2 DVD on a Region 1 DVD player.

To use a phone in Europe, you have two choices:

1. Sign up with a US phone service that offers GSM, like AT&T or T-Mobile. Then be prepared to pay some seriously huge roaming charges, especially if they're hopping from country to country. You won't really know the full cost until a month or two after they're home.

2. Buy a prepaid GSM phone that can be used here or there. If you really want to get sophisticated, you could forward calls from their regular numbers to the prepaid phone, but then be prepared to pay some big-time long-distance charges, since you'll probably be charged international rates for every minute of forwarded calling.

If it were me, I'd probably just get a prepaid GSM phone and leave a special outgoing message on their phones saying "here's where to reach me in an emergency."

We'll take calls from domestic and international listeners alike this Saturday from noon until 2:00 on Newsradio 1040 WHO at 515-284-1040. Or text us at 515-989-1040 and save on roaming charges.

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