Verizon last week announced that it would be opening up its network to all phones compatible with its wireless technologies, a move which goes completely contrary to the entire market model here in the U.S. of A. Therese Poletti of CBS’ MarketWatch talks about the significant move and what it might mean for the wireless industry in America. While she indicates that it would be a good move, and references the Apple iPhone as a major contributor to the pressure, she only brushes up against what it might mean.

We at The Dojo typically avoid opining on these kinds of topics since we generally focus on the gear and such, but I feel that its important that one sizable aspect of this kind of approach to wireless sales should be indicated. The current sales model is for American carriers to offer absolutely everything from beginning to end. You select a phone, a plan, and extra services and that carrier gives you their own specific brand of wireless mobile.

With this new open network approach, handsets would need to become generic, meaning that they are no longer branded. Carriers prefer to brand their handsets because it affords them a number of abilities, chief among them the ability to lock down the phone. Carrier-specific services come a close second. Once that happens, subsidies (the partial cost of the handset which the carrier pays for to make the selling price cheaper and, therefore, more attractive to buyers) will start to vanish.

Ultimately, this means that the prices of phones will seem to magically rise and people who don’t pay any attention to the mechanics of national and global wireless networks will start to see what it really costs to have a wireless handset. It will also make it crystal clear to just about everyone how cheap an iPhone really is. When the device makers can no longer hide their true costs behind subsidies, users will end up seeing a wide range of Windows Mobile devices which cost a lot more than an iPhone does.

Will that have an impact on how carriers are organized and their business practices? Probably, but its not going to happen any time soon. Will it change how people approach buying a mobile phone? Yes, but only because buyers will now realize they have numerous sources for handsets. Will it change the outward facing elements of carriers? No. All of the carriers will still offer their own branded devices and likely start offering incentives to buy their just, but what we have now won’t change much, if at all.

written by Tyler Regas \\ tags: business, mobile, wireless