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How Apple exploded Europe’s crony capitalism

Wednesday, January 11, 2017 8:45
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Steve Job’s unrelenting genius challenged and overcame the status quo multiple times in his life. The iPhone being his last spectacular victory.

Remember Erickson?

(From The Register)

Nokia may have been shifting hundreds of millions of phones a year, but in reality it didn’t have hundreds of millions of “customers”. It had around 100, and only a couple of dozen of these were really important. These were the key buyers at the mobile networks around the world. And, just as an organisation has to move at the pace of its dumbest manager, the mobile industry had to slow down to accommodate the conservatism and risk averseness of the network buyers. You didn’t get the devices you deserved: you got the phones that the mobile carriers thought you needed. And these would be devices that didn’t break their precious networks. I have lots of sympathy here for networks, who were (and are still) encumbered by debt by greedy politicians, and who face not only huge capex commitments merely to stay in the game, but who are vilified by the slacktivist army of Net Nannies – today’s equivalent of the 19th century’s nonconformist moralisers – for doing evil. But things had got very cosy. It was a chumocracy.

The other cronyism factor was the industry’s Dirty Secret. The network equipment manufacturers were essentially banks who were financing the network operators so they bought the gear they made. They still do this, advancing credit against purchasers. Network capex was soft subsidised by the equipment industry. Supporters of this model argue that it keeps investment rolling along. But the relevance to us here is that the handset vendors like Siemens, Ericsson, Nokia and the equipment vendors were often the same company. Things were even cosier than they appeared. Simon Rockman sheds some light on this world here yesterday. These two groups of paternalistic technocrats dictated the pace of progress.

Click here for the article.


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