With iPhone, Apple showed AT&T and Verizon who’s boss

Apple refused to let wireless carriers ruin the customer experience.

The first iPhone changed the technology industry in a lot of ways, mostly because it was a great device that lots of people wanted to use. But looking back at the device's first decade, one of the most beneficial changes the iPhone brought about for consumers didn't have much to do with the phone itself.

One of Apple's biggest decisions before releasing the iPhone was to retain control of software updates. Apple gave AT&T exclusive rights to carry the iPhone in the US beginning in 2007 with the phone's release. But Apple, not AT&T, would be in charge of updating the software.

"For decades, wireless carriers have treated manufacturers like serfs, using access to their networks as leverage to dictate what phones will get made, how much they will cost, and what features will be available on them," Wired wrote in a 2008 article detailing the Apple/AT&T partnership. "Handsets were viewed largely as cheap, disposable lures, massively subsidized to snare subscribers and lock them into using the carriers' proprietary services."

Steve Jobs had other ideas. At his insistence, AT&T "granted Jobs unprecedented power," and "Apple retained complete control over the design, manufacturing, and marketing of the iPhone," according to Wired.

The Apple approach to carriers makes perfect sense. AT&T, Verizon Wireless, T-Mobile USA, and Sprint don't make the operating systems that power smartphones, so why should they be able to prevent phones from getting software updates? It's not just that customers miss out on new capabilities. Preventing updates also harms consumers by forcing them to use phones that haven't received security fixes.

Even though the Apple approach seems obvious in retrospect, it still isn't the norm in the non-Apple portions of today's smartphone market. Most Android OEMs never took complete control away from carriers, instead choosing to let network operators dictate the pace of upgrades and pre-load phones with their own software on top of Android.

The involvement of third-party hardware makers further complicates Google's task with Android. It is possible, though difficult, for a software maker to take control of updates away from both phone manufacturers and carriers. Microsoft pulled that trick off for a while, but Windows Phone's failure in the smartphone market meant that few customers benefited from Microsoft's smart decision.

iPhone success helped Apple control updates

We said above that Apple's success in taking control away from carriers "didn't have much to do with the device itself." But the iPhone's desirability to consumers did play a role here, since carriers were willing to cede control to Apple in order to carry the iPhone. AT&T realized before the iPhone was even released that having it on its network would be a competitive advantage over Verizon, T-Mobile, and Sprint. And by the time Apple's exclusivity deal with AT&T expired, the iPhone's popularity was through the roof. Verizon was suddenly ready to negotiate.

Though Verizon and Apple worked for six to nine months "on the technical side," it only took one day to negotiate the commercial terms of the deal, Verizon CEO Lowell McAdam said in an interview with Bloomberg in January 2011.

"The companies’ detente underscores Verizon’s desire to offer one of the best-selling smartphones, even if it means ceding more control than usual," the article said.

Verizon had to agree not to put its own logo on the iPhone, which carries only Apple's logo, but "that wasn't a major issue for us," McAdam told Bloomberg.

Other carriers followed suit. Later in 2011, Sprint committed to buying 30.5 million iPhones over four years. T-Mobile started selling the iPhone in 2013, though it was already supporting 1.9 million iPhones on its network for customers who purchased unlocked devices.

Apple took similar approaches abroad, initially awarding exclusive deals to carriers in 2007 (O2 in the UK and T-Mobile in Germany, for example). Just as in the US, other carriers would eventually get the iPhone, but Apple always retained control over software updates.

Elsewhere, Apple has even developed its own multi-carrier SIM card for the iPad, making it easier for consumers to switch carriers and further reducing carriers' influence over devices that connect to cellular networks. Alas, the Apple SIM hasn't yet made its way to the iPhone, though Apple sells SIM-free iPhone models that can be activated on any carrier.

With Android, a different story

Things proceeded much differently with Android, but the origin of Android's problem is clear: "Android was originally designed, above all else, to be widely adopted," we wrote in a 2015 article on Android's security update problem. "Google was starting from scratch with zero percent market share, so it was happy to give up control and give everyone a seat at the table in exchange for adoption."

Google recognized early on that this created problems. Way back in 2011, Google announced the Android Update Alliance, which would ensure that Android phones and tablets would receive updates for at least 18 months after their introduction. By 2012, it was clear that this alliance with hardware makers and carriers didn't work out.

Google's job is obviously much harder than Apple's because it has to work with third-party hardware makers in addition to network operators, whereas Apple controls both the hardware and software. Instead of a single version of Android for all phones, there are various customizations made by hardware makers and apps preloaded by manufacturers and carriers. Hardware makers and carriers do their own compatibility testing before pushing out updates.

While there are just a few iPhones, there are many different models of Android devices that all get slightly different updates.

But even when hardware makers have their custom versions of Android ready, the updates aren't pushed out simultaneously by each carrier. Verizon has earned a reputation for stalling Android updates and refusing to let certain devices on the network in a timely fashion, though there are also examples of other carriers pushing out updates slower than Verizon does.

That's in stark contrast to the iPhone ecosystem, where carriers are given early builds of new iOS versions for testing purposes, but these partners don't interfere when the updates roll out on schedule simultaneously across all carrier networks.

Google has done a better job with its own Pixel and Nexus phones, which receive two years of guaranteed Android updates and a third year of security updates. These devices get the latest versions of Android directly from Google, usually within two weeks of the software's release—as long as you bought the device from the Google Store. Google-branded devices purchased outside the Google Store are not guaranteed to get updates on the same schedule, although Verizon has been issuing updates to its Pixel phones at the same time as Google.

But Google-branded phones are a relatively small part of the market. Fewer than 10 percent of Android devices that visited the Google Play Store in the week ending June 5, 2017 were up to Nougat, which was released in August 2016. Only about 41 percent of Android devices had been upgraded at least to Android Marshmallow, the version released in October 2015.

To counter this bleak situation, Google has been breaking as much of the system as possible into apps that can be freely updated on the Play Store, while shared components go into a catch-all super app called Google Play Services.

Still, some technically advanced users turn to custom builds of Android to stay relatively up to date. But with so many Android phones not even receiving security fixes, it has become a dangerous situation.

The fragmentation that began when Android was a bit player has continued even with Android now dominating global smartphone sales. Meanwhile, iOS 11 will be released this fall and will run on all iPhones going back to the iPhone 5S released in 2013. iOS 10, the current version, supports the iPhone 5 from 2012.

Microsoft was in the same boat as Google, as it worked with third-party hardware makers while also making some of its own phones. But it managed to retain control over Windows phone software even for phones built by third parties, and for a while the company was able to update Windows on phones without carriers screwing it up. But Microsoft's attempts to gain market share from the iPhone and Android failed, and the company seems to have given up on the smartphone market.

The end result is that if you want a phone that receives prompt software updates and major OS upgrades for more than two years, the iPhone is by far the best option. And it's all because of decisions made before the release of the first iPhone a decade ago.