July 16, 2013, 2:14 PM — 'Semi-yearly upgrades!' That was the offer dangled by T-Mobile CEO John Legere last week in The New York Times. The article discussed plans by T-Mobile and AT&T to do away with the now-standard two-year mobile phone contract in place of "flex" plans that (for a price) allow users to upgrade their entire phone every six months, or a year. Expect other major carriers to follow suit – and soon!
The change in policy on mobile device "lock in" is being couched in terms of consumer choice. "Seven-hundred-thirty days of watching new phones come out that you can't have, or having to live with a cracked screen or an outdated camera," he said in a T-Mobile statement. "We say two years is just too long to wait." Maybe so. But switching from two year contracts to six-month contracts also reduces the pressure on carriers to do something that they have, so far, been very reluctant to do: manage the security of the devices their customers use.
I discussed last week, it can take months – if not years – for updates and security patches for mobile operating systems like Google's Android to make it from the OS vendor to the individual device user. That's if the update comes at all. Lately, handset makers seem to be floating the idea that patching mobile devices isn't something they're going to bother with. The handset maker HTC told the online publication Androidcentral.com earlier this month that it would not offer any more updates for its HTC One S Android phone – locking the device at Android Version 4.1, despite the fact that it only came out a year ago.
Walking away from your obligation to support a phone you sold only a year ago might seem crazy. It's less crazy, though, if the user has the option of upgrading to the latest and greatest version of Android by other means – namely: a hardware change. And that, I fear, is part of the (twisted) logic driving the move away from the two-year contract. Both device makers and carriers perceive it as a "win-win." Device makers "win" because they continue to move hardware, while washing their hands of the (expensive, time consuming) obligation of supporting that hardware in the field. Carriers, of course, "win" by exacting a premium from customers for the "right" to more frequent upgrades.
But hold on – what about mobile phone user. Do they "win," too? I think, in the final analysis consumers come up short. Yes, they get more flexibility. Putting aside the dire environmental consequences of treating mobile phones like Bic Lighters, however, consumers will pay a hefty premium for their new device measured in time, productivity and dollars. In the case of T-Mobile, they'll be asked to pay a monthly premium for the "flex" option in addition to a hefty fee should they choose to "flex" and exercise their early upgrade. Consider, also, that many of the "feature" improvements between mobile devices (including security) are software-based rather than hardware based – features that consumers are entitled to and would get (as iPhone/iOS users do), if their handset maker and carrier would only make OS updates available to them.
Of course, we've seen this before in the market for PCs, network devices and other peripherals. So-called "rip and replace" options server, switch and router makers were a cause for complaint long before the first Android phone saw the light of day. Over time, however, enterprises got wise to the hidden costs of such "fork lift upgrades" – migration and integration, staff retraining, licensing and support costs, downtime. They put more pressure on their vendors to think long term, with online and real-time update features and more modular software and hardware that allowed customers to add or remove features as needed. Hopefully we'll see the same thing happen in the mobile space, once phone owners get hip to the fact that they're not being "cool" getting a new device every six months. They're just getting used.