France Telecom CEO Stephane Richard thinks the world should be greatful to Apple for inventing what we think of today as a smartphone by introducing the iPhone. At the same time, however, the telco bigwig — France Telecom operates the Orange network in 15 countries — expressed concern about Apple’s control over App Store content, and suggested that Net Neutrality concepts ought to apply to more than just the pipes that carry the data.
France Telecom CEO Stephane Richard speaking at an EU symposium on Net Neutrality in 2010
Photo courtesy of Olivier Ezratty
Praise be to the iPhone
The comments came in a speech in San Francisco last week that was attended by AllThingsD. In that presentation, Mr. Richard spoke on a variety of topics concerning the smartphone business, including the value of Android, Apple’s contributions to the space, and the state of competition in the market.
“They just created smartphones with the iPhone,” Mr. Richard said about Apple. “Everybody should be grateful to them to have put such a product in our market.”
Mr. Richard is enough of a fan of the iPhone to use it himself, and during his talk he singled out Apple and Google’s Android platform as being the only two platforms his company works with that doesn’t have problems.
“I think [Android is] quite a solid and reliable operating system and doesn’t suffer with bugs,” the French executive said. “We have regularly problems with [Research In Motion]. We have no problem with Apple and with Android. Let’s be frank and clear.”
Still, he said not to count RIM out of the race, noting that the BlackBerry platform has a strong following in Europe. He also said that the risk with Google is whether the company begins to use point updates to Android, “as a weapon in their relationship with device manufacturers and indirectly with telcos.” So far, so good, on that front, however.
The power of control
He also fears Apple’s power to use the App Store as a weapon against telcos like his. Not only does he want to be able to sideload apps onto his customer’s iPhones — something all telcos want and most customers do not — he worries about the day when Apple keeps Orange (or another telco) from even offering an app they want their customers to have on the App Store.
“Everybody is talking about Net Neutrality,” Mr Richard said. “Net Neutrality is not only dealing with pipes. It also deals with management of application shops. If you have people like Apple managing their application store and saying ‘This is OK and I don’t want to see this app in my shop,’ it’s a problem.”
He stipulated that though Apple has been a tough negotiator when it comes to pursuing its business and operational interests, that his company and Apple have so far been able to work together to find soliutions. “We are not at war with the Apple guys,” he said.
Still, there’s that sideloading issue. Sideloading is the telco practice of installing software — apps in this case — on smartphones (or on PCs in the computer space) before the device is sold. There is often a fianancial transaction involved, or at least promotional considerations at play, though sometimes companies are trying to simply make the devices more attractive to consumers users by putting useful software on their smartphones (or PCs).
“Of course,” he said, denoting how matter-of-fact this is to him, “Ideally we would like to have those services embedded natively in the handset which is what we do with Android-based devices like with Samsung or HTC or people like that. It is not possible with Apple. We still are in a position to bring those apps to our customers through the app stores, provided clearly we have access to the App Store.”
“The problem,” he said, “is the day when Apple says ‘I don’t want this one.’”
Come that day, he said that France Telecom would go to court to protect its interests. “Competition is not only something that should be applied to telcos and to carriers,” he said. “For us it should be a principle for the whole Internet environment.”
SIMs & iPad
Other tidbits from the talk include the fact that he confirmed that his company is working with Apple to develop smaller SIM cards, and he said that Apple has been looking for a software SIM solution. He suggested this is no longer in the works, in part because Orange had convinced Apple it was a bad idea in terms of security.
He also praised the iPad, saying, “To me as a user and as a partner, there is the iPad and there is the rest.” He thinks the gulf between Apple’s iPad and the competition is so large that he doubts how big the media tablet market will be.
He said, “To be honest, I am still a little skeptical of the size of the world market in tablets. First, I do think the iPad is very well ahead of the competition in terms of tablets. I think there will be a world market for the iPad. What will be, really, the size of this market, is difficult to say, because in fact it is a new market. In fact I think that in the future people will have several devices, several screens. Nobody knows what is the mix or the range of devices that we will have.”
One interpretation of those remarks could be that he doesn’t believe anyone is going to be able to truly compete against the iPad, limiting the market to being mostly what Apple sells.