Sometimes I think we are just too smart for our own good.

As an example, let's take a look at Apple and its exciting new phone release, the iPhone.  On Jan. 22, 2008, Apple reported it had sold 3.7 million of its smartphones (BusinessWeek, Feb. 11, 2008), while AT&T, the only authorized service provider, reported that fewer than 2 million subscribers activated their iPhone.  Almost 1.7 million phones have NOT been activated.

Or so it seems.

The deal here is that AT&T pays Apple an estimated $10 per month for every activated subscriber over the two-year span of the service agreement.  Apple also earns about $120 per phone sold.  That's lots of money for a closed architecture arrangement.

However, this strategy may not be in the best interest of the most important part of the equation--the customers.  And it is the customers that are having the final say here.  Experts estimate that almost 1 million phones have been hacked into, unlocked, and been changed to allow their use on other service provider networks.  The rest of the phones apparently are making their way overseas to places like China.

Imagine the groundswell of sales if Apple had made the iPhone available to all providers instead?  Take the profit on sales, and roll out enhanced versions in 12 to 18 months!  Customers would be estatic, and the iPhone would dominate the market.

Instead, the strategy was anti customer.

In a different industry, I encountered the same strategy as it pertained to maintaining escalators.  The national retailer I worked for had a portfolio of over 1,200 escalators with probably 30 different manufacturers.  We moved to a single provider to handle all of our maintenance needs, and the program worked until we encountered the proprietary equipment of one vendor. 

Because that company had been unsuccessful in its bid for the national service agreement, they balked at providing our service provider the diagnostic devices and support to handle their equipment.  We had to become involved int he process--a time consuming and non-customer friendly approach.  This led us to remove their equipment from our approved list, and it closed them out of our market for over 5 years.  They finally got the message and cooperated.

Are you being short sighted in your strategic decisions as it affects your customers?  The answer is to think about what is best for your customers.  Doing so will always be the most profitable decision you can make.