"Cell phone firms just don't get it" is an article recently posted to the Inquirer, which seems (to my European mind) riddled with holes. It's a classic example of the difference between US and European attitudes to wireless.
The central point made by the author - that phones are over-bundled with features and consumers want simplicity - has some truth. But the way he sees this happening is by divorcing network capabilities from the device, allowing you to plug any device you like into the network.
My problems with this? Firstly, many mobile phone users are completely non-technical; this is why the industry is so large: operators have put effort into selling technically complex devices in the mass market. Expecting all these people to purchase 2 devices and integrate them just isn't realistic.
Secondly, how does this lower the cost for the end-user? 2 devices from different manufacturers are likely to be more expensive than a single integrated handset from one vendor.
Thirdly, it doesn't take account of the fact that in general, people don't understand how they behave, and how they will behave. If you'd asked me 10 years ago what I thought of text messaging, I would have laughed in your face and hit you with my spade. This is why it was a surprise success for the industry: because no-one looked at it and thought "Wow - I'd use that".
It's the same with camera-phones. When they came out, there was a raft of negative press - who would ever need a camera inside a phone? But a year or so later, they're out there, and people are actually using them - so now we see some positive stories.
Ask your customers to commit money up-front to completely new services, and you'll get nowhere. They need to be taunted, tempted, given freebies (something Orange really get with their Try promotions), and shown how useful such services can be, before they'll commit.
And this is why the idea presented in the Inquirer article is based on false premises: people don't understand how useful mobile data services can be. They didn't understand it with text messaging, or indeed with mobile voice calls - I seem to recall reading that the original business plan for one operator had a target of 15% mobile penetration in the UK, compared to the 75%+ we have today. They certainly don't understand it with 3G, which is why we endure endless news stories about how focus groups show that customers don't want 3G.
Operators need to stimulate usage of their networks - whether that usage be data services, internet access, voice calls, text messaging, whatever. To do this they need devices which encourage usage of all these things, by making them simple to use. Reducing the amount of money they spend subsidising handsets will help the bottom line, but it won't grow their business.