Apple’s attempt to disintermediate carriers backfires, Windows Phone 7 to benefit

Apple’s plans for a SIM-free GSM iPhone, which would have locked users even tighter into the Apple ecosystem and have diminished the role of the carrier as the service provider appears to have spectacularly backfired.

Not only was Apple forced to drop plans for the so-called “Soft SIM”, but  according the Sanford Bernstein’s European telecoms analyst Robin Bienenstock carriers have retaliated by reducing subsidies for the iPhone 4 by between €40 to €150 “in the largest iPhone markets.”

“It seems that the ironic and unintended consequence of Apple’s apparent attempt to divide and conquer the Operators has been to drive them to more rational pricing policies for both handsets and tariffs,” writes Bienenstock, noting the handset has also disappeared from the front page of the carrier’s websites.

Bienenstock expects carriers will de-emphasize the iPhone 5 next year and seek to promote a “fragmented” landscape of different phone platforms , including Windows Phone 7 devices.

Like many in the past, it appears carriers have found that a deal with Apple is very much like a deal with the devil, but have been fortunate to have been delivered multiple viable alternatives this year, meaning Apple, already fading from prominence in the market, may end up paying a heavy price for its arrogance.

Read more at Barrons here.