Big, Dumb Pipes ⇥ wsj.com

Dennis K. Berman, Wall Street Journal:

When Steve Jobs released the first iPhone in June 2007, Apple Inc. and Verizon Communications Inc. were worth almost exactly the same in the public markets: About $115 billion.

What came over the next eight years was one of the greatest transfers of power and wealth in corporate history. Mobile phone operators — who had been brutish, intractable gatekeepers to the customer — were turned into Apple’s lackeys.

The customer was still spending money with the carriers, but now she was spending far more with Apple. Today Apple is worth about $735 billion, nearly double that of Verizon and AT&T Inc. combined. The carriers still love to romance the “power of the network,” but this has the feel of a crumbling empire, vainly proclaiming its domain over places long overrun.

Facebook and Google are worth more than Verizon or AT&T, too, and Amazon is pretty close. Remember how terrified carriers were of becoming dumb pipes? It’s happened; it was inevitable. And now carriers are finding creepy — really creepy — ways to try to salvage what leverage they have left.