Friday, May 16, 2008

The Cell Phone Revolution, Innovation, and the Marketplace

Last month, we very quietly marked the 35th anniversary of the cell phone. There will be a short pause while everyone does the math. Yep, 1973. In April of 1973, the first cellular telephone call was made (company lore was that is was from a company engineer to a counterpart at Bell Labs, with the first words being, "NYAAAH NYAAAH!!!"). For the real history, go here.

That was the culmination of something like five years of basic development. It would be ten more years before the FCC approved the system for commercial use. Thus it took something like 15 years to get to sell a phone in the marketplace. And about ten more years would pass before the technology was widely available at a reasonable price. So that brings us to about 1993. As cell phone became ubiquitous, so did the Internet and email.

Today, we have convergence of the cell phone, the Internet and email on a single portable device that just about anyone can carry with them in their pocket, almost anywhere on the planet.

And it seems so natural to be so connected. I don't think of walking out the door without both of my cell phones (one personal, one work). Both are capable of Internet connectivity; and if I work at it, I can get email on my personal phone. But 15 years ago, the height of connectivity was a pager and access to a pay phone.

My daughter is studying in France this summer. She is required to have a cell phone with her at all times. I went online and purchased a SIM card for her for a French cellular company. The process was quick and easy and should save us a few bucks (check out Brightroam for more info). Not that many years ago, we would have hoped for a weekly letter home and a periodic brief phone call.

This is innovation wrought large. It is a true technological revolution. And it all happened within the lifespans of most folks who will read this blog. And for some who read this, you've never known a time without the Internet, email, or cell phones. (me? I remember rotary dial phones and $.30 per gallon gasoline).

My thoughts are a little scattered today, but one more point comes to mind. The cell phone took nearly 15 years of engineering work to get to the point that someone could sell service and devices. It then took another ten years before the devices and services were broadly available at a reasonable price. Then the money machine kicked it. But for all intents and purposes, there were 25 years of development before anyone really made money. But in that time, we built what amounts to a global infrastructure where there was nothing before. That's pretty impressive, but I have to wonder how many companies would be able to commit that much time, money, and resource into a similar project today? One of the things that concerns me about the stock markets today is that everyone wants the big payoff tomorrow. The markets and stockholders have no long term vision. If the company isn't making money today, forget about it. That's a dumb point of view. And I am afraid that it has turned the stock market into the playground of gamblers and bullies, while forcing out companies that want to take risks and spend the time and capital that it takes to make something that is really new and ground-breaking. Once upon a time, buying stock in a company was a way for an individual to help a company grow or develop something new. Certainly, there was an expectation that the investment would grow with the success of the company. But this was generally seen as a long term bet. Somewhere along the line, we lost sight of that.

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