by Dana Blankenhorn
  Volume VIII, No. XLII

This Week's Clue: Cellular

Home | Dana's Bio | Clued-In Archive | Newsletter '04 Archive | | Subscribe!
This Week's Clue: Cellular
SSP (Shameless Self Promotion)
What Drives Innovation
Google Print
The 24/7 Workday
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2004 a better year for yourself, your business, and your family.


For the Week of October 18, 2004

For the last several months I've been studying the cellular (or mobile) phone industry, with an eye toward helping a friend launch a business in it.

I've discovered a maze of contradictions:

  • No tech industry is so entrepreneurial, yet none is under such tight control.
  • No technology is changing so fast, yet none is facing such resistance to change from customers.
  • In no other technology market is the U.S. completely lagging, not only on the sell side but the buy side.
  • No other technology has such cheap prices, but offers so little value-for-money to consumers.

It's amazing really. Practically every nation around the world recognizes two key mobile technologies - GSM and Java. Not the U.S. Verizon, the largest carrier, insists on CDMA and Brew. The other three aren't highly compatible either. As a result you can't advertise cellular data products to the whole market, through newspapers, magazines or TV. And the phones are all one carrier only models.

Until a year ago you couldn't get a message across these networks. It was like the online world before X.25, when The Source, CompuServe, and GEnie shared a tiny, but fairly stable market, with high prices and profit for all.

In fact the U.S. mobile industry is entirely pre-Internet. Most mobile "web access" is a walled garden, in which the carrier controls not only pricing, but distribution and even the content of what it is sold. (Verizon, again, is the leader in this.)

The price of this deliberate Luddism is that mobility is a foreign lake. (Apologies to Ted Turner for using the word foreign - but if I said international I'd be including the U.S.) Every aspect of the business is dominated by firms outside the U.S. There are U.S. participants, but this is not where the leadership is.

So we are paying a price for Luddism, even while the mobile (or cellular) industry continues to count its profits and pretend nothing is wrong. We have lost the first great growth opportunity of the 21st century because we have allowed big companies to run roughshod over entrepreneurs.

This is not to say there aren't opportunities. There are. And they're multiplying. There are opportunities in retailing, in training, in transaction processing, in delivering the goods, and in jumping over the hurdles placed by the big boys. There is also money to be made in identifying those hurdles. The industry doesn't have a site to rival "Consumer Reports." So Verizon's attitude is unknown to most consumers.

The biggest threat to the industry in America remains 802.11 or Wi-Fi. This threat doesn't really exist in Asia, Europe or even Africa, where carriers are at least nominally responsive, because the range of a Wi-Fi signal is terribly limited. Also, since the frequency is free, not sold, it's hard to build a uniform coverage area of any size. But it's because the industry here is so unresponsive that Intel feels there's money to be made in delivering 802.16 or Wi-MAX to the mass market, over the next two years.

The response of the industry to this growing threat is to go to the government, demanding more "auctions" of "scarce" frequency. But the plain fact is that, in part because of technologies cellular pioneered, spectrum is not scarce at all. It's marvelously abundant. An 802.16 system will mainly use frequencies that might be classed as "greenfield," empty plains of spectrum hardly touched. It was easy for the satellite companies to gain bands at 38 GHz to deliver TV services - no one else wanted them. And by limiting power appropriately every home or building can have its own 802.11 local network, with 802.16 backhaul available on the cheap.

The appearance of dual-mode phones next year, which work as 802.11 devices where such networks are available but as mobiles where they're not, will begin the process of change. Moore's Law will do most of the rest, turning all mobile phones into real computers, running real computer operating systems. The mobile carriers are on their way to becoming back-up capability, OK in a pinch but not optimal, simply because those operators demand to control every dollar and every bit that runs through their current pipes.

It's a shame, but within 10 years, maybe less, America's mobile networks will be as dead as the Bells. And it didn't have to be that way.


Shameless Self-Promotion

I work as a freelance writer in Atlanta, and am on the development team for EgoScout , a new kind of marketplace for cellular data services.

My last book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards .

You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Takes on the News

What Drives Innovation

There is a myth in the U.S. that innovation is mainly driven by a desire for money.

Not that there's anything wrong with wealth and fame. I could use a bit more myself, when the bread machine breaks or I don't think I'm being heard. But if you gave me Stephen King's money and notoreity I would still do things much as I do now. And I would still work very hard at being creative.

In fact, a recent article in Fast Company indicated that many innovators, and many innovations, are driven by people to whom money is secondary. Charles Leadbeater calls these "pro-ams." Linus Torvalds and Richard Stallman are two examples. Some critics wonder "If people aren't being paid for their work, how will they earn a living" but in fact such professional amateurs are paid, often well. Once you have what you define as "enough," you move up the hierarchy of needs, to such things as self-actualization, but you do keep growing.

These are the drivers of what Richard Florida calls the "Creative Class" and the big news is that the U.S. is now losing these people. .

In fact the big economic news of our time may be how real growth is becoming untethered from raw materials and capital. Ideas draw money, not the other way around. More important they build capital. When you understand that fact, the policy implications are huge, and your path becomes obvious.


Google Print

Most of the talk concerning Google's coming Google Print service involves how it might compete with Amazon.Com.

That misses the point. The idea here is to enable people to not just have a database of what we're writing now, but what has been written previously. Newspapers and magazines have tried to take this archive off the Web (the London Guardian is just the latest to go to registration-only), taking away the Web's memory. Some Web sites, like the Internet Archive , have tried to patch some of these memory holes (those on the Web are bigger than those in print), but there's far more printed material locked in books than was ever online in the first place.

Google Print moves the company from indexing what's out there to building a database of its own, its own storage cache. While the database has a "cache" function that keeps old snapshots of pages, this goes beyond that, toward the storage of all the world's knowledge.

Some years ago Jerry Pournelle predicted that by this century you would be able to find anything, instantly. Many people thought databases like Google fulfilled that dream. But there is still a good distance to go, and the good news is that we're going there.

The 24/7 Workday

Recently my wife, having driven my daughter to a doctor's appointment (sprained ankle, she's fine thanks) and back to school, decided that rather than continuing to her office she would work from home that day. This was fine with me. Her employer has replaced her desktop computer with a laptop. When she comes home she plugs in a big monitor, a new wireless keyboard, and can be more comfortable than in her office.

She may also work harder. There was no pressing need to "go home" on this day, and she wound up working until 10 PM, pausing only to eat. In fact she's now able to work during her weekends, and frequently does. Her bosses have never offered more than "comp time" for overtime work, there are pressing deadlines ahead, and she says everyone she knows is doing the same thing.

Small businesses are actually leading this charge to a "virtual work environment," in which everyone is an entrepreneur, on-call 24/7.

There are huge implications from this, and we're accustomed to thinking of the big-picture economic ones, like smaller offices, bigger homes, and 802.11 networking at the coffee shop. We don't yet think much of the bigger, social implications, the need for workers to turn themselves off, and the need for employers to allow that lest they burn out their best people.

Here's some advice from someone who has lived this life for over two decades. You do need to turn off. You need distractions. You need a life. And if you employ people, you're abusing them if you don't demand that they get and keep a life.


Clued-in, Clueless

Clued-in are Baby Bells offering consolidated mailboxes, with voice mail (wired and wireless), faxes, and all e-mails available in one location and accessible from any service. Can't wait until someone who is truly clued-in offers it.

Clueless was China's mobile phone industry, which caused a worldwide chip shortage this spring due to inexperience. Many firms are now being squeezed out as a result. Irrational exuberance means the same thing in any language.


A-Clue.Com is a free email publication, registered with the U.S. Copyright Office as number TXu 888-819. We're on the Web at

Home | Dana's Bio | Clued-In Archive | Newsletter '02 Archive | | Subscribe!