Urgent Matters

Maybe the cell-phone industry is starting to grow up


Recently, one of the cellular-phone manufacturers launched a new television commercial that centers on the concept that every cell-phone user is different, with very different needs and desires. "You don't need to get a phone — you need to get a phone that gets you," this company tells us.

Somewhere, the father of the cell phone must be smiling.

A few weeks ago, I had a wide-ranging conversation with Marty Cooper, who led the team at Motorola that invented the device that seemingly has taken over the world. At one point, Cooper confided that he is dismayed at the cellular industry's business practices.

"They try to foist universal devices on everybody," he said. "Androids and iPhones are wonderful pieces of technology, but very few people use all of the features — in fact, nobody does. [The industry is] going to grow up someday, and when it does, devices are going to be customized to people."

This has been going on for decades, according to Cooper. We talked a bit about the Touch-Tone phone, which sat on the research-and-development shelf at AT&T for a very, very long time because — as a monopoly at the time — Ma Bell had no incentive to bring it to market, choosing instead to keep pumping out the basic black rotary-dial phone.

"People should be deciding what these products are, but that's exactly the opposite of what occurred with the black rotary-dial phone," Cooper said. "Bell Labs did the research and decided what the products were going to be, Western Electric built them, and then the operating companies said to the consumer, 'This is what you want.'"

The problem today is the same as it was then, Cooper said: For each phone model an operator offers, they have to do market research, manage production and do inventory control — a lot of additional processes that are inconvenient and expensive.

"That's the reason that there aren't more types of cell phones offered by the carriers," Cooper said. "It's going to take some time for them to grow out of this kind of thinking. We have to remember that we're only a generation away from monopolies. When they do grow out of it, that's when we're going to see more customization."

In the world envisioned by Cooper, cell-phone manufacturers wouldn't start out with a piece of machinery, as they do today, but with an application. Then they would try to envision the optimum device solution for that application. "Only then would they see whether there's a convenient way to combine that with something else," Cooper said.

I asked him whether the offering of customized devices to consumers would destroy the manufacturing economies of scale that enable cell-phone manufacturers to be profitable; such economies are especially critical when a company is hawking commodity products such as cell phones. Cooper told me that the economy-of-scale issue is "way overrated."

"The best example is when you buy a car," he said. "When you do that, you design it to your tastes. The colors, the features — you literally design that car for you. This is a very cost-sensitive product, but they have learned how to manufacture these things in a flexible way and still customize the car to you. So, there is absolutely no excuse, when you're building a cell phone — and there are a lot more cell phones built than cars — why they can't customize these devices to the individual. It's only a matter of desire."

All of that said, Cooper remains optimistic that the day eventually will arrive when the cell phone customer truly is king.

"It's going to take time, but you're eventually going to get products that are customized to fit your needs. It happened in the auto industry and many other industries. Telecommunications is a little slow in this regard, but it's going to happen," he said.

Maybe the process already has begun.

What do you think? Tell us in the comment box below.

For more information on mobile data, attend these sessions at IWCE in Las Vegas, March 7-11, 2011.

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Insights from Donny Jackson concerning the most important news, trends and issues.


Donny Jackson

Donny Jackson is editor of Urgent Communications magazine. Before joining UC in 2002, he covered telecommunications for four years as a freelance writer and as news editor for Telephony magazine....
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