McGuire’s Law

On Tuesday, I participated in the Connected Planet 4G Salon. My first slide showed two paths the mobile operators could pursue. The starting point was 2006 (specifically chosen as the end of the pre-iPhone era).

One option is what I refer to as the “Big Bell Dogma” path. This path involves making every decision with one goal in mind - maximize control over the ecosystem which allows the operator to maximize its share of the revenues in the ecosystem. This path forces innovation to happen at “carrier speed” and the result is constrained ecosystem growth. As I’ve described before, Big Bell Dogma is named to represent the mindset that telcos have held onto ever since Alexander Graham Bell invented the telephone in 1876 and was really at its prime in the old monopoly AT&T days. However, all carriers suffer from Big Bell Dogma to some extent - some more than others.

The second option is the one I referred to as the “Open Enablement” path. This is the path that Sprint has chosen, perhaps as best represented by our hosting of our 10th annual developers conference this week in Northern California. On this path, every decision is considered with the goal of maxmizing ecosystem growth. Operators must ensure that they’re adding value, both to accelerate growth but also to make sure that our added value translates into an earned share of the revenue in the ecosystem. Along this path, innovation happens at “Silicon Valley speed.”

Later, during the Q&A, someone from the audience asked how Big Bell Dogma was different from Apple’s approach to managing the ecosystem.

That’s an excellent question and the reality is that Apple suffers from Big Bell Dogma. They want to put constraints on how innovation can happen so that they dominate the ecosystem and extract the most value.

The difference is the starting point. Unlike mobile operators, Apple really is an innovative company. They understand the “hits-based” nature of the software industry and therefore the need to enable lots of apps to enter the market so that a few can really make a difference, so they gave application developers the basic capabilities that had previously been missing to allow the app ecosystem to explode. However, on every other dimension, Apple has kept the clamps on, constraining innovation to happen at “carrier speed.”

Unlike Apple, Google has allowed the Android ecosystem to innovate in all dimensions, and even in the app ecosystem, Google’s lack of constraints is winning over developers.

Think about it - Apple makes great handsets. But they introduce one new iPhone handset a year. How much real innovation is represented in that one handset? Only as much as one company can imagine and productize. Now think about all the different Android handsets you’ve seen and the level of innovation that handset OEMs are bringing to market. Consider just the HTC Evo: kickstand, front and rear facing high resolution cameras, HDMI output, 4G network connectivity… Now multiply that by the innovation that Samsung, Motorola, LG, Sanyo, and all the other innovative handset manufacturers that are out there can bring to the table.

Think about it - here in the U.S. Apple has limited the iPhone to one carrier. How much innovation has that operator delivered to customers since 2007? In that time Sprint alone has rolled out 4G nationwide (in 2 months, Sprint 4G will cover 120M people), introduced the first all inclusive unlimited plan (Simply Everything), Ready Now to help customers actually make full use of their advanced devices, Any Mobile, Anytime, and the Sprint Free Guarantee, just to name a few. I imagine T-Mobile and Verizon have each had some innovations as well. The Android ecosystem benefits from these innovations, but the iPhone ecosystem doesn’t.

And even within the application segment, the Android ecosystem can enjoy growth-accelerating innovations, like Sprint ID, which would never be allowed by Apple as they seek to rule the app ecosystem with an iron fist…

Apple makes great products and back in 2007 they gave the entire ecosystem a fast start with the (previously unmatched) enablement they provided to application developers, but they are definitely playing the Big Bell Dogma game.

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• Is Verizon About to Destroy All Future Android Devices?
• Verizon Wireless to customers: GPS issue? What GPS issue?
• Yet Another Lame Carrier-Backed Mobile OS
• Clearwire’s San Francisco WiMAX launch was a bureaucratic nightmare
• Microsoft Files Patent Suit Against Motorola

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• How To Finance a Community Broadband Network When Incumbents Fight Back
• Indonesia Joins Blackberry Ban
• RIAA and NAB Attempt to Force FM Receivers in Handsets
• FDA has App Stores Under Surveillance

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• People Aren’t Buying Blank CDs Any More, So Collection Agency Demands Media Levy Expanded To Mobile Phones
• Taxation Policy Affecting Mobile Broadband Usage
• FDA, FCC discuss medical smartphone apps as industry adjusts to regulatory culture
• BlackBerry email, web and messaging banned in UAE due to ’security concerns’

This week I participated in the MobileBeat conference in San Francisco. For the panel I was on, I wanted to find a way to sum up the role of the mobile operator in the application ecosystem.

As I’ve often said, there’s lots of ways that carriers (in their Big Bell Dogma ways) try to force themselves into (or onto) the ecosystem that just plain don’t make sense. As I said at this conference a year ago, application developers want to move at Silicon Valley speed, not carrier speed.

That doesn’t mean that mobile operators are relegated to just being dumb pipes.

Instead, we need to understand where we do, uniquely, create value for the ecosystem. To me, it boils down to Bandwidth, Bills, and Bags.

For starters, we really are network companies. We operate billions of dollars worth of network assets that enable stuff (voice signals, web pages, mobile ads for “free” games) to get from the right point A to the right point B. Clearly, it’s more than just Bandwidth, but for the benefit of alliteration (so at least I can remember it), I’ll use that word to represent this vast array of assets. Carriers can contribute significant value-creation potential into the ecosystem by exposing those assets to developers to enable tremendous innovation (location, QoS, call control, performance data, etc.).

But, we aren’t just network companies. Mobile operators have long term relationships with our customers. I’ve chosen the image of the cellphone Bill to represent a complex set of interactions that provide the carrier with perhaps the most complete view of the customer that anyone has. On one hand, those bills can be a valuable way for developers to monetize their efforts, but even more, the information that the mobile operator holds about each customer is a veritable treasure chest. We have a responsibility to be good stewards of this treasure entrusted to us (consciously or not) by our customers. On one hand, we must defend the privacy of customer data “to the death.” On the other hand, as good stewards, we must enable the maximum value creation on behalf of our customers. We must enable developers to create capabilities that our customers can choose to approve the use of their data to make applications work better (e.g. location-based search) or even enable applications that simply aren’t possible otherwise (e.g. social location services).

Finally, we not only operate networks and maintain relationships with customers, but we also are some of the largest retailers in each of our territories. We operate thousands of stores where customers can walk in and interact with us. Historically, these stores were primarily sales locations. Increasingly, especially with increasingly complex products, these stores have become service locations. And in the past couple of years Sprint has introduced “ReadyNow” services to help customers fully use those increasingly complex products. While not yet on the order of Apple’s Genius Bar, ReadyNow is a valuable way that Sprint helps customers use their smartphones to do more than just talk.

I think my message was well received by the audience. What do you think? Does Bandwidth, Bills, and Bags communicate how mobile operators (like Sprint) are more than just dumb pipes, but rather value-contributing partners in the mobile ecosystem?

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• Apple revises iOS rules on outside advertisers, cuts out Google, Adobe by implication
• Lesson Not Learned: AT&T locks down the HTC Aria’s app selection
• Here’s the latest way AT&T Mobility is screwing its customers
• AT&T explains, basically ignores criticism for locking down Android handsets

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• AT&T disputes poor showing in dropped calls survey
• Investigation: Apple vs Nokia vs Google vs HTC vs RIM
• AT&T warns customer that emailing the CEO will result in a cease and desist letter

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• Verizon CEO Ivan Seidenberg ‘Studies be damned’ yet refuses to see facts
• Are The New Apple App Store Terms Illegal?
• Smartphone apps moving into regulatory gray area
• Google: 3 Big Telcos Reach For Their Guns
• AT&T More Upset About Stupid Analyst Report About Its Network Than Actual Network
• Verizon: Here’s the Truth About Sprint 4G
• The Real Reason Skype’s App For Verizon Phones Won’t Work On WiFi
• The incumbent telcos’ attack on YouTube looks like a suicide pact
• AT&T Tries to Strong-arm the Feds
• A return to the (walled) garden
• Adobe throws in the towel on Flash app tools for iPhone

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• North Korean Executed for Using Illegal Mobile Phone
• Open WiFi To Become A Liability In The UK Under Digital Economy Bill
• Skype pulled from Nokia’s Ovi store in the US, Verizon Wireless to blame?
• Motorola Backflip doesn’t allow non-Market apps, proves AT&T doesn’t get Android
• Skype Deliberately Crippling Functionality of iPhone and WinMo and Verizon Apps?
• Egypt Says No More Mobile Skype Calls
• AT&T, Verizon blast FCC rules for proposed LTE network
• FDA ruling on mobile image viewers could shake iPhone app market

As we work to build mobility into every product, service, and process, our greatest inhibitor is the mindset represented by those who defend the tethering of products and processes to specific places. This mindset is fueled by the investments that have been made that establish power in the companies, departments, and individuals that stand in the way of mobilizing our lives and our businesses. These investments are not always in hard assets, but often are investments of time and experience to establish intellectual and relational assets. We should expect our assault on these ways to be defended to the death. Here are recent examples:

• Apple Blocks Google App From iPhone While Trying To Patent The Same Invention?
• Why carriers didn’t want to allow 3G VoIP before. And why they’re now setting it free
• Jordan Increases Taxes on Mobile Phone Networks
• Will Control Freak Apple Let Another iPhone Browser Into The App Store?
• The real winners in the game of political donations
• University Of Texas Claims Trademark Over ‘Texas’; Wants Useful iPhone App Blocked
• Incumbents Blocking Broadband Stimulus Efforts Because They Don’t Like Competition
• Should mobile phones be subject to warrantless police search?