McGuire’s Law

In many of my recent talks, I’ve been telling a story about the impact of the microprocessor revolution on a specific business transaction. I believe this story paints a picture of the benefits in how we personally interact with the world and how businesses operate that can come from a technology revolution. I believe the mobility revolution is having the same kinds of impact - and will even more as it continues to unfold.

Let me share the story here:

If you’re old enough, think back to 1979 and imagine buying gas and paying for it with a credit card.

The first “a-ha” difference you’ll remember is that you might not have pumped your own gas, but that’s not the focus of my story. It really starts when it comes time to pay and you need to walk into the dark little office with your credit card. The attendant takes your card, grabs this brick like device, slaps your card down in it, puts in a paper form (in triplicate, with two carbon sheets in between) and (ka-chunka, ka-chunka) manually makes an imprint of your card. He fills in the amount of the sale and has you sign. He gives you one copy (and maybe the carbons, if you’re worried about someone stealing your credit card number), and you’re on your way.

Having taken that mental time travel, it’s now easy for you to understand the huge improvement in the customer experience that came from microprocessors being built into the gas pumps. Today, we “pay at the pump” and are immediately on our way as soon as our tank is full. I’m sure you can remember, like I can, after first experiencing “pay at the pump”, driving into a gas station, realizing that they didn’t have pay at the pump, and driving off to find a station that did. The customer experience improvement was so great that it changed consumer behavior and forced virtually all gas stations to follow suit. In short, the microprocessor revolution changed the rules of competition in this industry.

But, I’ve only told you a third of the story so far.

The second part of the story begins when the customer walks out of the office. The gas station attendant takes the two remaining copies of the credit card transaction and files them away. Sometime within the next week, the gas station owner/manager will bundle up all the bank copies of those transactions and send them off to their merchant bank for processing and payment. About a week later, those payments would be credited to the station’s account.

Today, the electronic transaction dramatically accelerates the payment cycle, radically changing the cash flow cycle for the small business owner and enabling her to think differently about her business.

The third part of the story begins when those credit card transactions arrived at the processing center. The merchant bank would have rooms full of clerks, trying to decipher the greasy fingered handwriting of thousands of 16 year old gas station attendants from across the country, and entering the data into mainframe-based systems.

The microprocessor revolution radically changed the core processes, systems, and organizational structures around which this credit card processing business operated. The automated systems radically changed the risk profile of the business (does anyone remember the books full of printed lists of canceled credit cards?) and, of course, the cash flow and transaction volumes accelerated dramatically. With the automation enabled by the microprocessor came significant increases in credit card use, not only at gas stations, but everywhere people spent money.

So, one simple transaction, impacted by a technology revolution, dramatically improves our personal interaction with the world, improves the cash flow for a small business owner, and redefines an entire industry.

Look around your industry for the opportunities to drive the same level (or greater) impact of the mobility revolution. What do you see?

I’ve started writing a monthly column for Christian Computing Magazine called The Mobility Revolution. My goal for the column is to help folks at churches and other ministries to shift from deeply understanding how to leverage PC and Internet technologies to advance their missions to beginning to understand how to leverage Mobile technologies to the same end. My assumption is that most of the readers are not yet deep in understanding the mobile industry.

Since my employer doesn’t publicly support any religion, I have permission to write these columns as an “industry executive”, so - as with all the content published here on my personal blog - the views reflected here don’t necessarily reflect those of my employer.

The article I wrote for this month’s column I thought might be worth sharing here. The August issue hasn’t yet hit the streets, so I’ve copied and pasted the text here (with the permission of the publisher).

THE MOBILITY REVOLUTION: Who Cares About Smartphones?

If there is one mobility topic that has captured the imagination of wireless buyers over the past couple of years, that topic would be the smartphone. From the Apple iPhone to the RIM Blackberry to the Palm Pre to Google’s Android phones, these expensive and powerful devices have been the object of appropriate desires for productivity and inappropriate covetousness.

So what is a smartphone, anyway?

Believe it or not, there is no standard definition for smartphone. My definition is that a smartphone is a mobile telephone that runs a general purpose computing operating system that can run applications. But the reality is that smartphones fit within a spectrum of devices with lots of shades of grey. The various classes of devices include:

• Basic mobile telephones – cellphones that can only be used to talk - there are hardly any of these being produced and sold today.
• Featurephones – cellphones that can access data services (including text messaging, e-mail, picturemail, and perhaps the Internet) and that have a proprietary operating system that may support applications written in Java or Brew.
• Smartphones – cellphones with data networking capabilities and that have a general purpose operating system supporting a broad array of applications developed by a robust ecosystem of third party developers.
• Smartbooks – an extension of smartphones with a larger display and an operating environment similar to a laptop or netbook.
• Mobile Internet Devices (MIDs) – small wirelessly connected Internet-centric devices providing entertainment and information - a MID typically cannot place telephone calls.
• Netbooks – smaller versions of laptop computers, often with smaller disk drives and no optical drives – heavily reliant on wireless connectivity to create value through network-based content and applications.
• Laptops – highly mobile general purpose computers.

With so many choices, why is it the smartphone category that has claimed all the attention? The answer, in two words, is “mobility” and “applications”.

Smartphones are small enough to carry in your pocket. Smartbooks and beyond don’t share that characteristic. As someone described it to me today, the cellphone is maybe the only thing you’ll unconditionally return home for if you forget it. Most people can make it through the day without their wallet, but we are increasingly dependent on the full-time connectivity that our cellphones provide. To realize the benefits of mobility, a device has to be small enough to carry in your pocket, have battery life to make it at least through the day, and be usable for basic communications tasks – most notably making and receiving telephone calls.

Featurephones share all of the mobility characteristics with smartphones, and featurephones are programmable, what sets the smartphone category apart is the attractive business model for developers. Featurephones generally support some level of programmability, often using a version of Java called Java 2, Micro Edition (or J2ME for short). Unfortunately, J2ME is not tightly defined – from a programmer’s perspective, the programming requirements change from phone to phone, requiring a developer to create literally hundreds or thousands of versions of a program to run on different phones from different manufacturers on different carriers. With this level of fragmentation, no single phone represents a large enough target market of users to enable focused investment. This makes it very difficult for application developers to make money with mobile applications for featurephones (although a few have managed).

Smartphones were born out of the marriage of personal digital assistants (PDAs) and cellphones. The first commercial smartphone was probably the Nokia 9000, released in 1996 as the outcome of joint development between Hewlett Packard and Nokia. However, the first smartphone commercially successful in the U.S. was the Handspring Treo 300, released by Sprint in 2003. (Handspring was founded by the original founders of Palm and was later bought back into Palm.) The Treo ran the Palm operating system, which already supported thousands of developers. Applications developed for any Palm OS device would run on any other Palm OS device, creating a viable business model for developers.

But if smartphones have been around for 5-10 years, why the sudden excitement? Another two words – “the Internet” and “AppStores.”

The original Treo 300 device used Sprint’s 1xRTT network for data connectivity and ran a browser developed for the limited computing capabilities of the device. 1xRTT can technically support peak data speeds of 144kbps, but you can generally think back to your experiences accessing the Internet using a 56k modem to appreciate how poor the Internet experience was on these early devices. Smartphone web browsers certainly didn’t improve the situation – poorly rendering web pages and not supporting basic capabilities such as Javascript and CSS.

By late 2006, Sprint was upgrading to EV-DO Rev A technology, and Verizon would follow suit in early 2007. This new technology steps up performance to DSL-like speeds – typically in the 1Mbps downlink range and 300-400kbps on the uplink. AT&T would later follow with HSPA technology providing similar performance.

But the real breakthrough was the introduction of the Apple iPhone. Although the original iPhone only ran on AT&T’s EDGE network (similar to 1xRTT), it enjoyed the “insanely great” product design of Apple, and most importantly, a real web browser – virtually the same Webkit-based tool as Safari running on a Macintosh. Finally, the full power of the Internet was available on the go. Google’s Android and Palm’s new WebOS-based Pre have since also come to market with great design, highly usable interfaces, and full Webkit-based browsers.

The second major breakthrough, again introduced by the iPhone, was the iPhone AppStore. Launched in July 2008 to coincide with the release of the iPhone 3G, the AppStore made it easy for iPhone owners to find (and application developers to market) compelling new software for their devices. A year (and 1.5 billion application downloads) later, the AppStore is an unqualified hit that has made hundreds of entrepreneurial businesses quickly successful. Of course, AppStores are also now available for the Palm Pre, Android, RIM Blackberries, and Windows Mobile devices.

So, what impact does any of this have on your ministry?

I think there are two critical lenses through which you should think about smartphones. First, is there a role for smartphones in my church or ministry – can it help us be more productive and successful in serving God? Second, are the people we’re ministering to using these popular new devices, and if so, can we serve them better by leveraging the technology they have in their pockets?

Continue to ponder those questions – it looks like I know what next month’s topic should address.

Sprint has just introduced a few more options for the Everything Plus referral plan. These are new “Messaging” offers that don’t include all the Everything features (they don’t include unlimited data, TV, navigation, etc.) but are at a lower starting price.

The individual plans start at $39.99/month for 500 anytime minutes and unlimited messaging. Family plans start at $79.99/month for 1600 anytime minutes and unlimited messaging.

See more at http://www.sprint.com/everythingplus

For about a decade I’ve been talking about “bandwidth built in” and for that long I’ve been using the watch as an example.  I’ve used it several times in the past month, so I feel compelled to share it with all of you.

Usually when I talk about the Mobility Revolution, I put it in the context of the PC/Microprocessor Revolution and the Internet Revolution, but this story works better to talk about the Electrical Revolution and the Microprocessor Revolution.  It’s all the same, really.  It’s a story about how new technologies radically change how we interact with the world and the rules of competition across industries in ways that we could never have imagined.

If I were a technology visionary 100 years ago and I went to a watchmaker and said “in the future, virtually all watches will have electricity built in”, he would think I was crazy.  In his mind, he would imagine a power cord running to the watch and he would say that no one would buy such a product.  He also would recognize that electricity wasn’t even available in much of the U.S., much less the world.

Of course, today, that prediction has come true.  Not in the way that the watchmaker envisioned, but through powerful, tiny batteries.  No one expects to wind a watch anymore.  Electric watches have freed us from the effort of winding, and from the worry that our watch will run down and we’ll need to re-set it - or at least we only need to worry about it every few years when the battery dies.

Thirty years ago, if I’d gone to a watch maker and said “in the future, most watches will have a computer built in”, he would think I was crazy.  He’d imagine the computers of the day - huge systems that required raised floor, climate controlled spaces to operate, and he could not imagine how that could be associated with a watch.

I couldn’t quickly find stats to prove this, but I would guess that today, that prediction has come true - that at least a large number of watches sold today are either digital watches, or they are “analog” (they have hands), but they also have microprocessors within them playing some role (even if just for displaying the date).

A decade or so ago, I started saying that “in the future, most watches will have bandwidth built in”.  At the time, most people thought I was crazy.  They envisioned a modem (remember those?) with a phone wire (remember those?) hanging out, and they couldn’t imagine anyone buying a watch like that.

By the time I started talking about it, I’d already bought a Timex Data Link watch (I still have it around here somewhere).  So, I can’t claim to have just dreamed the concept up.  Since then, most of the watches I’ve bought have had some form of bandwidth built in, whether they be linked via satellite to the national atomic clock, or even Microsoft’s failed “SPOT” technology.  Or my most recent exciting edition - a GPS-based exercise watch!

When I wear a watch that doesn’t have atomic time, I feel inadequate.  Even if I’m not traveling across time zones, simply giving up the confidence that my watch is perfectly accurate causes concern (I hate to be late for anything).  A brother-in-law who is a jeweler made a completely different observation about the atomic watch.  He said “wow, I bet they can make them really cheap that way.”  His point was that the mechanism in the watch doesn’t need to be very accurate, because the time is regularly updated with perfect accuracy, offsetting the deficiencies of the internal workings.

However, to prove my point even more than I thought…

Especially for young people, the majority of “watches” certainly have bandwidth built in, but not in the way I’d imagined.  I was just as bound by my foolish projection of current models into a future state as the watchmakers of old that I poke fun at in my story.

Today, for many people, the cellphone has completely replaced the watch.  My son may grow up never regularly wearing a watch.  (Since I have this fascination with watches, he’s felt compelled to wear one for a day or two at different times in his life.) For most people, the cellphone is always with them, it’s time is always accurate, it adjusts to new timezones (if it’s linked to the cellular carrier’s clock) - so why bind your wrist with some leather and metal?

Of course, this “bandwidth built in” is beginning to have a significant impact on the jewelry business.

What does “bandwidth built in” mean for your industry, your business, and how you personally interact with the world?

Research is good. Free highlights from expensive research reports are great. Here are some recent headlines:

• Mobile video to top 534 million subscribers by 2014 (Pyramid Research)
• Mobile Ad Spending to Grow to $5.7 Billion (Juniper Research)
• Sales of Low-Cost Mobile Phones to Reach 700m by 2014 (Juniper Research)
• 130 million mobile LBS users in Europe by 2014 (Berg Insight)
• Scannable coupons will invigorate promotions according to study
• Smartphones, data plans, and new apps to drive ad revenue to $1.5B in 2013 (Parks Associates)
• Mobile Money Market Worth $5 billion in 2012 (Reuters)
• Close to 10 million shipped Femtocell units expected by 2013 (iDate)
• Ad-funded MMS Revenues to Hit $87M by 2014 (Juniper Research)
• Mobile Email and Mobile Instant Messaging Will Drive Mobile Messaging Growth (Strategy Analytics)
• Survey Finds Majority Simply Not Interested in Buying an iPhone (NPD Group)
• Worldwide Mobile Services Revenue to Grow at Least 1.2% Annually Through 2014 (ABI Research)
• Global Handset Navigation Subscriber Base to Grow to 26 Million by 2010 (ABI Research)
• 223 Million Smartphones to be Shipped with Open Source Operating Systems by 2014 (Juniper Research)
• Global sales of smartphones to reach 310 million units in 2013 (Parks Associates)
• 366,000 Picocells to be Deployed by 2013 (ABI Research)

An early proof point of the Law of Mobility turns 30 years old today. Happy Birthday Walkman!

From varnelis.net:

On July 1, the Sony Walkman will be 30 years old. It’s hard to imagine what urban life was before the Walkman. Sony first introduced portable transistor radios in 1957 and these proliferated rapidly. With an earphone (like this), it was possible to carry music around on the go, but both sources and quality were limited. Portable cassette players and boomboxes flourished in the 1970s and if the latter served as means of building impromptu communities, they were also consciously thought of as sonic assault devices, marking out territory and creating tension in urban spaces. The Walkman was a counter against this, turning music inward toward a solitary experience (although not entirely: as Scott points out, Walkmen often had two jacks, making them less solitary than iPods). If the boombox represents the last moment of urban decay and street violence, the Walkman represents its re-colonization.

This weekend I had the pleasure of “test driving” the new Sprint MiFi. This is an incredible device that I expect will dramatically advance the Mobility Revolution.

If you haven’t heard of the MiFi - here’s how I’ve been describing it to folks: You know that box you have at home which is your broadband router? And you know the box sitting next to it which is your WiFi access point? Well, combine those two boxes together into a battery powered device about the size of half of a deck of playing cards. Wherever you go (within Sprint coverage), you have broadband connectivity for up to five devices. Today, those devices are probably laptops or netbooks. But increasingly, they will include media players, game machines, cameras, and all kinds of other devices.

Imagine how this kind of always/anywhere connectivity will change the way we live our lives and do our jobs.

And it’s available now at Sprint.com! (It’s not yet available through Everything Plus, but…)

I love this tweet from Guy Kawasaki:

@GuyKawasaki The Sprint MIFi gadget is lifechanging. Now my iPhone is fast! And I can Skype from anywhere.

It says so much…

Research is good. Free highlights from expensive research reports are great. Here are some recent headlines:

• Femtocells to Dominate for Indoor Coverage (In-Stat)
• P2P mobile messaging to reach $106bn by 2014 - but revenues to decline in some sectors (Juniper Research)
• Financial Applications on Cell Phones to Attract 2.2 Billion Users in the Next Five Years (Insight Research)
• Global Wireless Data Market Update - 2008 (Chetan Sharma Consulting)
• Mobile Application Revenues to reach $25bn by 2014 as Apps Stores Hit Mass Market (Juniper Research)
• U.S. Mobile Financial Services Markets Expected to Reach $1.46 Billion in 2013 (Frost & Sullivan)
• Home Automation System Shipments to Approach 2.8 Million in 2011 (ABI Research)
• Mobile Operators to See $2.9 Billion from Individualized Services in 2011 (ABI Research)
• 5.4 Billion Mobile Subscribers in 2013 (ABI Research)
• Market for Embedded Picoprojector Modules in Cellphones, Netbooks and Consumer Devices to Exceed $1 Billion (In-Stat)

I’ve mentioned a couple of articles from Telephony stemming from an interview I did with Kevin Fitchard. Well that interview specifically was for a much larger piece Kevin was developing for the cover story of the print edition of Telephony that was released in time for CTIA, the industry’s largest annual event.

Obviously, all of that was a couple of weeks ago, but I just got around to reading the whole piece. I was pleasantly surprised that the article was largely built around my interview. You can check out the entire piece here: Wireless 2025: A look at wireless in the year 2025.

Here are some of my highlights:

• Kevin opens the piece by repeating two of the five trends I called out to him (plus a reference to the drive to 4G, which obviously we are leading at Sprint): “Today we’re witnessing a new revolution in which wireless has come to signify data services as much as voice. Over the next two years, the first 4G networks will emerge, pairing mobility with true broadband for the first time. The handset has begun to evolve from a mere phone into a miniature multimedia computer, and portable and mobile devices with no voice capabilities to speak of have started connecting to the wide-area cellular network.”
• My comments are the first and most extensively used in the piece. About half of the article is directly taken from the engaged discussion Kevin and I had several weeks ago.
• Kevin almost perfectly quotes McGuire’s Law of Mobility in introducing me: “the value of any object, application or idea increases relative to its mobility.”
• He goes on to provide examples as proof (I didn’t provide him with these): “The principle can be applied to almost any scenario: A famous work of art that is moved from one museum to another can be viewed by more people, thus increasing its aesthetic value to the whole world. A computer, a phone, even a business becomes more useful the less it is physically constrained.”
• The article also benefits from great insights from others prominent in the industry including my old friend and Sprint co-worker Matthew Oommen, Vish Nandlall, carrier group chief technology officer and distinguished member of the technical staff for Nortel Networks, Henry Tirri, head of the Nokia Research Center, Håkan Eriksson, chief technology officer for Ericsson, Vanu Bose, CEO and founder of Vanu, a pioneer in SDR base stations, Prabakhar Chitrapu, principal engineer for Interdigital Communications, and Ralph de la Vega, CEO of AT&T Mobility.

It really is an interesting read. I recommend you check it out.