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Thursday, September 5, 2013

A history of mobile phones

Microsoft is buying Nokia's mobile phone business. Michael Mace explains the rationale from the perspective of Microsoft. The deal prompts me to review my own history of mobile phones.

A significant accomplishment of my former employer, Nortel, was bringing the GSM standard from Europe to North America. GSM became the core of the Cingular/AT&T 2G network. Nortel and BellSouth launched a trial of GSM in 1997, and I signed up as a test user. Nortel provided the handset, whose OEM was Telefunken in Germany. Telefunken had 20-20 vision and abandoned the handset market shortly therafter.

Gail joined me in using GSM, and by that time Motorola was selling GSM phones. Acquired by Google, Motorola is now insignificant aside from its patent portfolio. Perhaps Google will succeed in shifting some of its Android volume from Samsung to Motorola, perhaps not.

Our next phones came Ericsson just as the Sony Ericsson joint venture spun up. Ericsson proper became the largest supplier worldwide of infrastructure products to mobile operators like AT&T, but the JV with Sony collapsed. Who expected Sony to become irrelevant to the overall consumer electronics market that it largely created?

We then turned to Siemens, another German company; they focused on the low-end of the market, dumb phones which were in demand from third-world countries at that time. But Siemens discovered that it's impossible to compete with the Chinese in low-end electronics and exited the market.

Next for us came Nokia, who provided our last dumb phones before we adopted iPhones and Galaxys. Nokia, like its predecessors in my story, lost its way and has become merely a manufacturing operation for Microsoft who are desperate to win traction for Windows Phone.

Mobile phones are such a tough business! What are the odds that 15 years from now, Apple and Google/Samsung will still have a duopoly? Less than 50%, I believe.

P.S. And now we're about to see what happens with smart watches.