ON THE SAD STATE OF US WIRELESS

DEJA VU

If you want to get a refresher on how disadvantaged US wireless users are vs. Europe and other markets, read this PC Magazine review comparing Motorola's newest RAZR2 phone on all the US wireless carriers.

This is the same phone I'd posted on a few days ago. 

Given that the RAZR2 is the successor to one of the most popular, mainstream cell phones in the US in recent years, the update is available on all the major wireless carriers in the US. 

That in itself is unusual, where typically a carrier manages to garner a short-term exclusive of a cool, new phone for it's network before it gets on other carriers.  Apple's iPhone is an extreme example of that, with it's "multi-year", exclusive relationship with AT&T/Cingular.

Here's the set-up of the situation from the PC Magazine article on the new RAZR2 on the various carriers:

"Give four wireless carriers a blank canvas, and see what they do with it. That's exactly what Motorola did in an effort to boost its failing fortunes. The cell phone manufacturer is pushing out versions of its RAZR2 phone on all five major U.S. carriers this fall: Alltel, AT&T, Sprint, T-Mobile, and Verizon Wireless...

Here's the ten-second summary: The RAZR2 is a big, luxurious slab of metal and glass that feels and drives like a luxury SUV. Whichever model you get will be one of the best voice phones this year, but if you want to go beyond voice into media, e-mail, or Java applications, your mileage will vary by carrier. Check my individual reviews for details.

You see, there isn't just one RAZR2. There are three. Or five. That's because "RAZR2" isn't a phone model; it's actually a case design, and there are three very different kinds of guts that go into that case. The V8 model for T-Mobile (which I'll review as soon as I get it) is based on a GSM platform, the V9 model for AT&T is based on WCDMA, and the V9m for the other guys (Alltel, Verizon, and Sprint) is based on CDMA EV-DO technology. That affects everything from call quality (best on AT&T) to battery life (worst on AT&T). T-Mobile's V8 runs a Linux-based OS, while the other models all run Motorola's older Synergy platform.

Sprint, Verizon, and Alltel have all picked the same hardware platform—V9m—but have slapped very different software onto their phones. It's like getting three identical Dell PCs but one is running XP, one Vista, and one Linux. The user experiences are dramatically different, including different address books and Web browsers."

And here's where it gets real depressing:

"While the carriers would say the wide variation in features of their respective RAZR2 models shows the vibrant competitiveness of our market, I say that's nonsense. On the contrary, this shows exactly what's wrong with the US market. The RAZR2 platform is capable of running a variety of Web browsers, e-mail platforms, and, with the right APIs, throwing live video onto the external screen.

Messaging software developers and video programmers should be able to compete and outdo each other at using that gorgeous external screen. That would be a truly competitive market, unleashing the hunger of hundreds of developers. Instead, we're stuck with the mediocre choices picked by our carrier overlords for us—and if you want something different, no soup for you!"

This is exactly what tech leaders like Google, Microsoft and others, lobbying the FCC for a fair shot at the next major wireless spectrum auction.  Despite the recent FCC ruling on the auction, the odds don't look too good, given the massive incumbency, financial resources, and lobbying machines of the wireless carriers.

In many ways, our wireless market today is reminiscent of the Japanese PC market in the eighties, which was fragmented and controlled by an oligarchy of Japanese computer companies (NEC, Toshiba, Fujitsu, Hitachi and others).  The reasons are not important today, but interesting nevertheless.  You can read the whole story in this report titled "Behind the Curve:  Japan's PC Industry" (pages 5 and 6).  It's in PDF form, but worth reading as well.

It's ironic that the country that launched the global PC revolution, finds itself mired in a wireless backwater akin to the anemic Japanese PC industry in the 1980s.

The story of the new RAZR2 is a great anecdotal example of stuck we really are, in all it's gory details.

Comments

[Renie]

Hi Michael, please add your blog to our new directory of Indian Blogs, thanks!

http://www.indiblogger.in

[Sach]

I think its time for these Ma Bell derivatives to move over and companies like Google give them a run for their money...

http://tinyurl.com/2lmpf5

[Alex Tolley]

The report "Behind the Curve: Japan's PC Industry" is interesting for its historic context - just look at how the market and players changed since it was written in 1995!

Your analogy about the similarity to the Japan PC market in the 90s is interesting, but I think it really only captures part of the story. Certainly, each phone is like a different platform and this makes creating common software a real problem.

PCMagazine hit the nail on the head when they note that the problem is that programmers do not get to compete on a common platform.

I've read that independent programmers cannot make any money because of the fragmented mature of the platform.

However, I think that the greater issue is that carriers have kept the phone and its system closed. had it been open, this would have forced a common platform, much like the availability of software forced the shakeout of the competing hardware and software in the US market in the 1980s. "Killer apps", written for a particular platform forced consumers to make a choice and then network effects took over. Even in the consumer electronics market, the user's choice of available titles sealed the path of the VHS format wars.

Phones do not really offer that. Users have no choice but to accept what is offered. Moreover, carriers have made switching costs painful.

I think Apple has recognized this and that is why the iPhone's web browser is the Trojan horse. It will provide the common platform as WiFi starts to penetrate. Users will be able to use their iPhones as a computing platform/comm/entertainment platform running the apps of THEIR choice, rather than a carrier's. This will allow iPhones to interoperate with other web attached computers, which makes them much more useful IMO.

[fukumimi]

But what about the fact that Japan, which probably (nay, definitely) has even stronger carrier control over handset distribution, is one of the leaders as far as the mobile internet ecosystem is concerned?