The Journal Report section of today's WSJ features a lead article by Walt Mossberg – Free My Phone. It's a great read and lays out a comparison of using a personal computer versus a cell phone. With the PC, you are free to choose vendor, operating system, ISP, applications etc. while with the cell phone you are stuck in a walled garden where the carrier tells you what you can do – if you don't like it, tough luck as the "competition" isn't any different.
Mossberg pulls no punches (my emphasis added):
"A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now. And the result has been a mobile phone system that is the direct opposite of the PC model. It severely limits consumer choice, stifles innovation, crushes entrepreneurship, and has made the U.S. the laughingstock of the mobile-technology world, just as the cellphone is morphing into a powerful hand-held computer."
Sadly we can say the same thing about broadband connectivity – while our elected officials proudly point to the percentage of US homes with "broadband" access, their definition of "broadband" is a low hurdle and leaves us with far less bandwidth and capabilities than countries like Japan and South Korea.
The closed nature of the Cellular Carriers has a definite stifling effect on the evolution and delivery of new capabilities – just as it did before the wireline networks were opened to innovation.
I see a fair number of business proposals to leverage the mobile phone as it morphs into a computer – my first two questions are always the same:
- Do you need the carrier to do anything to enable your business? There's a degree of difficulty element to this – it ranges from getting the carrier to "sign" your app so it can be downloaded, to giving the carrier a cut of sales and ends with deck placement.
Mossberg points out this problem for small companies:
"As a technology reviewer, I have met with multiple small companies that had trouble getting their programs onto consumers' phones without the permission of the carriers; getting that permission often requires paying the carriers. Sure, there are some clumsy workarounds that can evade the carrier barrier, but it's nothing like the ability small software companies have had for decades to offer their products for installation on Windows or Macintosh computers."
There are also signs of change for the better – Apple announcing an SDK for the iPhone (we'll have to wait and see how much freedom this provides however), the possibilities of the Google gPhone and perhaps signs of enlightenment at the FCC.
Despite the obstacles, this is a space full of opportunities for startups – it just requires careful thought to deal with the above questions.