An Industry In Transition

I get the feeling that, technologically, we are approaching a huge inflection point. Look at cars, for instance. In the next few years we will see a massive transition in engine technologies that make them more efficient both in a gasoline and emissions kind of way.

I believe the same is true for cell phone industry.

In the last few weeks, huge announcements regarding openness and competition have taken place. Here are the ones I think are critical:

T-Mobile and Sprint announce wi-fi support. Couple this with iPhone having built-in wi-fi that works off AT&T’s network and suddenly connectivity is changing. Have a wi-fi connection near-by? No problem. Don’t? No problem.

AT&T pre-announcing for Apple that rev 2 of the iPhone will be 3G enabled. What’s 3G? Think internet access on your cell phone as fast as cable or DSL at home. No bandwidth lag on the phone means a whole new world for application development and device access. Devices with mediocre browsers will be in trouble as more and more content is delivered wirelessly to you anywhere you are. (As an aside, I would love to have been a fly on the wall when Steve Jobs heard AT&T announce this for him.)

– Android from Google is announced. Now this is a platform and isn’t massively changing the market in and of itself. But if Google is successful with their approach, we will have more interesting devices that work across networks and offer more choices for developers and customers alike.

– Open platforms have become the norm. Verizon joins T-Mobile and Sprint in the open platform approach advocated by Google. This could have a huge impact on how we buy cell phones and open up the market for alternative devices. Like to carry a wireless tablet? Today, the cost to partner with the big boys is too expensive for anyone other than Microsoft, Google and Apple. That might not be the case tomorrow.

– There is new bandwidth coming up for auction and anyone can bid on it. While I am no expert on the ins and outs of cellular bandwidth, I do know it is big deal when companies like Apple and Google bid on it. See, whomever controls the bandwidth has the right to set the licensing terms to others as to how it will be used. Computer companies like Apple and Google will see how to use that bandwidth a lot differently than Verizon and AT&T.

The bottom line is more openness, more choices, and higher bandwidth. As you can see by the names in bold, all the big boys here in the States are playing.

To this point in time, major carriers such as AT&T and Verizon have dominated the cellular game, lording it over hardware manufacturers, software developers and customers alike. This model may be turned on its head, with hardware and software companies gaining at least equal footing and consumers getting much better options.