It can sound trite to say – as we often do in the information technology industry – that no one can predict accurately how technology will evolve. But more importantly if you look at the trends in information technology sector, you will not only find that time and time again the technology takes turns no one – including industry experts – predicted. You will also find that the turns are almost always for the benefit of consumers.
It can be comical to review predictions made in the IT sector but it also should be sobering. Here is just a quick list of some the predictions or somber assertions made by industry experts over the years that have proven to be way off the mark:
“Where a calculator like the ENIAC today is equipped with 18,000 vacuum tubes and weighs 30 tons, computers in the future may have only 1,000 vacuum tubes and weigh perhaps 1 ½ tons.” Popular Mechanics, 1949
“There is no reason for any individual to have a computer in their home.” Ken Olson, Founder of DEC, 1977
“The telephone has too many shortcomings to be seriously considered as a means of communication.”, Western Union, 1876
In the wireless sector, the propensity to get it wrong as to where the industry is headed and what it can do for consumers is especially strong. This is such a vibrant sector with so much change and innovation that predictions are not only usually wrong, they also do not begin to appreciate the full scope of the industry’s positive contribution to society, the economy and consumer welfare.
I was in Bell Atlantic Mobile Systems for a short time in the mid-1990’s. At the time, the full potential of the mobile industry was only just dawning on many. Early mobile phones were heavy, required several watts of power to operate, and were really most suited as a device connected to a ready power source – the car. Hence, the early lingo around mobile phones in the U. S. was to call them “car phones”. They cost lots of money to purchase, air time was very expensive and they also had to be installed in the car professionally!
One of the studies I came across in those days was done by McKinsey and Company, a respected business management and forecasting firm. They were asked by AT&T in the early 1980s to assess the growth potential of the mobile market which AT&T of course pioneered. McKinsey’s study was based almost purely on the then existing technologies and business models. The study’s failure to predict with any accuracy the market over the next 20 years was largely based around not taking into account advancements in actual communication devices, advancements in mobile bandwidths, and improvements in such things as battery power and miniaturization. McKinsey estimated a total market size of fewer than 1 million subscribers with mobile devices by the year 2000! The actual number of mobile devices globally in 2000? 415 million!
I thought of this study again when I read this well written analysis done by Richard Bennett of the Information Technology and Innovation Foundation. Richard looks at the FCC’s recent report on the mobile industry and offers some interesting insights regarding the industry’s progress. His key conclusion demonstrates just how fast things are changing in the sector in even a couple of short years and how hard it is to try and make any projections for the future:
“Mobile is a dynamic, rapidly changing marketplace, and 2008 conditions have little importance to “policy lever operators” working in 2010. In 2008, we were at the end of the 3G transition, but we’re now at the beginning of a 4G rollout. In 2008, Apple had the only significant App Store, but now each platform has one. Networks that were over-built and under-populated in 2008 are now gaining subscribers at a rapid rate, and two new mobile platforms will debut this year.”
“Perhaps most disturbing is the FCC’s disregard for the changes in the dynamics of the mobile marketplace itself. Five years ago, mobile devices were simple and network operators competed on the basis of price and coverage. With the advent of the smart phone, it also became important for the operator to offer the most attractive platform and the best data handling capability, and at present applications have become increasingly important. So the number of operators and their systems of base stations, backhaul, and spectrum no longer determines the competitiveness of the mobile marketplace; it’s also a matter of applications, App Stores, and their policies.6 Consumers benefit as much from competition between Apple’s iPhone, Google’s Android, RIM’s Blackberry, Hewlett-Packard’s Pre, and Microsoft’s Windows Mobile 7 as they do from competition among network operators.”
As with many facets of the IT sector, these changes demonstrate the overwhelmingly positive impact of the mobile industry’s evolution on consumers. It would be a shame to interfere with the innovation and dynamism that is evident in this industry as some advocates are suggesting.