Anyone Can Build a Phone

Today’s Dilbert cartoon is about how anybody can build a smart phone. As if it was a technical problem these days. But back in the mid-90s it really was. All the contract manufacturers like Solectron and others figured that since they could build a PC they could build a phone. It turned out that building radios was really hard. Each one had to be tuned a little, at least back then, and nobody knew how to do it.

So it is interesting to look at what it takes to compete in the mobile market. Back in the early 90s it was all about radio. Nobody could build a cell-phone radio easily, so Nokia, Ericcsson, Motorola and other who had worked out how won out. In fact I can remember when I worked for Cadence giving a keynote at Nokia in Tampere and I talked to the Nokia exec giving the other keynote, about software radios. He told me that they had a spreadsheet of every radio (RF) engineer in the world, who they worked for and so on. Because there were just a few hundred people who knew how to build a mobile phone radio

Then in the late 90s, things shifted. Anyone who mattered could build a radio that worked. But operating systems were hard. Nokia created Symbian but ultimately it was not that successful because Nokia was so dominant at the time that nobody (a few) would trust Nokia to be independent. It was sort of public domain but even so, it was still closed source and Nokia dominated the company. Eventually, too late to make a difference, they made it public domain.

Too late because after iPhone it was all about application level software. Even before Apple created the app store, everyone could build a radio and the software to drive it, everyone had an OS, but the application level is where it moved up to.

And how. My son works for a (now mostly mobile) gaming company. They give their games away but really charge for in-game stuff. Like you want a city: $100. Lots of people pay. Some days they make nearly a million dollars. In one day. The most highly downloaded game on the AppStore is Angry Birds but it is not on the scale for making money. There are people paying $10,000 for in-game stuff on phones (these people are called whales, just like in Las Vegas casinos).

Eat your heart out Verizon. You have to build base-stations and stuff. Radios. Who cares. In game stuff is worth a fortune more.