On Monday's show, Stephen Colbert described the merger of AT&T and Cingular.
Here's what AT&T looked like before the breakup in the 1980s.
And here's what AT&T looks like today.
David Carr at Ziff Davis' Baseline has a very useful article, Inside MySpace.com about how MySpace faced the problems of scaling to their current size of 40 billion page views and 26 million users. Some of the more interesting observations:
Larry Dignan commented on the Baseline article on his blog at ZDNet and there is a lively thread on Slashdot.
Mike Arrington has pushed the otherwise obscure issue of Intercarrier Compensation into the mainstream with his inquiry into the business model of AllFreeCalls, a company that will let you call almost anywhere in the world for the cost of a long-distance call to Iowa. As many of the comments pointed out, this is the same hack used by the several free conference calling companies. It turns out that it is no coincidence that all of the number you dial for these companies is usually in a sparsely populated part of the country where the compensation paid by the long distance carrier to the local exchange carrier is much higher than average - sometimes as much as $0.10 instead of one tenth that amount. Since the long distance carriers usually charge a flat rate to their retail customers, they are effectively subsidizing these free calling companies by paying the inflated termination fees. These fees were initially intended to make up for the higher cost of serving rural communities, but now some of the local exchange carriers are obviously sharing them with the free calling companies. Everyone wins except the long distance carriers, who may not be so complacent if these businesses take off.
Tom Evslin did a good write-up here and here. And Alec Saunders has a good explanation on his blog. If you want to see why changing the compensation scheme would be complicated, take a look at Ed Rosenberg's presentation here.
In an interview Steven Levy reported in Newsweek, Steve Jobs said:
You don’t want your phone to be an open platform,” meaning that anyone can write applications for it and potentially gum up the provider's network. You need it to work when you need it to work. Cingular doesn’t want to see their West Coast network go down because some application messed up.
Either he's never heard of the Palm Treo which has supported independently-developed software applications for years without gumming up anyone's network, or the iPhone is peculiarly vulnerable to malware.
John Markoff in the New York Times observed that Jobs may have forgotten that a similar attitude about keeping the Macintosh closed led to his ouster from Apple in 1985:
Indeed, when the Macintosh Computer — which, like the iPhone, was designed by a small group shrouded in secrecy — was introduced in January 1984, it was received with the same kind of wild hyperbole that greeted the iPhone this week. But a year later, the shortcomings of the first-generation Macintosh cost Mr. Jobs his job at the company he had founded with his high school friend Stephen Wozniak nine years earlier.
In light of the iPhone’s closed, appliance-style design, it is worth recounting the Mac’s early history because of the potential parallel pitfalls that Mr. Jobs and his company may face.
Despite its high price of $2,495, the Macintosh initially sold briskly. But Mr. Jobs’s early predictions of huge sales (on Tuesday, in a similar fashion, he set a goal for the iPhone 1 percent of the world’s cellular phone market, or 10 million phones a year, by the end of 2008) failed to materialize.
The Mac’s stumble was in part because of pricing and in part because Mr. Jobs had intentionally restricted its expandability. Despite his assertion that a slow data connection would be sufficient, the gamble failed when Apple’s business stalled and Mr. Jobs was forced out of the company by the chief executive he had brought in, John Sculley.
Of course, Apple did open up the Mac. With the addition of a hard-drive (something Jobs had fought against) and software from Microsoft (notably Excel) the Mac became a huge success.
One can hope that a similarly enlightened approach will obtain with the iPhone.
Sometimes what goes on in Vegas doesn't stay in Vegas. My Convoq co-founder Chuck Digate went to CES and got quoted in the Wall Street Journal:
With a price tag starting at $499, the sleek new Apple Inc. iPhone may seem prohibitively expensive to some, but Apple is counting on demand from consumers like Chuck Digate.
"Do the math," says the Boston-based software entrepreneur. Mr. Digate says he paid $350 for a video iPod last month and $300 for a smartphone from T-Mobile with a two-year contract. The iPhone "has all the things I'm using, and I can consolidate two devices into one."
The recent Apple iPhone announcement highlighted the wide variation in performance of the wireless data offerings in the USA The problem is compounded by the tendency of some carriers, especially Verizon, to substitute proprietary brands, such as Broadband Access, for the industry-standard terms such as EV-DO. So here is the wireless data decoder ring:
Speed |
Data Rate |
GSM |
CDMA |
Cingular |
Verizon |
Sprint |
Low |
56 kbits |
GPRS |
IS-95 |
GPRS |
|
|
Medium |
144 kbits |
EDGE |
1xRTT |
EDGE |
National Access |
Power Vision |
High |
1.8 mbits |
HSDPA |
EV-DO |
Broadband Connect |
Broadband Access |
Mobile Broadband |
The top tech news story of the week is, of course, the long-awaited Apple iPhone. The headline that summed it up for me was Good Morning Silicon Valley's Keyboards across country shorted out by "iPhone drool." The device will have the innovative user interface we have come to expect from Apple, but several open issues remain before it can be considered a breakthrough. Tom Evslin and his readers cover a lot of them. My main concerns:
In my opinion that the success of the iPod was due to three factors:
My hope is that Apple will take advantage of being one of the few players who can step out of the traditional role of providing a restricted set of features via a restricted set of carriers and turn loose a new wave of creativity for mobile applications.
Founder and CEO of SBR Health, a provider of real-time video communications to the health care community.
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