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M-Business: The Race to Mobility
Excerpts
1. Structural Migration: From E-Business to M-Business
- Why is Microsoft so focused on transforming itself from a PC firm into a multi-platform infrastructure services company? Does the company perceive a migration away from a PC-centric to a multi-device model?
- Why is Intel so intent on transforming itself from a leading microprocessor producer into a manufacturer of mobile networking and communications products? Are they anticipating the impact of emerging mobile innovations on the hardware ecosystem?
- Why is Nokia reinventing itself to become a major player in the mobile economy instead of a narrowly focused cell-phone manufacturer? Are they positioning themselves to become the Cisco of the mobile economy? • Why is NTT DoCoMo—the leading wireless operator in Japan with over 25 million subscribers—exporting its i-mode mobile Internet service to the U.S. and Europe? Do they expect to leverage their first-mover advantage and dominate these emerging markets?
- Why is Sony attempting to make on-the-go, in-hand entertainment the next gaming frontier? Is Sony quietly becoming a dominant handset and content player in the mobile space?
Why are these leading firms and others like IBM, SAP, Siemens Bertelsmann, and Vivendi repositioning themselves? What is behind this corporate migration toward mobility? Are these firms expecting the mobile Internet to be the main catalyst toward a new kind of computing and a new kind of Internet? Are they anticipating that a new technology infrastructure is emerging to supersede the Web and form the bedrock of the next economy?
2 Trends Shaping the Mobile Economy
In January 1975, Popular Electronics published a cover story on a computer kit called Altair 8800 that sold for less than $400. Microinstrumentation & Telemetry Systems (MITS) of Albuquerque, New Mexico, designed the Altair. It didn’t look anything like the sleek machines of today. There was no monitor, no keyboard, and no mouse. The MITS Altair 8800 was a simple box with switches and small lights, designed for scientific calculations. It appealed mainly to hobbyists.1
The MITS was typical of first-generation technology. Many industry executives did not see a need for it. In 1977, Ken Olson, founder, president, and chairman of Digital Equipment, was quoted as saying, "There is no reason anyone would want a computer in their home." Even consumers did not see any need for it. If someone said, this would be great for calculations and accounting, people would laugh and say, "This would never replace the HP-35 four-function calculator." Or if someone said, this would be great for word processing, people would say, "This will never replace a typewriter." Clearly, the most troublesome aspect was not the technology per se but gauging the scale and speed of user acceptance.
Few could have foreseen what was to come. From that ordinary start in 1975, the PC industry has exploded into a $500-billion-a-year business. In a twenty-five-year period, the PC became an integral part of life—a word processing tool, accounting tool, messaging device, and entertainment center. The PC industry’s fortunes increasingly sway the direction of the global economy. How did this industry become so influential so fast? There are four reasons: Customers found creative uses for the PC. PC software steadily improved in its price/performance ratio. The processor speed followed Moore’s Law, doubling roughly every eighteen months or so. Lastly, the Internet greatly increased PC use.
There is reason to believe the evolution and adoption of mobile technology will follow a similar path. There will be intense skepticism followed by grudging adoption. As the prices of mobile devices and services drop, reliability improves, applications that they support get better, and demand will explode. Consider this: Today, more than 100 million households worldwide have access to the Web. There are already well over 1 billion cell phone users. Handheld sales are beginning to eclipse PC sales. It’s only a matter of time before mobile becomes mainstream.
One thing is clear: The mobile economy is inevitable. However, few business gurus, visionaries, and prognosticators can predict the shape and form of mobile innovation. Though the future cannot be foreseen, it is possible to generate insight about the mobile economy by developing plausible scenarios, based on recognizable patterns. Scenarios are relevant to the problem of creating sustainable business models constructed from various elements—an understanding of current conditions, an identification of driving forces for change, and a vision of the future.
Interesting Trend -- Decreasing Power Requirements of Handhelds
Have you heard of Gene’s Law? Gene’s Law postulates that the electricity needed to run a computer circuit will decline exponentially because of advances in battery technology, because of better power management, and because circuits consume less power as they shrink. Since 1994, when Gene Frantz, a Texas Instruments engineer, came up with his law, the electricity required to run an integrated circuit has declined by a whopping factor of 10 every 24 months. The improvements show no signs of slowing down. Gene’s Law has huge implications for mobile devices. Less power means smaller devices because, batteries account for a huge proportion of the size and weight of any electronic device.
Interesting Trend -- NanoTechnology
Nanotechnology -- building computers and machines at the atomic level -- is just beginning to see commercial applications. The implications of nanotechnology on mobile applications can be rather profound. Interesting things happen when the size of the transistor shrinks. Smaller transistors take up less space, generate less heat, and are cheaper to build. For instance, Intel can put 42 million transistors on its Pentium 4. With 20-nanometer transistors, Intel could put 1 billion transistors on a chip. That means more computing power for everything from cell phones to handheld devices. Companies to watch in this space: Applied Materials.
Interesting Trend -- HSPDA
HSPDA, or high-speed packet downlink access. This is a new high speed wireless data solution that could run up to speeds of 10 Mbps (though we think this is probably a peak theoretical speed). This could be a long way off from commercial rollout, but it is a sign of speeds to come.
8 Supply Chain Focus
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