Editor’s Note: As part of its celebration of 20 years covering the wireless communications industry, RCR Wireless News each month will take a look back at crucial points in the history of mobile telecommunications. This month, RCR Wireless News revisits the evolution of the phone from the car, to the suitcase to the pocket.
The early images of the cellular industry are humorous, to say the least: car phones installed in trunks, bag phones that resembled suitcases in both size and weight, brick phones that tipped the scales at several pounds.
At the time, these seemingly ancient devices were at the cutting edge of technology. Cellular’s early adopters surely couldn’t imagine that within the span of two decades, pounds of equipment and components would be reduced to a compact device weighing only ounces and providing much better functionality than their monstrous predecessors.
The transition hasn’t necessarily been easy for consumers, but it has been necessary for the growth of the wireless market. Industry experts agree the success of the industry is due at least in part to the introduction and uptake of handheld devices.
“The industry could never have grown the way it has without the portable,” said Marty Cooper, who was a leader in the early efforts to design the first portable phone. “The real contribution of cellular was releasing people from the need to be in a specific place if they want to be reached. The car telephone only shifts the chain from the desk to the car.”
It’s easy to overlook the fact that car phones date back 50 years, when a crude version of today’s cellular system was available. The networks were capacity-constrained and service required the intervention of an operator, said Cooper, who is now chairman and chief executive officer of Arraycomm Inc., a company that manufactures smart antennas. The car-phone system was improved in the 1960s, but capacity continued to be constrained and service was poor.
“All you could get in a city was one conversation on each channel at a time,” said Cooper.
But technology innovations led to the birth of cellular, an idea that was the first step toward creating the possibility of a mass market for mobile communications. While the Federal Communications Commission weighed how to allocate spectrum in the 1970s, manufacturers worked on concepts for mobile devices. Cooper, who was working for Motorola Inc. at the time, developed along with a team of industrial designers the first model for a portable cellular phone weighing 2.5 pounds. Ten years later, the one-pound, commercially viable Dyna-Tac portable phone was released.
Early on, car phones sold for about $3,000, said Cooper, and portables were even more expensive.
“When service started in 1983, most units sold were car telephones, but there were a small number of portables sold,” said Cooper. “Within five years, half the units sold were portables, and another five years later, it was hard to even buy a car telephone, which is still the case today.
“The thing that inhibited the portable more than anything else was the coverage, because in the beginning you had limited coverage, and the car telephones just worked better,” said Cooper.
“When you think about the original car-mounted devices, while they were deployed globally, they were very small in their acceptance because they were anchored to a power supply just by virtue of the three-watt power consumption requirement for reaching the base station,” said David Murashige, vice president of strategic marketing, wireless Internet, at Nortel Networks. “The value of being able to communicate anytime was limited by having to be in the shell of an automobile.”
Consumers got their first taste of true mobility with transportable devices that worked like a car phone but could be used away from the car.
“The transportable is an interesting combination of two things,” said Murashige. “It was the recognition, more in the European community than anywhere else, that there were times you wanted to be able to speak to somebody, but it wasn’t just in the car.”
“Here it is much more of a car society. In other regions of the world-Europe and especially Japan-this is not the case,” said Gilles Delfassy, senior vice president, Worldwide Wireless Terminals Business Unit, in Texas Instruments’ Semiconductor Group. “They are much more of a pedestrian society.
“I think this general consideration had some impact because, for example, it is much less important to have a very small phone, or a low power consumption phone when you have it in a car compared with when you need to carry it with you,” he said.
But the real trend toward true mobility would come with better, smaller and cheaper portable handheld devices. Improvements in battery technology and miniaturization were key drivers of handhelds. Delfassy said three main parameters have traditionally been used to measure phones: weight, battery life and number of semiconductor components. Wireless phones, he said, have progressed from several pounds to only a few ounces, battery life measured in hours to battery life measured in days, and several hundred components to less than 10.
In addition, doctors, real estate agents and contractors began to view cellular as a necessity.
Christopher Hotz, president and co-founder of Reason, began his wireless career in sales for McCaw Cellular in Denver in the early 1990s. Hotz said his monthly quota was eight phones, and he remembers celebrating when a co-worker scored a four-phone deal.
Sales, he said, were a highly personal experience.
“You would drive 60 miles to get an activation,” he said. “Selling a single cell phone was about as involved as selling an expensive copier. Education was a huge part of it. Your normal sales process to sell one phone to one person would be between two and three appointments.”
Some consumers found the new devices to be awkward.
“All of these social changes take more time than anybody ever admits,” said Cooper. “You don’t just tell somebody, `Here’s a gadget; change your lifestyle.’ These things happen gradually.”
Reason’s Hotz said a common question customers asked was how far they could move away from their car and still have their phone work. Other customers, he said, had to be taught how to re-charge the battery.
For manufacturers, it was a guessing game as to what type of devices consumers would accept.
Hans Davidsson, who spent 19 years at L.M. Ericsson before becoming managing partner, telecommunications, for IdeaEdge Ventures, said Ericsson was convinced it needed to offer a flip phone and a retractable antenna in the U.S. market to garner consumer acceptance.
TI’s Delfassy said consumer acceptance of certain features differed among countries.
“For example, in Germany, a good thing is a solid thing. So at the beginning they were really afraid that these things would look too much like gadgets and would not be robust enough,” he said. “In Germany, some manufacturers were artificially keeping their phones bigger.
“On the other hand, if you think of a society like Japan, that was exactly the sweet spot of their societal behavior, because they like miniaturization,” he said. “They like small things and small gadgets full of buttons.”
Phillip Spector, a partner in the Washington, D.C., office of Paul, Weiss, Rifkind, Wharton & Garrison, said the FCC also is responsible for encouraging competition in the wireless market, which led to an acceleration of mass-market acceptance.
“The handheld was really needed to make that happen,” said IdeaEdge’s Davidsson. “The penetration, what we see right now, is just the beginning because you will see antennas in appliances, digital cameras, games and everywhere. It’s really just the beginning and the handheld was the thing that really kicked it off.”
