Learning From the Past Meant Stable Footing for the Mobile Industry

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This past year, the worldwide mobile industry flashed passed an important milestone on the economic scale, turning in a sales performance that saw it move to a whopping two percent of global GDP.. As impressive as that may be, it is probably the work behind the scenes over the past two decades­ that deserves the lion’s share of the credit for paving the way.

Back in 1983, when Ameritech first started offering Motorola mobile phones for users in it’s calling areas, the chipmakers that today provide cell phones with their brains, were still in their infancy and were not yet sharing standards to the degree that they are today. Meanwhile, the PC hardware standards and configuration battles of the 1980s and 1990s were a tumultuous time for manufacturers, with Toshiba, Fujitsu, Panasonic, Sony, and Hitachi each fielding differently configured hardware PCs in Japan alone. It was only after Windows released its 3.1 version in the early 1990’s, that manufacturers began to work more closely together to link hardware and software together so that costs did not need to be duplicated. This proved to be a dynamic that was subsequently ported to the mobile phone industry, where the manufacturing cycles were typically shorter and did not lend themselves to extended engineering cycles. Instead of coalescing around a common software platform as they did in the PC industry, most handset manufacturers standardized around a chipset that contained APIs or other capabilities that allowed them to create their own software for each version.

It was around this time that Qualcomm came out with CDMA as an alternative to the GSM implementations that were already in existence. The competition among handset manufacturers for market share proved to be as fierce as it had been in the PC industry, but it centered around providing the greatest benefit to the regional and national carriers instead of the customers. The upshot was that GSM remained the standard in Europe and much of Asia, while CDMA took over the North American and East Asian markets.

As there continue to be communication platform choices in the marketplace, the chipset manufacturers got together in 2003 and formed a working group on the Mobile Industry Processor Interface. This consortium spawned working groups in several different areas of internal connectivity related to cell phones. From creating standards for the battery interface, to the interfaces used by cameras within phones, each area was eventually conquered and standardized enough that all manufacturers consistently created similar device interfaces.

As the midpoint of last decade rolled around, China and other developing countries made a choice to leapfrog existing telecommunications infrastructure in order to go directly to the latest versions of the high speed mobile communications. This allowed the countries that did, the opportunity to have their people able to compete from a communications standpoint. Nokia remained the handset leader with a large 70% share of the global market in phones. Nokia accomplished this by dominating the upper end of the market for smartphones, while also dominating the lower end of the market for inexpensive phones with basic features.

Flash forward a few years, and a misstep by Nokia and another leader, Blackberry, in terms of design and release, caused the market to shift and send Nokia’s market share into a tail spin. Apple moved into the smartphone market and eventually added their tablet devices. In the most recent quarter, Apple’s market share for tablet devices reached 60%.