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Cell Phone Industry's Six Biggest Failed Schemes 163

adeelarshad82 writes "The tech world is for dreamers, schemers, and sometimes, scammers. Which is why it's no surprise that the cell phone industry isn't any different. In wake of the recent news about the Israeli mobile-phone firm Modu shutting its doors, mobile analyst Sascha Segan revisits six major failures in the cell phone industry, from using phones to create a peer-to-peer that would eliminate the need for wireless carriers to a company with a $225,000 phone."
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Cell Phone Industry's Six Biggest Failed Schemes

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  • by UnknowingFool ( 672806 ) on Sunday January 16, 2011 @09:34PM (#34901036)
    Reportedly MS has spent about a billion dollars on the Kin only to kill it after very poor sales. Part of the costs was the Danger acquisition (reportedly about $500 million), the engineering and R&D for 2 years. Then the marketing and launch costs. Numbers vary on actual sales but the highest estimate was about 10,000 units sold. In my book, that spells FAIL.
  • by fuzzyfuzzyfungus ( 1223518 ) on Sunday January 16, 2011 @09:37PM (#34901050) Journal
    P2P would(barring some very clever design or a focus more or less exclusively on walkie-talkie use cases) likely be a poor candidate for cell phone use(lousy latency, uncertain availability, battery life of nodes...) P2P works pretty well for cheap transfers of big files; but somewhat less well for low-bandwidth, but latency sensitive, stuff.

    The system that I would like to see would be a radically free market(and thus, likely never to be seen in the cellular arena) system of phones that electronically bid for resources in real time, from carriers within range who dynamically compete for customers in real time.

    Consider a basic example: I have a cellphone with a GSM module that can see two or three carriers' towers, and a wifi module that can detect a number of access points. I open my address book, or start typing in a number. Detecting that I am going to be making a call, my phone checks the rate information being broadcast from the wireless links visible to it: it then silently routes the call out through whichever offers the lowest rate. In order to prevent surprises, the user could, of course, set "absolute ceiling", "manual verify", and "warn but continue" price thresholds within their phone's bidding engine. Towers, for their part, could dynamically adjust prices, down to the operator's set floor, in order to keep themselves busy but not over-saturated.

    Data would be handled in a similar manner: cell towers and wifi access points could broadcast their willingness to provide, and rate(at home, of course, your router would treat you as a special case of free access, to ensure that you always used the bandwidth you had already paid for, and applications requiring data could choose based on price.

    Since most people would not want to trouble themselves with the details, phones would, ideally, ship with some sensible defaults and a few heuristic rules(ie. if I almost always make long calls to contact X, and very short ones to contact Y, select a carrier for contact X based on lowest expected price for a long call, and select a carrier for contact Y based on lowest expected price for a short call). For those who did wish to dig deep and twiddle all the knobs, the tools for expressing and solving optimization problems in multiple constraints to computer systems are not exactly terra incognita. The real propellerheads could have their handsets algorithmically trading off between lower and higher power-requirement connections based on batterly life and location/time based estimates of next charge, and whatever other variables they felt like including...
  • by cgenman ( 325138 ) on Sunday January 16, 2011 @09:38PM (#34901058) Homepage

    Cell companies are probably going to get hit by data-anywhere aggregators + VOIP plans. I loved how you could drag a Vontage phone to any country in the world, and make VOIP calls as if you were local to your city, Oklahoma.

    They'll get hit, but from in front. Just like landline phone companies have been marginalized by cellphone companies, cell companies are about to marginalized by wireless data companies.

  • Re:Iridium (Score:5, Interesting)

    by fuzzyfuzzyfungus ( 1223518 ) on Sunday January 16, 2011 @09:43PM (#34901082) Journal
    Iridium was a total clusterfuck for Motorola, who basically ended up paying many of the capital costs and then having to write off the whole thing.

    On the other hand, the (definitely in no way whatsoever US clandestine services connected, just like everybody else in McLean, Virginia...) group of private investors who snapped up a fully functional constellation for $25 million have been doing just fine with it.

    The moral of the story seems to be that there is absolutely no way that satellite phones can(in the face of cheap terrestrial calls) justify their startup costs; but if some sucker eats those for you in bankruptcy, it is a perfectly viable business....
  • by kanto ( 1851816 ) on Sunday January 16, 2011 @09:51PM (#34901142)

    The Outcome: zzzPhone took some orders and shipped a small number of very low-quality phones. I heard crazier and crazier stories about Horowitz, all second-hand. For instance, he apparently hired a carver to make him a cell phone out of wood that he tried to insert working phone components into.

    I found that a bit funny because making one [] is a course at a Finnish university. More pictures here [], but with finnish text only.

    I originally read about this in a magazine; apparently they solder the sim-card connecting leads so swapping operators requires some work.

  • by Culture20 ( 968837 ) on Sunday January 16, 2011 @10:15PM (#34901260)

    What's the point of breaking articles up on multiple pages anyway? Simply more ads? Slightly less bandwidth for people who only read the first part? To accomodate some browser that for some reason doesn't have scroll buttons? Pagan ritual of some type?

    To figure out what percentage of people are interested in more than the title and summary paragraph.

  • by fuzzyfuzzyfungus ( 1223518 ) on Sunday January 16, 2011 @10:54PM (#34901400) Journal
    I'm guessing that it would go over about as well as poor old "cablecard", which was largely murdered in the cradle despite being far less radical.(Or, for that matter, if SIM unlocking is too scary for them, this idea would have them shitting bricks, since it amounts to phones that automatically swap SIMs every second or so, depending on price...)

    In theory, though, there would be nothing preventing "traditional" style cellphone contracts(other than cheaper competition potentially making them foolish).

    I deliberately modeled the notion on that of electronic market trading, in which context a traditional cell contract would be, in essence, a "minutes/SMS/data option contract". Instead of buying my minutes at the market price where and when I need them, I purchase an "option" on X minutes, Y SMSes and Z megabytes to be delivered in the following month, at a set rate(presumably for a discount over the expected spot prices).

    Again, having to have a finance degree just to make a phone call won't really appeal to most people, so I would invoke the "sane defaults" notion and hope for the best; but the explicit parallels to common financial instruments, along with automated transaction engines, open up some fascinating possibilities for enthusiasts(as well as, in theory, helping networks cope with congestion: heavily congested regions would be more expensive for spot-price users, encouraging them to moderate usage; but they would also be most profitable for local wifi operators, temporary telco cell trucks, etc. to set up shop...)
  • Re:Iridium (Score:4, Interesting)

    by Anonymous Coward on Monday January 17, 2011 @12:59AM (#34901938)

    I was a Motorola engineer for 10 years (and a consultant for things related to them and Freescale ever since) and got to enjoy some involvement in Iridium. Hopefully I am remembering this ancient history correctly.

    It did not cost Motorola $5B USD. One of the things the Wikipedia article leaves out was all the foreign investment involved (Saudi Arabia had almost as much money invested into Iridium, IIR the Powerpoint presentation correctly) leaving Motorola's contribution/investment at about $400K USD with a total exposure of probably $1B, but they got most (if not all) of that back by paying themselves the other investors money for the design work. No-lose contracts are a nice way to do business if you can get someone to sign from the other side. The .pdf you linked to has some good historical information, but also some glaring errors which I am not in the mood to fisk.

    That said, Iridium SSC was a SNAFU from the start, as anyone looking at the map of world wide cellular coverage in 1997/98 should have been able to see. Since there are no records of the skepticism I put forth much earlier than that, I won't bring it up further. Of course, Motorola in 1994 still thought that analog cellular was the only way forward and was in the process of completely mismanaging the conversion to digital, so it isn't that surprising that the higher up execs missed it. The phoenix that arose from the ashes to enable the South Pole to get 28.8 kbaud and US DOD operators to be able to phone home without having to lug around 3-4 kg of satellite equipment is something I applaud the US bankruptcy laws for. Stupid money and big dreams can have good endings for someone. I will forever wonder how the US automotive industry would have fared if those same laws had not been interfered with.

    I was invited to sit in on one of the early presentations right when they made the decision to reduce from 77 satellites to 66. The presenter's manager didn't much care for my smart ass suggestion they rename the project Dysprosium (I doubt he ever had the geek cred to read /., but if he is reading this- HI!). I was also the guy who previously explained to them why the PowerPC 603 was a horrible CPU to use for a satellite and the guy who helped them redesign around the PPC604 after the managers woke up to just how important it is to have at least SOME level of cache checksums in hardware (a pretty reasonable requirement for anything floating around the earth, and which was why my coworkers and I were invited to the presentation). But it was a great joy to spend time at their design facilities right next to a dairy farm south of Phoenix. Fragrant.

I go on working for the same reason a hen goes on laying eggs. -- H.L. Mencken