For those of you that weren’t watching SNL in 1975, a Land Shark was a cunning urban predator that disguised itself before attacking for the kill. In other words, a cell phone.
I wrote a similar post in Jan/09 called Mobile Phones Kill More than Brain Cells, this is an update and refresh.
The basic premise is the mobile phone is killing industry by industry – and few people realize it. Anyone that thinks its path of destruction is over is wrong. And enterprise voice is not safe.
Let me clarify that I am writing from the perspective of observer. I am neither cheering for the cell phone or hoping to see it slow. It is what it is – the main point here is I don’t think very many people see the cell phone as a predator. Fools.
Cell phones kill industries.
- Walkie-Talkies (including FRS)
- CB Radios?
- Highway Call Boxes
- Answering Machines
- Paper Calendar (Franklin types)
- Pay Phones
Land Lines: Land Lines are facing a double attack from the Internet and from cell phones. But even the Vonage types are cursing the cell phone predator for not sharing fairly in the kill. People need a cell phone, but don’t necessarily need a home line. The reasons to have a home line are disappearing quickly.
Area Codes: Any telecom person takes great pride in what is referred to as a dialing plan. The US dialing plan was a marvel – three digit area codes followed by a three digit prefix and a four digit number. The dial plan was designed for rotary switches that routed the calls as you dialed. As a result, if you moved, you most likely had to change your number. As switches got upgraded you could keep your number on local moves only. Today, area codes mean very little. The regional carrier used to offer free local calls and charged extra only for long distance – today there is no concept of local. Cell carriers tend to charge by the minute regardless if the call is local or not (or initiated or received). Related to this is cellular (and Internet) carriers tend to route the whole number instead of a digit at a time. This shows up in a variety of ways, such as 1+ used for long distance dialing is no longer used on mobile phones.
Two Way Radio: Cell phones are eliminating two way radios. This is most evident to the consumer with the FRS walkie talkies that were quite popular just 10 years ago. More and more, two way radios are being replaced with cell phones – taxis, “radio dispatched” repair vehicles, CB radios, delivery vehicles, emergency vehicles, etc.
Control Over Charges: This is a very important mind shift that is occurring with surprisingly little complaint. The old PSTN network, with its universal service creed, put all charges on the caller – not the callee. If you wanted to keep you bill low, don’t make calls. Receiving calls was always included at no additional charge. This is not the case with cell phones that charge not only for receiving calls, but receiving SMS alerts. If you don’t answer the phone, you still pay for voice mail minutes as they are not covered in most plans. SMS is even worse as not answering or refusing certain messages isn’t even an option. If the phone is off, text messages patiently queue-up and wait. Also outbound calling is a bigger gamble as many European countries charge higher rates to the caller for connecting to a cell phone.
Portable Music: My newest cell phone does have a standard stereo headphone jack. Not only do the cell phones store, play and stream music, but the carriers are actively engaged in selling music.
Portable Game Systems: Largely thanks to theiPhone and theApple Touch – developers are finding a lucrative home in the portable phone space – more so than the single purposed gaming market largely dominated by Nintendo. The phones have so many sensors and such an efficient distribution model – it is hard to see this changing. The only real obstacle is the pre-teen market doesn’t have cell phones (yet).
Watches/Alarm Clocks: I’ve written a few posts about wake-up calls and I always get a response about the iPhone a being superior solution. Now that I have a Droid, I get it. I used it last weekend. Easier to set and accurate time, no power fail vulnerability. Why bother with those pesky slow and fast buttons to set the time? Watches need to be wound or require new batteries. Remember when you first saw someone use their phone to check the time? It seemed odd – not any more.
Voice Recorders: In “Night Shift”, Michael Keaton carried a cassette recorder to note his great ideas like feeding tuna mayonnaise. The cassette recorder gave way to the solid state recording device, and now to the cell phone. I just ran into a friend on a walk yesterday and he used his iPhone to make a few verbal reminders to himself.
Digital Cameras: Not quite there yet, but getting closer. The new cell phone cameras are 5 megapixels and have a flash. Their biggest limitation now is their fixed lens. Protruding and adjustable lenses can’t be more than a few generations away. The smartphone cameras today already offer still and video, and an easier way to upload/email pictures. For things like Twitter I prefer to use my smartphone than a regular camera.
Remote Controls: Many cell phones have IR capability and apps are available to emulate a remote control. But as IR fades, wifi gains. I use a wifi Squeezebox remote app on my phone that saved me over $100 from buying a new hard remote. The home automation scene is also embracing smartphones as a portable keypad for all kinds of functions.
Navigation: With the Droid, and now the HTC Hero – turn by turn navigation is included in the device. A connected navigation system makes a lot of sense. I have aGarmin Nuvi and the Droid is superior in almost every way. Not only does it use speech recognition to look up my destination, but its GUI is more intuitive, it offers real-time traffic information, and even shows me a picture of my destination. TheiPhone has similar functionality available through the App store (for a lot less than a separate navigation system). This also threatens the built-in navigation market the auto makers are rushing to embrace. My Droid will also provide navigation in Europe, so scratch that Garmin Euro Map kit off my shopping list.
Money: Several countries already use the cell phone to pay for services or transfer money – the services are here in the US and coming full speed ahead. Even Business Week covered it. Companies like Western Union and Obopay are betting on it.
E-books: This is a new emerging industry, and the cell phone an active though silent participant. Some feel the KindleiPhone app is superior to the Kindle. I felt the screen size on the Kindle was too small, but still like the backlit nature of the Droid ebook reader and use it to read stories to my son in a darkened room. The ebook battles are just starting, but all of the major players have a cell phone angle and even if a specific hardware solution, such as the Kindle, wins cellular carriers are still victories as they provide the transport.
Coupons: The coupon business is begging for a revolution – the paper coupons are expensive to distribute and return/reclaim and are not that effective. Online coupons are an improvement, but even less likely to be in a purse or wallet at the right time. Location based digital coupons are coming. Coupious is currently testing in some markets the concept of coupons that are location aware – $10 off a pizza from the restaurant around the corner sounds a lot better than $15 off a pizza from the place across town.
Video: The Saygus V1 phone available on Verizon includes a video camera for live mobile video conferencing. More phones expected to follow.
Laptop?: I used to never travel without a laptop. But now, I can “get by” with only my cell phone. The compromise is screen and keyboard – not functionality. Even when I do take a laptop, my Verizon card is an easier way to stay connected than various hot-spots. No card slot? Consider a MiFi. The laptop and the cell phone are merging- the product is a Netbook. Now Acer offers a netbook with Android as its OS. Similar to the e-book, the winner is the cellular networks – maybe not the specific device or the cell phone.
There is more, much more. Wallet photos, newspapers, calculators, even puzzle books like soduku -maybe not entire industries -but functions and services that used to be met with other products and services are being replaced with our mobile phone.
The PBX is safe today, but there is a perfect storm forming that can threaten it significantly. Consider the following:
Soft Clients: My Droid has both Fring and SipDroid. Fring allows me to make receive SIP, Skype, Google Talk, and MSN Messenger Calls. SIPDroid is a soft SIP phone. Both work flawlessly with SIP trunks or a SIP phone system over wifi and 3G.
Google Voice: Google Voice provides PBX like services such as call record, call screening, voice mail, and find/me/SimoRing seamlessly on a cell phone. The Google Voice Client available for Android and BlackBerry phones makes the service stronger and seamless for outgoing calls.
PBX/Mobility: The PBX makers are rapidly embracing “mobility” largely via the cell phone. Last decade it was wifi extensions, now the PBX makers are working to integrate the cell phone into the equation. The premise is so strong that it is possible to skip the PBX phone entirely (the Mitel solution does not require a PBX phone for every user). Incoming calls are directed to the cell phone and can be transferred to other extensions from the cell phone.
Presence: Presence has been termed the killer app for unified communications. Presence improves communications and reduces voice mail by providing real time presence and availability information. However, the flaw is presence is typically determined by computer activity which is not that accurate of an indicator of availability. Nor is there a simple way to determine presence is at the office, at home, or another location. Meanwhile cell phones are benefiting from GPS information with a whole new set of location aware applications. With Locale, you can set the cell phone ringer to turn of when in church. With Foursquare you can find nearby friends to socialize (or coworkers to collaborate) with. Smartphones can integrate presence, location, and calendar into a more sophisticated solution for availability.
Location Aware: As mentioned above, location awareness is something new for electronic communications. Cell phones use this feature in fleet services – you can track field staff, even see if they speed or not. Some carriers offer tracking services to families, so parents can track kids. Google Latitude does all this for free. Location aware is gaining popularity for social purposes, commerce (coupons), and soon collaboration.
Headsets: Headsets on a cell phone are easy. Headsets for a PBX phone are difficult. Want a headset for a wired phone – plan a minimum of $100 and a bit of a hunt to find a compatible model. Wireless? add another $100 for a base and handset lifter. Blue-Tooth headsets for cell phones are available for as little as $19, plan to spend $50 and 5 minutes to pick one.
Personal Directory: This is standard issue on cell phones. On PBX extensions it is a bit harder. The current direction is to integrate Contacts from Outlook or Gmail and make them available on a cell phone -this works pretty well. Getting them on a PBX phone is not so easy – usually requires add-on software licenses and requires both the desktop computer and desktop phone together and at the same location to make a directory call.
Hosted Voice: Although hosted voice is not new, it would seem we are about to enter a new phase of it. Many of the PBX makers are positioning around being the platform of choice for hosted voice. Though I wonder how long until the cell carriers discover they too can offer hosted voice/PBX functionality. Not all locations are suitable for wireless phones (conference saucers, courtesy phones, no coverage zones, etc.) but many of the cell carriers already offer landlines and/or SIP lines to complement their solutions. Femtocell solutions are also available from most carriers to address dead zones.
Costs: Not long ago, the cell phone was cost prohibitive to use. In fact, it was common to only use it when absolutely necessary and to reconnect upon arrival at a land line. Those days are gone, the cell phone plans have dropped (a bit) and new affordable options exists for international dialing (such as Google Voice). Conversely, cell phone usage has significantly increased and organizations now pay more for cellular than land line costs. At some point the cost cutting knife may divert around cellular and instead cut the cords.
Could an organization survive without a wired phone system? Certainly some do, and with an increasing variety of UC tools available that are independent from the phone system the impact is decreasing. TheiPhone, Blackberry, and Android platforms are already enterprise plays.
The PBX industry needs to learn from the Navigation industry. The cell phone alternative to the GPS navigation device came out of nowhere, at a pricepoint that will kill the existing industry, and with additional and better functionality. Navigation stocks tumbled about 25% upon the news that Google was going to provide nav free on Droid phones. And it seems clear the industry’s clock is ticking as smartphones continue to increase.
The biggest difference between cell phones and virtually all other forms of electronic communication is we love our cell phones. They are personal devices we take everywhere. We are never alone as long as we have our cell phones…waiting rooms, airports, school, even football games (lady in front of me sent SMS texts during the entire game). Blind love, a ton of innovation, and robust wireless networks will wreak havoc on many (more) industries, possibly including yours.
The irony is that in the SNL skits, the Land Shark sometimes attempted to lure its victim into safety by claiming to be from the phone company.