Elgan: Will AT&T let 'emerging devices' emerge?

Or will the company strangle this infant technology in its crib?

We're about to transition from an era where everything is in the cell phone -- cameras, GPS devices and more -- to one in which the cell phone is also in everything.

Your stand-alone digital camera and your in-car GPS system will connect via the cell phone mobile broadband network and will do powerful things on your behalf.

AT&T says it wants to lead the revolution. But will greed and a lack of vision put the company in the position of killing the revolution before it even begins?

'Emerging devices' emerge at AT&T

AT&T announced a new emerging devices initiative this week, which will be headed by Glenn Lurie. Lurie is probably best known in consumer electronics circles as the guy who landed the Apple iPhone deal for AT&T.

Until this week, Lurie's title was president of national distribution for AT&T's wireless division. Now the company has slapped "emerging devices" on the front of his title and list of responsibilities. So now he's president of emerging devices, national distribution and resale.

(Emerging devices is one of those labels that sounds cool now, but that the company will later regret -- like Microsoft's NT, which originally stood for new technology. Once those devices have "emerged," will Lurie no longer be responsible for them?)

Emerging devices is a euphemism that actually means noncell phone devices that will use the mobile broadband cell phone data network. AT&T's announcement specified "personal computers, mobile Internet devices or mini computers, in-car entertainment and navigation systems, cameras and machine-to-machine communications solutions." Interestingly, all those emerging devices have already emerged, but not necessarily at AT&T.

AT&T is very late to this party. After all, the idea of wirelessly connecting noncell phone devices to the data network for one reason or another has been around for years, and products in this area have been shipping for a long time.

The most significant example is Amazon.com's Kindle, now a year old, which uses a mobile broadband connection via Sprint for downloading electronic versions of books, magazines and newspapers from the Amazon store. Mobile broadband catapulted this newcomer to a position of total dominance over e-book rivals like Sony in the U.S. marketplace.

How to stop devices from emerging

Lurie was too busy to talk to me this week, but I did speak with Mark Siegel, executive director of media and industry analyst relations, who made it clear that AT&T isn't making any decisions prematurely. How the technology, pricing and partnership deals will work are undecided at this point, according to Siegel.

AT&T is a dominant company and is in a position to lead the shiny new world of emerging devices, or delay it for years.

The most likely way to screw up all this will be if AT&T does what wireless carriers usually do with infant technologies: Nearly strangle them in their cribs out of greed and conspicuous lack of understanding about what drives consumer behavior. In this case, the most likely error will be either overcharging for mobile broadband, complicating it or, most likely, both.

Let me give you the nightmare scenario, which is also the most likely one.

Let's say you've got a happy iPhone customer named Joe the Plumber, who signed up for an AT&T voice and data plan costing $89.99 per month.

Joe gets a big tax break from the new president and wants to buy a digital camera. He reads in Computerworld that some of the new models connect wirelessly and that he can buy them from the same AT&T store where he bought his iPhone.

Joe goes down to the AT&T store and discovers that the 12-megapixel Olympus digital camera of his dreams is only $499. But to be able to upload pictures to Facebook and videos to YouTube directly from the camera, he'll need to buy a wireless data plan for the phone, which is $14.99 per month for up to 1GB of data service, then an additional $4.99 for each additional gigabyte. Plus, it requires a separate contract. Oh, and it turns out Joe can't upload to either Facebook or YouTube, either. He can, however, upload to AT&T's new social network, MyFace, and to AT&T's alternative to YouTube, called "MEdia Gall."

Both AT&T and Olympus just lost a sale.

The concept of emerging devices itself leaves a bitter taste in Joe's mouth, and he feels misled. The bitterness and disappointment spread across the gadget-loving universe, and further innovation is suppressed because there doesn't appear to be a market. Why? Because greed and a total lack of vision lead AT&T down the wrong path. Shareholders will never know how much money they lost.

How to enable emerging devices

OK, here's the dream scenario. Joe the Plumber goes to the AT&T store, finds his $499 dream camera and checks out the costs associated with uploading files. Wow! It's $4.99 per gigabyte added conveniently to his existing cell phone bill. The upgrade to his plan takes place at the register when he pays for the camera. And he can upload to any of his favorite sites. That means Facebook and YouTube. Sold!

Now Joe wants every gadget he buys from then on to have mobile broadband. He loves AT&T and will go there first from now on looking for gadgets. An industry is born, and the consumer electronics universe is transformed by ubiquitous wireless networks.

That's a scenario. Let me put this approach into simple rules for success:

  1. Don't think of each new emerging device as the equivalent of a new cell phone customer. Imagine a future world where all gadgets are connected via mobile broadband, and each customer has a "Chinese menu" to choose from in terms of which devices to connect.
  2. If you're serious about letting emerging devices really emerge, think volume. Leverage your Wal-Mart connections to transform what random gadgets can do on a massive scale. Go for maximum devices per customer -- maximum incentive per customer to use bandwidth -- not maximum revenue per device.
  3. Forget about controlling content. Nobody wants to be corralled into a single source for content except Apple fans. People want to upload to the services they're already using. Nobody wants their cell phone carrier dictating online activity.
  4. Keep it simple. No, I'm serious. One contract per customer, and keep data plans brain-dead easy to understand and remember.
  5. Maximize deals that make bandwidth free to the consumer. The Amazon Kindle is a great example. Amazon is willing to pay Sprint directly, then make wireless connectivity free to customers because the Kindle's primary usage model is the transfer of money from the user to Amazon (for the purchase of books, etc.). There are other opportunities where the actual amount of bandwidth that will be used by devices will be very, very low. For example, wristwatches that get weather data, the time and calendar sync won't be pushing petabytes around your network, so push Timex to pick up the tab for wireless connectivity. The benefit of free access is simplicity for the user.
  6. Don't leave out voice. When people think about nonphone devices using cell phone mobile broadband, they usually think about data only. But why not voice, too? Digital cameras, for example, already have speakers and microphones. Why not turn them into cell phones? Instead of being stuck with some cheesy, low-quality camera in my otherwise awesome cell phone, some of us want a cheesy, low-quality cell phone in our awesome camera. Let people choose.

AT&T: Welcome to the emerging devices revolution. You did the right thing with the Apple deal. You thought out-of-the-box, gave up control of content and entered into a partnership with an uncomfortable number of unknowns. I'm guessing that worked out pretty well for you.

Now it's time to do something similar with emerging devices. Grow a vision, thrill the customer and the money will come. Most importantly, don't let your new emerging devices initiative devolve into something that gets in the way of the coming mobile broadband explosion.

Mike Elgan writes about technology and global tech culture. He blogs about the technology needs, desires and successes of mobile warriors in his Computerworld blog, The World Is My Office. Contact Mike at mike.elgan@elgan.com or his blog, The Raw Feed.

Copyright © 2008 IDG Communications, Inc.

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