Wireless industry celebrates anniversary of first public cell phone call

Thirty years ago, Motorola Inc. researcher Martin Cooper called Joel Engle, head of research at AT&T Labs, from a cell phone. That marked the first public cell phone call made. Ten years later, Motorola unveiled the world’s first commercially available cell phone. The DynaTAC 8000x was 33 cm in length, weighed in at 794 grams and cost $6,000. The Canadian wireless industry has come a long way since then and now approximately 12 million Canadians own a cell phone. To mark the 30th anniversary of the first public cell phone call and 20 years of the first commercially available cell phone, Report on Wireless interviewed David Woodcock, director of product management for Motorola Canada’s Personal Communications Services division, to get his thoughts on the evolution of the wireless market. The following is an edited excerpt of that interview. RoW: It’s been 30 years since the first public cell phone call was made and when we look at where the industry is today, that has got to be a big accomplishment for the industry in general. DW: We’re actually very proud of our role in having created that industry. I think the Canadian carriers have spent $12 billion on wireless infrastructure just here in Canada. I think the industry employs 25,000 people in Canada. That’s a real monument to the success of the business and we’re pretty proud of our role in it. RoW: In the last couple of years, there has been a slump in handset sales and in wireless device sales in general. How has the industry, and Motorola in particular, been coping with that decrease in handset sales? DW: From our perspective, actually, it’s been a fairly good couple of years. I guess our approach has been get back to basics and really focus on what’s going to create value for our customer, the carriers, and be appealing for the consumers who buy from them. That’s resulted in strengthening our relationships with our customers. They’ve been telling us ‘we like what you’re doing, you’re listening to us and you’re giving us the products we want.’ I’d say that our last 18 to 24 months have actually been very successful. RoW: What’s your opinion on the apparent slowdown in subscriber growth in Canada? DW: We’re actually looking forward to an acceleration in market penetration. The data from other markets suggest that once you get to about 30-35% penetration, it really starts to jump upwards. We saw that first in Scandinavia and we’re starting to see it in the United States. We’re probably two to three years behind the U.S. in terms of all of the market trends in adoption and growth. I would expect to see 50% pretty quickly. And some people have actually talked about more than 100% as an ultimate upper limit, more than one device per person. RoW: There is still skepticism out there about being able to get the higher penetrations rates like we’re seeing in Europe and Asia. What demographics do you see picking up cell phones that don’t already have them? DW: If we take our lead from Europe, they have a far greater penetration in younger age groups as low as 10 years old. And most of those people are on a pre-paid program. So if we elected to, as an industry, we could achieve a much higher penetration in that age demographic and I think that’s where a lot of the growth is. Initially when the cell phone was invented it was $6,000 and it was a luxury item and really confined to the business user who could really justify it. Now carriers will give you a phone. It’s opened the market to a whole different class of user. I think you’re going to see younger and younger people use it, friends and family-type connections. Business is always going to be there as a predominant driver of revenue, but in terms of who buys them it’s going to be a younger and younger group. RoW: Do you see a bigger trend towards integrated devices like the new voice-enabled BlackBerry and the Treo? DW: I think there is always going to be a market for niche devices like that. Certainly the BlackBerry by Research in Motion is a great example of a product that solves a particular application very well. But I think the primary, the "killer" application if you will, for cellular is voice, has been voice and probably will always continue to be voice. So what you’ll see is more segmentation within that. So instead of having segmentation based by price tier – entry level, mid-tier, high-tier phones – you’ll see segmentation by what the buyer wants to do with the device. You’ll see maybe a mid-tier phone that’s targeted at imaging or then you’ll have a mid-tier phone that’s targeted at the enterprise user that has built-in organizer capabilities. You’ll also have one that’s more gaming focused for the youth market. And maybe they all co-exist at roughly the same price points. As the market becomes more sophisticated, it can support different segments like that. RoW: All the four national operators have their 2.5G networks out and there doesn’t seem to be any indication that they are going to go beyond that for the foreseeable future. How does that affect the handset manufacturer? DW: We honestly have to keep our eye on the ball in terms of when a carrier would want to take their network to the next level both from an enabler’s point of view but from a ‘what they want to do with it’ point of view. Obviously, one of the applications you would want to deploy with a 3G network would be streaming video. So the handset not only has to do 3G, it has to do streaming video. It behooves us to keep our eye on that ball. But I think in the meantime, Canadians are very lucky to have probably the best rollout of 2.5G in the world. And we’re only now starting to adopt SMS so there’s a lot of headroom in the networks that are currently deployed before we talk about going to 3G here in Canada.

Wireless industry celebrates anniversary of first public cell phone call

News | April 15, 2003

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