Carriers and Bit Pipes

One of the more interesting quotes from last week’s Mobile Congress came from Vodafone chief executive Arun Sarin who cautioned mobile carriers that “we must not allow ourselves to become bit-pipes and let somebody else do the services work.

I’ve been waiting for one of the carriers to say something like this. I’m certain that carriers will be conflicted in the coming months as they realize that there is a lot of revenue to be made from data services, but to capture this money, they give up control to companies like Apple, Google and Nokia.

In response to Sarin’s comments, Ajit Jaokar has a great post comparing mobile carriers to the builders of the silk road. In it, he writes:

But by common consensus, the company everyone wanted to meet was not an Operator – It was Apple. Like it or not – Google, Apple, Nokia and others drive the agenda today – and already with the launch of iPhone – the Operator is already a bit pipe. There may be no going back since iTunes is the billing mechanism for iPhone.

The truth is that mobile carriers are going to be bit pipes. The transition has already started. I expect to see a lot of carriers vacillate between opening their networks in order to provide more data services that consumers want and fighting the changes to the market that will mean that their importance is diminished.

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“Pipe Dream Driven by Greed”

I stumbled across another fun article from the NY Times about the mobile market tonight. Here are some choice quotes:

We are writing Chapter 2 of the history of personal computers.

This could be “the mother of all markets.”

Now guess who said them.

If you followed the recent Davos coverage, you’d probably guess that the first quote is from Google CEO Eric Schmidt who compared mobile to the recreation of the Internet. The second quote is almost verbatim what SanDisk CEO Dr. Eli Harari said during CES in January.

As you can probably guess by the set up, the quotes aren’t from Schmidt or Harari. They are from Nobuo Mii and John Sculley respectively. And they said them in 1992.

They got things right, but they were off on timing by a decade and half. By contrast, Intel’s Andy Grove called “the idea of a wireless personal communicator in every pocket is ‘a pipe dream driven by greed.'”

He was right about it being a pipe dream in 1992. 2008 is a different story. Intel itself has in many ways bet its company’s fortune on the expanding mobile market. The pipe dream is now reality.