The announcement of the 34-member Open Handset Alliance Nov. 5 combined elements of Sherlock Holmes, Microsoft and, of course, Google. All had various lessons to teach observers of the cell phone industry as the partnership embarks on an ambitions program of developing new software for wireless devices.
Speculation leading up to the announcement was not an example of singular sleuthing. Most of the reports, particularly those focused on one potential partner or another, were wrong. Also wrong was the speculation of a Google device. Rather, the Sherlockian lesson here comes from the second-most quoted text in the canon of Holmes stories, from the story “Silver Blaze.” While inspecting the murder of John Straker, the trainer of the race horse, Silver Blaze, Holmes and Inspector Gregory of Scotland Yard had this immortal exchange:
Inspector Gregory: “Is there any other point to which you would wish to draw my attention?”
Holmes: “To the curious incident of the dog in the night-time.”
Gregory: “The dog did nothing in the night-time.”
Holmes: “That was the curious incident.”
One draws from this that it is as important to notice what did not happen as it is to notice what did happen. Look at the list of carriers who have become affiliated with the alliance. China Mobile has 332 million subscribers. NTT DoCoMo has 53 million. KDDI, Japan’s competitive wireless carrier, has another 28 million. Telecom Italia has 34.3 million and Telefonica has 149 million worldwide. The smallest of the four major U.S. cellular carriers, Sprint with 54 million customers and T-Mobile with 27 million the U.S. (around 112 million worldwide).
Who was missing? The two largest U.S. cellular carriers, AT&T with about 65.7 million subscribers and Verizon, with 63.7 million are not members, and it’s easy to see why. Here’s the mission statement: “Each member of the Open Handset Alliance is strongly committed to greater openness in the mobile ecosystem. Increased openness will enable everyone in our industry to innovate more rapidly and respond better to consumers' demands.” Does that fit the description of any major cellular companies? I can think of two, and their trade association, which might object. Verizon and AT&T were invited, but declined.
For the record, Verizon has said it wouldn’t rule out joining. Verizon Wireless spokesman Jeffrey Nelson told a number of publications Verizon hasn’t ruled out joining, saying the company shares the goal of more open development for mobile applications.
This from a company that went to court to challenge even the weak “open access” features of the 700 MHz auction that would allow for devices to be used on different services and for more open applications. (It’s true Verizon withdrew their court challenge. But they simply had their trade group file the same thing instead.)
This from a company that is still said to be fighting the issue at the FCC, and which testified against open access in July. Steven Zipperstein, the Verizon Wireless general counsel, told the House Telecom Subcommittee on July 11 that an “open access” regulatory requirement would lead to harm to the network and even decrease the incentive for cellular companies to invest in their own services because “they would simply be in the business of providing airtime.” AT&T has no interest. They captured the iPhone after Verizon foolishly punted, and one company can only stand so much innovation.
There’s no guarantee that at the end of the day all of the companies involved will hew to the Open Handset creed. Will the Chinese, or the Japanese? Who knows? But the fact that they are at least in at the beginning is very promising.
Another missing party leads to the second element of the Open Handset Alliance philosophy. That missing party is Microsoft. It, along with Palm and RIM, companies which already have their own wireless operating systems, are also missing from the consortium. What is present, however, is the original philosophy that made Microsoft dominant. It doesn’t matter how cool a device looks. Without the right software, it’s just plastic, metal and silicon. Who needed a commoditized box when there was software to be sold to put into it? It’s better to let companies who know, or think they know, how to design phones, to build the actual products. That’s why you never saw a Microsoft computer. On the other hand, the lesson can be forgotten. Zune anyone?
Google was smart enough to stick to the basics of what it does well in putting together the consortium. It does software. It does systems. It doesn’t do boxes. That’s why there won’t be a gPhone. That’s why it was a shame that Google was more or less dragooned into the spectrum auction the FCC will conduct early next year. Google originally didn’t want to play because they don’t want to build a cellular network. They would have liked to buy some spectrum wholesale to see what could be developed, perhaps, but that’s a far cry from a network with towers and backhaul and billing.
With this project, Google stuck to what it does well, in a partnership that includes a lot of companies that do a lot of things well. If it works out, even Verizon and AT&T may find themselves dragged along into a more open future.