Technology Futures

I still remember a conversation I had about a year ago when I told an business acquaintance that Blockbuster was toast, and that it was only going to be a year or two before the company would be gone. My acquaintance argued politely that that was not going to happen, we agreed to disagree, and we finished up our meeting. But for some reason, that particular conversation stuck with me, even though I have talked about this to hundreds of people.

What amazes me is how stuck some people get in a belief that business models never change, and that companies and markets can grow forever. Blockbuster was in the right place and the right time to enjoy dramatic growth, crush its business enemies, and become one of the most hated brands in America. The company's insistence on ridiculously punitive late fees was the first clue that the company's leaders were out of touch with customers and the market. How anyone thought that enhancing profits by punishing customers was a good idea still perplexes me, but a lot of people at Blockbuster thought so.

Netflix was really a response to that. The Netflix folks had two key ideas: one was that people tend to take a few days to get around to returning movies. The second was that some day, DVDs would be history and everyone would watch on demand via a broadband connection. Even though the company started out mailing DVDs back and forth, you will notice they did not call the company "PostalFlix."

I saw something the other day that made me think I might finally want an iPad--someone near me on an airplane was watching a movie on their iPad. The big screen was easy to see, and the iPad has enough battery life to watch a long movie without running out of power, which is a problem with many laptops. Air travel has become so unpleasant that being able to watch a movie of my own choice has some appeal. The seats are now so close together that on most flights, even on bigger planes, it is nearly impossible to work comfortably on a laptop. I was on a 757 the other day, and there was only 12 inches of space between the front edge of my seat and the back of the seat in front of me. When you dropped down the tray table, the edge was jutting into my chest--impossible to comfortably use a laptop keyboard or to get the screen at a comfortable angle. But my iPad seatmate was able to prop the iPad up easily and enjoy a movie.

As video has moved from the Blockbuster store to the Netflix postal model (which is also toast, but Netflix knows this) and is now rapidly moving to the on demand model, the iPad and similar tablets are going to take it the final step--true portability--watch whatever you want, whenever you want, pretty much wherever you are.

In making a hotel reservation, I wanted to double check how to get from the hotel (B) to the office building (A) where the meeting will be held. The hotel appears to be less than one block from the office building. But the loop-de-loop blue line is the route that the map software gave. And that's why I seldom use a GPS device in the car.

There is so much confusion and mis-direction in this article that it is hard to know where to start, and I don't really blame Cecilia Kang, the Washington Post reporter who wrote the article. She interviewed a bunch of wireless equipment vendors and wireless services firms, and it those firms that are doing the dreaming. And most of it is dreaming. If the FCC does release additional spectrum for wireless broadband use, it will be years before off the shelf commercial devices are available for it. Standards and protocols have to be developed, which is a contentious and time-consuming effort. And then new chips have to be designed and new equipment for the chips has to be rolled out. And the industry then has to convince current users to throw away all their existing equipment and buy new. Perhaps the silliest statement in the article is about the "vast" potential, which was "validated" by pointing out that over "1 billion" WiFi chips are already in laptops, cellphones, and other devices. Um, are we going to throw all those away and buy new everything? I don't think so.

Remember WiMax? No one else does either. WiMax was going to solve all the world's problems just four or five years ago. The was a "WiMax Industry Summit" in every major city in the U.S. just about every week for about two years. Where is WiMax today? Nowhere. Now LTE is supposed to be so much better than WiMax. The two wireless protocols have much in common in terms of performance and capacity, but the point is that the "WiMax revolution" has already been passed by before it started by LTE. Meanwhile, laptop and portable device vendors keep releasing products using the same old protocols that are supposedly outmoded (i.e. WiFi). And that's the problem with wireless--to get more performance, you have to throw away 90% of your original capital investment and replace everything. On the other hand, if you need more capacity with fiber, you can cheaply and easily increase any fiber link by simply replacing the equipment on each end of the fiber--you don't have to "upgrade" the fiber itself.

Want proof that LTE/WiMax/White space is NOT going to solve all the world's problems? Look at poor AT&T and their experience with the iPhone. When the iPhone was released, they thought they might have to double network capacity, but it turns out that iPhone users fooled them--the company has found that the smartphone owners use between ten and 100 times more data bandwidth than other cellphone customers. And it keeps getting worse--as the iPhone gets faster, iPhone owners use even more bandwidth. As fast as the company rolls out more capacity, it gets used up, because customers can do more, like watch major league baseball live video streams, which just crushes AT&T's network.

Wireless is important, but it is not cheap, and we all still need fiber connections at home and at work. Wireless is essential for mobility access to the 'net, but it is not a replacement for fiber--it's a complement to fiber.

This site has collected a set of old computer ads from the late seventies and early eighties. Some of the goodies include:

• A 20 Mhz 80386 PC that sells for a low, low, low $8,499.
• A modem the size of a toaster oven.
• A 15 meg (yes, meg, not gig) hard drive for $2,495 and a 10 meg hard drive for $3,495.
• An ad for the venerable Heathkit H8 with 4K of memory; a real bargain for $1244.50!

Good for a chuckle, and an indication of how far the computer business has come in 25 years. The $199 iPod Touch is more powerful than the multi-million dollar mainframes of the seventies.