Tag: AT&T

Videoconferencing

Videoconferencing is well over 50 years old. Today, it is fast and virtually free over the Internet. However, aside from extremely formal or informal events, videoconferencing has largely failed to catch on.

Background

AT&T introduced videoconference at the 1964 World’s Fair. People in New York waited in line to walk into a booth and spend a few minutes talking to a stranger, with voice and video, in Disneyland, in California.

Simultaneously, they tried to commercialize the service by adding devices in Washington, D.C., and Chicago. The device was called AT&T Picturephone Mod I. However, the most common pricing plan cost $80 for 15 minutes of voice/video chat (about $660 adjusted to 2019). Three minutes of videoconferencing cost $16 ($130 adjusted to 2019). In the first six months of service, 71 customers paid for calls and volumes declined from there.

Additionally, besides the high prices, the video was tiny. Black-and-white screens measured 13 cm x 12 cm (about 5×5 inches) and connections oftentimes dropped.

Eventually, AT&T released a picturephone with the same internal parts but a more attractive plastic box. However, potential buyers still passed; the value video provided did not correlate to the additional cost either in terms of money or convenience.

AT&T Keeps Trying

Between 1966 and 1973, AT&T invested more than half a billion dollars developing and marketing the videophone. They renamed it the Picturephone Mod II, targeted to the corporate market. Nobody was interested.

By 1982, they created a Picturephone Service Meeting. The equipment and call costs were exorbitant, and nobody was interested.

Finally, in January 1992, AT&T released the VideoPhone 2500, a phone with a small color video screen. At the initial price of $1.5 million, the phone attracted literally no sales. They reduced the price to $1,000 and allowed people to rent the phone for $30 per day. Buyers refused even at these lower prices.

By the late 1990s, free videoconferencing appeared on the web but, even as it evolved, the product still remains largely a niche market. Even with a price of zero, many customers will prefer texting or speaking rather than videoconferencing. One exception is in certain office situations, where high-end videoconferencing systems can reduce the price of in-person travel.

MP3

MP3 enables the digitization of high-quality audio to small files. File sizes are small enough to easily store many or transfer them over the internet, even with 1990s slow transfer speeds. The small file size is primary the benefit of MP3 over digitized compact disk file because MP3 files are much smaller with good enough quality.

In 1992, Karlheinz Brandenburg – working on his Ph.D. thesis – explored encoding a digital stream over an ISDN data phone line. Patent examiners rejected a patent application because they deemed the technology impossible.

In 1998 the International Organization for Standardization (ISO) called for standards in audio and video encoding. That team used the monkier Moving Picture Experts Group (MPEG).

Brandenburg and AT&T’s Jim Johnston worked together for a compression algorithm that maintained sound quality, trying over a thousand variations.

In 1992, ISO releases MP3 as a standard. For the most part, the world ignored it.

However, in 1995, as the world wide web was exploding, browser makers decided to support a file extension for encoded audio. They agreed on MPEG, Level 3, and the file extension, MP3.

By 1997, use of MP3 was exploding. However, users ignored both Brandenburg’s IP rights and also the rights of the music they were encoding. By 1999, with the launch of Napster, Brandenburg and the Fraunhofer Institute all but lost control of the technology they developed. IP infringement was rampant.

MP3’s still exist though other encoding technologies offer smaller files with high-quality sound. Piracy is less rampant due to consumer preferences for streaming, enabled largely by broadband and cheap mobile data.

Mobile Phone

Mobile phones allow calls from anywhere that’s within range of a tower. They vastly increase productivity, convenience, lower the risk of a missed call, and they’re fun. Mobile phones work by beaming voice (and, later, data) to a tower, seamlessly switching from tower-to-tower as the person moves.

Cooper Creates the Mobile Phone

Battery-operated gadget maker Motorola invested $100 million between 1968 and 1983 to develop the mobile phone. Martin Cooper led the development effort. This culminated in the release of the $3,995 ($9,900 in 2019) Motorola DynaTAC 8000 in 1984. The world’s first mobile phone weighed 28 oz., offered about 20 minutes of talk time and took ten hours to charge. “The battery life wasn’t really a problem because you couldn’t hold that phone up for that long,” Cooper famously quipped.

The first public mobile call was from Cooper to Joel Engel, his competitor at AT&T who was also working on a mobile phone. In front of reporters, Cooper called Engel and said “Joel, this is Marty. I’m calling you from a cell phone, a real handheld portable cell phone.” Engel conceived of the idea for a cellular phone network, with switching from tower to tower, as a Bell Labs employee in 1970.

Mobile Mania

In 1980 consulting powerhouse McKinsey famously predicted there would be about 900,000 worldwide mobile subscribers by the year 2000. Instead, there were 109 million.

Due to mobile phones, Motorola revenue skyrocketed. A decade later, in 1994, their revenues of $22 billion put the firm 23rd on the Fortune 500 list.

Finnish company Nokia overtook Motorola in 1997 by retooling for digital, rather than analog, phone calls. Rather than focus on digital mobile phones, Motorola instead focused on Iridium satellite phone.

Motorola Stumbles

However, CEO Chris Galvin focused on a small digital phone, the Razr, but was fired in 2003 before it launched and replaced by Sun Microsystem COO Ed Zander. However, Galvin’s Razr was a mega-hit, boosting Motorola’s market cap to $42 billion in 2004.

Eventually, Zander struck a deal with Steve Jobs’ Apple to release an iTunes enabled phone, the Rokr, in 2005. Surprisingly, the iPod/iTunes phone flopped. However, as part of the development process, Motorola taught Apple about mobile phone technology and the mobile phone business. Simultaneously, Samsung adopted blue ocean strategy to manufacture good-enough phones at lower cost.

Subsequently, in 2007, Apple released the iPhone. Motorola had no smartphone, either in the development or the sales channel. In 2008, Carl Icahn purchased 6-percent of Motorola and demanded it be broken into parts and sold. Motorola continued working to compete, building an early Android phone. However, by 2012, Samsung had built a better Android phone, at lower cost.

On August 15, 2011, Motorola was sold to Google for $12.5 billion, a 63-percent premium over it’s then market capitalization. Twenty months later, Google sold what little remained of Motorola, besides the patents, to Lenovo for $2.9 billion.

Today, Motorola – innovator of the mobile phone – is essentially nothing more than a brand in the mobile phone world.

Telephone

The telephone vastly lowered the cost of communication by eliminating the need for Morse Code and enabling real-time voice conversations.

Bell was a Scottish immigrant, a teacher for deaf children. The inventor of the telephone would go on to marry one of his students, a then 15-year-old deaf young woman.

Due to his work with the deaf and his temperament as a natural tinkerer, Bell focused on a telegraph to help deaf people communicate. That work segued into a voice telegraph, that Bell termed the telephone.

In 1874 Antonio Meucci arguably created the telephone, two years before Alexander Graham Bell. Meucci had several working telephones but lacked the capital to either fully commercialize or adequately patent his innovation. In 2002 the US House of Representatives passed an acknowledgment stating Meucci invented the telephone. “If Meucci had been able to pay the $10 fee to maintain the (patent) caveat after 1874, no patent could have been issued to Bell,” reads the proclamation.

Whomever actually invented the telephone it was Edison, in 1876, who eventually created and patented the amplifier. That enabled people to more easily hear the transmissions. Edison’s amplifier made Bell’s telephone commercially viable, usable by and useful to ordinary people.

Bell’s telephone company, established in 1877, focused on local lines. It was eventually acquired by the American Telephone & Telegraph Company (AT&T), that focused on long lines, in 1899.