The great idea that Capitalism will kill in the cradle

Build-a-Phone






















I mean obviously it is appealing, PCs are very similar to this in a respect. I personally would love it if this were the case. However, I can't see this happening for three reasons.

1) The phone OEMs (Samsung, HTC, RIM, Microsoft via Nokia, and most of all APPLE) will never let this happen in the way Dave Hakkens imagine it. This disintermediates them because component manufactures like Qualcom and others enter into very detailed and binding contracts with the above OEMs. Some of these contracts limit who the component manufactures do business with; exclusivity clauses if you will. Just like the iPhone was an AT&T exclusive for several years. If any of the major component manufactures indicate that they might bypass the OEMs and release one of their top of the line processors or sensors directly to customers in a form that is compatible with this lego style phone, the OEMs would retaliate. They would threaten to ditch them as suppliers. Since the OEMs have all of the marketing power and carrier deals this could be a death sentence for their main business. Which leads me to reason two.

2) The one component that makes or breaks this idea is the 3G/4G radio. A stand alone plug and play radio would have to get blessed by the carriers that it plans to connect to. Due to the lack of common carriage laws in the US there is no regulation that says any carrier has to allow a device on to there network. So since this will not only bypass the OEMs, but also the carrier's handset retail business (which is just as lucrative as their service business if not more so), no carrier will approve a modular radio to connect to its network.

The result of these first 2 will relegate these modular devices to wi-fi only handsets with medium to low quality parts from small component manufactures. This may find a place with niche consumers, but will never come close to replacing anyone's main smartphone. It would be a companion device at best and therefore likely never get made. Now you might see a form of this but only in a form that doesn't threaten any of the established players. I could see Samsung releasing a line of modules that will work together, the catch will only Samsung parts will work together. The component manufactures would still ship the raw components to the OEMs, and then they would add encase it in the swappable module. This would allow you to upgrade your Samsung branded processor with another Samsung branded processor. If you wanted to use parts from say HTC if they started doing the same thing, you'd have to start over and get all HTC parts thus defeating the purpose.

3) Getting past 1 and 2 are not impossible but will require significant regulation reform in the US to prevent these types of exclusivity contracts and require wireless carriers to act as common carriers with mandated connection requirements. When/if this happens it will be years from now, in addition to make all the modules work well together, someone (The FCC maybe?) would have to put out strict interoperability protocols and then enforce them. Each component would have to have it's own FCC filing which will increase the cost of going to market with new components. This is all possible, but the time to get it in place is staggering, and my prediction is if/when it is, smartphones will no longer be the main computing paradigm. These components are getting very small very fast, and wearables/implantables are right around the corner. So unless you want to assemble the component modules of your smart contact lens with a microscope, the smartphone is likely the last chance for modular computing in the macro sense and due to the lack of regulation on US capitalism it will never reach its full potential.

Driverless Cars...

RE:Google's Trillion-Dollar Driverless Car -- Part 2: The Ripple Effects

In part 2 of Chunka Mui's series on how the driverless car will shape society he expounds on how many business models will be disrupted in the near future by the technology. While he also predicts some opportunities that will emerge, reading the first 2/3 of the article left me deeply concerned.

While i have considered many of the implications of an economy of driverless cars in the past, Mui's assembly is a much bigger and more far reaching set. I agree with most all of the claims but what has me concerned is not "what" will happen but how arduous the transition will be. If the past 100 years and even the next 5-10 years of disruption in the information system economy is any barometer, the industries that stand to loose in Mui's predicted disruptions will look to block the transition in every way they can. Instead of looking to capitalize on the opportunities this new and revolutionary technology presents, they will lobby heavily against laws that will allow driverless cars to do more.

There have been laws past so far allowing driverless cars in some states. I believe that this will become a harder battle in other states as the implications that Mui has outlined become more and more real. There will likely become a huge argument over who is to blame when a car that is driving its self is responsible for an accident. Just because i hasn't happened doesn't mean it won't. This responsibilty question is almost trivial in that the frequency of this happening will be in the six sigma range, but the fact that it can happen will be fuel for the opposing argument, especially from insurance companies.

To build on the that thought, the implications of having a vehicle drive it's self has significant implications when you apply it to shipping. If large trucks could be automated, why have a driver in the truck at all? This adds one more group that stands to loose, truck drivers. The labor unions will lobby heavily to make it illegal to operate a vehicle without a capable driver in the vehicle. If states go different ways on this matter i can image trucks going stopping at state borders just to pick up a driver so as to operate legally in the next state. How do you enforce this? What happens when a vehicle get's pulled over and there is no person in it? I can see the trucking company getting fined and having to send out a driver to move it. All to satisfy a law that was put in place to keep a dying profession alive. Small indications of this are already starting to crop up in the case of NYC banning Uber to keep the taxi's in business.

Another thought I've had relates to the transition and the interaction between automated and non-automated vehicles. How long will they be allowed to co-exist on the same road. The benefits Mui highlights about lighting and road construction are great but only apply if "ALL" the traffic is automated. The answer is certain roads will have to become "driverless only" roads. The opposition will argue against tax dollars being put toward infrastructure that can't be used by all. This is a ridiculousness argument but it will be made by a subset of the population that will refuse to use driverless cars. There is still a subset of the population that even refuses to use cars.

To be clear I want driverless cars right now. I don't ever want to drive a car ever again. The benefits Mui has presented so far are real and can change so much. I am just very concerned about how we are going to get there. The linear thinking that has been so pervasive in industry as of recent does not lend it's self to such step changes in technology. The industries that will be threatened by the commercialization of driverless cars have a lot of money and a lot of friends in government. I don't think they have really seen the writing on the wall but they will and when they do, things will come to a screeching halt.