Mobile Web: History of the Mobile Internet, Part 5

This six-part blog series will retrace the evolution of the mobile Internet in an attempt to understand its complicated history. Part 1 touches on the history of the PC Internet. Part 2 covers AT&T Pocketnet, the First Mobile Internet Phone. Part 3 is about NTTDOCOMO’s i-mode. Part 4 discusses the growth of the mobile Internet in the early 2000s .

APPLE SPARKS THE LONG-AWAITED MOBILE INTERNET

In June 2007, everything changed. Overnight, the world woke up to a new phone that was radically different than its predecessors. It was the Apple iPhone, which will be remembered as the device that finally lived up to the mobile-Internet hype. But it could have been very different. In 2006, AT&T was working on a secret project with Apple, dubbed “Project Fruit.” The project, done in typical Apple secrecy where few people were aware of the project within both companies, was for Apple to become a Mobile Virtual Network Operator, or MNVO. In the middle of the decade, MVNOs were the rage. Although Virgin looked like a successful MVNO, many other notable brands, such as Disney and ESPN, were having a difficult time with their MVNO offerings.  ESPN was shut down that year.  Apple took notice of the MVNO failures and changed its plans. It would not become a virtual operator, piggybacking on someone else’s network, but instead, it would focus on selling devices. Can you imagine how different it would be if Apple was an MVNO? By 2007, Apple stuck to its core business and put its focus on the launch of the iPhone in the U.S., with an exclusive deal with its first carrier, AT&T.

Until the launch of the iPhone, critics stated that the mobile Internet needed faster networks and cheaper data plans to succeed. They claimed that the mobile Internet wouldn’t go mainstream until this happened. Apple’s iPhone proved them wrong. The first iPhone launched using AT&T’s EDGE network (a 2.5G technology), despite the fact that AT&T had already deployed a 3G network. And the phone required a $30 per month unlimited data plan, when other phones on AT&T were only $20 per month for unlimited data (the price of the plan actually increased, not decreased). Therefore, it wasn’t the speed of the network or the price points that had been the problem for slower-than-hoped-for mobile Internet growth before the iPhone, it was that the market lacked a device that had the experience that users expected when they surfed the mobile Internet.

Apple’s industrial design team hit the mark once again with the new iPhone. Mobile Internet adoption shot up, putting an immediate strain on AT&T’s network. AT&T’s wireless network utilization graph looks like a hockey stick during the last decade – the period from 2000 through 2007 shows slow, incremental growth in data usage, and then starts its hyper-growth phase beginning in 2007 – the inflection point exactly matching the introduction of the iPhone.

While the iPhone’s strength is its focus on the customer user-experience, it is also a model program for its focus on developers. This is something that Apple’s competitors lacked. Unlike other device manufacturers, Apple had a long history with its operating system for its desktop computers and a strong developer base to start with for mobile-app creation. This background gave Apple a head start with the iPhone. Device manufacturers like Samsung, LG, HTC and others quickly rushed in with iPhone copycats, but they were not as successful because they lacked a strong developer base.

This is why the iPhone is at the center of the inflection point for most of the world’s mobile networks. Apple has a laser-like focus on the customer experience and the developers who build the rich applications that power the iPhone. Before 2007, standards were driven primarily from vendors who sold network hardware into wireless carriers. Thus, these standards were optimized for carriers, not developers. The Apple model turned this around and focused on users and developers. For developers, this meant that mobile Internet development would finally be in line with PC Web development – HTML.

NEXT WEEK: Part 6, “The State of the Mobile Internet Today”

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