Very bad news came out about two big mobile companies yesterday: BlackBerry maker RIM, which can't seem to get its act together to release new phones, and potential new 4G network LightSquared, whose technology seems to confuse GPS receivers for miles around.
It's very sad to watch RIM melt down, but perhaps the company's complex corporate structure—two CEOs, three COOs—isn't conducive to nimble shifts. RIM is going through a painful transition right now, one that no other mobile OS provider has so far succeeded in doing. In trying to shift from a 1990s-era OS to a technology for the 2010s, Palm folded and got absorbed by HP, which so far hasn't released a successful product with the new OS. (We'll see how the TouchPad does.) Nokia has completely changed into a maker of Windows Phones. Microsoft is pumping money into Windows Phone 7, which right now has tiny market share.
Any of those contenders may rise out of the flames forged anew, of course, but they haven't done so yet.
So add RIM to the mix. They could go the Palm way of utter collapse, the Nokia way of transformation and shrinkage, or the Microsoft way, where their revenue from enterprise clients keeps them alive long enough for new QNX-powered phones to appear and save the company.
But what if they don't? Then we're definitely heading for a smartphone OS duopoly, where Google's Android OS and Apple's iOS dominate the marketplace. With RIM out of the picture—that's just assuming RIM is out of the picture—Microsoft's Windows Phone would probably adopt a weak third position, buoyed on Nokia's marketing strength outside the US. I'd like to see Windows Phone succeed, just because I think it's easy to use and full of good ideas. (I'd like to see webOS succeed too, but I'm not that much of a Pollyanna.)
This consolidation is sad, but it isn't necessarily bad. Mobile software developers, who are the true engines of smartphone innovation, have had too many targets to aim at. And there's enough competition and diversity within the Android world to keep a mobile OS triumvirate from looking stodgy, as long as Google doesn't clamp down too hard. In this case, Android's "fragmentation"—all those manufacturer versions of the OS—can become a lab where unexpected mobile OS innovation develops in the future.
But then we get to LightSquared.
Everyone in the mobile industry agrees that we need more spectrum to satisfy Americans' hunger for wireless broadband. The FCC has pledged to find it, but almost all the spectrum out there is spoken for. (You can see the problem on this convenient map here.) Agreeing to let LightSquared, an existing spectrum owner, use its airwaves for a new 4G LTE network was an easy way around a thorny political problem. Otherwise the FCC will have to take on ham radio operators, broadcasters, or the military, wresting away spectrum they already use. This Fierce Wireless column gives a very good perspective on the challenge of finding new spectrum.
The FCC gave LightSquared, a satellite communications company, provisional permission to start a land-based cell-phone network on its former satellite band. We need more 4G competitors. More 4G competitors might even help to alleviate the higher prices, more restrictive contracts, and lack of choice that will probably result from the AT&T/T-Mobile merger.
The FCC has allowed willy-nilly wireless carrier consolidation over the past few years, and it may allow AT&T to absorb T-Mobile and turn into a vast supercarrier. And while third-party developers can drive a ton of innovation across relatively few OSes, carriers' strict control of their handset and software lineups means that the fewer carriers we have, the less innovation we have.
The problem is, apparently LightSquared's network destroys GPS for miles around. Solutions will be complicated and expensive. Killing LightSquared will also weaken Sprint, Cricket, and other smaller carriers who have been looking to make deals to rent its network.
Having fewer mobile OSes—as long as one is the rich stew of Android—won't necessarily hurt U.S. consumers. But having fewer wireless carriers will.
The FCC needs to get serious about finding solutions so that we don't wake up in a few years and have everything owned by AT&T and Verizon, with a strictly limited handset lineup, mandated bloatware, high prices, and a lackluster approach to innovation in an uncompetitive marketplace. Destroying GPS isn't the answer. The FCC will have to take on some of those existing spectrum holders, and excluding the two big gorillas from new spectrum auctions for a while may be a good idea as well.