Standards in Fast Changing Industries

This is a delightful sentence:

I have a T-Mobile cell phone, which uses GSM technology; it works all over the world – and in parts of New Jersey. – Paul Krugman

It’s delightful, of course, because New Jersey is the home of Bell Labs.  Paul’s posting is a short musing on the current state of play in the standards battle about cellular phone.  He’s sense is that European standards practice appears to have bested the Americian ones at this point.  Maybe so, I tend to agree.

There are lots of aspects to this story.  For example an interesting one is how American standards practices appear to give us the upper hand the computer industries standards battles.  While it is my impression that the European approachs have given them the upper hand in industries that are evolving more slowly.    Another aspect of this is an American affection for that oxymoron: multiple standards.  That tends to blind us to the winner take all nature of these things – these are standards battles and wars, not competition in the commodity market sense.

T-Mobile positioning in the US market is as a second or third tier player. The different vendors in the US have core markets which overlap less than one might expect.  T-Mobile’s focus is on down market urban customers.  Their network’s coverage is great in cities, and pretty lousy in the suburbs, and it’s useless in the country side.  You become quite aware of that if you use t-mobile’s cheapest offering, prepaid, as I do.  If you take the path of least resistance (monthly subscription/lock-in, loss leader phone, 2 year contract, screw you occasionally on overcharges) then you get access to the emerging AT&T GSM network; which has more coverage.  Though still it’s useless in rural locations.
GSM was designed with a higher population densities in mind.  In Europe those higher density venues aren’t as down market as they are in the US.

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