Happy Birthday Cellphone!

By Stephanie Blanchard, Digital Editor — April 15, 2013

April 3, 1973. As pedestrians gape, a man walks down the streets of New York City, talking on a large, clunky yet portable phone. Weighing almost three pounds, the device is operating on radio frequencies and has about twenty minutes left before the battery dies.


The man was Martin Cooper, Vice President, Communications Systems, Motorola. He carried the DynaTAC, the first mobile device that changed the enterprise, and pretty much our way of living. In its original press release, Motorola rightfully predicted that portable phones would be used by virtually everyone, “anyone who needs or wants telephone communications in areas where conventional telephones are unavailable.”

Although not immediate, a new era had begun with that one call, which Cooper used to jab at Bell Labs, Motorola’s competitor. It was more than a decade and $100 million later before Motorola debuted the first commercial cell phone. The DynaTac 8000X, weighing “only 30 ounces,” went on sale in 1983 for $3,995 (imagine that happening today.)

But what’s a cellular phone without a hot spot? After licenses were granted by the FCC, networks began appearing in dozens of major cities, from Seattle and Dallas to Boston and Phoenix. The first service, provided by Ameritech Mobile Communications, became available in October 1983, in Chicago. Perhaps it was no surprise that with a combination of expensive hardware and limited connection areas, only 2,500 handsets were in use by the end of that year.

Business Anywhere
The DynaTac was eventually popularized by the iconic Gordon Gekko in Oliver Stone’s Wall Street (1987). Companies didn’t wait for the film to hit the theaters, however, to pilot the new technology. Nor did only C-suite executives receive new toys. Enterprises slowly began purchasing cellular phones so employees in the field could stay in contact, from construction and mining, to real estate and sales.

Some business owners suddenly couldn’t wait to hop in the car and make calls from the road, to get a leg up on competitors. Other early adopters were rescue crews and beat reporters. Still, only 100,000 cell phones were in service by the start of 1985.

As more manufacturers jumped into the fray, the cost of cell phones started to decrease from its original exorbitant asking price. Although hardware was becoming somewhat more affordable, service plans were nowhere near cheap, costing as much as $200 a month just for basic service in some areas. Basic service was just that: a dial tone. To attract more subscribers, carriers began offering call forwarding, call waiting voice mail services, and roaming agreements.

By the end of 1989, there were 2.5 million wireless subscribers.

Work Life Balance
Originally advertised as a way of employees to keep in touch with the office and make the workday more productive, the shift to marketing the cell phone for both work and home life started in 1989, the same year Motorola launched the MicroTac. Still over eight ounces, it was a much smaller, lighter device than the original brick from five years before.

Then, with the introduction of 2G, and a noticeable decrease in retail prices, wireless expanded. In 1993, cellular customers numbered 14 million, which shot up to 74 million by 1997, according to the CTIA. Only 18% used their wireless phones primarily for business, said a survey by the PCIA, while 17% split phone use between work and personal.

In 1998, Motorola, now lagging behind other manufactures for market share, started selling the StarTAC which introduced the clamshell design. Instead of three pounds, the new phone weighed just over three ounces, and could fit into a pocket or clip to a belt, what some termed “wearable technology.”

It also had SMS capabilities, and ran off a lithium-ion battery, instead of the Ni-MH commonly used. Devices flew off the shelves as more users purchased cell phones simply because they liked them.

When 3G was introduced in 2002, new users literally signed up in droves. By 2007, there were 297 million subscribers on the 3G network. Today, with 4G widely available, the number of cell phones in the U.S. exceeds the country’s population.

Before BYOD
Before 2005, the term “BYOD” stood for Bring Your Own Disk, not Bring Your Own Device, and most companies had corporate-liable programs. (As one example, the California Highway Patrol spent more than $484K on 1,231 cell phones in 2003. Employees were required to reimburse for personal calls.)

By 2004, Forrester Research estimated that large corporations had between four to six employees dedicated to managing mobile phone distribution and paying wireless bills. With the popularity of smartphones around the corner, that kind of human resource allocation was soon to be a memory.

What About the Data?
Since its inception, and for several decades after, cell phones were primarily used for voice communication. No surprise, since most phones had minimal abilities besides text messaging and networks were lowly 1G.

Internet-ready phones became available in 1999, to complement the upgraded networks, yet wireless data accounted for a mere 2% of the market just two years later, according to a study by Insight Research. As a result, cellular companies at the time were reluctant to pour additional money into the 3G upgrades, but avoiding the gamble was not an option.

Once 3G was available, data downloads multiplied along with subscribers. The combination of 3G and decrease in hardware prices triggered the wireless explosion.

Then, Apple introduced the iPhone (2007) and the App Store (2008), which were both game changers leading to the mobile landscape of today. Juniper Research predicts that by 2017, mobile data traffic will be the equivalent of almost 42 quadrillion tweets or roughly 7 billion Blu-ray movies, and Yankee Group values the mobile broadband marketplace at U.S.$1 trillion.

Mobile Enterprise Explosion
Remote employment didn’t start with the mobile device, but it was surely helped as the technology developed. Before the cell phone debuted, several million employees in the U.S. were “telecommuters.” By 1993, there were 7.6 million telecommuters, up 15% from the year before, concluded a survey by LINK Resources. That amount almost doubled by 2000.

Today, more than 60 million Americans are now operating remotely for a significant portion of their time, and according to Yankee Group, 2012 was the tipping point — a year in which the majority (54%) of those workers, for the first time, was comprised of professional workers — executives, managers and non-managerial workers as opposed to the dedicatedly mobile field, sales and delivery employees.

As smartphones evolve, and with many carriers offering so-called affordable phones and changing data pricing models, there’s no telling what the next 40 years will bring. In fact, by the end of 2013, Cisco forecasts that the number of mobile-connected devices will exceed the number of people on earth. And this year is also predicted to be the one where mobility begins to “pay off” for the enterprise.
 

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