For the first time in a long time, two American companies are driving innovation and leading one of the planet's most important industries. Dan Frommer filed this report, which also ran in the Fall/Winter 2012 issue of SAY Magazine.
The first half of 2012, I flew more than 60,000 miles, searching for interesting tech stories for ReadWriteWeb, including stops in Korea, Japan, Iceland, Spain, Germany and Silicon Valley. The biggest meta-trend I've observed: How two U.S. companies, Apple and Google, stand tall as the world's most influential mobile companies, leading one of the planet's most important industries.
It wasn't always this way. Now five years after the first iPhone debuted and almost four years since Android launched, it is easy to forget that America was once a mobile-phone backwater.
The iPhone-ification of Japan
One trend I've enjoyed watching over the past several years is how Japan — perhaps the most interesting mobile-phone–accessorizing nation — has embraced the iPhone.
In December 2007, eight months before the iPhone launched in Japan, but shortly after it had gone on sale in the U.S., I spent a week wandering around Tokyo, zipping in and out of electronics stores. It was a fascinating experience. Everything felt so foreign, because it was. In the States, it already seemed obvious that a full-touchscreen smartphone was the device of the future. But in Japan, it felt like the opposite.
The most sophisticated phones were big, long flip phones without touchscreens. Gadget department stores had huge sections of charms that you could buy to attach to a tiny loop on your phone: Cute little animals, cartoon characters, food items, screen wipers, all sorts of stuff. (On a later visit in 2010, even Japanese Starbucks stores sold their own cellphone charms, including a tiny plastic coffee cup.)
Handsets competed mostly based on physical design, color and features such as built-in mobile TV support. One new device, the "KDDI InfoBar 2," looked more like an art project than a phone, with colorful buttons taking up much of the phone's face. Having already fallen in love with the iPhone, this seemed strange to me.
In many other ways, the Japanese were far ahead of the world: NTT DoCoMo, the dominant Japanese operator, had long established its mobile Internet services, and a universal mobile payments system meant you could pay for a subway ride or can of coffee with a chip in your phone. Meanwhile, most Americans were still learning how to send text messages.
Fast forward to May 2012, when I spent another week in Japan, again spending an unhealthy amount of time in electronics stores. I knew the iPhone had become popular in Japan and that local cellphone manufacturers had embraced Android. But I was shocked by the extent.
Those long aisles of cellphone charms are now dominated by a dizzying selection of iPhone accessories and cases, ranging from the practical to the absurd.
At one store, a $50 iPhone case looked exactly like a fried tonkatsu cutlet, the breadcrumb texture down to an incredible detail. At another: a case with a rubber hand on the back, so you could "hold hands" while talking on the phone. (Creepy.) I saw an entirely new selection of charms that plug into the iPhone's headphone jack, including tiny pieces of sushi, a Tokyo commuter train car and Kapibara-san, my favorite Japanese fictional character. And an elaborate, $40 gadget in the shape of a baseball stadium — slip your iPhone into the "AppBaseball" plastic slot — designed as an analog controller for a baseball game from the App Store.
There weren't as many toys specifically for Android because there are literally thousands of different Android devices and only a few that sell in enough volume to justify their own custom accessories. But all the big Japanese phone makers had switched to Android in my absence — the homemade, custom stuff was all but gone.
The Rise of Mobile Software
What happened? Why did two American companies grow to dominate the mobile world? In a word: software.
If you watched the rise of Japanese electronics companies such as Sony and Panasonic in the 80s and 90s, most of their skill was in hardware design, engineering and manufacturing. They were amazing at making things tiny, with superb industrial design. The impossibly thin Sony Discman I bought in Hong Kong in 1998 is still one of my favorite gadgets of all time. Hardware engineering and distribution were the most important traits of early mobile companies, and that's how Nokia, Samsung, LG, Sony Ericsson, Kyocera, Sharp and even U.S.-based Motorola moved the needle. For software, they either outsourced — thus, Symbian's early smartphone OS dominance — or made their own. But it was mostly junk, and that was okay because screens were small and everything was very simple.
Then in January 2007, Apple changed everything with the iPhone. Sure, its industrial design was slick and its touchscreen looked different than other phones on the market. But its biggest revolution was software. The iPhone's OS was as strong as a computer's, and the apps it could run were super-advanced. Apple's iTunes sync software was miles better than anything Nokia, RIM or any rival offered. When the iPhone App Store launched in 2008, it became the gold standard for mobile software.
Google's Android project followed. It was never as good as the iPhone software, but it didn't matter because companies like Samsung and HTC couldn't get their hands on Apple's OS. For many purposes, Android was good enough. And its easy (and free) licensing meant anyone could use it for almost anything. Samsung, most notably, has found success with its Android-powered Galaxy lineup, and almost every mobile company around the world has bet itself on Google. (Nokia, now in rebuilding mode, has also attached itself to a U.S.-based platform, the Microsoft Windows Phone.)
Back in the U.S.A.
A decade ago, a tour of the world's mobile-phone capitals might have started in Finland, home of Nokia, stopped in London to visit Sony Ericsson (itself a joint venture between a Swedish telecom giant and Japan's gadget leader) to Korea for Samsung and LG, perhaps to Germany for Siemens, wrapping up at Motorola — the company that invented the cellphone — in the Chicago suburbs. Of these, Samsung is now the only one still profitably making mobile phones, and its strengths are still mostly hardware and distribution — it's hardly a software-platform company.
Today, the most important mobile corridor in the world is the one in Silicon Valley, California — the nine-mile drive between Google's headquarters in Mountain View and Apple's in Cupertino. Until the next revolution, at least.