Cell Phone Adoption in
Germany and the United States
Why cell phones?
1. Exciting technology
2. Based on observations while traveling
3. Findings while testing at Microsoft
4. Desire for better technology and service
5. Attempt to understand U.S. market
Are there differences in cell phone adoption
between Germany and the United States?
Does adoption in the U.S. lag behind Germany?
What factors have caused differences in cell
phone adoption in Germany and the U.S.?
What has been the role of government
regulations in the in the adoption process?
Adoption: The introduction and incorporation
of cellular phone technologies and services.
Government Regulations: Rules or laws
imposed on the market regulating the
development, distribution, or numbers of
technologies and services available.
Past, Present, Future
1. How did cellular phone technology develop?
Introduction of key milestones in cell phone
development in Europe and the United States
2. What is the shape of the modern market?
Look at current technologies and standards
3. Where is cell phone adoption going?
Outlook for future technological developments
Could the U.S. have led global development of
cell phone technology?
1946 AT&T was developing cell phone technology and
requested more bandwidth allocation from FCC (denied)
AT&T stopped experimenting with the technology
First ‘official’ cell phone call in the United States by Dr.
Martin Cooper, an employee at Motorola who, in 1973,
placed a phone call to AT&T Bell Labs while walking the
streets of New York.
1971 – 1980s FCC starts de-regulating cell phone services
- December 1950 Sture Lauhren makes first cell phone call
- 1969 Nordic Mobile Telephone Group established
- 1982 Europeans establish ‘Group Special Mobile’ to develop GSM
(GSM network = Global System for Mobile Communications. Today mostly
used in Asia and Europe)
- 1992 All major European operators start commercial use of GSM
- 1998 European Parliament sets out rules for the implementation
of UMTS (Universal Mobile Telecommunications System )
- Industry and governments are currently working on the
implementation of 3G (Third Generation cell phone technologies)
- U.S. deregulation of cell phone providers and
technologies by FCC
Many different frequencies and networks used
– no guidelines on standards
Phone service/coverage was not very good
– prices too high
- Early EU regulation of service providers and
standardization both in Europe and worldwide
Better phone service, better prices
State of the Market
How have past decisions
affected cell phone adoption today?
- Was deregulation effective in the U.S.?
What choices are available in the U.S. market?
Number of cell phone carriers in the U.S.: 5
(Nextel, Sprint, T-Mobile, AT&T Wireless/Cingular,
and Verizon Wireless)
Number of cell phone manufacturers in the U.S.: 10
(Audiovox, Siemens, Nokia, Sanyo, Samsung, Siemens-Ericsson,
Kyocera, LG, PalmOne, and Motorola)
State of the Market Cont.
Number of cell phone carriers in Germany: 12
(T-Mobile Deutschland GmbH, o2 Gemany GmbH & Co. OHG,
mobilcom AG, E-Plus Service Gmbh, Drilisch Alphatel AG, debitel
AG, Talkline GmbH, Tangens GmbH, Tschibo Mobilfunk GmbH &
Co. KG, Telco Services GmbH, Victorvox AG and Vodafone D2
Number of cell phone manufacturers in Germany: 30
(Audiovox, Siemens, Nokia, Sanyo, Samsung, Siemens-Ericsson,
Kyocera, LG, PalmOne, Motorola, AEG, Blaupunkt, Panasonic,
Sendo, Trium Mitsubishi, Alcatel, Bosh, LGE, NEC, Philips, Sharp,
Tchibo, Xelibri, Bang & Olufsen, Dancall, Maxon, Sagem, TelMe,
Benefon, Hagenuk, o2 Germany, Sony, Toshiba, HTC)
Who actually uses cell phones? For what purpose?
“Cell phones are less common in the United States-while
widely available, market penetration is lower than
elsewhere in the developed world.”
57.6 Million cell phone users (72 % of the population)
150 Million cell phone users (66 % of the population)
Cell phones were initially intended for use in cars
Today cell phones are used by everyone
Teenagers and Baby Boomers the largest target
Cell phone adoption rate now highest among
African Americans in the U.S.
Changes in Usage
From being connected to the business world
to being connected to everyone…
- Phones in the U.S. are mainly used for calling
– secondary purposes are checking email and
- In Germany cell phones are a status symbol
– mostly used for SMS, internet, email, and
Always connected, always available
Cell phones allow people to be reached at all times
The fading division between the workplace and home
Directly connect to a particular person
Disappearing landline service
The dangers of preoccupation (e.g. calling and driving)
Future of the Market
Cell phone companies in Europe and Asia
have long enjoyed a profitable market.
- As the target consumer age gets younger industry will
increasingly explore advertising through phones
- Phones will become more multi-functional devices
- no longer limited to calls, internet, note taking, etc.
- may be used for paying in stores and at vending machines
- may store personal data, such as health information
Problems and Challenges
With new inventions come new challenges…
Privacy is compromised as phones store more data.
How can advertising be controlled?
Will the landline phone industry collapse?
Are there health problems associated with cellular
U.S. Market Outlook
Will the U.S. cell phone industry adopt
international cell phone standards (e.g. 3G)?
This would allow real international roaming
More customer choices in manufacturers
An increase in the number of service providers
Government regulations shaped the U.S. and German markets
Responsible for the number of providers and manufacturers
U.S. deregulation fragmented the technology and service
and reduced interoperability
- low user interest, low interchangeability, and high prices
EU: All manufacturers work under one standard and can
focus on developing new technologies
Service providers face higher competition, resulting in lower
prices and better service
May explain early adoption of cell phones in Germany
Will Americans demand more from the cell
Do you want to have better phones and
Will the U.S. industry adopt 3G
(Third Generation network standard)?