The walled garden hasn’t died — just evolved
At 4G World, Kris Rinne, senior vice president of architecture and planning for AT&T (NYSE:T), said the growth in wireless data services has reached its “tipping point,” a term she borrowed from author Malcolm Gladwell to denote when the momentum for change reaches an unstoppable stage. Her point: The mobile data and Internet revolution is upon on us and there is nothing we can do about it anymore. So deal.
Rinne didn’t make her claims lightly. She offered charts showing that mobile data has grown by almost 5000% in the last three years at AT&T. More than 8 million smartphones are now connected to AT&T’s 3G networks, and the carrier has begun to oversee a proliferation in e-mail devices, broadband data cards, and connected laptops and netbooks. AT&T’s networks have groaned under the strain, leading the carrier to launch a major network upgrade program that will double the capacity of its existing channels, add new channels across its spectrum holdings and boost its backhaul bandwidth with fiber to the site.
Despite AT&T’s success and optimism for the future, Rinne also offered a warning. She pointed to the checkered history of AOL, which stood on top of the Internet world in the late 20th century but saw its subscriber base collapse after the advent of home broadband. The Internet industry witnessed a tipping point of its own, which foreordained the broadband revolution and the collapse of the walled garden. As AT&T rides the cusp of the mobile Internet revolution, it has to be cautious it doesn’t fall into the same traps as AOL, Rinne said. And that means being open to new and numerous applications and business models. Rinne pointed to AT&T’s growing portfolio of embedded emerging devices, smartphones and connected PCs as an example of how AT&T has discarded the notion of the walled garden — and how it’s clearly enjoying the spoils.
AT&T may have discarded the walled garden itself, but ironically the key driver to its mobile Internet success hasn’t. Apple’s (NASDAQ:AAPL) iPhone is probably the ultimate culmination of the walled garden approach in mobile — one implemented elegantly and artfully but a walled garden nonetheless, where a single entity controls the platform and access to applications. Rather than reject the walled garden, consumers are flocking to it, frolicking happily within its confines. The iPhone isn’t the only example. The success of the Amazon (NASDAQ:AMZN) Kindle was built behind high topiary walls. Every book, newspaper and magazine downloaded to the Kindle comes from the selections available offered at the Amazon store, which offers no access to hundreds of thousands of titles available across the Web from such sites as Google Books.
Rather than tearing down those walls, operators and application developers are erecting new ones. Android, Nokia (NYSE:NOK), Palm (NASDAQ:PALM) and Research In Motion (NASDAQ:RIMM) are launching centralized apps stores. What’s different is the number of variety of app stores out there. The industry is abuzz with this idea that an open and expansive mobile Internet is in our future. But today, consumers don’t want expanse; they want alcoves — nests of innovative content. Maybe as tastes evolve consumers will gravitate toward truly open devices and they’ll develop the sophistication to hunt down the content, applications and services on their own. But for now they seem content to hop between one walled garden to another, and the winners in such a world will likely be the companies that can lay out the best garden plans.
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© 2013 Penton Media Inc.
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