wpostServer: http://css.washingtonpost.com/wpost
ideas@innovations
About Dominic | About Vivek | About Emi | E-mail Us E-mail |  On Twitter Follow |  On Facebook Fan |  RSS RSS Feed
Posted at 11:01 AM ET, 10/18/2012

Is U.S. mobile innovation getting soft?


Could Softbank’s acquisition of a roughly 70-percent stake in Sprint be a sign that U.S. mobile innovation has gone soft? (AP - AP)

The U.S. has one of the world’s largest mobile markets, but does it still have the most innovative? Japan’s Softbank, which is on deck to acquire roughly 70 percent of Sprint Nextel for over $20 billion, certainly doesn’t think so. At a time when many consumers are probably okay as long as they’re holding a cool smartphone in their hands and the “4G” icon lights up on the screen (whether or not they're actually getting 4G speeds), Softbank thinks there’s a lot more that can be done to spark the next round of mobile innovation and prod the big legacy carriers.

For $20 billion, Softbank is essentially betting that it can introduce the innovative types of products and services that behemoths like AT&T or Verizon either can’t — or won’t — introduce to their customers. That means the coolest devices on the fastest networks with the most innovative services and data plans for data-hungry mobile users. In Japan, Softbank was the first to introduce iPhones to their customers when bigger, stodgier NTT DoCoMo and KDDI wouldn’t. They were also the first to bang the drum for faster, more innovative wireless networks like 4G LTE. Expect more of the same now that they’re coming to America.

That’s because, in many quarters, Softbank is viewed as Japan's equivalent of Apple — a relentless innovator with a Steve Jobs-like billionaire maverick at the helm ready to take on the big boys. Once you read any of the back stories on Softbank president Masayoshi Son — a guy who grew up dirt-poor in the slums of Japan and was branded as an outsider because of his Korean ancestry — it’s almost impossible not to see the Softbank-Sprint deal as evidence that the U.S. mobile market is headed for a major shakeup. Masayoshi Son is already on record for calling network speeds in America "unbearable." This is a guy who bets big, and plays to win. Indeed, The Wall Street Journal’s Kenneth Maxwell wrote that this was the “biggest, boldest overseas deal ever by a Japanese company.”


Masayoshi Son, chairman and chief executive officer of Softbank Corp., left, speaks as Dan Hesse, president and chief executive officer of Sprint Nextel Corp., listens during a news conference in Tokyo, Japan, on Monday, Oct. 15, 2012. (Kiyoshi Ota - BLOOMBERG)

If you buy into the whole domino theory of corporate acquisitions (where one deal rapidly forces competitors into similar types of deals), then the whole Softbank-Sprint deal could unleash a round of wireless deal making, the likes of which we’ve never seen before. The Wall Street Journal’s Japan Realtime blog has outlined a massive chain reaction scenario of mobile consolidation deals, in which Softbank buys Sprint Nextel (done), Sprint Nextel takes over Clearwire (done), T-Mobile completes its merger with MetroPCS, Sprint buys T-Mobile, AT&T buys up Leap, and then one of the big three gobbles up Dish Network.

Compare these deals to the Google-Motorola deal last year, and you can see the fundamental way that Softbank could change the mobile innovation landscape. Whereas the Google deal was all about the device and getting access to those Motorola handsets, these deals are all about the spectrum. He who has the fastest networks wins. Forget 3G, it’s time to focus on 4G, in all of its various permutations. Which, come to think of it, may just be the reason why those rumors about Apple building out its own wireless network continue to persist.

At a time when it’s too easy to think of U.S. mobile innovation in terms of handsets and devices (Hey, we’re going to support the new iPad mini, so we must be innovative, right?), Softbank is changing the terms of the debate to focus not only on the coolest devices, but also on who runs the fastest networks. It is these networks that are needed to support a groundswell of new data-plan activity from tablets and other digital devices. American mobile innovation may be getting soft but that may end up being a good thing for consumers.

Read more news and ideas on Innovations:

‘Iron Man’-style exoskeleton could help in space and here on Earth

Faster than sound

Vivek Wadhwa | The clueless moment

By  |  11:01 AM ET, 10/18/2012

Categories:  Dominic Basulto, Business, Technology

 
Read what others are saying
     

    © 2011 The Washington Post Company