What Drives Innovation in Mobile Technology?

Published on February 26, 2010

Mobile technology may be developing faster in other countries than in the United States, but it may be due to a lack of incentives since the United States already has sufficient substitutes.

Raymond Reinhardt, ’09, cofounder and CEO of Cuddlephish, moderated a panel discussion that examined the topic at the TechVision 2010 conference February 26 at Harper Center. The event was hosted by the student-led High-Tech Group.

In Japan, mobile phone users can use their devices to pay for trains and vending machine items, said Todd Roesler, ’05, manager of hardware engineering for Research in Motion. Such monetary transactions are “part of the whole infrastructure” of mobile device use in that country, Roesler said. He said the United States has a lot to do to get to that point.

Eliot Dam, director of location technology for NAVTEQ, said, “There aren’t that many incentives yet for the entire ecosystem” to develop in such a way. “Think of what the benefit is: The only difference is, instead of whipping out your credit card and swiping it, you’re now taking your phone and still swiping it.”

Being part of a Nokia-acquired company, he said an eye-opener for him was how mobile devices function in emerging markets, where Nokia has a large share.

Nokia, working with a company called Obopay, is launching the trial of Nokia Money, a transaction clearinghouse, in India. One reason behind it: “The number of underbanked and unbanked people in the world is huge. These people don’t have any other way to transact, other than just having cash, and maybe that’s even dangerous.”

Through the new program individuals will be able to transact with other individuals via mobile devices. This “creates a huge step-function in terms of value that we’re delivering,” Dam said. “Developers in countries like that will start to innovate, and they’ll help us find the value that will actually create the opportunities to move things forward in primary markets like the United States.”

Reinhardt pointed out that a mobile device system called M-Pesa began operating in Kenya. This is a Safaricom operation in which mobile users transfer money to each other using SMS (short message service).

“It’s interesting to note that a lot of the innovation in the world is not occurring in the United States. It’s predating us a little bit,” he said.

He added that closer to home, Square is a new way to make mobile transactions. A peripheral device, shaped like a square, can be plugged into an audio port, and a credit card may be swiped through it. “It’s a venture that is still designing prototypes, but it’s a promising Silicon Valley solution to mobile point-of-sale,” Reinhardt said.

Reinhardt asked whether Chicago can become an epicenter for mobile technology, given a recent statement in the Wall Street Journal by Motorola co-CEO Sanjay Jha that the company’s mobile phone business might be better off moving to California. Motorola is headquartered in Schaumburg, Illinois.

“I don’t think there’s any doubt that this area will sustain the future of mobile communications,” said Raymond Dikun, vice president of products at Research in Motion. The region boasts “fantastic talent. You can really see the passion for new development of solutions here.”

Jay Malin, ’03, managing director and cofounder, AGENT511, said that while Motorola has been the powerhouse for hardware, tremendous potential exists from a software perspective as well. “We should try to identify the niches that we have here in the Chicago area and utilize them,” so that industry verticals like advertising and marketing can be taken advantage of by entrepreneurs creating new technology companies.

Google’s Chicago office does sales but also engineering. Previously, a disconnect existed within product creation, an attitude of “oh, by the way, what are you doing on mobile?” said Satyajeet Salgar, ’07, Google product manager. “Today, from day one, every product [creator] is thinking, ‘How can our mobile version of this make my apps better?’ so that effectively means it’s not so much mobile, it’s software.”

Ajay Jain, a student in the Evening MBA Program, said he found it interesting that consumers within the United States and other countries employ “drastically different technologies. The winds of technology can fuel two completely different business models in two different parts of the world.”

—Mary Sue Penn

Read Janet Pucino’s views on cloud computing and the entertainment industry in her keynote speech.