Innovation

George Gilder, perhaps the leading futurist of our day, predicted the rise of the Internet, the decline of television and the explosion of the smartphone. Now he’s predicting another giant step forward – an innovation potentially as consequential as the Internet itself. It is called blockchain technology, and it has begun to challenge the way we buy and sell things.

Morgan Stanley analyst Kathryn Huberty believes iPhone sales could double if Apple ends its exclusive partnership with AT&T. Huberty cites a 136 per cent increase in the iPhone’s French market share after the überpopular smartphone became available from SFR and Bouygues Telecom after initially being limited to Orange. * * * *”In the top six iPhone markets that are still exclusive,” she writes, “we believe that Apple’s market share could rise to 10 percent, on average, in a multiple carrier distribution model from 4 percent today.” The FCC shouldn’t follow the French example of prohibiting iPhone exclusivity. Appearances to the contrary, this isn’t a regulatory success story. Regulation just happened to be in the right place at the right time. Read More ›

The Economist has a great special report on mobile phone service in developing countries. For one thing, “mobile money” is transforming the lives of ordinary people in areas with poorly-developed banking systems. … a new opportunity beckons: mobile money, which allows cash to travel as quickly as a text message. Across the developing world, corner shops are where people buy vouchers to top up their calling credit. Mobile-money services allow these small retailers to act rather like bank branches. They can take your cash, and (by sending a special kind of text message) credit it to your mobile-money account. You can then transfer money (again, via text message) to other registered users, who can withdraw it by visiting their own Read More ›

Perhaps the most interesting man I met in Israel on my recent trip was Martin Gerstel. Alone on the cover of Business Week when he graduated from Stanford Business School in 1968 (as the nation’s most promising MBA student), he founded Alza Corp. with Alex Zaffaroni and built it into a major pharmaceutical devices company. It was sold in 2000 to Johnson & Johnson for $14B. In 1993, he moved to Israel, the home of his wife, and discovered a cornucopian realm of new technologies, leavened by the arrival of a million highly educated people from the former Soviet Union. He resolved on Compugen (CGEN) as the most promising. It came public as CGEN in 2000 with a valuation of Read More ›

Should antitrust enforcers be concerned about entry barriers in the search ad market? Some believe the market exhibits “network effects,” according to the New York Times. Although traditionally applied to Industrial Age industries with high fixed costs like railroads and telephone exchanges, anything now exhibits a network effect if its value increases because more people use it. Network effects are “everywhere,” according to a top former antitrust official. Coke and Pepsi drinkers, for example, “benefit from the network of their fellow consumers because Coke and Pepsi are widely available in restaurants and in vending machines,” claims Timothy J. Muris. A preexisting network of vending machines is admittedly tough for soft drink imitators to replicate. But a barrier to imitation can Read More ›

You should have been there! Telecosm was thrilling. I will list the ways, in chronological order in two or three posts over the next few days. (Below is Part 1.) 1) Lawrence Solomon, author of The Deniers, demonstrated, beyond cavil, that nearly all the relevant scientists, outside of the government echo-chambers, completely repudiate the climate panic. He concluded by pointing to evidence for a cooling trend ahead. 2) After I presented the statistics showing that most of the global economy is driven by innovation in the Telecosm–teleputers, datacenters, optical fiber, fiberspeed electronics–Steve Forbes gave a magisterial tour of the world economy. Relevant to the debates on the Gilder Telecosm Forum subscriber message board was his assertion that the Fed had Read More ›

Referring to Bret Swanson’s and George Gilder’s prediction U.S. IP traffic will reach an annual total of 1,000 exabytes, or one million million billion bytes by 2015, Ethernet inventor Robert Metcalfe foresees a terabit-per-second Ethernet, according to Telephony. Although not sure eaxctly when, Metcalfe predicts — New modulation schemes will be needed for the coming network, he said, as well as “new fiber, new lasers, new everything.” The need to replace existing technologies will create “chaos,” Metcalfe said, but also opportunity for equipment vendors.

In preparation for the “Exaflood” paper, I read the November 2007 paper by Nemertes Research — “The Internet Singularity Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web.” It is an exemplary supply-side work (low utilization rates signify inadequate bandwidth rather than lack of demand). Failure to invest in infrastructure will produce not a breakdown of the Internet but a breakdown of the innovation culture of the net that brought us YouTube et al. I recommend the paper to all as a guide to the prospects of our network processor and hollow router paradigms. It contains a number of obvious errors (dates reversed on charts (p.22), confusions between zettabits per second and petabits), and a “What me Read More ›

Driving the economy are not dollars in peoples’ pockets but the ideas in their heads. Not buying-power but incentives impel people to take risks and make efforts and investments. More dollars may even reduce peoples’ incentives to work and invent and invest. Every dollar rebated to a consumer comes from another consumer or investor. You cannot increase spending power (real income) without first increasing output. Supply creates its own demand. Demand does not increase supply except to the extent that the demand symbolizes previous productive efforts that expanded output. Democrats and wobbly Republicans are panicked by class rhetoric from lowering the top rates which most affect incentives. These top marginal rates yield all the revenue (the lower the rates the Read More ›