A Consultant's View

Prairie Trail Software, Inc. ............................................................. December 2009

New Technology Cusp?

Every time a new computer technology comes into being, it starts by being used by specialists, then by people playing games, and only later do general purpose applications show up. Each time, the new technology was derided as a "toy" by those who were working with the previous technology. For example, the operating system Unix was started as a way to play a game. Over time, each new technology reaches a "cusp" where it changes from being a fun technology into something that most people will use.

We are approaching that point with smart cell phone technology. For a long time now, cell phones have had the specialized use of just making phone calls. Quickly, games were added to them. Also, cell phone technology has been used for specialized uses such as POS terminals. However cell phones have not had a standardized operating system nor were they easy for other people to put their own applications onto. That is changing with both the Apple iPhone and the new Droid phone. Both use standard operating systems and languages. Apple has greatly benefited from all the people putting their own applications on the iPhone.

What has kept the iPhone from being used as a general purpose device has been the lack of input. There are now rumors that Apple is changing that (specifically, there is a rumor that Apple is putting a card reader on it to run credit card transactions). The Droid has both USB and Bluetooth that while officially they don't support input, there are lots of people hacking that device to provide full keyboards and interfaces to many other devices.

Where this is going is that we will soon have a fairly low cost device that can be used in retail and industrial applications. Certainly, mobile data collection is going to be made a lot easier.

The cost of entry for new ideas in the retail space has been higher than many people have wanted mainly due to high software costs for a low volume of merchants. Since there are lots of people programming these devices, the cost of trying a new idea is going to be a lot lower than with the current equipment.

This won't affect the banks nor the terminal manufacturers who sell mostly to banks. Instead, it will be an opportunity for many entrepreneurs to jump into the services market with new ideas based on a low total cost of entry.