How To Make a Dumb Phone Seem Smarter

How To Make a Dumb Phone Seem Smarter

In most of the world, mobile phones are pretty dumb. Eighty-two per cent of the planet’s nearly seven billion mobile phones operate on what’s known as a 2G network, meaning connections to the Internet are so slow it’s difficult to display TV programs, movies, or music. (They also often can’t snap pictures, search the Web, send e-mail, shop, play games, take school tests, or pay bills.) What they can do is make phone calls and send and receive short bursts of text, usually on prepaid cards whose cost can be measured in pennies. India, for instance, has nine hundred million mobile customers, but only ten per cent have smart phones. That percentage holds true in China, and dips even lower in Africa and South America.Enter Vuclip. The technology was invented by two foreign-born, but American-educated, engineers based in Silicon Valley: Nickhil Jakatdar and Zhigang Chen. The technology they crafted allows Vuclip to deliver crisp, non-jerky video or audio over congested mobile networks and onto dumb-phone screens, assuring that the video on these screens is roughly comparable to those on a smart phone. Vuclip’s software breaks a video or audio file into chunks of about fifteen seconds and streams them over the mobile network, a chunk at a time. As it is readied to be streamed, a transcoding technology translates the chunks to match the quality level of the network, slowing down the stream for more congested networks. In the final step, a Vuclip algorithm assures that the chunks are seamlessly connected, whether the network is slow or fast. Vuclip has raised thirty-five million dollars from three Valley V.C.’s: N.E.A., Jafco Ventures, and SingTel Innov8. Vuclip sees itself as a neutral Switzerland, working with no single telephone company, headset maker, or content producer exclusively. Incorporated five years ago, today Vuclip claims forty-five million customers, mostly in the developing world. Jakatdar, the C.E.O., expects this customer base to quadruple in two years, and to reach seven hundred million subscribers by 2017. He concedes that the company is still investing in its technology and growth, and does not yet generate a profit. It employs several pricing models. “The typical data consumer in India,” Jakatdar says, pays the telephone company two dollars a month for two gigabytes of video, audio, and text data; those who consume less pay about two cents per day, through prepaid cards or their phone company; and some consumers are offered free content–“until Vuclip gets the next opportunity to up-sell them” some new “premium content.” The technology has immense promise. It can democratize information and content by extending the reach of the Internet deeper into the developing world. People who couldn’t afford a five- or eight-hundred-dollar smart phone, or who reside in countries with primitive Internet connections, would suddenly have access to YouTube and other video or audio content at affordable rates. The technology opens business and health opportunities in the developing world, as I explored in a 2011 piece on Mo Ibrahim, the entrepreneur who constructed the first mobile network in Africa. It also opens opportunities for online education in countries where expensive textbooks are replaced by mobile devices. In February, according to Jakatdar, his company introduced an education portal, Vuclipedu, featuring “education videos for K-12 and higher education and includes content from the Khan Academy and M.I.T.” Citing recent studies, he says, “in developing countries, one hundred and eighty million children will be able to stay in school between 2013 and 2017 due to mobile education.” Vuclip does face threats. Since the U.S. and Western Europe are mature markets where rocket-like mobile-phone growth has levelled off and smart phones dominate, Vuclip’s success depends on poorer citizens of the world being able to afford the service. If Jakatdar’s prediction is correct, and a spurt of capital investment in the developing world produces abundant smart phones, then the question becomes about the networks themselves: if the wireless networks can’t support the wave of smart phones, Jakatdar says, Vuclip’s “value proposition gets even stronger.” But if the networks keep pace with the hardware–and if companies like Samsung succeed in selling new versions of smart phones for less than a hundred dollars—Vuclip could become an interim technology steamrollered by both technological advances and cheap prices. And while Jakatdar does not spot a competitive technology on the horizon, he knows that digital giants like Google, Apple, or Samsung have the deep pockets to invest in a rival technology–or to swallow Vuclip by acquiring it. Vuclip’s future may be unclear, but its technological breakthrough is another reminder that our digital future will be dominated by mobile. Wireless devices outsell P.C.s and laptops. And now dumb phones are becoming smart.