Vanu Envisions the Network-Agnostic Cell Phone: Apple, Take Note

| About: Apple Inc. (AAPL)
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By Carl Howe

I had planned to write about Vanu, the creator of software-programmable radios, last week, but postponed it because of workload and other more pressing news. Well, I'm paying the price for procrastination this week because the Sunday New York Times ran their own article in the business section titled, Software That Fills a Cellphone Gap. For those of you not familiar with Vanu's product, it's a software/hardware combination that allows a single radio to speak all forms of cell phone alphabet soup protocols, ranging from GSM to CDMA to HSPDA. And yes, that means a single cell phone could work on both ATT and Verizon networks, eliminating the need for consumers to buy new phones when switching carriers.

My take on this technology is that it is important because it eliminates a lot of wasteful infrastructure investments and cell phone recycling just to please carrier business models. But I also believe that most carriers will fight it tooth and nail. Why? Because carriers want consumers locked into their networks and their technology. Allowing consumers to switch among networks would be, as they say in business, bad for business.

And then there's the other challenge brought up by the first paragraph of the New York Times article:

Vanu Bose is the son of a fabled engineer, but he garnered no mercy when he presented his big idea at a technical conference in 1996. Mr. Bose’s graduate work at M.I.T. involved using software to handle the radio function in a cellular phone. He remembers that after he successfully demonstrated his technology, an audience member stood up and dismissed it with: “Congratulations! You’ve just invented the world’s most expensive cellphone.”

But despite these issues, one company should be looking very carefully at Vanu's technology. That company is Apple (NASDAQ:AAPL).

Apple, after all, wants to make one device that works with many carriers. And its interest isn't limited to just GSM and CDMA -- it would also like a single iPhone model to be able to work in Japan, which uses another set of standards. And wouldn't it be great if a single hardware platform could operate on EDGE, 3G, and 4G networks?

Further, Apple's history is full of examples when it embraced software-driven functions when the rest of the PC world was obsessed with cost. Apple's Macintosh pioneered the processor-managed bit-mapped display when the rest of the PC world was fussing with monochrome and EGA adapters. It was also the first company (and one can argue still is the only computer company) that had plug-and-play hardware, because it embraced a general-purpose model for hardware peripherals instead of special-casing every single driver. It understands that the cost of servicing and maintaining lots of special purpose hardware can dwarf the costs of deploying a general purpose system that costs more initially, but can easily be upgraded over time.

So imagine an iPhone 5.0 circa 2011 that used Vanu's technology sold by Apple. It works on any cell network world-wide, as well as work as a wireless home phone and an IP/WiFi phone. Contrary to Apple's initial forays into the cell phone business, Apple now has enough mobile phone market presence to drop its exclusive carrier agreements and to sell its iPhone as a device that sets consumers free of carrier lock-in. And the price for that freedom? Consumers actually pay for their phones instead of expecting to get them for free from their carriers, something Apple pioneered with iPhone 1.0.

Soft radios and true world-wide phones are a great idea in general, and an amazingly great idea for Apple. And consumers have nothing to lose with soft radio technology but our carrier chains.

Oh, and if you are wondering who Vanu Bose's father is, he is of course Dr. Amar G. Bose, founder of Bose Corporation. It would seem that entrepreneurialism and breaking new ground in technology runs in the family.

Full disclosure: the author owns Apple stock.