While it’s certainly fun to focus on the where, when and how much details for Verizon’s forthcoming Long Term Evolution (LTE) network, at the Verizon Developer Community Conference in Las Vegas this week it was clear that Big Red is already taking a long-term view of its pending 4G network, putting in place the monetary, business and technical-assistance pieces to help build LTE devices that go way far beyond smartphones or USB modems.
The big question for Verizon’s internal device-developer help center — an entity called the LTE Innovation Center, which has its own physical office space just outside Boston — is whether or not Verizon can effectively team with device entrepreneurs to build cutting-edge electronics that are not only revolutionary, but also business successes as well. After sitting through several LTE-related presentations (where Verizon didn’t reveal anything it already hasn’t said) we sat down with Verizon’s Brian Higgins, general manager of the LTE Innovation Center, for some deeper-dive details.
Basically, here’s how the LTE Innovation Center will work: Companies or entrepreneurs who have networked-product ideas can pitch their plan to Verizon, which will use internal business-case and technical advisory teams to gague the probable success, much like venture capital partners screening funding applicants. Selected companies will then be invited inside the center where there is lab space for testing and development, with Verizon networking engineers on hand to provide assistance and guidance. By next summer, Higgins said Verizon hopes to have several applicants ready to “showcase” at the Innovation Center as well as at industry trade shows.
Unlike a VC fund, however, Verizon won’t require companies who join the program to pay or give up any equity for the development assistance. This is not an insignificant benefit, since VCs or investors almost always want a big piece of the startup pie, if and when you can get them to invest. Device and hardware startups are currently among the least attractive for private investment, due to the large upfront cash outlay needed for prototyping and development, and the long lag time between idea inception and an equity event, typically several years or longer for those whose devices actually make it to the marketplace. What Verizon wants to do, Higgins said, is help defray some of those expenses and winnow out the ideas with the best chance of success — without requiring the entrepreneurs to give away big chunks of their company in return.
“Whatever intellectual property you bring in the door is yours to keep,” Higgins said. What kinds of projects is Verizon looking for? If your plan is just another tweak on a smartphone or pad device, best look elsewhere. What Verizon wants — and needs, if the company is going to get to its stated goal of “500 percent” device penetration (meaning that most people will have at least five devices that connect to a network, instead of just one phone or laptop) — is a slew of devices that probably haven’t even made it off the PowerPoint. “Viable, meaningful and non-traditional” is how Higgins described the ideal applicant idea.
Though LTE-future powerpoints and dream-scenario videos often guess at future devices like in-car infotainment systems, or pad devices that synchronize seamlessly with tabletop computers, in reality the network devices of the future are more likely to be highly specialized and single-purpose, adding networking to something that didn’t have it before (like cameras). To help such devices succeed, Verizon already seems to know that it will have to have multiple, flexible network-access pricing plans — “you’re not going to pay $60 per month to connect your refrigerator to the Internet,” Higgins noted.
Due for launch later this year, Verizon’s LTE network will begin with the most boring of network connectivity devices, a USB modem. LTE phones and maybe tablet devices are slated for unspecified delivery in the latter parts of 2011 — “The sexy things will come out later next year,” said Lindsay Notwell, Verizon’s executive director of 4G implementation. And on beyond that, if Higgins and others do their job, more and more sexy and maybe non-sexy things that connect us to the network in ways not currently thought of.