Chapter 5 Section 4 External Shock

If the internal cause of the end of the AT&T empire is the greed and short-sightedness of Wall Street and AT&T itself, then the rise of the Internet completely crushed the empire from the outside.Before the rise of the Internet, landline telephones were almost the only means of interactive communication for human beings. Therefore, as long as you occupy a place in this industry, you can be pushed forward by its waves even if you don't do anything. AT&T has been like this for a hundred years.It's taking its time, and there are a lot of failed investments, but that doesn't hurt it in the slightest.Nor can it prevent it from forming a monopoly time and time again.

After the rise of the Internet, the situation was different.When people have a free real-time communication method, no one will pay for international long-distance calls of three dollars a minute.In the past, people could not find any business information without the phone book.Now with the Internet, people look for information more from the Internet.All the long-distance telephone companies had to cut prices to stay in business in order to promote sales.When I came to the United States more than ten years ago, the cost of long-distance calls from the United States to China was one dollar per minute, but now it only costs two cents per minute to make international long-distance calls with a phone card.

Along with the Internet came the mobile phone business.Originally, AT&T was the leader in this field. With the mobile phone business, it can compete in today's communication industry. (Many of Google's outstanding scientists and engineers come from AT&T, including Ken Thompson, the inventor of the Unix operating system and C language.) However, when AT&T broke its left and right arms, everything became impossible. The same is true for the impact of the Internet on Lucent.In the Internet age, the world's demand for data switching equipment is gradually exceeding the demand for voice switching equipment.The former is the strength of upstart Cisco (Cisco), while the latter is Lucent's.Cisco's victory over Lucent has become an unstoppable trend.

The rise of the Internet has also had a huge impact on the research of the original Bell Labs.For example, the automatic recognition of speech, which was once considered one of the greatest dreams of mankind, has now become unimportant with the passing of the telephone age.Today, Nuance is the only major speech recognition company left in the world. The entire speech recognition market in the United States is less than $500 million a year, which is equivalent to two weeks of Google's revenue.At the same time, the world's demand for word processing and image processing technology continues to increase with the popularization of the Internet.

In the history of industry, the replacement of old technology by a new technology is independent of human will.The luckiest thing in life is to discover and follow this trend.When talking about his father's failed investment at the beginning of the last century, investment guru Buffett said that there were many automobile companies at that time, and people didn't know which one to invest in, but there was one thing investors should see: the horse-drawn carriage industry was coming to an end.Buffett regrets that his father didn't notice this.Today, although the Internet cannot completely replace fixed telephones, the former has greatly squeezed the development space of the latter, because it can provide more flexible, richer, and cheaper means of communication.

Looking back at the century-old history of AT&T, almost everyone regrets the decline of this century-old store.It was once synonymous with the telephone industry, and its Bell Labs was synonymous with innovation, and now all this is history.I have talked to many AT&T executives and scientists about this, and the general consensus is that every big decision made by AT&T is difficult to avoid under the circumstances at the time, even if it is known to be wrong.In the 1990s, AT&T no longer belonged to one person or an institution, and no one cared about its development ten or a hundred years later. (We will see many times in the future that when no one has control over a company, its long-term development will have problems.) From Wall Street, to its executives and employees, most of them hope to make a quick profit from it. a sum.In the past, the U.S. government asked for the dismantling of AT&T many times but failed to do so. However, since ten years ago, it has dismantled and sold itself on its own.In this way, instead of grasping the opportunity of the information revolution of the past decade, it buried itself in the tide of the Internet.

In a sense, modern communications began with Alexander Bell's invention of the telephone and his founding of AT&T.In the heyday of AT&T, its outstanding scientist, Dr. Shannon, described information quantitatively for the first time, and brought human beings into the era guided by information theory.Digital communication was born, and it benefits every one of us today.However, AT&T, an empire that started with information, fell in the era of the global information explosion at the end of the 20th century.Many people regret this, assuming that "if AT&T hadn't broken up", "if AT&T had entered the Internet space in time", "if AT&T hadn't made so many fatal mistakes", etc., it would have been better.My point is, if AT&T were to do it all over again, it would probably make all the same mistakes because it's getting older.No one can live to be two hundred years old, and no company can be brilliant for two hundred years. This is the law and it is difficult to surpass.Today, we still spread the glory of Bell Labs in the past, just like we spread the legends of the mighty Tang dynasty in the east and the Roman Empire in the west.After all, AT&T is a company that has historically served humanity.