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Two Major Mobile Milestones

By Alex Planes – Apr 3, 2013 at 11:33AM

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Learning from the market's past to understand its present.

On this day in economic and business history...

Verizon (VZ -1.99%) began its existence -- as a brand, if not a company -- on April 3, 2000, when Bell Atlantic announced the name (and formalized the agreement) of its wireless partnership with Britain's Vodafone (VOD -2.27%). Simultaneously, the regional Baby Bell confirmed its adoption of the Verizon brand name for the combined company to be created from its pending merger with GTE, which at one time had been the largest independent American telecom during the Bell System era.

"Verizon" as brand was created as a portmanteau of "veritas," Latin for truth, and "horizon," with the new corporate identity meant to convey integrity and the possibilities of the future. Analysts weren't quite so enamored of the morphological mash-up, though. Wireless industry analyst Tole Hart of Dataquest told CNET: "The brand name Bell Atlantic isn't going to sell well elsewhere. But I think they could have come up with a better name." Elliott Hamilton of Strategis Group took the long view, saying: "In the short term it might seem silly. But in the long term, ten years from now, everybody will just know Verizon. ... It's just like anything else; you have to get used to it."

The Verizon Wireless brand was set to leapfrog all mobile-carrier competition on the market in 2000, with an estimated 23 million subscribers (following the Bell Atlantic and GTE merger), nearly double the subscribers of second-place AT&T (T -1.65%) Wireless. When Verizon itself assembled later that year, it quickly became one of the nation's leading companies -- which led, four years later, to its inclusion on the Dow Jones Industrial Average (^DJI -1.03%), as it replaced longtime component AT&T. The merger also gave Verizon majority control over its wireless joint venture, which initially included GTE's cellular operations as well.

In recent years AT&T has considerably narrowed the subscriber gap, and it boasted 99 million wireless subscribers to Verizon's 106 million subscribers just more than decade after Verizon Wireless began operating. However, thanks to further telecom consolidation, AT&T's revenue eventually surpassed Verizon's by the end of the decade: The original Ma Bell reported $125 billion in revenue to Verizon's $107 billion at the end of 2010.

The call that started it all
Verizon Wireless would never have come into existence without developments made at Motorola in the 1960s and 1970s, which culminated in the world's first cellphone call on April 3, 1973. That day, 44 year-old Motorola executive Martin Cooper stepped out onto the streets of New York City with a bulky, brick-like cellular-phone prototype. His first call went through to AT&T's Bell Labs, where he got in a bit of gloating to rival researcher Joel Engel for having won the mobile-phone race. After this one-upsmanship was over, Cooper decided to keep going. He recalled that morning in an interview 38 years later with London's Daily Mail:

As I walked down the street while talking on the phone, sophisticated New Yorkers gaped at the sight of someone actually moving around while making a phone call. Remember that in 1973, there weren't cordless telephones, let alone cellular phones.

I made numerous calls, including one where I crossed the street while talking to a New York radio reporter -- probably one of the more dangerous things I have ever done in my life.

It took Motorola another decade before it could commercialize cellphones in the form of the DynaTAC, which was to be the first mobile phone ever sold to the public. From then on, the mobile industry would grow by leaps and bounds to the point where there are now more mobile phones active around the world than there are humans alive to use them.

Motorola's early lead in the mobile race soon grew into an enormous patent portfolio, which proved too good for Google (GOOGL 0.34%) to pass up when it acquired the handset maker in 2011. With more than 25,000 patents and patents pending, it's safe to say that Motorola has continued developing mobile technology with as much focus as (if not more than) any other company on the planet. It's also been an industry leader: Before the rise of smartphones, Motorola's RAZR line of flip phones sold more than 130 million units, making it the best-selling example of the design in mobile history.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.

 The Motley Fool recommends Google and Vodafone. The Motley Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$29,961.76 (-1.03%) $-312.11
Verizon Communications Stock Quote
Verizon Communications
$37.98 (-1.99%) $0.77
AT&T Inc. Stock Quote
AT&T Inc.
$15.39 (-1.65%) $0.26
Alphabet Inc. Stock Quote
Alphabet Inc.
$101.78 (0.34%) $0.35
Vodafone Stock Quote
$11.43 (-2.27%) $0.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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