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Great Changes in the Telephone.

Changes in the telephone itself have been the most visible development in communications during the past two decades. Many functional, many for fun . . . the changes in the telephone have made it both a bona fide communications terminal and a decoration.

When we published our first issue of Communications News in October 1964, the telephone had just moved out of the era of "basic black". The telephone on our desk was a beige but the dial was still rotary.

The gentleman who brought a little color into the telephone industry was Fred Kappel who became president of AT&T in 1956 and was the Bell System's chief executive officer for a decade, first as president and then as chairman. Until the mid-1950s the phone company's attitude on phone color was much like Henry Ford's had been on his Model T . . . the customer can have any color desired, so long as the color wanted was black! Altho color phones in white and pastel colors were available on a custom basis (and used chiefly in the movies!), Kappel moved to make color phones readily available to all subscribers, calling the sales strategy "moving out of the dark ages." Kappel continued the razzle-dazzle with the "Princess" phone in 1959, the "Touch-Tone" phone in 1963, and the "Trimline" in 1965.

"Touchtone" was, of course, much more than a cosmetic change in the telephone. Initially it was simply a way to speed dialing. But with the development of electronic switching and digital transmission, the 12-button pushbutton telephone became a desk top communications terminal.

Telephone manufacturers have, over the last two decades, tried to out-do each other in designing ever more attractive telephones to serve every basic need.

For the home, each offers a small colored phone for the bedroom, a wall-hanging phone for the kitchen, and many other styles.

For the office, each has phones with special features built in such as single-digit dialing of frequently called numbers, speakerphone capability, call-forwarding and so on.

And, attached to a modern PBX and other equipment, each of these office phones can have such features as "electronic mail box," least-cost routing and complete call accounting.

Beyond utilitarian features, telephones have become art objects . . . the delight of decorators, nostalgia buffs, hobbyists and children of all ages.

L. M. Ericson . . . who shared the 100th anniversary of the telephone with the Bell System in 1976, marked the occasion with the introduction of its slim, one-piece, stand up Ericofone . . . a truly modern telephone that is a decorator's dream.

For the executive there is the telephone enclosed in a rich leather-covered box.

For nostalgia buffs there is the ornately decorated "French phone" or the old candlestick phone . . . in basic black or red-white-and-blue.

For drinkers there is the phone in the shape of a Coca-Cola bottle . . . or the Jim Beam 100 Digit Dial Phone Decanter billed as "a real conversation piece".

And for children there are a variety of telephones, the most popular being the bright Mickey Mouse phone.

Perhaps the most heart-warming example of changes in the telephone and of the marvels of electronics is the story of Susan Chambers, one of 17 telephone operators who handle the thousands of calls coming in to the bustling Yale-New Haven (Connecticut) Medical Center. Susan became blind and continuation of her job as a console attendant for the center was made possible last year when Yale University installed a Northern Telecom SL-1 PBX, complete with a unique light-emitting diode (LED) sensing probe. The probe is slightly larger than her thumb. By moving it over the attendant console in front of her, she can determine the status of each line on her console by tones that are transmitted through the headset she wears. Since she is not able to read the information in the directory, she has access to the talking Information Management System called TIM II, designed by Maryland Computer Services, through use of her desktop computer. She types a request into the computer and its electronically generated voice provides the answer through her headset. She then gives the caller the requested information. The entire process takes less than a minute.

Beyond these many clever, creative, colorful and useful telephones which have taken us out of the dark ages during the last two decades, two very important developments make the changes in the telephone a momentous happening of the 1980s.

The first is the development and surprising popularity of the cordless telephone.

AT&T believes that the cordless phone is still in its growth stage as a product category. Their research shows that 20 percent of all households without a cordless phone are likely to purchase one. And 45 percent of households which have a cordless phone are likely to purchase another one. This, AT&T feels, indicates a tremendous consumer acceptance of the cordless phone.

The sudden takeoff of cordless telephones which occurred in 1982 is expected to be followed by spectacular growth in the cordless market during the mid-1980s, according to a market research report from International Resource Development.

The Yankee Group sees annual sales of cordless telephones at close to eight million phones in 1984 and over ten million in 1985.

The second is the development of the telephone as a "workstation". Northern Telecom pioneered this development with their "Displayphone" in 1981.

"During this decade", says IBM's Jim Boyle, "there will be a ten percent growth in office workers . . . from 50 to 55 million. However, during that same period, the number of workstations installed in the United States will increase more than 10-fold . . . from about 3.5 million to more than 35 million, and worldwide over 60 million. And that does not include typewriters or computers in homes, schools or hotel rooms. That means there will be about two workstations for every three office workers. In 1989 alone, expenditures on office systems will be almost twice IBM's revenue today."

Frost & Sullivan, the New York City-based research firm, feels that by 1990 the executive workstation will be as common in the office as the telephone is today. Its new report on "The Market for Professional/Executive Workstation" sees increasing demand for products at current technology rates, rather than new break-throughs, driving the market from about $2.5 billion in current annual sales to nearly $7 billion in 1968 (in constant dollars). A survey carried out in connection with the study supports the idea that the unwillingess of executives to use a keyboard is changing.

A new study by Venture Development Corporation of Wellesley, Massachusetts, indicates that workstations which combine voice and data capability will be the most popular. The "small desktop footprint" of these voice/data workstations will be immensely important.

Mary Owen, director of ARD's Terminal Research Service, says: "Voice/display products have a tremendous potential for growth."

The market for telephones of all types is suddenly skyrocketing.

Alfred Franks, then with American Bell, says: "In early 1983, I gave what I thought to be a very optimistic view. I am here in June, 1984 to tell you, happily, that I was wrong. I wasn't optimistic enough. The 1983 retail unit sales volume for new telephones was over 17,000 units, out-performing my estimate by more than seven million units! And the message I have about our industry for the remainder of 1984 and succeeding years remains optimistic."

The market for new telephone sets will grow from 16.5 million sets in 1982 to 38 million sets in 1990, according to a new report from Gnostic Concepts entitled, "Electronic Telephone Sets". In terms of value in current dollars, this will represent a 1990 market of $4.5 billion. Of this total, the market share for business versus residential telephones will increase from 25 to 36 percent from 1982 to 1990.

Several factors are pushing the demand for intelligent telephone sets: deregulation of customer premise equipment and growing requirements of the electronic office and home of the future.

A six-month multi-client study called "Home Telecommunications," conducted by Mackintosh International and assessing future product and market developments, found that after 100 percent market growth in 1981 and 1982, sales of telephones and related products doubled again in 1983 and will hit $700 million annually within five years.

And, with cordless phones now leading the explosion, eventually, the wrist "radio phone" will become a reality.
COPYRIGHT 1984 Nelson Publishing
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Publication:Communications News
Date:Sep 1, 1984
Previous Article:Deregulation and Competition.
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