For years, the press was filled with stories about how the U.S. had fallen behind Europe in wireless. A 1999 TIME article entitled "Why Your Cell Phone Stinks" boasted that Europeans routinely used their mobile phones to pay bills, make reservations, and share digital photos. Americans, meanwhile, were still catching up with Europeans in text messaging.
Europe's wireless industry was booming. Unlike in the U.S., nearly everyone in Europe had mobile phones, and they worked on all mobile networks, because every phone manufacturer and every mobile network operator used the exact same technology. The lesson, according to the pundits, was that markets for new technologies do best when solutions are developed by industry-wide panels of experts and technical standards are enforced by governments.
Wireless was growing in the U.S., but at a slower rate. The pundits grumbled that new technologies do not fare as well in the U.S. because of what they called "market fragmentation." Consumers had to choose among competing standards. There were different mobile phone models for each network.
The evidence seemed to say that industrial planning and government mandates are superior to competition.
Fast-forward to 2012. Europe's wireless industry is on the ropes. Finland's Nokia, for years the world's leading maker of mobile phones, is sinking almost as fast as it rose to the top. The U.S. leads Europe in fourth-generation (4G) network deployments and user adoption of smartphones. AT&T, T-Mobile, and Verizon Wireless have built nationwide 4G networks, and Sprint's is under construction. Two thirds of the mobile phones sold in the U.S. today are smartphones.