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Thursday April 13, 9:48 am Eastern Time
Forbes.com
The Hidden Brainpower Of AT&T Labs
By John Shinal
When AT&T spun off Lucent Technologies (NYSE: LU - news) in late 1996, it lost access
to the Bell Labs scientists who had invented many of the 20th century's key communications
technologies. The move left AT&T (NYSE: T - news) without much of its research and
development brainpower.
Yet the phone giant kept some of its best minds and used them as a nucleus to form AT&T Labs, which now employs 3,000
researchers at sites in New Jersey, Silicon Valley and England. While AT&T Chairman Michael Armstrong has dominated
headlines with his bid to turn the company into the world's biggest provider of Internet over cable, AT&T Labs scientists are
quietly developing technologies that may change the way people use the Web.
The prototype of one of these gadgets, recently demonstrated at AT&T Labs' leafy, tranquil office building in Menlo Park,
Calif., might be the most innovative phone to ever sit on a desk. The device, now called the Broadband Phone, was first
dubbed the ThinPhone by its inventors in AT&T Labs' Cambridge, England facility.
Part phone and part Internet appliance, it got its original name because it functions as a so-called thin client of a network server.
Like other thin client appliances being developed by Sun Microsystems (Nasdaq: SUNW - news), Oracle (Nasdaq: ORCL -
news) and others, the Broadband Phone is a dumb device connected to a Linux-run computer server. The server stores the
software that provides the phone with all of its intelligence.
The Broadband Phone looks like other handsets except it has a display instead of a push-button keypad. The display's default
setting makes it look and function as a number pad, similar to the calculator display on a PalmPilot. With the tap of a stylus,
however, the display is converted to a menu that leads to the phone's more powerful functions.
Through the display, users can access frequently called numbers, send or receive faxes, e-mails or text versions of voice
messages and browse the Web at broadband speeds. Perhaps the niftiest use of the display, though, is as a sketchpad that
functions like a two-way Etch-a-Sketch. The shared sketchpad allows a caller to draw a map or diagram that instantly appears
on the display of the Broadband Phone on the other end of the call.
The display lets users view photos and videos over the Internet as they chat or peruse a restaurant menu as they order.
Because it has no hard drive, memory or software of its own, the device never has to be upgraded by the user and can be used
to manage huge amounts of text and images.
Despite its wealth of features, however, the Broadband Phone ironically will never appear as an AT&T product. Because
AT&T is solely a provider of services, it has little interest in phone equipment. ``We don't make products; we're not Lucent,'
says AT&T spokesman Kevin Compton. ``We're more concerned about the services we can offer' via the phone.
AT&T is more interested in the device's software, now being tested in AT&T's network and with other service providers,
Compton says. As for the phone itself, AT&T will license the technology to equipment makers who can build it cheaply.
Such licensing agreements are a new trend for AT&T Labs. In the last six months, for example, the company has licensed its
image-compression technology to Lizard Tech of Seattle and signed a similar agreement with Excalibur Technologies (Nasdaq:
EXCA - news) for software that stores videos in digital libraries. Similar deals are in the works, Compton says.
Until the Broadband Phone's software finds its way into the network of AT&T or some other service provider, however, it will
remain the exclusive toy of the big brains who invented it.
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