The U.S. Closes the Mobile Innovation Gap

It was a familiar refrain: The U.S., the birthplace of the Internet, was a wireless backwater. Even early in this decade, many viewed the U.S. as a developing market, fit mostly for hand-me-downs from the more advanced Europeans and Asians. Unlike unified Europe, the U.S. market was fractured by warring radio standards and dotted with dead zones. Long after cellular was a way of life elsewhere, Americans still carried beepers and left messages saying to call cell phones only in emergencies. America was to be pitied, and the competitive upshot was huge: The next great innovations in wireless, including the mobile Internet, were likely to arrive from outside the U.S.

Yet the competitive balance is shifting. As the focus of the wireless world moves toward Internet communications, the U.S. strength in software, most notably at Google (GOOG) and Apple (AAPL), is pushing the U.S. ahead as a laboratory for wireless development. American users are catching up, too. In the past year, the U.S. surpassed Western Europe in the number of subscribers to the high-speed networks known as 3G, according to consultancy comScore M:Metrics (SCOR). "The industry needs to stop talking about the gap between the U.S. and Europe," says Kanishka Agarwal, vice-president of mobile media at Nielsen. "We have caught up, and we have already passed."