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Financial Times magazine, cover story April 21, 2001
With Mike Steinberger
Scientists and the media love to flirt. Inventors, particularly those not tied down by corporate PR departments, like nothing better than to blab about their discoveries and the media, desperate for news of the new, loves to lap it up. It is a partnership made in heaven and few people care if the breakthrough comes to nothing. By the time one invention bites the dust, another has taken its place and caught the public imagination.
Randice-Lisa Altschul loves the media even more than most. The 41-year-old New Jersey resident is an insatiable inventor (“I dream up 20-25 inventions a week,” she says) and her latest project is a $10 mobile phone that you can throw away when you have used up your minutes. And reporters, it seems, can’t get enough of it.
It all started in November 1999, when Altschul filed a US patent, #5,983,094, for a “Wireless telephone with credited air time and method”. She had filed patents before, including three others for disposable wireless devices, but somehow it was 5,983,094 that caught the eye of The New York Times. On the day Altschul got her patent approved, Manhattan’s favourite broadsheet ran a story on its technology pages headlined “Throw Away That Cellphone”. The paper reported that Altschul had patented a technology which, she said, could be used “to manufacture cellular phones so inexpensively that they could be sold for a fixed amount of air time... and then tossed in the garbage once their minutes had been used up”. The disposable phone’s – and Randi Altschul’s – moment of fame had arrived, and it was going to last a lot longer than the regulation 15 minutes granted to the rest of us.
Altschul first struck it big with a Miami Vice board game. She conceived the idea in her early twenties in the hope that it would land her a meeting with the star of the show, Don Johnson, for whom she had the hots. She never did get the chance to rub up against Don, but her cops-vs-coke dealers fantasy helped her earn her first million by the time she was 25. She is also credited with developing the game “Barbie’s 30th Birthday”, has invented toys made of cereal that turn soft and edible when submerged in milk, and recently came to the aid of daredevil teenage boys with a plan to make skateboards that fold neatly into a rucksack.
The idea for a disposable mobile came one afternoon in 1996, when she was driving and trying to have a conversation on her cellphone. The signal kept cutting out and in frustration she just wanted to throw the phone out of the window. The thing that stopped her – the fact that the phone was expensive to replace – started her thinking: “Why not make a mobile cheap enough that you didn’t have to worry about losing it, breaking it or, indeed, throwing it away in anger?”
Four patents later, Altschul’s invention was in the news. Pieces appeared across the world, from the Chicago Tribune to the Bangkok Post. Here was
a story with science, human interest and a nice line in anti-corporatism all rolled into one. Why spend a fortune on a sophisticated mobile handset when you could buy one for virtually nothing?
What’s more, the science seemed to back her up. A roll of “paper-like material” (later, reporters would simply call this “paper”) could be fed into a press and printed with conductive inks to make the circuitry. Add a couple of chips – one to run the keypad, the other to produce radio signals – and a few other components and you have a long ribbon with everything you need to run a simple mobile (Altschul’s phone has no screen). Fold the ribbon over on to itself and the outside surface becomes the casing of the phone, removing the need for a separate plastic cover. Add a socket for an earpiece and microphone and you have a unit that, according to Altschul, could retail for $10, including 60 minutes air time.
For a year, things went quiet (Altschul now says the time was spent in frantic development and raising first-stage capital) but in January this year she announced that the Phone-Card-Phone, as it was now called, was ready to go into production. Again the media went into overdrive and writers blithely confused the detail and recycled the hype. The paper-like material had become a “mobile phone, made of paper” (Daily Telegraph). New York’s Daily News reported that Altschul had been so focused on her invention that she didn’t even recognise a picture of two Sopranos stars shown to her by its photographer. (“Sorry,” she said, “I’m too caught up in my own world.”) Information Week said the phone was made “almost entirely out of paper” and reported Altschul as saying that she already had “more than 100m units on order, which is sort of terrifying”.
The New York Post cited the 100m figure as fact, adding that she had received “300m orders globally”. Altschul confirmed both figures on NBC’s Today programme. Even at a wholesale price of $1 each, the inventor from New Jersey looked as if she was going to achieve her ambition of being “Bill Gates without the problems” by the end of the year. Even the CIA seemed to be involved. “I met with about 10 men at their headquarters in Washington,” she told the Post. “I can’t reveal the specifics of what I discussed with them. I can just say that all of my products will be made with the approval of the Secret Service. They like the fact that I am going to put a phone in everybody’s pocket for an emergency.” The golden girl from New Jersey could do no wrong.
It was about this time, however, that the first doubts began to be voiced. Irked by the lack of detail coming out of Altschul’s company, Dieceland Technology Corp, anonymous postings on the techies’ bulletin board Plastic.com began to ask whether the phone could ever really work. Many of Plastic.com’s contributors complained that the Dieceland website offered only vague information about the phone. The company’s one press release, a cruel but accurate poster pointed out, contained too many exclamation marks to be credible. The site also talked of Altschul having filed “more than 20 patents”, including an “anti-virus chamber”, although no record of this last invention appears on the US government’s patent database. One posting described her product as “blatant vapourware”, a term used to describe pie-in-the-sky products a computer company flags up but has no intention of producing. Another, perhaps more generously, thought she might be “a genuine inventor with weird PR skills and a bad website”.
Things got worse on February 13, when another website, Planet IT, ran a story called “The Disposable Cellphone Hoax”, casting doubt on a number of Altschul’s claims, although it was unable to provide much evidence against her, and in an undated interview, Netpilgrim.com published Altschul’s not-too-detailed replies to its reporter’s e-mailed queries. While some were simply evasive – “We do not provide tech info”, “Just watch and see”, “Time will tell” – others were downright bizarre for a woman who, in her own words, seemed to be on the verge of heading up a multibillion-dollar company. To the question, “Tell us a bit about yourself”, Altschul is quoted as saying: “I guess I’m just a certified wacko. I can see finished products in my head as if my mind is a catalogue and I just make them happen. My greatest asset is that I don’t know anything. So I’ve no boundaries. Then I surround myself with people who are a lot smarter than me and we make it happen!!!”
So although Altschul had a working model of her phone, which she demonstrated successfully on the NBC Today programme, she seemed to be treating any serious request for information with a frivolous disdain. On the grapevine, the “wacko” label began to stick and people began to wonder if the whole thing wasn’t some massive April Fool’s joke, brought forward to the beginning of the year.
Then came the General Electric deal. At the beginning of this month, Altschul announced that GE Capital, General Electric’s financial services arm, would be handling North American sales, marketing and distribution of the Phone-Card-Phone.
Suddenly the project had life again. “GE and the Jersey girl,” she gushed excitedly. “The last time GE got involved with an inventor from New Jersey it was Thomas Edison, one of my heroes, so I’m not doing too badly here.” It would be one of her last comments to the press. In a move that must now be causing Altschul not a little agony, GE Capital has told her not to talk to reporters. All calls are referred to the company’s Connecticut office, where John Oliver, GE Capital’s spokesman, has become the mouthpiece for Dieceland Technology.
Oliver is quick to point out that the project is in its early days. “What we have,” he says, “is a marketing and sales agreement that applies to North America for the distribution and sale of the Phone-Card-Phone. We have a number of interesting ideas as to how this will work. The history of modern times is full of individuals who have come up with good ideas, and we think this is a brilliant – and workable – idea. Ms Altschul has a working model of her phone and we have taken all reasonable steps to assure ourselves of its scalability.”
GE Capital won’t be drawn on the finances of the deal, although sources close to the company suggest that it has taken about a 5 per cent stake in Dieceland Technology. Oliver does say, however, that Altschul has raised start-up capital “from a couple of very highly regarded sources”. As for the 100m orders, he is a little more cautious. “I know there is significant interest in this product and when it comes on line there will be a big roll-out. We have good relationships with retailers in the US and Canada.”
An issue that inevitably arises with such a throwaway product is its impact on the environment. Asked whether the phone is recyclable or biodegradable, Altschul says she has “no idea”. Oliver is more forthcoming, saying that the device uses ordinary batteries rather than the heavy-metal versions found in most mobiles. “We will have more information on that nearer the launch,” he says.
Needless to say, the idea of 100m disposable mobiles fills groups such as Friends of the Earth with horror. “Products like this encourage the throwaway society,” says Sarah Oppenheimer, waste campaigner at Friends of the Earth in London.
“They lead to the destruction of natural habitats, leaving us to live amid mountains of rubbish or suffering pollution from it all going up in smoke.
“The problem is that mobiles are such a fashion item. We’d like to see them made to last longer and this should be a duty put on producers. It looks like this inventor is not taking into account the environmental externalities.”
On the technology front, Altschul has earned some cautiously optimistic endorsements. Unlike in Europe, where the pre-pay sector has boomed, most US mobile phone users are still on monthly contracts, and it is the people who don’t want to make that kind of commitment, such as school children and the elderly, that Altschul is targeting.
“People will do pretty much anything to save money and for convenience,” says Daniel Berninger, managing director of Pulver.com, the US telecommunications consultancy. “This is one of those things that appears not to be possible until somebody does it.” Peter O’Kelly, analyst at Patricia Seybold Group, the Boston-based wireless research company, is another supporter and sees the phone as something people could buy at the airport for use when their own mobile doesn’t work. On the dissenting side, however, Richard Dineen, an analyst at Ovum, the telecoms consultancy in London, says he finds it difficult to see a market for disposable mobiles. “Mobiles are increasingly becoming lifestyle products,” he says, “capable of doing more and more things and getting smaller and sharper-looking. A disposable phone with no features goes against this. It is difficult to see who would buy and use these phones.”
Before her media gag took effect, Altschul invited me to see the phone in action. I am a little sceptical as I put on the earphones while she dials the number. The house phone rings and she dashes off to another room and answers it. It’s me calling. “Well, what you do think?” she asks. I tell her the reception is excellent.
In its most basic form the phone, powered by a 6V battery, is capable of making only outgoing calls but the idea, says Altschul, is not to compete with the Nokias and Motorolas, nor to target investment bankers. Instead she thinks the phone will appeal to mothers, teenagers, senior citizens, tourists – in short, people who want cellular capability but don’t want to lug around a piece of costly equipment. The unit will also be popular with those with credit problems: it will come with 60 minutes of free calling time (once the calling time is exhausted, the user can either discard the phone or purchase more time). The biggest niche, however, will be as a marketing tool: a company such as Nike will be able to customise the phone – putting its name and logo on the laminate – and use it for promotions. Altschul says her next project is a paper laptop computer, but no one has been able to persuade her to give more details on this. That’s probably no surprise. This is Altschul’s proprietary technology and the IT industry does not always behave in an ethical way. Her ambitions are straightforward.
“I want to be a billionaire,” she declares.
She talks about watching a television interview with the late Sir James Goldsmith. It was a round-table discussion involving several prominent tycoons. After listening to his fellow magnates perform verbal gymnastics in trying to explain why they did what they did for a living, Goldsmith broke in and said: “Let’s cut the bullshit; we’re in this to be filthy rich.” These are words Altschul now lives by. I ask her how she’ll feel if the phone fails to live up to expectations. “There’s no way it will flop, I won’t allow it,” she says. “I will make it happen.”
Dieceland Technologies, www.dtcproducts.com
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