[monocasa]

It used to be that the service providers did massive amounts of R&D. Hell, Bell labs was one of the most impressive R&D laboratories of all time. The service providers just decided that it was better to buy themselves protective laws, and to squeeze out any R&D than to try to actually compete.

This isn't a sign of how important patents are, but a sign of how the extreme rent seeking behaviors of the telecoms greatly manipulated many aspects of the market that they're in.

[rayiner]

AT&T (of which Bell Labs as a subsidiary) was a vertically-integrated nationwide monopoly that bankrolled its R&D using its massive consumer revenue. Most people would consider the current market structure, where service providers are separate from equipment manufacturers, to be an improvement.

[monocasa]

And yet, it was the fiscal year of 2017 that has had the historical highest profit margins, not their years of (highly regulated) national monopoly.

https://www.thestreet.com/story/14243906/1/how-at-amp-t-mana...

[rayiner]

You're still only pointing to two different basic models: companies that recover R&D expenses through vertical integration and direct-to-consumer sales (old AT&T, Apple, Google), and companies that recover R&D expenses in markets mediated by patent protection (Intel's wireless business, Qualcomm, Broadcom). Is your point that the former is preferable?

Also, you're comparing apples and oranges. AT&T today sells a different, much more valuable product than AT&T in 1970. Back then, a household might have one phone line and demand growth was basically nothing. Today, households have multiple cell lines, they're willing to pay much more for them, and demand keeps exploding. Likewise, Google is more profitable than AOL was at it's peak--it sells a different, much more valuable product.