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Vendor lineage

USRobotics

Won three times with proprietary protocols, and gave up all three the moment a standard arrived.

Casey Cowell and four partners founded U.S. Robotics in a garage in Skokie, Illinois in 1976, naming it after the fictional company in Asimov's robot stories. The first modem shipped in 1979, and the business only opened to the general public after the AT&T breakup in 1984 made it legal for anyone to attach equipment to the telephone network.

The two product lines are the story, and the relationship between them is better than either. The Courier was built for bulletin board operators and businesses: rugged, remote-diagnosable, and using an upgradeable digital signal processor, so a Courier bought in 1994 as V.34 Ready shipped speaking V.FC because V.34 had not been finished yet, and was upgraded in the field when it was. That is why the line was eventually called V.Everything. The Sportster, launched in 1991, was the consumer line, and by the mid-1990s a 28.8 model sold for around $149.

They shared a motherboard. On certain 14.4 Sportsters, a sequence of AT commands would enable the faster 16.8 HST mode the Couriers were sold for. The hardware was the same; the difference between the consumer modem and the professional one was firmware and price. Segmentation by software rather than silicon is now so normal it has a name, and this is one of the places it was learned.

The company's actual pattern is proprietary-then-standard, three times over. HST was USR's own high-speed protocol, and it worked: if the board you dialled had a Courier, transfers ran faster than anyone else could manage, which is why HST spread through the bulletin board world and made FidoNet mail runs bearable. Then V.32bis arrived and HST stopped mattering. Years later the same play ran again with x2 against a rival consortium's K56flex, and neither won, because everybody could see V.90 coming. USR dropped x2 when it arrived.

That is worth stating plainly, because it cuts against a thread this site returns to often. Elsewhere the timeline records neutrality and openness paying off - carrier-neutral exchanges, vendor-neutral certification, protocols that stayed open and became infrastructure. USRobotics did the opposite and it worked repeatedly: a proprietary protocol bought real advantage for real years. What it did not buy was permanence. Every time a standard arrived, the advantage evaporated, and the company was sensible enough to stop defending it.

Scale followed the Sportster. Revenue was $889M in 1995 and $1.98B in the year to September 1996, a 122 per cent increase. The company bought Palm in 1995, acquiring the PalmPilot, and was itself acquired by 3Com in June 1997. It was later spun back out, moved to Schaumburg, Illinois, and now belongs to UNICOM Global.

One detail from the operators' side deserves recording: the first large-scale Courier deployment on CompuServe's network uncovered a bug that crashed the modems and stopped them answering calls under heavy call volume. The most reliable modem on the market found its limit the way everything does - at a scale nobody had tested.

Founding stories

1976

U.S. Robotics

Chicago, then Skokie, Illinois · Founders: Casey Cowell, Paul Collard, Stephen Muka, Stan Metcalf, Tom Rossen

Several of them came out of the University of Chicago, where Collard had been working at the Computation Center; he had an applied physics degree from Sussex and designed the modems into the mid-eighties. Cowell had finished an economics degree the year before and ran the company for most of its life. The first product communicated at three hundred bits a second.

The company was named after Asimov's fictional U.S. Robots and Mechanical Men, on the stated reasoning that in his stories it became the greatest company in the known galaxy. In 2004 the real company appeared in the film of I, Robot playing the fictional one.

The timeline

  1. The first modem

    Three hundred bits per second, which was competitive.

  2. A quarter of the market

    More than a quarter of North American modem sales, with earnings up 158% in a year - and Hayes, which had defined the category and its command language, displaced as the leader.

Flagship products and solutions

  • CourierThe professional line: rugged, remotely diagnosable, and bought by the people whose modems answered calls all day.
  • Courier Dual StandardThe one that mattered commercially. It spoke both HST and the v.32 standard, so a caller with any manufacturer's modem connected at full speed rather than falling back to 2400 bits per second. It made a proprietary protocol safe to deploy.
  • SportsterThe consumer line, and the volume business - the modem a very large number of people first connected to the internet with.
  • PalmAcquired in 1995 along with Megahertz and ISDN Systems, and by some distance the most valuable thing the company ever bought.

Key innovations

  • Subsidising the hub to sell the spokesUSR sold modems to bulletin board operators at a substantial discount. That is the mechanism behind everything else: a sysop with a discounted Courier gave every caller a reason to buy a USR modem, because HST speeds were only available if both ends had one. Discounting to one side of a market to create demand on the other is standard practice now and was an unusual thing to understand in the late eighties.
  • Making the proprietary protocol safe to adoptThe Dual Standard is the reason the strategy worked rather than backfiring. A modem that only spoke HST would have been a gamble; one that spoke HST and the standard was strictly better than a standards-only modem, so there was no risk in buying it. The proprietary advantage was offered as an addition rather than as a substitution.
  • Displacing the company that wrote the command languageHayes defined the modem category so thoroughly that its command set is still called the Hayes command set and still begins every line with AT. Being overtaken by a competitor whose products speak your own language is an unusual way to lose a market, and it happened because reliability and speed turned out to matter more than authorship.
  • Buying the thing that outlived the businessPalm was one of three acquisitions in a single year and the only one anybody remembers. A modem company bought a handheld computer company, and the handheld business went on to define a product category while the modem business was made obsolete by broadband.

Main markets

Bulletin board operators first, then consumers in enormous numbers during the years when getting online meant dialling, and businesses buying remote access equipment. Revenue reached roughly $2B before the 3Com acquisition.

The market it dominated no longer exists in that form. What remains of the brand sells connectivity equipment for industrial and remote management use, where a dial-up or cellular link to something in a field is still the practical answer.

Analyst standing

  • The company's commercial record is best read as a case of correctly-timed proprietary advantage: three attempts, one clear success, and a willingness to abandon each position the moment a standard made it indefensible.
  • The organisation outlived the company that acquired it. 3Com was itself absorbed, while the USRobotics name was spun back out, passed through a management buyout, and still trades - which is an unusual afterlife for a brand whose defining product category was eliminated by the technology that replaced it.

Acquisitions

  1. 1995 Palm, Inc.

    The company behind the PalmPilot handheld.

    Part of USRobotics, then of 3Com, and later independent again - a corporate path more eventful than the product's.

USRobotics ↗
From the company

This company no longer trades under this name.

Sources