The Economics of Standardization and USB-C

There is a lovely story, and you may have heard it before, about why CD’s are of a particular length:

Both Sony and Philips knew that the legendary conductor Herbert Von Karajan would be instrumental to the success of their new format. He had agreed to endorse the CD at the Vienna press conference where they would announce the company’s prototype.
But he had one condition: that the new technology could allow listeners to hear the whole of Beethoven’s Ninth Symphony without interruption.
The longest recording Sony could find was Wilhelm Furtwängler’s glacial 1951 recording which ran to a length of – you’ve guessed it – 74 minutes.

Read the entire article, it is a short read about how CD’s came to be of a particular length, but more importantly, it also speaks about the forces of competition, regulation and signaling also played important roles in the length of the modern compact disc.

Of course, this wasn’t the first time that the consumer electronics industry went through something like this (and I guarantee you it won’t be the last):

The videotape format war was a period of competition or “format war” of incompatible models of consumer-level analog video videocassette and video cassette recorders (VCR) in the late 1970s and the 1980s, mainly involving the Betamax and Video Home System (VHS) formats. VHS ultimately emerged as the preeminent format.

And that brings us, in roundabout fashion, to the modern equivalent of these two episodes: Micro-USB vs Lightning Cables vs USB-C. And if you find yourself wondering (as I often do) why the world doesn’t just move to USB-C across all devices and firms – well, its complicated:

The reason USB-C can be complicated is that we have one plug that does multiple things — from low power to ridiculously high 240-watt power. From basic data to super high-speed data. Thunderbolt. Display monitors. Audio. The dream of a single cable and plug is great, but it’s also confusing.

There isn’t, as some of you might know already, just one type of USB-C cable. There’s at least seven, and in reality, many more:


Standardization matters. Anybody who’s traveled across international borders knows this, beginning with the adapters that you plug into walls. But this is also true of light-bulbs, laptop chargers, and so many other things besides. USB-C is, infortunately, a good example of why standardization matters, and what happens when the market fails to simplify it enough.

You might enjoy listening to this podcast for a somewhat maddening lesson in how things didn’t quite go according to plan when it came to the evolution of USB-C as a standard.

Update: Pranay pointed me to this edition of their excellent newsletter (you really should subscribe if you haven’t already!), in which they explain why regulating standardization is problematic. You’ll have to scroll towards the end of this edition:

So, as we dive deeper, the shine of promised benefits gets dulled by the impact of probable costs. Other solutions such as unbundling chargers and phones seem to have a better cost-benefit trade-off.
Beware of intuitive solutions to complex policy problems.

My takeaway is that the problem is even more complicated than my post made it out to be, alas.

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