On This Day In Finance: June 3 - Alexander Graham Bell Creates Photophone

By Peter Cherewyk | June 03, 2009 AAA
On This Day In Finance: June 3 - Alexander Graham Bell Creates Photophone

On June 3, 1880, Alexander Graham Bell transmitted the first wireless telephone message. Bell's new invention known as the "photophone" sent waves of light between two buildings which were converted into information - not exactly the cellular phone, but getting there. Actually, the photophone's modern equivalents would be the fiber optic cable.

Just five years before, Alexander Graham Bell and his financers founded the American Telephone and Telegraph Company, AT&T (NYSE:T), Bell was 28 years old. The Bell Telephone Company was formed in 1877 with Alexander holding 1667 shares worth $50 each. By the time he was working on the photophone, the shares were trading for $1,000 each.

In Today's Dollars?
1667 shares at $1,000 was $1,667,000 in 1880. Looking at the average inflation of around 2.45%, those shares would be worth approximately $38 million in today's dollars. Of course, this is an approximation but Bell could easily afford to play around with light on top of buildings at that time - in fact, he could also buy the buildings.

100 years later, in 1980, fiber optic cables were developed and quickly became a popular choices for transmitting broadband signals. The cables were laid across the ocean floor to transmit information between continents, and pulses of light through fiber optics are still used as an efficient way to send information today.

Was He a Pioneer?
No, the ancient equivalent would be fire signals from mountain top to mountain top. Today we are still working with the technology, realizing its potential in the communications, medical and defense fields - I, for one, am a laser tag champion, but there is also IBM's (NYSE:IBM) optical modulator which could replace miles of copper wire in supercomputers. Also new developments from Harvard deal with ultracold atoms transmitting quantum data. You might want to wait until the technology is proven before investing in quantum data, although Alexander Graham Bell might argue otherwise, given his investing success.

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