Radio-spectrum limitations meant that throughout the Chicago area the old car phone system could handle fewer than 2,000 calls an hour. Engineers at AT&T's Bell Laboratories thought they could boost capacity by 50 times or more by reducing signal power and dividing a region into smaller units called cells. Computerized switches would transfer calls from one cell to the next as drivers passed through their territories.The first large-scale experimental cell-phone system was built in the Chicago area in the late 1970s after successful tests of prototypes in New Jersey. One advantage of the location was the large Bell Labs office in Naperville, where engineers could monitor the system and iron out startup problems. In 1983, Ameritech Corp., the local successor to the Bell System, won government permission to convert the experimental system into a commercial one. Other areas of the country soon followed.
It was far from obvious that the new phones would have mass appeal. They cost around $3,000 at first, and monthly bills could average up to $200. Cell phones looked like a nice niche market to Motorola, which, along with other companies such as Zenith and Admiral, had once made the Chicago area a center of radio and television manufacturing. Like others, the electronics giant had abandoned the manufacture of television sets to the Japanese. Instead, it focused on two-way radio systems for police departments, cab dispatchers and others.
But as prices for cell phones fell, demand shot up. By the 1990s, they had become a fixture in American life, and Motorola found itself back in the consumer-electronics market as the leading maker of cell phones. The popularity of the phones and other new technologies, such as paging services and computer modems, created a new industrial base for the region.