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The Wireless Industry Is Changing Again

By Jeff Kagan
Nov 13, 2015 5:00 AM PT

Wireless is one of the strongest industries today. However, it continues to change. Every few years, the focus changes and the industry goes in new directions. It happened a few years ago with the iPhone and Android. Now change is happening once again.

The Wireless Industry Is Changing Again

The wireless industry growth wave is changing. It is cresting. That is not a problem for the network and handset companies that are creating the next growth waves to ride. The problem is for companies that don't recognize what is happening. Companies that don't create the next growth wave to ride may find the next five years tougher than the last.

Smartphones will continue to be the strong base, both for the network and the handset maker, but rapid growth will come from other areas. Wireless is still growing and expanding, and things look different going forward.

Wireless Is Transforming Other Industries

Wireless is working with other industries to help them modernize and grow -- industries like automotive, healthcare, retail, and so many others all are embracing the wireless world. Sometimes this rapid transformation is a little unsettling, but progress and growth are always good.

Just look at how cars are starting to work with wireless networks, for example, providing a WiFi hotspot for users' devices. All sorts of new and advanced technology keeps rolling out on the dashboard, both for drivers and passengers.

Another example is how wireless is transforming the pay-TV space. This is giving cable television companies a real run for their money. Some will change to meet the new challenge. Some won't.

The iPhone and Android Wave

The last major shift took place roughly eight years ago, when Apple's iPhone and Google's Android operating system hit the market. Super-smartphones transformed the industry and quickly took the lead, sending BlackBerry and Nokia to the back of the pack. They created an entirely new experience with apps and all sorts of features that were never available before.

Consumers and business users rushed to get their hands on smartphones. Now that growth curve is slowing. While smartphones will be a powerhouse segment going forward, they no longer will be a powerful growth engine. However, growth can and will occur.

Public Companies Need to Show Growth

Since public companies need to show growth to keep investors happy, they continually expand and create the next growth wave. That's the reason for the constant wave after wave of innovation in the wireless industry.

On the network side, AT&T Mobility started making changes in the last several years. Verizon Wireless is not moving as quickly or as aggressively, but it is transforming itself as well, to keep up with new industry trends.

Larger wireless carriers are working closely with many different industries to transform what they do and give them new areas for growth. They are changing the pay-TV business by letting users watch television in their homes, as usual, but also over the wireless network, anywhere, using their smartphones and tablets.

In fact, since AT&T acquired DirecTV, it now offers television over the AT&T Mobility wireless network. Now users can watch television anytime, anyplace, on any device -- like a smartphone or tablet. This lets AT&T compete nationally against the cable television industry, with a better offer than traditional cable TV.

Wireless TV Is a Threat to Cable TV

That is a big threat and challenge to cable-TV providers like Comcast, Time Warner Cable, Charter, Cox and others. This new competitive pressure means all players must rise in order to remain competitive. That is good, because the cable television industry has not shown much innovation in recent decades without a competitive threat.

That's likely why Comcast recently notified Verizon Wireless of its intention to develop new services. It is trying to remain competitive with DirecTV -- and AT&T's DirecTV is just the beginning of this new wave of television. The threat to the traditional cable television industry is great.

Different Path

Sprint and T-Mobile are transforming themselves as well; however, they are taking a different path. Today, they are strictly wireless carriers and they are now winning more market share, quarter after quarter.

T-Mobile started its recovery first, and it is still showing growth. Sprint is in the middle of a major transformation, and it is in the early stages of showing strong growth.

Smaller carriers like U.S. Cellular, C Spire, Tracfone and others don't seem to be transforming as yet. They might not show rapid change and growth like the big four will. However, anything can happen, so keep your eyes on all the players.

Handset Makers Are a Mixed Bag

Apple and Samsung are still the strongest players on the handset side. They have been showing innovation over the years, but today it's more a case of fine-tuning -- nothing earthshaking or industry changing.

Google keeps trying with the Nexus. In fact, it now offers its own wireless service as an MVNO, or mobile virtual network operator, but customers must use the Nexus phone. That limits its potential as a service provider. However, I'll keep my eyes on them.

What to Expect Going Forward

What will the next few years look like in wireless? Things are changing -- that's for sure -- both on the network side and the handset side. Changes in wireless are affecting other industries, like pay TV, retail, healthcare, automotive, home automation and security, and much more.

E-Commerce will play a larger and more important role going forward. Companies in every industry either are going full force, or just dipping their toes in the water. Any way you slice it, there is rapid growth and expansion ahead.

We will use our wireless devices as remote controls for our lives. Today we grab our keys, wallet and smartphone when we leave the house. Tomorrow, we'll only have to grab the smartphone. It will have everything inside it.

What You Should Do

One of the real problems is the language barrier between industries. We saw this with automotive and healthcare in the last few years. Wireless executives don't talk the same language as other industry executives. Each industry has its own special flavor.

This is a hurdle, but it represents a real opportunity for people who have wireless industry experience today. They can take their wireless know-how to other industries and help them grow and integrate with the wireless world.

That can mean huge new opportunities for other industries, for the wireless industry, and for individuals. The next few years will be filled with chaos and transformation. However, they also will be filled with innovation and change.

The next few years will provide special opportunities for customers, executives, workers and investors. Of course, not every company will be a winner. The trick is knowing where to place your bet.


E-Commerce Times columnist Jeff Kagan is a wireless analyst, telecom analyst, industry analyst, consultant and speaker who has been sharing his colorful perspectives on the changing industry for 25 years. Email him at jeff@jeffKAGAN.com.


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