2010 Wireless Industry Outlook: No Pain, No Gain

While the general sentiment for the passing of 2009 has been "thank God that's over," the year ahead will be characterized as one of steady progress but will fall far short of euphoric growth.

One of the most over-used buzzwords of the past decade has been "convergence." In 2009 convergence became a substantial reality.  Growth of netbooks, larger and higher resolution SmartPhone screens and cameras, and an accelerated shift to wireless data services including unlimited rate plans shifted the pivot point of the industry squarely between mobile and web centric universes.  As convergence has taken shape we hear less talk about it, while conversations have shifted to the details of competitive products, new networks, and service strategies that embody convergence as the norm.

Fixed-mobile convergence (FMC) has brought its share of distortions:

- Operators of 3-3.5G networks have been impacted by ramping broadband demand.
- CTIA and other organizations increased the call for the FCC and other regulatory bodies to release more spectrum bands.
    - Outside of previously anticipated auctions such as in India, few countries or regions are in a position to open up enough spectrum to meet the aspirations of the industry.
- Apple iPhone and other suppliers' web-phone sales exceeded most forecasts.
- Google Android, DROID, gained momentum that accelerates the shift to a device triumvirate: touchscreen web-phone devices, an open OS applications environment, plus online content and app stores. 
- The hottest segment of PC-laptop sales was the netbook.
    - Netbook sales reached over 36 million units during 2009. 
    - On top of the addition of netbook class devices, notebooks emphasize longer battery life and mobile data services.
- As predicted, social networking became a major theme for wireless services and applications.


2010 Forecast of Wireless Trends

We head into 2010 with, we hope, a steadier economic climate and expectations for how trends will play out.  Although our projections for 2009 proved mostly on target, the unsettled macro environment was a challenge.

Broad Industry Trends:

Trend #1 Device innovations will increase.  Devices that take advantage of new battery technologies, sharper displays, and solid-state memories will move into products starting in 2010.  Among these will be:
- eBook Readers
- 'Slate' or tablet devices including from Apple, DELL
- Longer and faster charging notebooks and netbooks
- UMD, ultra mobile device, category will finally take its place between SmartPhones and netbooks
- 2010 will presage accelerated device innovations that will take place during 2011-2015. 

Trend #2 Applications stores proliferate to the point of market confusion.  Third party app store portals and social networking review/recommendation sites will rise to help tame the confusion.  Increasingly, popular applications developed for the iPhone, RIM, Android or Symbian will be modified to run on the other platforms.

Trend #3 US government broadband spending will buoy smaller players.  Government funding will help save beleaguered equipment suppliers from collapsing business prospects.  Aperto, Alvarion and Redline will be among the beneficiaries.

Trend #4 Backhaul infrastructure deployment will continue along current trends.  Wireless backhaul will rise to see year-over-year growth of 60% as wireless data growth accelerates.  Operators will deploy backhaul more as a strategic component of the network, making use of wireless backhaul grid architectures to reduce cost/capacity.

Trend #5 Cloud 4G (cloud computing/ICT) will take center stage as a major theme for wireless operators.  The growth of Cloud services will compel operators to provide increased managed services that comply with IT industry objectives and standards.


LTE and WiMAX Market Trends:

Trend #6 Clearwire-Sprint will meet their goals of coverage of over 100 million POPs by year's end.  Scale of operations and coverage is an overriding factor that has hemmed the prospects for subscriber growth - 2010 will see Clearwire emerge as a more worthy competitor.

Trend #7 Clearwire-Sprint and their cable partners will move into a more competitive position vis-à-vis mobile operators in 'hot' device availability.

Trend #8 Legal battles between mobile device, PC, and consumer electronics suppliers will continue.  The battle between Nokia and Apple will be joined by additional skirmishes as IPR developed within the converging industry collides.

Trend #9 Verizon will not officially open its LTE network until late 2010.  However, several announcements of devices and 'pre-grand opening' deployments will take place.  What compels VZW to hold back on LTE is the need to come to market with a full slate of devices and lack of pressure from Clearwire.  With progress being made in LTE development, Verizon can afford to be strategic rather than reactionary.

Trend #10 Verizon and AT&T will continue to do battle over coverage and devices.  The market share gains these juggernauts have experienced will fall: Sprint will finally see an upturn. 

Many other trends have started to emerge:

- SoCs that will make multi-band WiMAX devices more practical
- WiMAX ecosystem suppliers will be among the first to supply LTE ICs and devices.
- MyFi connectivity expanding to AnyFi: netbooks and other devices may soon come with built-in router capability
- Cable operators gain mobile market share: although the numbers remain low compared to mobile phone industry norms, cablecos start to press their content and home-road advantage. 

For more information, contact the author at robert@maravedis-bwa.com  MARAVEDIS is a leading analyst firm focusing on disruptive technologies including smart networks using WiMAX, IEEE, and 3GPP/LTE. 




Robert Syputa, Sr.  Analyst & Advisor

Robert Syputa, BSEE, MBA, is Senior Analyst & Advisor - IPR & Technical, and has over 26 years experience in the broad field of electronics and seven (7) years experience as a telecommunications industry analyst and consultant, particularly in the emerging fields of Wireless Broadband and related businesses and technologies.  His background experience includes technical sales at Fairchild Semiconductor and sales management at Philips.  Robert ran TEAM Associates, an independent manufacturer's representative firm. 

Several years ago, Syputa developed an interest in 'what is next' for wireless communications from the perspective of enabling semiconductor and wireless technologies that would meet evolving market needs.  He developed a broad understanding from grounds up analysis of the technologies, companies and business trends and standards shaping the converging industry.  He has consulted with both startup wireless companies and leaders in the WiMAX/WMAN field, and with investment groups.  Mr.  Syputa obtained a Bachelors of Electrical Engineering from Southern Polytechnic State University and a Masters of Business Administration from Seattle University.

 

Monday, February 01, 2010 in Business  | Permalink |  Comments (1)