The Jeff Kagan Report & Comment

 

Details on the New report. Read preview below: 

 

STATE OF THE INDUSTRY 2010;

Wireless and Telecom in Transition

Opportunities, Challenges and Risks. What’s coming next?

Looking at companies who are winning and losing, and at the changing industry

By Jeff Kagan, Telecom industry analyst

 

PRICE: $490 (US).    Approx 75 pages.    Report # 1331.    Now available for purchase.    12/20/09

Questions? contact Jeff Kagan at jeff@jeffkagan.com or 770-579-5810

Each report is protected under Copyright. All Rights Reserved. Ownership of information remains with Jeff Kagan. Reproduction and distribution or using quotes from this publication or information in any form without prior written permission is forbidden. If you want to purchase reports to distribute please contact Jeff Kagan.  

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This new Jeff Kagan Report & Comment 

is now available for purchase

It includes . . . 

 

The rules of success are different now. The core of this industry changes every few years. It is changing again. 

Staying on track is critical to success.  

 

This report looks at;

-    Who is currently  winning, who is losing and why?

-         What is new and what is next?  And when. 

-         How will changing government regulation impact the growth rate and opportunities?

-         What new ideas, companies and brands are transforming the industry?

-         Which companies, technologies and ideas are at the beginning of their growth curve, and which are at the end?

-         Will the regular wireless handset market recover?

-         Will the entire wireless market go smart phone?

-         As the industry closes in on 300 million devices in the US where will growth come from?

 

Over the next few years the industry will continue to transform. New leaders will emerge. Old leaders will struggle. Well-known brands and strategies must be updated. New thinking continues to reshape the industry.  

The good news is opportunities are enormous, but they look very different from the past. What do companies have to do for continued success? What new threats do existing leaders have to keep their eyes on?  

This report is for industry executives, investors, workers, customers, advertising and public relations firms, regulators, media, students and more.  

It looks at wireless and telephone companies and their competitors, as well as networks and handset makers. 

Included are industry groups like telephone, wireless and cellular, cable television, IPTV, Internet, and much more.

It takes a close look at many companies. What they are doing right and wrong and what is the next big threat they face.

 

Contact;

Jeff Kagan

Telecom industry analyst

The Jeff Kagan Report & Comment

(770)579-5810  

Email; jeff@jeffkagan.com     

Web site; www.jeffkagan.com

 

 

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Preview of first few pages from the report

 

STATE OF THE INDUSTRY 2010

Wireless and Telecom in Transition

 

What’s coming next?

Opportunities, challenges and risk

 

By Jeff Kagan

Telecom Industry Analyst

 

Copyright 2009 Jeff Kagan. All Rights Reserved. Reproduction and distribution or using quotes from this publication or information in any form without prior written permission is forbidden. Information contained here has been obtained from sources believed to be reliable. Jeff Kagan disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although this research may discuss legal or investment issues, Jeff Kagan does not provide legal advice or services, or investment advice or services. Jeff Kagan shall have no liability for errors, omissions or inadequacies in the information contained here or for interpretations thereof. The opinions expressed herein are subject to change without notice. Caution, once this material has been sent, it could be changed, so only trust material e-mailed directly from Jeff Kagan at jeff@jeffkagan.com. If you want to purchase reports to distribute please contact Jeff Kagan.

 

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TABLE OF CONTENTS

 

~ Who will benefit from this report?

 

~ About the author

 

~1~ Overview

 

~2~ The State of our Industry

 

~3~ The current path of telecom – wireless and wire-line

 

~4~ The changing industry

 

~5~ A look at the companies

Companies performance; on the way up, stalled, or on the way down?

Other companies like 

and more keep the wireless and wire line telecom story growing.

 

~6~ Conclusion

 

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WHO WILL BENEFIT FROM THIS REPORT

 

THIS REPORT is for anyone interested in the wireless and wire-line telecom business. People who want a quick snapshot of the transformation of the industry. This looks at the changing competitive marketplace, changing technology, what is new and who is winning, losing, and why.

It looks at where we have come from, where we are today, where we are headed tomorrow, and where we are going over the next 5 – 10 years.

This is written for industry executives and employees, investors and customers. It focuses on the changing wireless and wire-line industry, and new opportunities and challenges that presents.

 

Interested readers include;

 

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About the author.

Over the past twenty-five years Jeff Kagan has been a telecom industry analyst, speaker, author, and now publishes the Jeff Kagan Report & Comment.

This report shares his thoughts, research and opinions on the topic with you.

Over the past 25 years he has pulled back the camera and looks at the longer-term historical perspective on the topics he covers and as the industry continues to change. He has followed the growth and transformation in the wireless, telephone, cable television, IPTV and Internet space. He speaks at meetings, has written articles, and participated in meetings at companies, industry conferences and colleges and universities with groups of executives, employees, customers and investors.

His research and thoughts are shared through the reports, annual subscriptions, consulting services and speeches. See www.jeffkagan.com for more information.

He examines the competitive and changing industry, technologies, advertising and marketing issues and strategies companies face as they compete. This includes technology trends, customer behavior, business models and whether companies are winning, losing and why.

Jeff Kagan looks for what’s hot, what’s not, why, and what’s next. He looks at the changing companies, opportunities, challenges, technologies, competition, regulation, politics and changing industry from a high level.

He has worked with many of the companies he has written about which gives him deeper insights to offer in these reports.

If this report is missing something you wanted to see, or if you have another idea for a report, let me know.

This is my thinking on the subject, the same as I share with the media and in speeches. If you would like to add to my thinking I invite you to contact me at jeff@jeffkagan.com ¨

 

Jeff Kagan, PO Box 670562, Marietta GA 30066 770-579-5810 jeff@jeffkagan.com www.jeffkagan.com

 

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~1~

OVERVIEW

 

Unintended consequences are the biggest unknown

Remember last year as wireless carriers publicized their brand new unlimited voice and data plans? They were trying to generate user traffic. They obviously succeeded. Perhaps too much success. AT&T is now trying to slow down demand from the small percentage of very heavy users.

 

This is one of the times of the year I give speeches on the changing industry. Looking at where we came from, where we are today, where we are heading tomorrow, and looking down the road over the next 5 – 10 years. This report is a longer version of my typical State of the Industry speech, but still cannot cover all of this exploding industry.

Yes it is that time where we pull the camera back and take a big-picture look at our changing industry. At the direction things are headed. To make sure we are on the right track. To make sure we stay there. To take score to see what we have accomplished, and what our competitors have done. A look at who is winning, who is losing and why. About the fast growing and fast changing companies and technologies. About what’s new and growing, and about what’s fading away.

Over the last 25 years I have followed the changing industry and watched countless companies succeed and fail, and technologies grow and fade. The lessons have been many. So have been the surprises. This year is no different. The industry is dealing with some very surprising turns and competitive moves.

Some companies are early in their opportunity-curve like smart phones and Netbooks, while others are at the end of theirs. Some companies and technologies are still here after all these years, while others are gone. And the next big new idea that will change the world has yet to be introduced and is in the quiet building and planning stage in the back office or even the corner of the garage.

Most of what we talk about, read about and use every day is new technology. It is in the media and that stokes the fire of interest. New ideas come from existing competitors, or new competitors to the space or young companies with new ideas.

This is a very exciting time to be in the industry. A time of change and full of ripe opportunity and risk. Fortunes are being made and lost. Some stories are very surprising.

What new companies and technologies are going to be winners going forward for workers, investors and customers? Which are at the beginning of their exciting opportunity and which are at the end of theirs?

That is what this report focuses on. The companies and ideas which are at the center of this wave of change. Ideas that are hot today, and ideas that will be hot next. Sometimes with all the hype it is hard to tell what is coming next.

Yet that is our most important job. To be there, before we get there, so we can profit and lead in our changing industry. Fortunately leaders change. So do followers. We have seen many changes over the last decade or two.

Motorola lead until the mid 1990’s. Then Nokia lead ever since. Now the smart phone market is exploding while the plain handset business has slowed. Suddenly Nokia is not growing like they had been because their brand is for plain handsets.

Will Nokia re-define their brand or lose the lead to a new competitor like Apple or Google or Samsung?

These are the issues every executive, worker, investor and customer face every day in this exciting industry.

 

 

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~2~

THE STATE OF OUR INDUSTRY

The State of the Telecom Industry is very good and very strong.

Both the wireless and wire-line opportunities and risks are changing.

Are you ready for the next step?

 

It continues with strong growth and rapid change. Parts are on the upswing and other parts that are on the downswing. The industry is pulled at both ends as it wrestles with the bad economy and continuing change and innovation.

The wireless and wire-line industry is going through very important and very significant long-term changes. A seismic-shift of the telecom variety. In a few years it will not look like the same industry it is today. It has already changed dramatically over the last ten years, and is continuing that pattern over the next ten years and beyond.

Is the party over? Some individual companies are staying on-track and leading the way, while others are having trouble. Wireless networks for example, are still growing rapidly, but that growth is changing. New customers are harder to find as we reach the upper limits of 300 million devices and people in the United States. Winning customers from each other is the new focus. Looking for new opportunities is another. Fortunately there are plenty, but who wins and who loses in this new area is not clear yet.

The industry is growing and strong, but already looks very different than just a few years ago. Not every company and every area in the industry is strong. There are weaknesses.

Forbes cover story in November 2009 talked about the $10 phone bill. The cover page articles talks about the $116 billion business of selling cell phone calls in the US facing a long and ugly decline. That this scares everyone in the industry except Roger Linquist the CEO of MetroPCS. This may sound crazy, but it illustrates the point I am making.

Just like over the past ten and twenty years we have seen waves of change wash over the industry and transform it, those waves continue. Certain parts of the business are in the early stages and other parts are in the late stages.

The wireless business is re-inventing itself. Non-cell companies like Apple and Google are suddenly leading the way to this next generation. Yesterday if you picked up your phone to make a call, it went over the phone network, period. Today wireless is a large part of the total calls made. Today the Internet plays a larger roll with wireless calls with wi-fi, wi-max and 4G. Will your call go over the regular wireless network, or over one of the VoIP providers like Vonage or Skype? Accessing the Internet plays a larger roll in wireless going forward. We won’t have to carry our laptops around with us on every trip anymore.

How does that change the entire economic model of the industry?

The brands are changing. Like in the 1990’s when Motorola was the number one handset maker, then lost to Nokia, suddenly Nokia is at risk of falling behind other handset makers like Apple, Google, Samsung and others.

It is the regular handset vs. the smart phone and the smart phone is winning.

Companies who have build their brand around the smart phone are winning business while other companies who built their brand around the regular handset are not.

In this report we will look at the strong, those who have stumbled, those who may stumble. We will discuss shifting trends and who is doing a good job shifting with them.

This has been one of the toughest years in the history of the general economy. Different industries have been under enormous pressure. Banking, automotive, travel, real estate and many others have struggled against enormous headwinds that are reshaping them.

Generally speaking, after a very rough year in the general economy, the health of the wireless and wire-line telecom industry remains very strong, but is rapidly changing. Some of that change is because of the economy, but most was already under way.

The pressure is on though. Pressure to change. Pressure to transform the industry. Pressure from Washington DC, from investors, from workers and from customers. What will the industry will look like and how transformative will these waves of change be?

It is important to understand the direction of the industry. Where it has come from, where it is today, and where it is heading tomorrow in order to tell the difference between companies that are in the early stages or late stages of the opportunities and areas they currently compete in.

Plus the direction of change is different during the next few years compared with what we have seen over the last few years.

Along with great opportunity there is always great risk. The next several years look like risk will play a larger role. There is always plenty of talk among those in the industry about the direction things are heading.

Another big question is now about Washington DC. Massive waves of change are getting ready to roll out across, and reshape the industry starting in 2010.

It is important to understand so many competing interests. What about the direction of the industry? Which areas are growing stronger and which are getting weaker?

Key questions we ask ourselves include, how do I successfully compete? Where should I work? Where should I invest? Where should I buy services?

 

Jobs

This is one of the most asked about topics. Where are the jobs? Followed by where are the jobs going? Last decade all sectors of telecom were growing. Hiring was occurring so quickly and from so many companies. This was definitely one of the key places to be.

Then after 2000 everything changes. At first everything hit a brick wall. Some companies shrunk dramatically cutting more than 75% of their work force. Companies like Lucent and Nortel who were flying high suddenly were in dire straights.

During the 2000’s things got better, but only for certain sectors. Here is a nutshell today;

Wire line is shrinking. Still important, but not growing. Jobs are continuing to be cut. Telephone companies are losing customers. Other competitors like cable television companies and VoIP companies are hiring, but these are not paying at nearly the same scale. This will continue.

Wireless is growing. this is one part of the telecom industry that is growing strong. The wireless telephone side is still strong and still growing. However real growth, rapid can't keep up with the sudden rush of demand growth is in the wireless data services. This will also continue. Although there are fewer and larger companies so fewer total jobs. 

The number of companies in the industry continues to shrink. Last decade there were three big long distance companies and many small ones. There were seven baby bells, too many wireless companies to count and a growing number of Internet companies. In addition there were countless smaller cable television companies. A great marketplace for jobs.

Today however it is different. Companies have merged. Today there are only three baby bells, no long distance companies, and just a handful of cell phone companies. There are fewer cable television companies and the Internet while still growing did lose many companies around 2000.

Consolidation has occurred and is continuing. In this marketplace it depends where you are. Whether your sector is growing or shrinking.

Mergers will continue. The pressure is on to lower costs and have a larger footprint and customer universe. Although you may think all of the potential merger partners have occurred, and you are right to a large extent, there are also many smaller competitors who will continue to merge.

Making calls over the phone company is still here, but it is not the growing part of the business. Wireless is. So are making calls over the Internet with VoIP. Next we are looking at making calls over the wireless Internet. Companies like Skype and Vonage are actively chasing that dream. You see their icons on some telephone handsets like the iPhone.

The quality is NOT as good as traditional phone services, but it is cheap or even free and that is attractive. So you can’t understand each other. Many people don’t want to be bothered with the details.

When using your cell phone today’s handsets have built in GPS technology which not only let’s users tell where they are on a map on the screen, but also tells you where the nearest pizza or coffee shop is with directions of how to get there.

This is all part of that amazing wireless data growth and we are only at the early stages.

Cable television is continuing to do strong business, as is the telephone companies new IPTV service. Many customers cut back to a basic service at a lower monthly cost, but in coming years as the economy gets better many may increase their packages once again. Growth for the industry.

Cable television has done well, and is poised to do even better in the next several years. 

These are all very important questions and issues, but come at the issue from different directions. Let's roll up our sleeves and take a closer look in this report. We will look at the timeline of these general trends as well as the networks, the handset makers, the equipment makers on both the wireless and the wire-line sides of the business.

 

 
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~3~

 

THE CURRENT PATH OF TELECOM – WIRELESS AND WIRE-LINE

 

 

Yesterday

 

To understand the direction we are heading it is important to first know where we came from and where we are now. It’s about understanding the direction of the industry.

 

Lets look at the path we have been on and then at the path we are on now and then where we are going during the next couple years and beyond.

 

First of all it is important to recognize that beyond the next couple years we really do not know the direction the industry is heading.

 

Did we know Apple was getting into the wireless business? Did we know how much or how quickly the iPhone would change the smart phone market? Did we know Google would enter the space? How effective they would be? Did we know Google would not only work with other handset makers, but would also put out their own handset like Apple did with the iPhone? And what about all the other ‘did we know’ questions we have lived through and will live through in coming years? They all impact our business.

 

What the opportunities will be. What the challenges will be. What new technologies will we be using and what we will be talking about. What services will fade away. Who will be winning, losing and why?

 

We think we know, but do we? We thought we knew 10 years ago. President Clinton signed the Telecommunications Act of 1996 into law. We thought the future looked very bright and very clear. After all even the government was getting involved for better or for worse. That was an exciting time. It was the rules of competition between the local and long distance companies. It did not address the wireless industry or the Internet to any great extent, but that was ok because these were not the exciting places they are today.

 

If you remember the wireless industry was just going through the transformation from an analog to a digital network. There was no wireless web yet. Just a phone. The Internet was still in its very early stages after going commercial around 1994. At the time it was mostly text and very little business activity.

 

The focus of the Telecom Act of 1996 was putting the local and long distance telephone companies into competition with each other. It was a simpler time. We thought that would lower prices. We weren’t even thinking that much about innovation yet.

 

That was back in the days when companies competed in separate sectors like local, long distance, wireless, Internet and television. The industry was full of companies that were large for the time, but much smaller than today.

 

There were so many companies and so much innovation. Seven baby bells and three big long distance giants along with several hundred smaller players and there were dozens of small wireless carriers.

 

We thought this Telecom Act of 1996 was the rules of competition going forward. We were wrong. It only lasted a few years. After the first couple years, once the baby bells got their act together and started competing in long distance the game was over. They won enough consumers that the long distance companies gave up and focused on the business market. Then a few years later the baby bells eventually acquired the long distance giants, who were no longer giants. Period. Game over.

 

Today there is no more stand-alone long distance industry. No more telemarketing phone calls at dinnertime. No more television advertising wars between AT&T, MCI and Sprint about saving cents-per-minute.

 

 

Today the industry looks much different.

 

 

Ten years ago if you wanted to make a phone call you used a phone company, period. Today there are a variety of competitors and technologies.

 

Just a few short years after the signing of the Telecom Act of 1996 into law, the industry changed. It became very different. It reinvented itself. The next race had begun. The industry was swept up in the wave of change. Several years around the year 2000 that wave broke and created a lot of chaos and loss. However just like at the beach, the waves of innovation and change stirred once again and reshaped the industry.

 

The wireless industry is one of the healthiest, fastest growing and most challenging business environments.

 

During the last ten years wireless has completely transformed itself. It’s a different place, and it is continuing to transform today. The industry looks very different today than it did just ten years ago, and will look just as different a few years from now. Keeping on track is vital. It can mean the difference between continuing to grow or lose business. We have seen both occur in recent years between the big three carriers. There are no long-term guarantees. Making sure you stay on the fast track of growth is your top priority.

 

The wire-line side of the business has its own interesting challenges and opportunities.

 

The wire-line side of the business has been rapidly trying to reinvent itself to stay relevant to as many customers as possible, for as long as possible. This side faces much competition in recent years.

 

Will wire-line matter going forward? That depends on the part of the wire-line business you are talking about. Are we talking about the POT’s telephone service, or the more advanced IPTV like AT&T’s U-verse or Verizons FiOS?

 

Parts of the business are shrinking while other parts are growing.

 

There are many questions about this wire-line side of the business. Even in the new, growth oriented parts like Uverse and FiOS, the growth while impressive, is still not yet making a dent in the direct competitors – the cable television companies.

 

Today competition for wire-line services is much different. Today phone companies compete with cable television companies for consumers and each other for business customers.

 

Today there are many new technology differences giving customers much more choice. Choice is good for the customer marketplace. Choice changes the competitive mix.

 

Until recently the ‘edge’ was in the favor of the companies. The providers of service. Customers had to do business the way the companies wanted them to.


However today, with so many choices in companies and technologies, the customers have the ‘edge’. Suddenly if the customer can take their business and leave and go to a competitor, suddenly the marketplace is shifting.



Suddenly the customer has the ‘edge’. That means since the customer can leave, the competitors have to be more customer-focused. Giving the customer a reason to stay.

 

What will the marketplace look like as it continues to mature, and as technology and competition continue to change the way business is done and what customers expect and demand? These are the questions everyone is asking.

 

Just like ten years ago I don’t think anyone really knows the direction of this industry past the next few years. It depends on changing regulations, changing technologies, changing competition, and changing customer opinions of the winners and losers.

 

One thing is for sure, the marketplace will continue to grow and change rapidly.

 

Companies who have a great relationship with their customers will have the biggest competitive advantage.

 

 

Today through tomorrow

 

What will the wireless industry and individual companies look like going forward? Today’s leaders seem to be structured very well to continue success, at least over the next few years. However they will look very different from the companies they are today. This is not talked about yet in their marketing. And we don’t know much beyond the next few years yet.

 

There are two kinds of competitors. Companies that have both can focus on wire-line and wireless separately or together in they’re advertising and marketing. And companies that are either wire-line or wireless.

 

Those that offer both can have a significant advantage if they can figure out ways to use it. Surprisingly that has not happened in any meaningful way yet.

 

Offering both wireless and wire-line services can be a significant strength.

 

Real competition is just starting to develop between telephone companies and cable television companies. We all have one Telephone Company and one cable television company in each area. Some customers have more than one of each. We always did business with both. However going forward we will be able to choose one and say goodbye to the other.

 

Cable television companies still do not have a wireless voice service yet. Although Cox is moving in that direction.

 

Growth tomorrow looks much different than growth we have seen.

 

 

Changing growth in Wireless;

 

Growth in wireless has always been delightful to watch. Over the last 25 years it has been a battle to win the hearts of new users, then to try to keep them. However as the handsets in service in the United States reach close to 300 million we have to wonder what growth will look like going forward. It will look much different that what we have seen.

 

Just look at the explosive text messaging market in recent years. According to the Census Bureau it has grown from 48 billion in December of 2007 to 110 billion in December of 2008. This growth wave is mainly the teen market. That means wave after wave of new customers are jumping into the wireless space. They will be vibrant customers for decades. However the usage patterns will change.

 

65% of adults also send text messages, but they are more important. Adults send real messages like, will you pick up dinner?  Kids send brief thoughts like, Yawn, or LOL.

 

Wireless calls are getting shorter. In 2006 the average call was about 3 minutes, but by the end of 2008 the average call was 2.27 minutes.

 

Length of calls are shrinking, as text messages are exploding. The wireless marketplace continues to change.

 

Where will growth come from in the wireless business?  Several areas.

 

Growth will come from winning customers from competitors. We have seen that during the last year or two. AT&T is currently winning business from Sprint for example, as well as winning business from smaller competitors.

 

Growth will come from emerging devices. Yesterday we used these devices primarily for voice and then added some data. Today we are using these devices for portable computing and also to make occasional calls. It has flipped. Tomorrow these devices and all the apps will allow us to control so much of our lives. The future of wireless looks much different than it does today.

 

New technology will be connected wirelessly so we get more value. Devices like Netbooks, photo frames and e-readers are becoming more popular. Will this change these industries. Will the e-reader change the book business? Yes I think it will. Not destroy the old model, but change it. There will still be plenty of bookstores to shop in while sipping your fresh cup of coffee, but you will also be able to buy books, newspapers and magazines online, wirelessly, from wherever you are, instantly.

 

This represents and enormous new business opportunity as this new segment may be in the $50 - $100 billion range within the next few years.

 

Growth will also come from new areas of business. One area that is not capturing the headlines yet, but is very important for growth going forward is helping other industries go wireless.

 

Helping other industries use wireless to transform themselves is a huge new opportunity for the wireless industry.

 

Two execs who will become well known names are Glenn Lurie of AT&T and Dan Dooley of Sprint. These men lead one of the new charges of the wireless industry. Updating other industries and having them use wireless technology. I am sure every company will have executives like these two as the industry continues to grow.

 

The wireless industry is in the very early stages of transforming every other industry. This is a huge opportunity for both the wireless industry and other industry. We have only just reached the front door.

 

This will be one of the biggest opportunities over the next ten years.

 

Growth will also come from a variety of new wireless data ideas. Wireless data growth is exploding on the wireless networks.

 

There are good and bad parts to this. The bad is the networks have not been engineered to handle such a large demands for wireless data. This means bottlenecks. At least until the networks are ready to handle the demand.

 

That’s where Wi-Fi and Wi-Max and other technologies are coming to the rescue.

 

Until recently wireless carriers never needed these technologies. They were an open door letting competitors like VoIP providers into their space. However with the sudden explosion of wireless data services they need as many ways to wrap their arms around this exploding opportunity as they can get. This new area lets competitors into the space. It will be interesting to watch this unfold.

 

 

Let’s look at Ford putting the Internet on the dashboard

 

Working with Sprint, Ford is putting a new feature on their dashboard. The Internet. They are looking to provide a new service that will help them win the hearts of new users, and increase their revenues at the same time. And the revenues will be increased on an ongoing basis every time a customer spends money on new features.

 

Who’s next? There are quite a few automakers in the United States and the world marketplace. Just like GPS caught on quickly, so will mobile Internet I predict. It will start out as a new and fun service, then will move into more important features as the years pass. This is similar to the App stores. It happens quickly.

 

Ford is forward thinking with technology. Already working with Microsoft on its Sync technology it is ahead of just about every other carmaker.

 

We used to buy cars and be able to keep them for years. Now if we want toe upgraded features on these Sync or GPS or now Internet services we have to upgrade our automobile more often.

 

The next generation may let users upgrade the technology while not trading in the vehicle. This would be welcome to many buyers and create a higher desirability for this brand or that brand.  Spending money to upgrade your cars technology may sound far fetched, but it’s a lot cheaper than upgrading the car. Plus you don’t have to upgrade. The choice is up to each user.

 

Another source of income for Ford will be from App developers to play a role in the experience. Imagine being able to chat with your friends on Twitter or Facebook from the dashboard of your car. Its coming.

 

Ford has not talked about it yet, but I will bet they will open a Ford App Store. Why not? Every one else is.

 

This is a sizable new market for the carmaker. Ford already sold about $5 - $6 billion worth of Sync, which is the first generation of this software. As the next few years unfold, and as users hear more about this, and as the experience gets better and richer and can do more I expect this number to climb quickly.

 

There is no way to know what it will grow to, but if we are at roughly $5 billion today, perhaps we could be looking at ten times that number of $50 billion in the next several years.

 

Whatever the number it will be very large and brand new. An opportunity that other carmakers and other technology companies cannot ignore.

 

 

The Government will get involved again, for better or worse

 

During the 1990’s the Clinton administration was very involved with the telecom industry. Telephone, wireless, Internet and television was plenty to try and wrap their arms around. The FCC was very busy trying to manage the growth, but the industry kept changing to fast.

 

Then the crash of 2000 where the Internet and everything else in the industry hit a brick wall. Investment, building, everything stopped for a while. Equipment companies like Lucent and Nortel, which were growing very rapidly suddenly stopped. Today they are a fraction of the size they were at their late 1990’s peak.

 

Next the Bush administration seeing this result decided to take a more ‘hands-off’ approach. That worked well as the Internet and cell phone marketplace exploded and the fixed line side started to reinvent itself. Growth was occurring at a rapid pace. We have seen many new and healthy areas over the last decade. Change was occurring at light speed. That brought many opportunities, but also much risk.

 

Now under the Obama administration we wonder what to expect. We have already seen much government involvement in other areas of business. We have also seen much activity buzzing around the areas of telephone, wireless, Internet and television. There has been much talk, but so far not much action. Right now things are positioning.

 

Even though it has not started yet I believe we will see much more government involvement trying to direct the industry. What effect will this have? We have to hope not the same thing that happened in the 2000 timeframe. Controlling the rapidly changing industry is very difficult.

 

Wireless is one of the most healthy and successful businesses today. It is not perfect. There are things that need to be adjusted. However stirring the pot too much may slow the growth and that would be tragic.

 

One of the biggest challenges today is to make sure growth continues strong and healthy. Wireless as an industry works. There is plenty of innovation and choice. These companies continue to pour billions into their networks to keep up with demand.

 

The problem is we have been hearing too much buzz around more regulation. The concern is we hear more regulation is good. While that may be true in some cases, too much regulation is bad. It can stifle innovation and creativity and growth.

 

We have to make sure we keep the doors wide open for innovation and growth, while at the same time protecting end users.

 

Some regulation may be good, but too much regulation is definitely bad. This is a very delicate path we have to explore to make sure we help, and don’t hurt the industry.

 

 

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