Wireless, Wi-Fi, RFID & Cellular Industry Market Research

Wireless communications, including such fields as mobile entertainment, RFID, mobile banking and cellphone service, continues to be one of the hottest of the world’s industrial sectors.  There were more than 7.5 billion global wireless communications subscriptions by mid-2016, according to Plunkett Research estimates, including more than 380 million in the U.S. alone.  (Since some people, particularly in developing nations, have more than one subscription, the number of individual subscribers is significantly less.)  The number of subscribers to fast Internet access via wireless devices is already more than 3.5 billion.

New cellphone handsets are selling at a rate of 1.9 billion yearly—making the cellular phone the fastest-selling single item of consumer electronics by far.  These handsets are purchased by new users (those who are getting cellular service for the first time ever), but more often by those who are upgrading to newer, more powerful phones.  At a very rapid pace, people around the world have upgraded to smartphones.  For example, more than 79.3% of U.S. subscribers now carry smartphones.

Most new smartphones feature a dizzying array of advanced features.  In addition, smartphones and tablets are Internet-capable, able to take full advantage of high speed access on 3G and 4G networks.  This means that small, lightweight smartphones and tablets can do much of the work of a standard desktop PC.  Consumers love the flexibility and capability of smartphones, and by some estimates spend an average of three hours per day using them in the U.S.  When considering this development, it is important not to overlook the way that smartphones have disrupted traditional business sectors.  For example, thanks to the powerful cameras built into smartphones, the number of photos taken by consumers has soared at an astonishing rate, while sales of traditional cameras have plummeted.

Total U.S. wireless service company revenues were about $191.9 billion during 2015, according to CTIA-The Wireless Association.  Market penetration of wireless service subscriptions in the U.S. represented 116% of the population at year-end 2015 (up from only 110% the previous year and 79% at the end of 2006).  American subscribers spend an average of $44.65 monthly on their cellphone bills.  (In 1998, the average monthly bill was $98.02, but intense competition forced prices to plummet.)

Consolidation of wireless service providers has been strong worldwide.  In July 2013, for example, Japan’s Softbank merged with America’s Sprint Nextel, creating a powerful new force in the American market, and giving this successful Japanese firm a solid foothold in the U.S.  The deal included about $5 billion in new capital for Sprint Nextel’s operations.

Of great importance is the interest in mergers between wireless carriers and other types of communications firms.  A $49 billion merger between AT&T (a leader in both wired and wireless telephony) and DirecTV (a big name in satellite TV services) was completed in July 2015.  The strategy for such mergers is to add to the customer base while creating the ability to offer bundled subscription plans with multiple features and services.

Worldwide, cellphone use continues to experience extremely rapid growth in emerging and developing markets.  China has over 1.3 billion wireless subscriptions, with India at about 1 billion.  In developing nations, cellphone service is bargain priced.  Handsets are particularly inexpensive in some regions.

Globally, smartphone-based electronic games (“gaming”) and mobile entertainment such as music and video continue to enjoy soaring growth, along with the increasing use of social media on mobile devices.  Smartphones are rapidly becoming everyday banking and payment devices, particularly in Japan, Korea and parts of Europe; that trend will move to the U.S. over the mid-term.  (In some cases, payments are made using a technology known as near field communication (NFC) to enable smartphones as payment devices when close by a cash register or vending machine.)  Mobile banking is one of the most popular services for cellphone owners in the emerging world, as wireless innovation is bringing banking services to remote areas for the first time ever, while banking apps are extremely popular in developed nations.

The wireless sector incorporates a great deal more than cellphone services, ranging from satellite-based communications to vast wireless Wi-Fi networks in corporate and public spaces.  There is no end in sight to the rapid acceleration of wireless.  RFID (radio frequency ID tags used to track inventory) equipment prices are plummeting while adoption is growing on a global basis.  Uses for smartphones are growing endlessly.  Applications for remote wireless sensors of all types (often referred to as the Internet of Things) are about to soar as technologies improve and costs decline.

Important wireless industry trends for the mid-term include:

1. The total wireless market and the number of uses for wireless connections will continue to grow, even though market penetration of individual cellphone subscribers has reached extremely high levels on a global basis.  M2M, or machine-to-machine communications, will be a major growth factor in the wireless industry.  Wireless Sensor Networks (the Internet of things) will proliferate, providing exciting new ways to gather environmental and industrial data, and to foster home automation and monitoring along with industrial uses.

2. Smartphones will continue to morph into ever more complex, multi-purpose personal communication devices thanks to the availability of apps of all types.  Smartphone circuitry will become much more powerful, piggybacking off the revolution in ultra-fast, multi-processor power in handheld game machines.  Chips will become more energy efficient.

3. 5G, the next generation of high-speed wireless, will quickly move onto the market, with global agreement to 5G standards and rapid introduction of advanced equipment.  Faster 5G speeds will lead to the introduction of a new level of mobile services and entertainment.

4. Security issues, such as eavesdropping on Bluetooth conversations, hacking into Wi-Fi networks and viruses spread among smartphones, will require more and more attention and investment from the technology and telecommunications sectors.

5. RFID will continue rapid adoption by manufacturers, logistics centers, shippers and retailers.  Third-generation RFID will eliminate most of the disappointments of earlier RFID implementations.

6. The wireless industry is relatively immune to dips in the economy, as consumers consider their mobile communications to be as basic a need as clothing or transportation.

7. The Personal Health Internet is becoming widespread, with consumers constantly using health apps and small devices, monitoring their own vital signs and uploading related data to online sites for analysis. 

8. The support that cloud computing provides to the wireless sector will continue to grow in importance, while costs and capabilities become ever more efficient and attract.  Cloud computing makes it possible for a vast variety of mobile apps to operate efficiently, while enabling the storage and analysis of massive amounts of data that can be accessed via mobile devices.