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Wireless & Cellular Business Trends Analysis, Business and Industry Trends Analysis

¹ Video Tip
For our brief video introduction to the Wireless industry, see
Wireless communications, including such fields as mobile entertainment, RFID, mobile banking and cellphone service, continues to be one of the hottest sectors in the entire InfoTech market. There were more than 7.1 billion global wireless communications subscriptions by mid-2015, including more than 355 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.  Estimates of the actual number vary widely. Cisco estimated 4.3 billion globally as of the end of 2014.) The number of subscribers to fast Internet access via wireless devices is already 3.5 billion.
New cellphone handsets are selling at a rate of 1.8 to 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 are upgrading to smartphones. For example, 76% of U.S. subscribers now carry smartphones.
Most new cellphones feature a dizzying array of advanced features. More music-capable smartphones are sold each year than stand-alone portable music players. More digital camera-equipped smartphones are sold than stand-alone digital cameras. In addition, smartphones and tablets are Internet-capable, increasingly able to take full advantage of high speed access on 3G and 4G networks. This means that some 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.
Total U.S. wireless service company revenues were about $187.8 billion during 2014, according to CTIA-The Wireless Association. This is down slightly from the previous year due to intense price competition among carriers. Market penetration of wireless service subscriptions in the U.S. represented 110% of the population at year-end 2014 (up from only 104% the previous year and 79% at the end of 2006). American subscribers spend an average of $46.64 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.
In Europe, it would be easy to say that there are too many carriers. Mergers have accelerated there, and some firms are beginning to partner-up on infrastructure costs. Britain’s O2 UK, a unit of Spain’s Telefonica, and Vodafone placed their networks into a partnership in order to save costs. This is not unprecedented. In India, carriers have long shared antenna networks while competing head-to-head. In July 2014, EU regulators approved Telefonica’s acquisition of E-Plus for $11.8 billion.
Perhaps more noteworthy 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 in the works as of July 2015. Also, T-Mobile (America’s fourth-largest wireless carrier) was rumored to be under consideration as a merger candidate with Dish, a satellite TV firm. (T-Mobile had previously tried to merge with AT&T but the deal was abandoned in 2011 due to regulatory and antitrust issues. T-Mobile had also tried to merge unsuccessfully with Sprint in the past.)
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 game playing (“gaming”) and mobile entertainment such as music and video continue to make great strides, 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 cellphones, ranging from satellite-based services to remote wireless sensor networks (WSNs) and vast wireless Wi-Fi networks on corporate and college campuses. Whether it is access through Bluetooth, the fast data transfer speeds of ultra-wideband (UWB), satellite, cellphone or Wi-Fi, consumers and business users alike have become extremely reliant on wireless services and devices in their daily tasks.
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 are about to soar as technologies improve and costs decline.
Important wireless industry trends for the mid-term include:
a)    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. Analysts at Cisco Systems forecast 50 billion wirelessly-connected devices by 2020. Wireless Sensor Networks (WSNs) for M2M will proliferate, providing exciting new ways to gather environmental and industrial data, and to foster home automation and monitoring along with industrial uses.
b)    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.
c)    Ultra-high speed LTE (Long Term Evolution) is quickly being installed worldwide. Download speeds on the most advanced cellular networks are already in the range of 19 Mbps (megabits per second). All of China’s major cellphone services companies began offering a version of LTE in late 2013 and early 2014.
d)    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.
e)    RFID will continue rapid adoption by manufacturers, logistics centers, shippers and retailers. Second- and third-generation RFID will eliminate most of the disappointments of earlier RFID implementations.
f)     The Apple iPhone sets the standard for consumer expectations for smartphone handsets. However, the Android operating system, launched by Google, has much higher market share on smartphones than the iPhone operating system.
g)    Contactless payment systems, utilizing near field communication (NFC) to wirelessly debit or charge accounts by waving a smartphone at a cash register or vending machine will grow quickly.
h)   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.
i)     The Personal Health Internet is becoming widespread, with consumers constantly using apps and small devices, monitoring their own vital signs and uploading related data to online sites for analysis. The enormous popularity of products such as the Nike+ FuelBand, that tracks all of a user’s daily activities, will accelerate this trend.

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