A lot has happened since I wrote in 2007 that “This is AT&T’s world. We just live in it.” Some are now suggesting that AT&T has been replaced by Google (or even Apple, Amazon, or Verizon) as the newest internet “Golden Child”. They may have a point.
So what happened in 4 years? Competition. Google, Apple, Amazon, Verizon and others are outpacing AT&T, both in technology (copper vs. fiber) and innovation (need I say more about Google?)
Another reason is the rapid pace of innovation and each company’s apparent insight into what is valuable and needed by internet users. In any case, the technology marketplace is changing and the open nature of competition on the Internet has forced an overthrow of the old guard.
Here’s the Latest
The Old Cable TV (Broadband) Model is weakening. Even some Broadband providers realize change is coming. While industry flacks deny it, Verizon and others see large numbers of cable and satellite subscribers “cutting the cord” for internet delivered television in the coming years.
But old habits die hard, even in the wireless broadband era. For example, Metro PCS, a wireless provider, is restricting access to services that require more network capacity. This not only highlights the notion that “closed” systems remain viable for some companies, despite ample evidence to the contrary, but also suggests the future importance of higher network capacity for more robust services, such as NetFlix.
The result is that video and other high capacity services will be charged a premium by some large providers for more network capacity, and those costs will be passed on to the consumer. In fact, we should expect more price hikes to support outdated and low capacity networks in the future.
In the U.S., this is taking place on two levels: older wireline networks (AT&T, and cable – Comcast, Time Warner, and Cox) that are still part fiber and part twisted pair (now regulated by the FCC): and wireless (3G and 4G cellular) that are being built up to take up the slack (still unregulated). All will be raising rates to meet the new network demands.
This is a major reason why wireless companies are promoting “data plans” so heavily, not because they are so “advanced”, but to replace all conventional cellular service to pay for the anticipated demand for “pad” and “touch” internet devices that are now being introduced.
Want a Reality Check?
Go into your local wireless store and see how many phones you can buy without a data plan. I’ll bet there are less than 5, but several that require a data plan, resulting in an extra $30 a month on the wireless bill. (That’s usually only for 5GB. An unlimited account is at least $60 monthly.)
Location is also becoming a factor. Large urban areas are more favored (cherry picked), while smaller cities, disadvantaged regions, and rural sectors are relegated to slower technology – which are less lucrative for major ISP’s and wireless companies.
Despite criticism by traditional press outlets, is anyone listening to (or reading) their comments ?
For example, see the recent editorials by USA Today and the Miami Herald.
Meanwhile, within the industry, individual companies are positioning themselves to service new wireless and mobile markets, providing high speed chips, full mobile access and apps
For example, as reported on “Seeking Alpha” (1-04-11) and other sites, Qualcomm, a wireless chip manufacturer, is purchasing Atheros Communications, a mobile and handheld chip maker. Also, at least 100 new tablet PC models will soon hit the market hoping to replace the laptop.
So, let’s summarize for early 2011
• Higher speed wireline (Telco-Cable) is going up in cost, despite “net neutrality” rules
• Broadband (wireline) will soon be a major platform for the delivery of TV, Radio, Internet
• Wireless costs are rising: data plans are now at $30-70. Soon regular cellular will be gone.
• Mobile and handheld devices will proliferate: all with WiFi/3G/4G capacity
• WiFi is languishing, however, due to the lack of a concerted business model by companies and local governments: some businesses will take up the slack. (and as a result contribute to a potential area of disruption to ISP and Wireless business models)
• Demand will be in affluent domestic and emerging markets, where users are tech/net savvy.
Which specific companies will prosper, and are worthy of your investment dollars? Sign up for my new technology newsletter to find out. (contact me to get on the list : >)
So what happened in 4 years? Competition. Google, Apple, Amazon, Verizon and others are outpacing AT&T, both in technology (copper vs. fiber) and innovation (need I say more about Google?)
Another reason is the rapid pace of innovation and each company’s apparent insight into what is valuable and needed by internet users. In any case, the technology marketplace is changing and the open nature of competition on the Internet has forced an overthrow of the old guard.
Here’s the Latest
The Old Cable TV (Broadband) Model is weakening. Even some Broadband providers realize change is coming. While industry flacks deny it, Verizon and others see large numbers of cable and satellite subscribers “cutting the cord” for internet delivered television in the coming years.
But old habits die hard, even in the wireless broadband era. For example, Metro PCS, a wireless provider, is restricting access to services that require more network capacity. This not only highlights the notion that “closed” systems remain viable for some companies, despite ample evidence to the contrary, but also suggests the future importance of higher network capacity for more robust services, such as NetFlix.
The result is that video and other high capacity services will be charged a premium by some large providers for more network capacity, and those costs will be passed on to the consumer. In fact, we should expect more price hikes to support outdated and low capacity networks in the future.
In the U.S., this is taking place on two levels: older wireline networks (AT&T, and cable – Comcast, Time Warner, and Cox) that are still part fiber and part twisted pair (now regulated by the FCC): and wireless (3G and 4G cellular) that are being built up to take up the slack (still unregulated). All will be raising rates to meet the new network demands.
This is a major reason why wireless companies are promoting “data plans” so heavily, not because they are so “advanced”, but to replace all conventional cellular service to pay for the anticipated demand for “pad” and “touch” internet devices that are now being introduced.
Want a Reality Check?
Go into your local wireless store and see how many phones you can buy without a data plan. I’ll bet there are less than 5, but several that require a data plan, resulting in an extra $30 a month on the wireless bill. (That’s usually only for 5GB. An unlimited account is at least $60 monthly.)
Location is also becoming a factor. Large urban areas are more favored (cherry picked), while smaller cities, disadvantaged regions, and rural sectors are relegated to slower technology – which are less lucrative for major ISP’s and wireless companies.
Despite criticism by traditional press outlets, is anyone listening to (or reading) their comments ?
For example, see the recent editorials by USA Today and the Miami Herald.
Meanwhile, within the industry, individual companies are positioning themselves to service new wireless and mobile markets, providing high speed chips, full mobile access and apps
For example, as reported on “Seeking Alpha” (1-04-11) and other sites, Qualcomm, a wireless chip manufacturer, is purchasing Atheros Communications, a mobile and handheld chip maker. Also, at least 100 new tablet PC models will soon hit the market hoping to replace the laptop.
So, let’s summarize for early 2011
• Higher speed wireline (Telco-Cable) is going up in cost, despite “net neutrality” rules
• Broadband (wireline) will soon be a major platform for the delivery of TV, Radio, Internet
• Wireless costs are rising: data plans are now at $30-70. Soon regular cellular will be gone.
• Mobile and handheld devices will proliferate: all with WiFi/3G/4G capacity
• WiFi is languishing, however, due to the lack of a concerted business model by companies and local governments: some businesses will take up the slack. (and as a result contribute to a potential area of disruption to ISP and Wireless business models)
• Demand will be in affluent domestic and emerging markets, where users are tech/net savvy.
Which specific companies will prosper, and are worthy of your investment dollars? Sign up for my new technology newsletter to find out. (contact me to get on the list : >)
