Jeff Kagan: Tech Growth Wave Is Shortening and Intensifying

Jeff Kagan  |

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It’s amazing how quickly hot, new technology cools down these days. When it comes to tech, the growth wave is shortening. Today, that same growth curve that used to take much longer is now shortening and intensifying. So, the challenge today is not only to find and jump on the next growth wave early, but also to know where that wave is in its lifespan.

Some companies are better at this than others. It all depends on how tuned in the CEO and executive management are. Think about the typical growth wave. It rises, crests then falls. When it’s on the growth side, sales, popularity and innovation are all increasing.

Eventually, growth starts to slow, and the wave begins to fall. The amount of time it takes to rise, crest and fall is different for every company and every technology. However, this wave is shortening in every case.

The Growth Wave rises, crests then it falls

I wrote about this in the early years when iPhone and Android were on the growing side of their growth curve. Now, that is slowing for both. So, what’s coming next?

Will it start to fall? Or will the companies come up with the next new and hot technology that will reinvigorate sales, re-energizing the wave for another extended period of time?

Any way we slice it, the wireless industry, as a whole, has been growing and changing for decades. Just think about the path it has taken from analog to digital to 2G, 3G, 4G and now to 5G, with 6G in the distance.

Every step of this path has been full of different growth opportunities. And with every new step, we leave yesterday’s hot technology behind in the dust.

Yesterday we loved Blackberry, Palm and Nokia handsets. Today we use super smartphones like iPhone and Android sending yesterday’s leaders to the back of the pack. Yesterday, there were only a few hundred apps. Today there are millions.

What will tomorrow look like on the Growth Curve?

With that said, the question every investor, worker and executive in this industry has is simple. What will tomorrow look like? What company, product and service will be hot tomorrow?

Sometimes companies do a great job jumping onto the growth wave. Other times they miss completely.

Consider a decade ago when non-wireless companies tried to enter the wireless world. Companies like Comcast, Time Warner Cable, Cox, Amazon.com, Facebook and others all jumped in at the same time.

They all saw wireless as a technology on the growth side. They were right, partially. The wireless industry was growing, but it was also changing from one G to the next. These companies jumped in at the end of one shift as it was declining. As a result, as the industry continued to grow, yesterday’s technology declined. That’s why they failed a decade ago.

Now, some of them have re-entered wireless and are trying once again. Think about companies like Xfinity Mobile, Spectrum Mobile and Altice Mobile, who are giving wireless another try.

We have not seen Amazon.com and Facebook re-enter yet. Will they? If so, when? And will they be successful this time?

Today’s Pay TV leaders are Comcast and AT&T

A few years ago, when AT&T acquired DirecTV, pay TV was still a hot commodity. AT&T both updated and transformed DirecTV into an industry leader. In fact, today the two leaders today in pay TV are Comcast and AT&T. That’s an incredible leap.

However, over the last few years we have seen the traditional pay TV model being challenged by new technology, new thinking and new companies.

Like with the transformation in wireless, pay TV is also transforming to its next level. Like moving from 4G to 5G wireless, pay TV is now changing as well.

So, pay TV and wireless have these things in common. Does this mean existing leaders should exit the marketplace?

Of course not. What it does mean is they must think ahead, stay with the change wave and transform the industry.

This area may not be a growth category today, but it is still an important piece of the puzzle. For one thing it is a cash cow and it is still a key leg to the stool that makes the whole company a leader. And it will be for many years to come.

The important area most investors don’t see

This is an important point. Even though every part of the business isn’t a growth engine on its own, all the parts of a business are important to making it run. This is where long-term and big-picture thinking is key.

This is often the part that most investors don’t see. They think every part should be highly profitable. Yet, seeing this is key to stability and growth going forward.

The same challenge faces every pay TV player in the marketplace. This is an inflection point as the industry transitions to the next level.

Every industry hits different inflection points

This is the challenge every player in every industry continually faces. Either they continue to change, to update, to transform, or they get left behind in the dust of a fast-changing industry.

Innovation and transformation have been on this same track for more decades than we can count.

You must understand where your company and your technology are on its growth curve. Every growth curve has three basic layers. It rises, crests then falls. Sometimes this growth curve takes decades. However, more often it takes only a few years.

Every Growth Wave has three different sections

As it takes less time, that means there is less of an opportunity for long-term growth. That means companies must be tuned-in and jump in as early as possible so they can get the most value.

I've always said there are three kinds of companies in every industry. Leaders, followers and those who should just get out of the way.

Today, winning companies must be leaders or fast followers, jumping in sooner rather than later. If the growth curve is shorter than ever, it’s important to jump in earlier rather than later. Companies who are not quick, will suffer.

Whether we are talking about large, more established companies or smaller, innovative newcomers, the rules are changing. Every company, every leader, every worker and every investor must understand this next growth curve.

We must keep our eyes on the long-term goals. You don’t want to short-circuit a company’s future for a higher stock price today.

This requires a long-term perspective, leadership, being tuned-in and being able to take quick action. It also requires the ability to make the right call and not to cut off your nose to spite your face. This can be the most difficult challenge any company, CEO and executive team faces.


Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, IoT Analyst, Industry Analyst, Influencer, speaker and consultant. He follows wireless, wire line, telecom, Internet, pay TV, cable TV, IPTV, Cloud, Mobile Pay and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.

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Equities Contributor: Jeff Kagan

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer. The author of this article, or a firm that employs the author, is a holder of the following securities mentioned in this article : none

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