The past year has created many new challenges in the wireless network and smartphone space. Expect these to continue in 2022. Even through these challenges, the industry continues to show strong growth. Some parts are stronger than others. There are new technologies like 5G, wireless chips, metaverse and so much more. Let’s take a look at what we can expect in 2022.
2021 and COVID-19 changed the industry, and those challenges will continue into 2022. In fact, every industry has changed and will continue to change, some for the better and some for the worse.
Chip shortage will continue in 2022 and impact wireless industry
The chip shortage has impacted every industry including wireless and smartphones. This has been building over the years and reached its peak in 2021 when demand increased, and workers stayed home during the coronavirus.
Let’s hope we can start to level off the supply and demand curve in 2022. On the bright side, this is actually great news because it shows top level demand.
Demand for chips and smartphones and so much more has risen during this past year. We worked from home, but our appetites only increased, both in the business world and consumers.
Supply chain continues struggle with pressure across supply-demand curve
This increasing demand put strains on the supply-demand curve. Today there is more demand than supply.
- Some of that has to do with keeping up with increased demand.
- Some has to do with the supply chain getting bogged down.
- Some has to do with factories not being able to deliver at the same rate as yesterday due to reduced workforce.
- Some has to do with bad regulations which keep supply ships sitting out at sea.
So, we have increased demand during a year with decreased productivity. This is the reverse of what we want to see in the supply-demand curve
Nothing has really changed, so we should expect the same things that hit us in 2021 will continue in 2022.
- Hopefully, the workforce will come back to the job.
- Hopefully, coronavirus fears will lessen, letting business get back to normal.
- Hopefully, we can start keeping up with demand, then getting ahead of the ball.
Wireless and smartphone demand in 2022 should look like 2021
We won’t know whether 2022 has been successful until we look back and compare.
Fortunately, the winners look to be the same companies we saw in 2021.
- Qualcomm, Huawei, Nokia, Ericsson and many others on the network and smartphone side.
- Apple iPhone and iPad, Android smartphones and tablets, Samsung and other competitors with smartphones, tablets and more.
Qualcomm, Huawei, Nokia, Ericsson, Google, Apple
We should also expect more conversation about the fact that the world has only two leaders in the smartphone and wireless data or app space… Google Android and Apple iPhone.
If for nothing else, only two major competitors are a red flag with which many regulators will be concerned — especially as Google Android and Apple iPhone and their app stores continue to grow in importance as we move forward.
More competition always reduces price and increases efficiency.
So, expect in 2022 that we will see regulators and politicians asking more questions and trying to solve this problem. I think this question will grow in importance in 2022.
Wireless carriers continue 5G upgrade
Wireless carriers are another story. Verizon Wireless, T-Mobile and AT&T Mobility are rushing with their rapid and costly upgrade to 5G services. This will continue.
Since there is very little reason most users need 5G so far, however, the carriers are not earning extra income from it to meet the investment.
As apps that require 5G are introduced, the demand will increase.
Wireless can be a lopsided industry. Incredible investment up front, then eventually usage catches up. Eventually.
So, the costly upgrade will continue until things start to level off and balance out, but that will be several years during which they will continue to load up the balance sheet.
New wireless technologies like remote surgery and Metaverse
As 5G continues to advance with its ultra-fast speeds and low latency, new technologies like remote surgery and even newer technologies like the Metaverse will continue to grow.
Just as we are very advanced today compared to a decade ago, we will continue to advance at least as fast and as much during the next decade.
Some of these advancements will come from the wireless industry, but many will come from other companies in other industries that will use wireless for the first time to gain a competitive advantage in their spaces like Uber and Lyft did years ago with 4G.
Looking to 2022, wireless and smartphone growth will continue
So, as I look ahead to 2022, I expect a continuation from 2021. It will continue to be one of the strongest years in the wireless and smartphone industry. Consumer demand is increasing.
5G will provide faster and more immediate wireless data connections. That will enable and empower new technologies like automated driving, telehealth and healthcare services and so much more.
In fact, other industries will start to use wireless as a way to gain competitive advantage, and the competitors will rush in as well just to keep up with the first movers.
Wireless will continue to grow as we move further into 5G and prepare for 6G. Growth will come from the wireless industry itself and from other industries using wireless to reinvent themselves going forward.
So, I think we can expect 2022 to be another great year of rapid growth and expansion of the wireless and smartphone industries in general. Just remember the specific growth rates will be different by sector and by company. They always are. Some companies will show strong and rapid growth while others, not so much yet.
Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, TeleHealth, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and on LinkedIn at www.linkedin.com/in/jeff-kagan/.
Equities News Columnist: Jeff Kagan
Source: Equities News