2014 will be all about change and transformation in the wireless space. AT&T Mobility (T) and Verizon Wireless (VZ) have been doing very well over the years. However Sprint (S) and T-Mobile (TMUS) seem to have fallen off the growth track years ago. But will things change next year?
AT&T and Verizon have been riding a pretty long winning streak in wireless. They have won roughly 70 percent market share at the same time Sprint and T-Mobile have been losing business.
I believe 2014 will be full of new opportunity and change. However if you listen to the carriers, they say growth will come from different areas.
AT&T and Verizon: Growth from New Areas
As current leaders, AT&T and Verizon are not only growing their smartphone business through traditional ways, but I also see growth coming from other areas. One of those areas is helping other industries like automotive, healthcare and retail embrace the wireless world and reinvent themselves.
There are also other unexplored areas like the smartwatch world. If that segment becomes as successful as smartphones and tablets, this could represent another solid growth track for AT&T and Verizon.
Then of course there is plenty of talk about curved screens. I am not sure yet what value curved screens will bring. Perhaps it’s a case of building the roads first. We’ll see.
What About Sprint and T-Mobile?
This could be one of the more surprising areas of growth and change, with revived competition coming from number three and four.
These are two companies who have not really been vibrant competitors over recent years. However both seem to be getting ready for a strong 2014.
Sprint Rebounding After Softbank Acquisition
Sprint has been trying to get their act together and T-Mobile has been trying to reinvent itself with pre-paid type services and other new ideas.
They have one distinct advantage. Sprint has more spectrum than any other wireless carrier. This is a big advantage if they learn how to use it. Sprint was recently acquired by Softbank and is presently in the process of also reinventing itself.
If they are successful in their reinvention, it will give them an advantage in the competitive playing field. However it is important to recognize that other competitors are not just sitting around. They are speeding up their connections as well.
So it will be interesting to see whether Sprint has a competitive advantage when they roll this out or not. I hope they can start doing well once again. The industry can really use several strong competitors.
T-Mobile Can Eventually Compete, But Needs to Recover First
Besides Sprint, T-Mobile is the other wireless carrier to watch. They were crashing and burning for years. They missed the move from 2G to 3G and fell way behind. Crashing and burning, T-Mobile hired a new CEO one year ago. He has already made some very interesting moves and T-Mobile seems to be benefiting.
They just reported the second quarter in a row of growth. That was the first time in a long time. The question is can that continue? The next question is, if so, where will these customers come from, larger or smaller competitors?
T-Mobile wants to challenge and change the wireless space. They want to change the way we pay for wireless services. Will they be successful? First things first. Let them start to recover first. As good as they are doing, they are still a smaller and weaker competitor.
Wireless remains one of the fastest growing sectors. It is also one of the fastest changing sectors. That however does not mean every competitor wins. Some win and others struggle.
Choosing the Winners is the Name of the Game
Which carriers and handset makers will be in the winner’s circle in 2014? That is the real question. While there is no way to tell yet, I would expect change to occur. Then again, in wireless, change always occurs.
Existing leaders have the edge. It’s theirs to lose. Other competitors want to win business from them. So the big winners have a target on their back.
Five years ago Blackberry (BBRY) and Nokia (NOK) were the leaders and smartphones were a smaller segment. Today those companies are struggling, and Apple, Google and Samsung are the leaders and the market is all about smartphones.
Next came the tablets, like the Apple iPad and Samsung Galaxy. Now the smartwatch is being launched with several new companies like Samsung, Qualcomm (QCOM) and many others as well.
So the real question is, what will this wireless marketplace look like in the next few years? That innovation will lead? What should we keep alert for? All I can tell you is that it will be defined by change, and the reinvention of the wireless marketplace. And next year will look very different than this year.
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