Guest columnist James Wong, product marketing manager at Linear Technology writes that before the worldwide economy imploded, the wireless infrastructure market had been seeded with several potent forces that are poised to explode in the next several years.
The momentum has been building rapidly as evidenced by the rapid adoption of smart phones such as the iPhone, Blackberry, the new Android-based devices and Pre phones and other wireless devices.
This explosion in smart phone usage is set to transform the entire mobile wireless industry and the mobile media market. It has broad implications for wireless infrastructure going forward, as it will create huge business opportunities globally. This article focuses on those trends that have immediate impact on the market and others that are considered game-changers.
Few anticipated how fast smart phones would penetrate the global market. In less than 3 years, smart phones captured more than 13% of the worldwide phone market – and are rapidly gaining ground, outpacing stripped down models. With good reason, smart phones have broader appeal in that they have capabilities far beyond just making phone calls and texting.
For example, the Apple iPhone alone garners more than 260,000 downloadable applications, from mapping to finding a popularly rated restaurant based on the location of the caller, live streaming of video clips, or video conferencing on a social chat, to games, productivity tools, and countless other applications. The Android platform isn’t lagging far behind, with exponential growth in the number of supported applications.
Devices Drive Data Revenue
As the number of smart phone users grows, so will their applications. This feeds on itself. Wireless carriers are now convinced that data will drive their future revenue streams. Today, most worldwide service providers are generating positive revenue growth from data, more than offsetting the decline in voice revenue.
This marks a significant milestone, as it represents a tremendous opportunity for network operators to grow their business without relying solely on selling more basic phones or signing up new subscribers. They now can grow by upgrading their subscriber base with revenue-generating contents, hence increasing the average revenue per user.
Aside from smart phones, the rapid adoption of devices such as Netbooks, WiFi-enabled handsets, eBooks, etc., all contribute to accelerated demand for more Internet bandwidth.
Future Applications Drive Bandwidth
Google’s launch of Android-enabled phones marks a change, not just in the competitive landscape in which Apple currently dominates with the iPhones, but in the way the content and information will be disseminated. No one now doubts Google’s ability to make money on the traditional Internet advertising services it delivers. Android provides a new platform on which Google can reach a broader market with a compelling “on-the-go” mobility dimension. This could transform the way information permeates people’s lifestyles, with increased location-based paid information services, transaction payments, investment tools, etc. The possibilities are endless and leave room for innovations that are yet to be conceived.
Cloud Computing
To a large extent, cloud computing has been with us for some time. Web searches are examples of users entering a few key words, using search engines residing elsewhere to crank through massive amounts of dispersed data and return thousands of “hit” results. Social networks that store photos, videos and user-specific information for retrieval represent another form of cloud computing.
Not until businesses begin to migrate their main applications (such as accounting, CRM, sales transactions, payroll, etc.) to a web-based service model instead of on their own PCs will cloud computing truly test the capacity of every piece of hardware and software in the network – from the backroom computer, to server farms, to the backhaul network and to broadband access points. When that happens, one can only imagine the massive data pipe needed to deliver a great user experience and the necessary productivity gain to justify building it.
What Does This Mean for Wireless Infrastructure?
The question is not if, but when will the 3G networks currently serving us well reach their capacity limits? New 4th generation networks, such as LTE (Long Term Evolution) and WiMAX with bigger data pipes are prime candidates to mitigate the impending capacity shortages. Of course no one knows exactly when LTE will come online, but history suggests that new technologies take 5 to 7 years to become mainstream.
What Does it Mean for the Wireless Markets in Italy and surrounding European countries?
Wireless market growth is expected to tie closely to the local demand for broadband services. As more smart phones penetrate the market, and more Internet-based devices (iPad, tablet computers, Internet devices) are sold, the present wireless networks will increasingly be strained beyond their capacity limits. Thus this demand will drive the carriers to expand their network capacity by deploying a new generation of wireless basestations that can boost capacity more than ten-fold.