2007: Not a Typical Year for Wireless

By Andrew Seybold

Those who write for organizations such as FierceMarkets are generally expected to write two columns at the end of each year-the first is a look back at the previous year and the second is about what lies ahead for the next year. This is the first part of my requisite two-column sequence.

2007 was a year of change for the wireless industry. There was the iPhone and the fanfare with which it was introduced, the almost instant price drop and the bragging rights about how many were sold in what period of time. Regardless of what you think of the iPhone and the AT&T deal, I believe that its introduction has already changed the wireless landscape for the better. Suddenly, real user interface improvements are coming from every wireless device vendor in the industry.

Next, of course, is Google's foray into wireless, first calling for open access, then saying it will bid in the 700 MHz auction. Google also introduced its free, open source operating system, Android, which is scheduled to be delivered on real devices sometime in late 2008. If Google does nothing more, it has changed the wireless industry. Verizon Wireless said it will be more open with its network starting in 2008 and Sprint and AT&T then said they were already open. The industry is still trying to define what open really means and how network operators can offer open access and still protect the integrity of their networks for the benefit of all of their customers, not just for the few with their demands. One thing is for sure: Open does not mean FREE! We will continue to pay for our access to these networks though, in fact, pricing models will change to reflect this new open access era.

No review of 2007 would be complete without a discussion of the multitude of lawsuits either settled or ongoing. Nokia, Qualcomm, Broadcom, RIM and many others are spending tons of money in legal fees in disputes about intellectual property rights, prior art, who is infringing upon whom and how much is a fair price to charge to license IP from the patent holder. This will spill over into 2008 and probably beyond. In the end, decisions about highly technical issues will be made by a non-technical judge and/or jury, based not on what they have come to understand about the technologies in question but rather whose attorneys can provide the least technical and understandable description of the issues.

2007 also saw more notebook computers built-in EV-DO and UMTS wireless data modems, and Qualcomm announced the Gobi world chipset for notebooks that provides all of these technologies in a single chipset. Notebook vendors can now build a single model, ship it anywhere in the world and know that there will be a wireless broadband network available for the customer.

Some realism began to creep into the Muni-Wi-Fi craze this year. EarthLink downsized and got rid of most of its muni-Wi-Fi team, San Francisco's muni-WiFi network was put on hold and several other cities cancelled their plans. Finally, the realities of muni systems using unlicensed spectrum with no sustainable business model are being acknowledged.

Meanwhile, in WiMAX land, 2007 ends with a real question mark in the United States. The Sprint/Clearwire nationwide partnership fell apart. Sprint has a new CEO, Dan Hesse. And Sprint's WiMAX network is in question. Are we or aren't we? Spin off? Continue to build? Build only to meet FCC build-out rules? Sell it off? Or what? Intel has to be very nervous. Its poster child for WiMAX may decide not to operate a WiMAX network after all, which could certainly affect the uptake in the rest of the world. But it will be up to Hesse to figure it all out, and my bet is that his package will be heavily incented to stop the bleeding, right the ship, cut churn and add more subscribers to the CDMA core network.

Clearwire and WiMAX had an IPO, the stock opened in the mid $20s, went up to a high in the low $30s and is now sitting at around $13 per share. After the IPO, they put into place a line of credit for yet another $billion in funds, and the uptake on their networks has not been great.

There were many other activities during 2007, but I have highlighted here the ones I believe will have the most impact on the industry moving forward. The last of these, of course, has to be the 700 MHz auctions the FCC authorized in August that will be held in January. The "C" block is the "open access block" and will draw the most bidders, the D block is an experiment in combining commercial and first responder networks and services, and the results of these auctions could have a far reaching effect on this industry for a long time.

To my thinking, the saddest thing for wireless in 2007 was that the Internet community did not come any closer to understanding the bandwidth differences between the wired Internet and wireless high-speed networks. Their vision is still for the Internet as we know it to become wirelessly enabled. I believe that the wireless Internet should be a different type of Internet based on smart networks and smart devices and not nearly as dependent on browsers.

2007 was full of surprises, but the demand for wireless continued to grow, as it will well into the future. What will 2008 have to offer? Stay tuned!

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide.

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