Mid-year checkup: revisiting our 2011 predictions


Sue MarekWith the 4th of July holiday behind us, it's a good time to check and see how FierceWireless is faring with our 2011 wireless industry predictions.

Every year the FierceWireless editorial team compiles a list of the top things that we think will happen in the coming year. Because we like to be bold in our prognostications there's a very good chance we will be wrong. But that's what makes these predictions so entertaining for us to write and hopefully fun for you to read.

Now please remember that our predictions are based on careful analysis of the news. We don't make blind guesses, nor do we have any inside information or knowledge of actual deals that may or may not happen.  To review our original 2011 predictions, click here.

Here's how we are doing so far:

Prediction No. 1: Android surpasses Symbian, while MeeGo, webOS and Windows Phone 7 founder.

Mid-year checkup: Right, sort of. Research firm Gartner reported in March that in the first quarter of 2011, Google's (NASDAQ:GOOG) Android platform commanded 36 percent of the market, up from 9.6 percent in the first quarter of 2010. Nokia's (NYSE:NOK) Symbian captured 27.4 percent of the market, down from 44.2 percent in the year-ago period. Interestingly, this decline occurred before Nokia decided to shift to Microsoft's (NASDAQ:MSFT) Windows Phone 7 platform as Nokia's primary smartphone platform.

Nokia's announcement in February of its move to Windows Phone sent Symbian into further decline and increased the profile of Windows Phone 7. In fact, research firm IDC predicted earlier this year it expects that Microsoft's Windows Phone will account for about 20.3 percent of the mobile OS market by 2015.

At the same time, Nokia's commitment to Windows Mobile puts MeeGo's future in question. Earlier this year, Nokia CEO Stephen Elop indicated that even if the company's MeeGo phone, the N9, is a hit with consumers, the company will remain committed to Windows Phone 7.

Meanwhile recent moves by Hewlett-Packard may breathe some renewed life into the webOS operating system. HP CEO Leo Apotheker recently said that there are a number of companies that are interested in licensing the webOS smartphone and tablet OS. However, so far no deals have been announced.

Prediction No. 2: Apple will remain king of the expanded tablet market

Mid-year checkup: Right. Despite numerous attempts by other manufacturers to launch an "iPad killer," so far Apple (NASDAQ:AAPL) leads in the space, and most research firms believe that the company will continue to do so in the coming years. Research firm IDC predicted that media tablet sales will reach 42 million this year and that Apple will continue to lead the market. However, the firm predicted low-cost options could take off in emerging markets. 

So far competitors have had lackluster sales. Research in Motion (NASDAQ:RIMM) shipped 500,000 PlayBooks in the first quarter and Motorola Mobility (NYSE:MMI) shipped 250,000 Xoom Android tablets, while Apple sold almost 5 million iPads during the period.

Prediction No. 3: Clearwire will deploy LTE, Sprint will be a wholesale LTE partner

Mid-year checkup: Too soon to tell. In May, Clearwire (NASDAQ:CLWR) COO Erik Prusch said the company will eventually switch to LTE network technology, but declined to say when the switch will happen--and warned the plans are not definite.

"WiMAX to date has been a very good technology choice for us," he said in an interview with Cnet. "We were able to take advantage of the speed to market before LTE was even a glimmer in anyone's eye. But we recognize the ecosystem in the U.S. will be larger for LTE than WiMAX, so we are conscious of that."

Meanwhile, Sprint Nextel (NYSE:S) has not inked a deal to be a wholesale LTE partner with Clearwire, but it has reportedly made inroads with Clearwire wholesale competitor LightSquared. In June, Sprint Nextel supposedly reached a 15-year network-sharing deal with LightSquared worth around $20 billion. According to Bloomberg, Sprint and LightSquared will build LightSquared's nationwide network, and Sprint will be a wholesale user of LightSquared.

Prediction No. 4: iPhone to expand to Verizon, T-Mobile USA and Sprint

Mid-year checkup: Too soon to tell. After months of speculation that it would launch a CDMA version of the Apple iPhone 4, Verizon Wireless (NYSE:VZ) turned rumors into reality and announced on Jan. 11 that it would launch the device on Feb. 4.

Although there were numerous predictions that Verizon's iPhone 4 launch would send AT&T Mobility's (NYSE:T) subscriber metrics into a tailspin, Verizon's launch of the iPhone had only a minor impact on AT&T's first quarter earnings. AT&T ended the quarter with 3.6 million iPhone activations and 2 million net adds, bringing its total subscriber base to 97.5 million.

However, except for Verizon and AT&T, no additional U.S. operators have launched the iconic device. There are reports that Apple will launch a new version of the iPhone in September with a faster processor and improved camera. However, so far there is little indication that the device will launch with Sprint or T-Mobile USA.

Prediction No. 5: LightSquared will face funding problems, LTE launch delays

Mid-year checkup: Right, sort of. The wholesale LTE startup continues to need additional funding to build out its network, and it recently indicated that it may seek additional funding from the public markets. In May, Philip Falcone, the head of the hedge fund Harbinger Capital Partners that backs the wholesale LTE firm, said that LightSquared will have an IPO in the future.

LightSquared has started testing its planned LTE network in Las Vegas, but the company's full-blown commercial rollout will not happen until next year. Meanwhile, the company has signed up several customers, including Leap Wireless (NASDAQ:LEAP), Cellular South, Best Buy and Open Range Communications. 

But perhaps LightSquared's biggest hurdle now isn't funding but concerns about interference with GPS receivers. During a recent congressional hearing, lawmakers and officials from federal agencies called for more testing of LightSquared's LTE network to ensure that it does not interfere with GPS receivers. On June 30, LightSquared submitted a final report to the FCC confirming its network interferes with GPS, but the company blamed the GPS industry for the issues. The company also submitted a plan it thinks will at least temporarily resolve the problem. Meanwhile, the GPS community wants LightSquared out of the L-band spectrum completely.

Prediction No. 6: Net neutrality will go into effect on wireless, but will be contested

Mid-year checkup: Too soon to say. Late last year the FCC approved net neutrality rules for wireless and wired networks.  But those rules immediately sparked protests from telecom providers and public interest groups.

Verizon and MetroPCS (NASDAQ:PCS) both filed lawsuits challenging the FCC's rules, but a federal appeals court threw out those lawsuits, arguing that the suits were filed too soon. Verizon, meanwhile, has indicated it will re-file its complaint against the FCC's rules for wireless and wired networks. Once the rules are published in the Federal Register, which appears likely to happen during the next several weeks, companies can begin filing fresh lawsuits against the rules.

In April, the House of Representatives voted on a measure that would invalidate the FCC's rules on net neutrality. House Republicans--joined by six Democrats--voted 240-179 to approve the legislation. There is also similar legislation in the Senate, but a group of 10 Democratic senators urged the Senate to squash any measures that would block the FCC from carrying out the rules. Additionally, it is likely that President Obama--a supporter of net neutrality--will veto any such legislation, were it to reach his desk.

Prediction No. 7: T-Mobile will acquire AWS-3 and D-block spectrum for 4G

Mid-year checkup:  Wrong! I'm not sure anyone could have predicted that in March AT&T would announce that it was acquiring T-Mobile USA for $39 billion. The merger, if approved, will combine the No. 2 and No. 4 U.S. wireless carriers, and will dramatically increase AT&T's subscriber base from 95.5 million to 129.2 million. It also will significantly broaden AT&T's current and future network footprint. AT&T has said that the transaction will allow it to deploy LTE to 97 percent of the U.S. population.

AT&T said it needs T-Mobile's spectrum holdings to help it meet the demands of mobile broadband data users. AT&T executives have said the company will consolidate T-Mobile's and AT&T's 2G networks and aggressively migrate 2G customers to more advanced devices. AT&T also has said it will use T-Mobile's 1700 MHz AWS spectrum for LTE, and migrate T-Mobile's AWS customers to AT&T's 1900 MHz spectrum. 

By my tally we are right on one of our seven predictions, and we are sort of right (or right on at least part of our prediction) on two predictions, and wrong on one prediction. That leaves three predictions that are too early to call. Of course, this is only July 5, so we still have a few more months left to see how we do with the rest of our prognostications. --Sue

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