Predictions for 2010: Mid-year checkup

Sue MarekWith the 4th of July holiday behind us, I thought perhaps it would be a good time to check and see how FierceWireless is faring with our 2010 wireless industry predictions.

Every year the editorial team compiles a list of the top things that we think will happen in the coming year. And since we like to be bold in our predictions--and think slightly out of the box--there's usually a good chance a few of our prognostications will be wildly wrong. But that's what makes our predictions so entertaining for us to write, and hopefully entertaining for you to read.

However, let me be clear, our predictions are based upon careful analysis of the news. We don't make wild guesses, nor do we have any inside information or knowledge of actual deals that may or may not happen. To review or original 2010 predictions, click here.

Here's how we are doing so far:

Prediction No. 1: Net neutrality will pass, but with exceptions for wireless

Mid-year checkup: Too soon to tell. Unfortunately, the FCC's net neutrality agenda is currently in disarray. In October 2009, the FCC decided to move ahead with its plans to draft net neutrality rules for wired and wireless networks. But that decision was thrown into limbo on April 6 when the U.S. Court of Appeals for the District of Columbia said the FCC overstepped its statutory authority when it cited Comcast in 2008 for interfering with subscribers' access to peer-to-peer file-sharing services. The court said the FCC could not rely on its "ancillary jurisdiction" under Title I of the Telecommunications Act to regulate how Comcast managed its network.

FCC Chairman Julius Genachowski proposed a "third way" forward on net neutrality that would essentially reclassify broadband from a Title I information service to a Title II common-carrier service while at the same time forbearing from, or agreeing not to pursue, many of the regulations that are imposed on Title II services such as telephone systems. 

Currently, the FCC is meeting with key stakeholders in the net neutrality debate to try to hash out an agreement that would allow the agency to move forward with net neutrality guidelines without reclassifying broadband as a Title II common carrier service. 

Prediction No. 2: Palm will be purchased by another handset vendor

Mid-year checkup: Right--well, sort of. On April 27, Hewlett-Packard stunned the industry by purchasing beleaguered smartphone maker Palm for $1.2 billion. The deal closed earlier this month. While we predicted that Palm would get purchased, it's a stretch to say that HP is a "handset vendor" in the traditional sense. However, with its acquisition of Palm, HP now moves closer to that status.

Prediction No. 3: Pricing, coverage issues will hinder cable companies' wireless offerings

Mid-year checkup: Wrong--at least so far. Cable companies such as Time Warner and Comcast are still rolling out their mobile WiMAX offerings, but there are few details as to how these services are faring with customers. In April Time Warner said it will offer WiMAX to business customers as well as consumers, and in July it introduced a personal hotspot device called Intelligo. Meanwhile, Cox Communications in May said it would commercially launch its forthcoming wireless service in the coming months--but so far that has not happened. The company has been testing its wireless service with "friendly" customers in select markets since March.

Prediction No. 4: Sprint Nextel's 4G leadership will help revive the carrier

Mid-year checkup: Too soon to tell. Sprint Nextel (NYSE:S) has certainly made a lot of progress with its campaign to establish itself as a leader in 4G, but it's a little too early to say that the carrier has been "revived" because of its 4G push. In its first-quarter earnings report, announced April 28, Sprint continued to lose wireless subscribers and reported a wider net loss, but the company made progress toward overall subscriber growth. In addition, the operator had its best year-over-year postpaid subscriber results in five years. "I never said Sprint's turnaround would be quick or would be easy," Sprint CEO Dan Hesse said at the time, noting the company has been gathering momentum since he took the reins in late 2007.

Perhaps we will know more after July 28, when Sprint reports the results of its second quarter earnings.

Prediction No. 5: Huawei will get one LTE deal in North America

Mid-year checkup: Wrong--at least so far. Huawei has been steadily building its presence in the equipment vendor market, but it has not signed an LTE deal with a North American operator. Recently, a Huawei executive was quoted as saying the company is maintaining a "long-term view" for both North America and Japan, and is continually looking at how to build stronger relationships with local carriers.

Prediction No. 6: At least one wireless carrier will experiment with usage-based data pricing

Mid-year checkup: Right! We nailed this one. AT&T Mobility on June 2 became the first U.S. carrier to institute usage limits on what were previously unlimited smartphone data plans. Executives from the nation's largest carriers have long discussed a move toward tiered, bucketed data pricing scenarios for smartphones, but AT&T (NYSE:T) was the first major U.S. carrier to implement the changes.

Prediction No. 7: Motorola will show some signs of recovery thanks to Android

Mid-year checkup: Right, at least so far. I'm going to agree with FierceWireless columnist and IDC analyst Ramon Llamas who wrote in his recent mid-year checkup that Sanjay Jha deserves credit for helping Motorola deliver a portfolio of Android smartphones that have helped re-establish Motorola (NYSE:MOT) as a wireless phone leader and a smartphone heavyweight.

In the first quarter of 2010, Motorola shipped 2.3 million smartphones, up from 2 million in the fourth quarter and above expectations of 2 million units. The company's average selling price jumped to $192, up from $169 in the fourth quarter, due to a higher number of smartphones. Indeed, all four of the Tier 1 U.S. carriers launched or announced Motorola's Android phones in the quarter, and the company also released phones with China Mobile, China Unicom and China Telecom; China is expected to be Motorola's second largest smartphone market this year after North America.

Prediction No. 8: Computer makers' attempts at Android smartphones will flounder

Mid-year checkup: Too soon to tell. Dell confirmed in May that AT&T will launch the firm's first Android smartphone, the Aero, but it has not yet hit the market. Meanwhile, T-Mobile USA is reportedly not having a lot of luck selling Garmin-Asus' Garminfone, which runs Google's Android platform. And Garmin executives in February admitted they were disappointed in their nuvifone line of products.

Meanwhile, Acer took the wraps off its latest Android smartphone, the Stream, in late May. The smartphone boasts the standard bevy of high-end specifications as well as the addition of a new user interface overlay supplied by Acer. Acer also now offers the Liquid. Further, the company said it expects to sell between 2 and 3 million smartphones this year running both Microsoft's Windows Mobile OS and Android. Previous reports had pegged Acer's smartphone sales expectations at around 2 million units.

By my tally we are correct on three of our eight predictions. Of course, this is only July 8 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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