Jeff Kagan: What to Expect in 2014 in Wireless, Wire Line and Internet (Part II)
(Equities.com Via Acquire Media NewsEdge)
(On Dec. 20 Equities.com published the first installment of renowned tech/telecom analyst Jeff Kagan's Predictions for 2013. This is the second installment in the series.)
Qualcomm is always a strong performer, but there are questions that are popping up now. Questions like how both their new CEO and their new Toq smartwatch will perform.
Also: are they getting into the hardware business again? Will the new CEO take them in new directions?
Qualcomm used to be in the handset business, but then left that segment and moved into chips and the insides of smartphones. Today Qualcomm is a very successful company in this space.
However with this new move into smartwatches and a new CEO there are always questions. Are they getting back into the hardware business or are they just showing the world what a Toq smartwatch with their technology can do?
I am not thinking anything is wrong there, but there is confusion so I am keeping my eyes open.
MicrosoftMicrosoft ($MSFT)is a large and successful company in the middle of a major transformation. The past decade has simply not shown the type of growth they need.
They want to be a leader in the smartphone sector. That's where the Nokia acquisition comes into play.
They can be successful of course, but right now Microsoft is in flux. They will hire a new CEO shortly and let's hope they can successfully transform their business and succeed and grow going forward.
I would not say there is any worry about Microsoft survival, but there is a question about what they will look like and whether they will lead going forward as the industry continues to change.
AT&T MobilityAT&T Mobility ($T) was always the leader charging into new business sectors like smartphones years ago. They successfully focused on smartphones even before the first iPhone hit the market.
Then they struggled with the heavy wireless data demand of the iPhone, but have solved the problem and are doing very well these days. In fact they are winning award after award from companies like JD Power and Nielsen for quality and customer satisfaction.
After attending the AT&T Industry Analyst meeting in early December I can see the various different directions they are heading in. Example, video is growing rapidly. So much of their business is video today and that is growing.
This is a company that will likely remain a leader as the entire wireless space changes. Their image in the marketplace will continue to improve based on what I am seeing with these awards.
AT&T and Verizon have won roughly 70 percent of the wireless market. And growth while changing is continuing.
Verizon WirelessVerizon Wireless ($VZ) was not as focused on change and innovation, but had always provided a good quality service. They came late to the iPhone game, but always had good quality.
However things have been changing lately. Their CEO and COO have given separate speeches in the last few weeks discussing the growing demand of video and wireless data, and their struggle to keep up.
Video is growing on Verizon as well and this seems to have taken them by surprise. They are embarrassed by their inability to keep up with the rapidly rising demand.
Verizon troubles started a couple years ago when they had a change in senior management. The new leaders are good people, but they have missed several key areas.
Can they recover? Yes of course. "Will they?" is the more important question. I bet yes, but today they are still struggling. Expect to see a more of these kinds of Verizon troubles, at least for a while.
SprintSprint ($S)is currently transforming itself thanks to the Softbank acquisition. They have more spectrum than any wireless carrier and when they start rolling out high-speed services they can start to grow again.
Softbank and Sprint say we can expect to see them challenge and change the industry. The guess is in areas like cost and speed. We have seen nothing like that yet, but it's still early. The Softbank acquisition happened during the summer and they are in the early stages of upgrading the network now.
To add this mystery, Softbank is a Japanese company that wants to make a big impact in the USA. So don't think they are done. I expect them to be involved with other acquisitions going forward.
Sprint has struggled for years, but perhaps they are on the cusp of a recovery. It's too early to tell today, but that's the direction they want to head. So stay tuned.
T-Mobile USAT Mobile ($TMUS)is another wireless carrier like Sprint that is in the early stages of a recovery. They were struggling for survival over the last several years. About a year ago they brought in a new CEO, John Legere, who has been really shaking things up.
T-Mobile has launched several major transformations from the iPhone, to going pre-paid to updating the network to faster speeds, and so on.
The T Mobile service is better today than it has been in years. They are winning new customers once again. They have seen growth during the last two quarters.
So while T Mobile seems like they are on the right track, it's still too early to say whether it will continue. I hope it does, but let's keep our eyes on it.
The word on the street today is Sprint and T-Mobile may merge. Will they? Who knows? The regulators said no to an AT&T T-Mobile merger. Will a Sprint T-Mobile merger be approved? Stay tuned.
(be sure to check back in for the last installment of Jeff Kagan's tech predictions on New Year's Day.)
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