See the complete list of trends that we analyze.

1) Introduction to the Wireless Industry.

Wireless communications, including mobile entertainment, RFID, mobile banking and cellphone service, continues to be one of the hottest sectors in the InfoTech market. There were an estimated 4.7 billion global cellular telephone subscriptions by the beginning of 2010, according to the International Telecommunication Union (ITU), including more than 285 million in the U.S. alone. This means that global market penetration is more than 50%. Rapid growth will continue to occur. Cellphone manufacturer LM Ericsson estimated that the global subscriber base topped 5 billion in July 2010, including more than 500 million 3G subscribers.

New cellphone handsets have been selling at a rate of about 1.2 billion yearly—making the cellular phone the fastest-selling single item of consumer electronics by far. These handsets are purchased by new users (those who are getting cellular service for the first time ever) and by those who are upgrading to newer, more powerful phones. Most new cellphones carry numerous advanced features. More MP3-capable cellphones are sold each year than stand-alone MP3 music players. More digital camera-equipped cellphones are sold than stand-alone digital cameras. In addition, new cellphones are often Internet-capable, and increasingly able to take advantage of 3G (third generation) high speed access, and very fast 4G systems such as LTE will soon become widespread. In fact, there are hundreds of millions of consumers accessing the Internet via some type of wireless access worldwide.

Cellular service companies have been investing heavily in an effort to improve coverage and service. A good example in the U.S. is the fact that the nation was sprinkled with 247,100 cellular telephone towers as of December 2009, up dramatically from 213,300 at year-end 2007.

The American cellphone industry provides direct employment for 249,200 people, as of the end of 2009. Total U.S. wireless service company revenues were about $152,600 billion in 2009, according to CTIA (“The Wireless Association”), up from about $148.1 billion 2008 and $138.8 billion in 2007. Approximately 91% of Americans had a cellphone subscription at year-end 2008 (up from only 79% at the end of 2006). They spend an average of about $50.00 monthly on their cellphone bills. (In 1998, the average monthly bill was $98.02, but intense competition forced prices to plummet.) U.S. text messages via cellphones totaled about 1.5 trillion in 2009, nearly a 50% increase over the previous year.

Advanced services, such as text messaging, Internet access and access to entertainment including videos and games, make up a growing portion of that monthly bill. Cellphones continue to replace traditional landlines in U.S. homes, to the extent that 22.5% of households have cellphones only, as of the beginning of 2010, up from 17.5% a year earlier.

Meanwhile, mobile shopping is a prime growth area in the ecommerce sector. Also, America’s government has long term plans to free up federal and commercial wireless spectrum that is currently allocated to various uses, but remains under utilized. This could pave the way for future growth of the wireless industry.

Big news in the U.S. is SkyTerra Communications’s hopes to build a nationwide, high speed wireless network based on two satellites and 40,000 wireless base stations. The satellites would enable communications in areas of the nation that lack base stations on the ground. The name of this venture is LightSquared. Harbinger Capital Partners is a majority owner. The firm plans to engage Nokia Siemens Networks to supply $7 billion in equipment. It remains to be seen whether this new venture can arrange adequate financing.

Worldwide, cellphone use continues to experience extremely rapid growth, particularly in China, Africa and India. In some nations, particularly in Scandinavia, market penetration exceeds 100% of the population as many people have more than one cellphone subscription. Globally, cellphone-based game playing and mobile entertainment such as music and video continue to make great strides. Cellphones are rapidly becoming banking and payment devices, particularly in Japan, Korea and parts of Europe; that trend will move to the U.S. over the mid-term. Mobile banking is one of the most popular services for cellphone owners in the emerging world, as wireless innovation is bringing banking services to remote areas for the first time ever.

The wireless world incorporates a great deal more than cellphones, ranging from satellite-based services and Wi-Fi hotspots to remote wireless sensor networks (WSNs) and vast wireless networks on corporate and college campuses. Research In Motion (RIM) continues to grow very rapidly due to its sophisticated smartphones with e-mail services. The firm added 4.9 million net new BlackBerry subscribers in the fiscal quarter ending May 30, 2010. BlackBerry unit shipments soared 43% during that quarter, and RIM shipped its 100 millionth BlackBerry. The total number of BlackBerry users topped 46 million, up 60% from the same period of the previous year. Whether it is access through Bluetooth, the fast data transfer speeds of upstart ultrawideband (UWB), satellite, cellphone or Wi-Fi, consumers and business users alike are becoming more and more reliant on wireless-based services and devices in their daily tasks. There is no end in sight to the rapid acceleration of wireless.

There are certain things you can count on when considering the wireless market over the mid-term:

1. The total wireless market and the number of uses for wireless connections will continue to grow rapidly, even though the penetration level of individual cellphone subscribers is reaching extremely high levels on a global basis. Analysts at LM Ericsson forecast 50 billion connected devices by 2020. M2M, or machine-to-machine communications, will be a major growth factor.
2. Cellphones will continue to morph into ever more complex, multi-purpose personal communication devices (including the growing use of the cellphone as a financial transaction device). Cellphone circuitry will become much more powerful, piggybacking off the revolution in screaming-fast, multi-processor power in handheld game machines. Additionally, tiny high-density hard drives are now being manufactured specifically for use in cellphones. Batteries for wireless devices will become much stronger, while chips will become more energy efficient.
3. Although cellphone markets are relatively well established in the U.S. and in major developed nations everywhere, the number of subscribers continues to grow in these countries nonetheless. In the U.S., new subscribers tend to be those on lower-cost plans and accounts set up by parents for their children.
4. Meanwhile, hundreds of millions of cellphone subscribers will be added in short order in less developed nations worldwide. Fort example, millions of new cellphone subscriptions are opened in India every month.
5. There is no end to the ways to make money out of wireless trends. For example, look at the rapidly growing market for iPhone applications.
6. Ever better, higher-speed, longer-distance standards will continue to emerge and be fully developed for wireless network access systems such as WiMAX and Bluetooth 3.0. Ultra-high speed LTE is quickly gathering advocates, as is HSDPA. Download speeds on the most advanced cellular networks are already in the range of 7.2 Mbps, and 14 Mbps will be available on some networks after additional infrastructure investment.
7. Security issues such as eavesdropping on Bluetooth conversations, hacking into Wi-Fi networks and viruses spread among cellphones will require more attention and investment from the technology and telecommunications sectors.
8. RFID (radio frequency ID tags used to track inventory) will continue rapid adoption by manufacturers, logistics centers, shippers and retailers, thanks largely to an early initiative by Wal-Mart to require its largest suppliers to use RFID to wirelessly transmit data from cases of merchandise. Second and third-generation RFID will eliminate most of the disappointments of earlier RFID implementations.
9. The Apple iPhone sets the standard for consumer expectations for high-end handsets, despite antenna problems with its iPhone 4, which was launched in 2010.
10. Wireless Sensor Networks (WSNs) will proliferate, providing exciting new ways to gather environmental and industrial data, and to foster home automation and monitoring.
11. “Contactless payment” systems, utilizing nearfield communications to wirelessly debit or charge accounts by waving a cellphone at a cash register or vending machine will grow quickly.
12. Yes, the global economic slowdown of 2008-09 dampened consumer purchases of all types. However, the cellphone industry is relatively immune, as consumers consider their mobile communications to be as basic a need as transportation.
13. Netbooks, that is, lightweight, inexpensive portable computers that typically have 10 inch screens and cost from $250 to $600, are rapidly becoming the wireless Internet access platform of choice for consumers of all types on a worldwide basis. The immensely successful launch of Apple’s iPad is part of this trend. Some of the latest models of netbooks are being shipped with WiMAX chips installed as well as Wi-Fi chips.