inCode Reveals Top 10 Wireless Predictions for 2005; Increased Competition Drives New Developments in Wireless Voice, Data and Video For Carriers, Manufacturers and Enterprises

Business Wire, Nov 19, 2004

7. Carriers Battle to Control Content, Which Trends Toward

Recorded Programs

High-performance phones and increased over-the-air throughput speeds are supporting a richer set of downloadable content. A new battleground is emerging over who controls the value of this content, and carriers will have to fend off non-traditional players. Instead of courting carriers, equipment vendors now try to marginalize them by directly attacking new revenue streams. For example, Apple and Motorola already have teamed up to deliver music content to iPods, and Club Nokia encourages handset owners to sign up for exclusive offers, event invitations and product information sent directly to phones. In addition, the trend toward viewing recorded versus live programs, which started with VCRs, continues in the wireless environment. Wireless devices with multi-gigabyte storage enable unprecedented freedom and convenience for customers. They can download, store and view the content they want, when they want and where they want. Those who missed the latest episode of "Survivor" or "West Wing" can record the program and watch it commercial-free from their airline seat during a business trip.

8. Spam Spares Wireless No Longer

The wireless industry focuses aggressively on protecting subscribers from handset spam -- limited and out of the limelight until now. However, several high-profile spamming incidents will occur next year. Wireless carriers counterpunch with spam-stopping technologies and policies that could ultimately help clear the way for permission-based, mobile marketing by major brands.

9. The Battle for Customers Moves from the Highway to the Hallway

Increased traffic has degraded overall network quality, and subscribers are far less tolerant of dropped calls. In-building coverage becomes a big differentiator for corporate and consumer wireless users. Customer collateral material begins to include coverage information on the square footage of key indoor spaces -- such as large office buildings, shopping malls and stadiums -- in addition to the square miles of interstate highways in the service area. Enterprises begin to deploy dual-mode 802.11/GSM devices as a means to save cellular costs and improve their own in-building wireless coverage.

10. Adult Entertainment Stays Mainly in Europe -- For a While

All forms of adult entertainment -- gambling, games and pornography -- provide tempting revenue sources for carriers. However, manufacturers and carriers must first devise a way to block adult content to under-age subscribers. Due to the current lack of such effective parental controls, as well as cultural and social issues, evolution of these services on wireless occurs primarily in Europe for the time being.

Bonus Prediction

11. Carrier Consolidation Continues, but Competition Heats Up

The industry finally has arrived at another inflection point. At least one additional consolidation will occur among network operators in the United States in 2005. Regardless, hyper competition will continue in the form of MVNOs.