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Changing Wireless Landscape Breeds New Winners And Losers

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Companies such as Amazon, Google and others are changing the wireless device landscape, but first a little history is in order.

Cell phone service in the United States started in 1981 and from then until the early 2000s, wireless device makers ( Nokia , Motorola, and others) built the devices they wanted to build and took them to the network operators.

As texting, broadband, and other services were rolled out, network operators began to demand that handset vendors build the phones they thought would sell.

This brought on a major upheaval in the industry as handset vendors adapted to this new way of doing business. Further, this change enabled network operators to buy phones from smaller, unknown vendors and put the network name on them. Companies such as Samsung, LG, HTC , and others began delivering phones as OEMs (Original Equipment Manufacturers). Once they were established, they transitioned to their own branded products. Today, Samsung, not Nokia, is one of the top five handset vendors in the United States.

Until the advent of smartphones, phone vendors also wrote their own proprietary operating systems. The OS did not matter in those days because there was only text and voice. That changed as smartphones hit the market. Qualcomm wrote an operating environment known as BREW, Microsoft wrote Mobile Windows, and Nokia used Symbian. Now we are in full smartphone and tablet mode and the major mobile operating systems are Apple iOS, Android, RIM BlackBerry O/S, and Microsoft Windows, now in release 7.

The landscape is changing once again.

Now, with wireless adoption in the United States and elsewhere passing the 100% mark (many of us have several devices) and with smartphones and tablets accounting for more of the devices populating the wireless networks, non-traditional players are beginning to lust after this huge market.

The first, and so far, most successful of these new players is Apple with its hugely successful iPhone and now the iPad. Next came Amazon with the Kindle, an entirely new device, and a new business model. The first Kindle delivered eBooks over Sprint’s network BUT the Kindle owner did not need a contract with Sprint since Amazon paid for the delivery. Google tried its own Android-based phone, the Nexus, which could not compete with other Android phones and quietly went away.

Now we are about to see many new products. Reportedly, there will be a new smartphone from Google that will be built by HTC (back to the early days of phone vendors being OEMs), and Google’s new Chrome tablet is being built by Samsung. The Amazon Kindle has many different models, some with Wi-Fi only and some with wide-area 3G wireless broadband—Amazon still pays the bill for content delivery. Today, the Kindle is becoming one of the few tablets that can compete with the Apple iPad. The new iPad includes fourth-generation wireless broadband technology to deliver content at speeds of up to 15 Mbps.

Adding wireless to almost any device has become relatively simple. Qualcomm, Broadband, and others offer chipsets that are basically wireless phones on a chip or a set of chips. Vendors such as Sierra Wireless and Novatel build wireless modules that can be dropped into a notebook or tablet, and as the technology continues to be developed it will be easier and easier to incorporate wireless capabilities into everything from a dog collar complete with GPS to track the dog’s location, to game consoles, to automobiles.

However, not just any company can successfully build and deliver a high-quality wide-area wireless product. There are critical pieces that need to be fully understood by engineers. Cramming multiple radios, using multiple technologies, plus Wi-Fi, plus Bluetooth, and GPS requires top-notch engineers who understand antennas, filters, and the other components necessary to build a product that will work well and satisfy the general public.

While we will be seeing all manner of products, including more from Amazon and Google, the most successful ones will be from companies that understand the complexities of wireless including companies such as HTC, Huawei, ZTE, and some as yet unheard of companies that have been building products for others. I would not be surprised to see specialized wireless products from Yahoo, eBay, Facebook, YouTube, and others. There is a strong rumor that Facebook will offer a wireless device before the end of this year.

What this means is that the companies that know how to build these complex wireless devices are teaming with companies that want a branded wireless device of their own. Add this to the fact that network operators will soon be offering wireless plans with monthly broadband allocations that will support a single person with multiple devices, and there will be an explosion of new, wirelessly-enabled products.

As important as the wireless device may seem to be, the future is tied to the model RIM (BlackBerry) Apple, and Amazon have been using: an end-to-end solution where wireless is the delivery method for the content and applications they supply. This will put even more strain on network operators’ ability to remain profitable into the future.