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Saturday | 6 December, 2008
The five top mobile and wireless stories of 2008
WiMax, open access and prospects for an iPhone rival top the list
David Haskin 24/12/2007 07:14:18

"Any way you look at WiMax, it's a dead end," said Gartner Inc. analyst Ken Dulaney. "It will not achieve what Intel has said it will, and I'm not sure [mobile] users really need more speed. And if you pay for mobile technology, you want it to be everywhere." Although Sprint has promised its WiMax will eventually be available to 100 million people, that isn't enough, Dulaney said.

"It won't drive people to Sprint," he said.

2. Will Sprint remain independent?

The success of WiMax is inextricably tied to the long-term success of Sprint, the experts agreed. Sprint has been losing boatloads of cellular customers to AT&T and Verizon Wireless and some of the company's shareholders are complaining that WiMax is an expensive diversion. However, many experts believe WiMax is the only way for the company to thrive in the future.

"We'll know more about Sprint's viability in the next year," Kerton said. He said the trick for newly named president Dan Hesse is both to succeed with WiMax and convince users that its cellular service remains strong.

"I don't believe their service is measurably better or worse than anybody else's, so it's a matter of marketing -- they have the reputation of being worse," Kerton said. "A technology problem you can fix, but a marketing problem like this takes a lot longer."

WiMax could help solve the marketing problem, Kerton said. "If WiMax works, it makes them look like a leader," he noted.

Gold agreed, saying the company must spend money to lure new customers and not focus primarily on cutting expenses. "If they don't do that, they'll eventually fade to irrelevance," Gold predicted.

3. Industry consolidation

Given its challenges, Sprint is a likely takeover target, the experts agreed, but there will be a lot of other consolidation in the mobile and wireless industry.

"It's harder and harder for [cellular operators] to make money," Gold said. "I think we'll see more foreign investment in US carriers. And it's a two-way street: I think you'll see AT&T go out and pick up [stakes in] international carriers."

Dulaney predicted most investment will be coming into the US.

"With the dollar so bad, everything in the US, including shares of cellular carriers, is cheap," Dulaney said. "Everything in America is for sale."

4. Openness comes to mobility

Openness refers to two related mobile issues: Open platforms for mobile devices such as Google's recently announced Android, and the ability of users to acquire content from any source they want. Currently, most phone platforms are closed, making it easier for carriers to impose so-called walled gardens on content; you get only the content the carriers sell you.

"The walled garden is falling in 2008," Gold said. "The notion that the carriers can control everything is falling apart."

Kerton agreed, noting that Sprint has said it will allow any WiMax-compliant device on its network. Even Verizon, long a champion of the walled garden, has said it will allow compliant devices to access its 3G network even if it doesn't sell those devices.

This will result in both more freedom and more expense for users. That's because operators often subsidize the price of devices, which enables them to control the content those devices can access and to lock users into long-term contracts. More unsubsidized phones will start to be available, meaning users will pay for their freedom.

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