More Americans are using wireless devices, primarily smartphones and laptops, to access websites. The number jumped to 59% in May, up from 51% a year ago, according to the Pew Internet Study.
What those Americans did online may not have any commercial impact, but the phone users are likely to be having a good time. The greatest increase of use was for instant messaging and e-mail, which are not very profitable for wireless providers. Most cell phone plans have flat fees for these services. Consumers may object to efforts by advertisers to insert marketing material into these messages. The number of wireless users who take videos was up from 19% to 34% between the two periods. The number of people who sent pictures rose from 66% to 76%. Again, it is hard to find a way to make these uses into commercial applications.
All of this leaves wireless subscriber companies including AT&T Communications (NYSE: T), Verizon Wireless, and Sprint-Nextel (NYSE:S) to contemplate where there is a significant chance that they can increase their profits from the evolving trends in 3G activity. All three of these companies will put 4G into the market place. Sprint is in the midst of the changeover to 4G now using WiMax technology. AT&T and Verizon will introduce their own products using LTE standards. The move to 4G will give customers access to wireless connections that are nearly as fast as those available through landline cable, but landline cable is primarily used for TV viewing and VoIP. The technology is, of course, a way for homeowners and businesses to access broadband.
The use of broadband on wireless devices is highly likely to be different from fixed line products. Most fast connections to the home or office are connected to TVs or PCs with relatively large screens. Those screens can be used to watch video programming, perform e-commerce activities, and play sophisticated games. TV can be supported by pay-per-view fees of TV commercials.
It remains to be seen if the tiny screen of a smartphone will be useful for consumers for video viewing and e-commerce applications, at least among large numbers of people. Also unknown is whether people will use their phones for texting, but move to their PCs and TVs for their commercial transactions.
A lot more people own smartphones and use them for hours each day. Nonetheless, there is no convincing case yet that there is money to be made from current wireless consumer trends.
Douglas A. McIntyre
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