AT&T (T) Prepares Wireless Teddy Bears

AT&T (NYSE:T) is running out of potential customers to sell wireless handset subscriptions. The US market is nearly saturated and the battle is mostly for market share with Verizon Wireless (NYSE:VZ)(NYSE:VOD), Sprint (NYSE:S), and T-Mobile all fighting for the same customer base.

Wireless companies now need to be inventive. AT&T executive Glenn Lurie told The Wall Street Journal that the phone company plans “to announce wireless-network services for advanced car-entertainment systems, home appliances, such as smart refrigerators, and handheld game consoles.” The market for powering these kinds of devices is expected to rise to $90 billion by 2013.

The day may come when parents can remotely turn on electronic toys for their children or switch on watering devices for their gardens.

The problems that the programs face are the same ones that all complex technology for the home run into. Most people do not want three TV remote controls, complex video game consoles. VoIP and standard landline phones and dimmer switches that automatically turn on lights at night fall.

Microsoft (NASDAQ:MSFT) and Intel (NYSE:INTC) tried to build a “smart” entertainment system for American homes in 2003. The concept was that one wired system would allow portable devices, TV sets, cable, WiFi, and PCs to all work in concert. The project was a failure. Consumers found the systems that drove the technology too complex to use. The instruction manuals for the technology must have been a thousand pages thick.

AT&T is up against the same resistance that the American consumer has always shown to new technology unless it is very simple. In a world where their car navigation devices talk to them, they find another set of “smart” devices too overwhelming to think about.

Douglas A. McIntyre