Categories: Opinion

That’s a wrap: RCR Wireless News’ analysis of CES 2012

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This year’s Consumer Electronics Show was big on attendance, but small on news across the wireless space. Sure, there were a number of new devices announced at what is traditionally a “device” event and large number of consumer electronic devices included embedded local area wireless technology, but for a few exceptions, the news was muted.

I don’t blame the event for this lack of news as it seems that over the past 12 months the need for wireless carriers to put out their news as soon as possible has made it more difficult to hold anything big that can be announced at a set time. Just take a look back at all of the one-off presentations made in 2011 where either device makers or wireless carriers held their own smaller events to announce a new initiative or product. I suspect this model will continue to the detriment of established trade shows.

This was most apparent for mobile operators with a dearth of information regarding network initiatives. Most domestic operators are either well into their LTE deployments (Verizon Wireless, AT&T Mobility, MetroPCS) or have already announced their initial launch plans (Sprint Nextel, Leap Wireless). Thus, updates on network plans were virtually non-existent at CES.

The only carrier that made some noise on the network front was T-Mobile USA, which having just come out under the suffocating blanket of AT&T’s attempted acquisition attempt, desperately needs to let consumers know that it is indeed alive and kicking. The carrier did what it could on such a tight time frame, announcing modest expansion of its current HSPA+ services, but remaining mum on any plans for LTE.

Devices in control

As for the news announced at CES this year, devices seemed to be the drivers for mobility. Unfortunately, most of the new devices announced seemed to follow the same script regardless of who was making the announcement. Android-powered smartphones sporting large screens, dual-core processors and blocky, dark-colored cases were the norm.

Unlike international events where a device maker can pretty much unveil any device and expect to have a chance at seeing that device in the market at some point, in the United States device makers are still reliant on wireless carriers to offer their devices at a subsidized price if they are too have any chance at mass-market appeal. Thus, most of the device announcements at CES were handled by wireless carriers, with the device maker playing a secondary role.

AT&T Mobility perhaps made the biggest splash announcing its plans to carry Nokia’s Lumia 900 device in the coming months. The device is the first from Nokia to incorporate both LTE and Microsoft’s Windows Phone 7.5 operating system, and marks a big win for Nokia, which has seen its efforts sag in the U.S. market compared with rivals.

The device will face stiff competition at AT&T Mobility, which despite efforts to broaden its Android-powered device portfolio, is still heavily reliant on Apple’s iPhone models. This is exacerbated by the carrier’s continued offering of the iPhone 3GS model for $1.

“While the jury is out as to whether or not [Nokia] will gain market share in the highly competitive North American smartphone space, our initial look at the user-friendly interface positions it well for its introductory LTE device,” noted Wells Fargo Securities in a research note.

However, Nokia’s spot of the limelight will have to be shared with HTC, which will offer its own Windows Phone 7.5-equipped device in the Titan II. Overall, AT&T Mobility has 11 LTE devices either launched or in the pipeline for the coming months, some of which are set to retail for $50 with a two-year contract.

While the carrier still trails rival Verizon Wireless in LTE scope, AT&T Mobility is using the broad device portfolio shaped by its HSPA-based 3G network to make up ground. Analysts noted that AT&T Mobility’s aggressive move towards LTE is being propelled by its need to get high bandwidth consumers off of its iPhone-clogged HSPA network and onto its more efficient LTE infrastructure for data services.

“This is a little bit of a different situation than with past network upgrades as the carrier is placing a greater emphasis on balancing network efficiency rather than trying to monetize their new 4G LTE network as quickly as it can,” explained Current Analysis in a research note.

Verizon Wireless continued to add to its LTE arsenal with a new Droid 4, a more battery-filled Droid Razr Maxx and a large-screened LG Spectrum. None of the device was really revolutionary, though the bigger battery in the Droid Razr Maxx would seem to be a good way to placate those consumers disappointed by the relatively poor battery life of current LTE devices.

Verizon Wireless also unveiled a pair of mobile hotspots that include international capabilities along with support for domestic LTE services.

Sprint Nextel pushed out details on its first LTE-enabled devices with the Samsung Galaxy Nexus that is already available at Verizon Wireless and the LG Viper. Launch details on the devices were scarce, though it’s expected the models will launch prior to the carrier actually turning on its LTE network mid-year. One note on the devices is that they will lack interoperability with the carrier’s current WiMAX-based “4G” network as well as Clearwire’s planned TDD-LTE network.

Sprint Nextel also remained mum on network plans with LightSquared, which was initially a big part of Sprint Nextel’s LTE announcement.

T-Mobile USA did about as well as could be expected of the carrier, announcing the first Nokia device running Microsoft’s Windows Phone 7.5 platform for the domestic market, though it remain tied to the carrier’s slower HSPA network.

Tablets keep lo-pro

Unlike the 2011 CES, new tablets were not around every corner at this year’s event. This market has indeed settled into a more sane rhythm as device makers are now focused on price points and features instead of just trumpeting their plans to rollout a device.

Apple remains the de facto standard in the space, setting both the top line price point as well as establishing the form factor that consumer’s desire. Those OEMs that want to play in the space found out in 2011 that if they want to see market success with their Android-powered models they need to drop their price points to a level well below what Apple is asking for a similar model.

Also interesting in the tablet space is the near lack of real interest by wireless carriers, or I should say the lack of consumer interest in purchasing a tablet device tied to a carrier’s data package. From those I have talked with, this is due to the fact that consumers seem to think that since they already are paying $25 to $30 per month for mobile data on their smartphone they should not be forced to pay another $30 per month for mobile data on their tablet.

Carriers have talked about ways to tackle this multi-device data conundrum, but to this point it has remained only as talk. Countless executives have said they were looking at some sort of bundled data package that would allow customers to purchase a monthly bucket of megabytes/gigabytes that could be used across multiple devices, but the industry so far has not come through with such an offering. Until this issue is resolved, wireless carriers will be a missing piece of the exploding tablet market.

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