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The year is half over. So let us make some quick predictions for the rest of 2001: “The Year of Wireless.” Or the “Year after the Year of Wireless.” Or the “Year Before the Year of Wireless.” Take your pick.
You know something is going on when cultural bellwether USA Today does a 10-page spread on wireless including a sidebar that defines WAP and Bluetooth. Those are pages that could easily have been filled with graphs comparing the amount of money spent on shoes by Jennifer Aniston and Sheryl Crowe, or an in-depth look into the gardening habits of people in southern Florida.
The second half of 2001 will see the start-up consolidation trend continue, as the Aether-wannabes run out of cash, especially those focused on consumer-facing applications. The consolidation will spur enterprise adoption of wireless, as confidence grows that the companies surviving the shakeout will actually be around in a year. We predict that Aether will start to lose market share to the survivors.
The newly shaken out landscape will prompt VC’s to open their checkbooks to fund new companies, as well, in the second half of the year, but not for applications companies. Look for the money to go to companies that promise to impact the carriers’ ability to provide coverage (indoor and outdoor), infrastructure companies, and companies that focus on handsets (chips, antennas, etc.).
Look for Microsoft to make several purchases. They just lost their head of wireless, so they’ll need to buy to improve their lagging wireless division. Plus, with the end of breakup legal wrangling in sight, along with a stable stock price and $30 billion cash hoard, Microsoft has the freedom to start making acquisitions. We’ve heard that Microsoft has lately been making inquiries towards this end. Finally, look for PocketPC to continue to steal market share from Palm.
Carriers, like Qwest and Cingular, will continue to focus on voice applications in the hopes of salvaging their investments in WAP. This creates new opportunity, for TellMe and BeVocal (See our Insider Report this month). Meanwhile, carries will continue to take steps toward being providers of data systems for enterprises, instead of being plain old dumb pipes. Carriers will buy no application companies. None.
IPO? It’s possible that some companies will begin planning more seriously by the end of this year. Who? TellMe, Seven, Brience. Look for at least a few companies to try and back their way into an IPO by buying a shell of a public bowling or plumbing company.
Handset Driving Laws -- More are on the way, thanks to New York. This will prompt handset manufacturers to high-tail it to Detroit to get cell phone docking systems installed in cars sooner rather than later. Look for Detroit, however, to hang on to dream of owning customers through their own proprietary systems like OnStar.
Josh Newman is editor of Unstrung and is remaining consistent with his strategy.
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