In the wireless industry, tough times can both help and hurt vendors and service providers, as well as their customers. Here’s a look at what to expect should a recession become a reality.
Device Manufacturers: The companies that make handsets and other mobile devices may be the most vulnerable to an economic downturn. Consumers and businesses with tightened purse strings may decide to forgo upgrades and hold on to their current devices for another year or two. Additionally, businesses with shrinking work forces aren’t likely to acquire additional devices.
Infrastructure Hardware and Software Vendors: As businesses and consumers face tighter budgets, new projects and expansion plans will likely to be placed on the back burner. This could mean tough times for vendors that sell wireless routers, access points, firewalls, management systems and other infrastructure products.
Mobile Service Providers: Dwindling employee numbers could mean falling revenues for mobile service providers. Furthermore, if business and consumer spending stagnates or falls, expect the number of new 3G/4G deployments to slow as service providers strive to cut expansion costs.
Mobile Entertainment: Over the years, the broadcast and motion-picture segments of the entertainment industry have generally been considered “recession proof.” Whether this tradition will carry over to mobile entertainment remains to be seen, since this sector of the wireless market barely existed during the last recession in 2001. The general belief is that mobile entertainment will at least hold its own during a recession, since people may be willing to spend a few bucks on downloadable content even if they don’t feel up to springing for a big night on the town.
Municipal Wireless: A recession can’t make a significant impact on municipal wireless, simply because the market is already flat on its back. With many municipal-wireless service providers tossing in the towel — and a growing number of cities and towns delaying, scaling back or flat out canceling their community wifi strategies — the sector’s woes are likely to continue, regardless of the overall economy’s condition. Municipal- wireless initiatives probably won’t experience a return to rapid growth until WiMAX technology becomes generally available. Even then, competition from private service providers may make government-sponsored wireless networks a tough sell.
Recession
All told, a recession (or even a lengthy economic downturn) will likely cause more harm than good for wireless players and customers. Fortunately, the industry should bounce back quickly once business growth resumes.
- By Oscar Noel
