Merrill Lynch Report says N.A. Wireless Future Bright, EU and Asia Less So

A report that is sure to be controversial was released by Merrill Lynch, concluding that the wireless industry in North America is poised for rapid growth, while those in Asia and the EU are doomed for stagnation. The study titled “Where’s the Growth? Lessons from Japan and Korea,” seems to think that North America is in this great position by 'virtue' of the fact that we're so far behind now. The report cites that mobile phone penetration in North America is lower, therefore we have room to grow where EU and Asia don't...but the report makes a common mistake, assuming that 100% penetration is an hard limit. We know that's not true, cars can have mobile accounts, other machines can too, homes, devices, and users can have multiple phones. There's plenty of room to grow in all the regions mentioned. One thing that the report observed with which we are in complete agreement is that "Users are increasingly able to download ring tones, games and other content directly from computers to their handsets, entirely bypassing wireless carriers." We've been saying this is an issue for carriers for years now. The smarter phones get (Sync to PC, use flash memory, use Bluetooth), the more backdoors there are into the phone without paying a toll to the carrier for installing a freakin' ringtone. Sure this will reduce carrier revenue share for data content, but we believe that while the share may decrease, net revenues may still increase, plus there will be a corresponding increase in demand for data traffic . Carriers won't win long term by blocking the backdoors into the phone (like VZW has done with Bluetooth), they will win by embracing the creativity of developers and consumers, like the iMode model. Also, if carriers offer great content, ringtones, and apps at fair prices, they will continue to be the vendor of choice, even when the backdoors exist. Update See the later Techdirt post that deals with cellular phones for pets! Just another of the many future uses for cellular radios and service plans, and one of the reasons no market is yet "saturated" because penetration is a paltry 65%.

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