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Forces Gather In The Wireless Revolution

Red Herring is running an interesting piece that proposes that demand for new wireless devices essentially reflects the state of the networks the devices function over. For example, the article points out that in the early 90’s there was a handset slowdown as networks transitioned from analog to digital networks. Consumers waited till digital networks became nationwide before switching to digital handsets. The industry is experiencing the same thing today as networks transition from 2G to 2.5G. Until these new networks have true national coverage, consumers will opt for handsets that are smaller and have color screens and will ignore handsets that offer new services but limited coverage. US TDMA carriers Cingular and AT&T have the biggest challenge as they transition to GSM. In fact they might lose customers through the transition to aggressive players like SprintPCS and T-Mobile who are pushing nationwide 2.5G networks and offering new color screen handsets.

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