Every successful wireless company rides several different growth waves. Wave after wave, time after time. Those who are not successful ride one growth wave up then down again. This is crucial for long-term success. We can learn some important lessons of exciting growth companies, and others who rode their one growth curve up then down again.
Let’s start with the handset side of the wireless industry.
Over several decades, Motorola was the number one handset maker in the wireless industry. They had been in wireless for decades. If you recall all those TV shows from decades ago, where actors would talk on wireless phones mounted in their cars. That was Motorola in Los Angeles in the 1960s, 1970s and 1980s.
Yes, wireless was around way back then, but different. That was back before the time where the service was available everywhere. Way back before it was affordable by the masses. It was a toy for the rich and powerful in certain cities.
Apple iPhone, Google Android, Samsung Galaxy took handset lead
Today, wireless is available everywhere with a wide variety of handsets and carriers. You would think Motorola would be even bigger and stronger than ever. After all, their marketplace has exploded with growth.
Why then did Motorola hit their peak in the mid 1990s with their StarTac, and why has it been crashing and burning ever since? In 2004, Motorola tried to re-start their next growth wave with the RAZR. It temporarily worked but was just a single growth wave. It climbed, crested then fell again and they had nothing to replace it with.
Growth seemed unstoppable, until it stopped.
Motorola gave way to Nokia on handsets, and Blackberry and Palm on smartphones. These companies took the lead for the next decade. Everyone loved these companies. They were addictive. You remember the term Crackberry?
Growth with these companies seemed unstoppable as well, until it stopped. That was until the Apple iPhone and Google Android were introduced.
Suddenly. Motorola, Nokia and Blackberry went from the top to the bottom of the list of leaders in the handset space. Over a few short years, both Apple iPhone and Google Android took the number one position leaving the others behind in the dust.
I think Nokia understood what was happening, but still could not come up with the next growth wave. Blackberry, who was the leader in smartphones was like Motorola. They never saw it coming. They denied reality. I and many others warned them in a variety of ways and times over several years, but they thought we were crazy.
Today, they are just a faint echo of what they used to be.
Carriers like AT&T Mobility, Verizon Wireless, T-Mobile and Sprint
The carrier side has also changed. It started with countless smaller and regional players. Today, the vast majority of customers choose either AT&T Mobility of Verizon Wireless. Today, T-Mobile has moved from number four to number three, switching places with Sprint. T-Mobile has been showing stronger growth than Sprint.
Now, with growth slowing, T-Mobile and Sprint are trying to merge. If they do, it will be good for both of them because they face a tougher marketplace going forward. T-Mobile is great at marketing and Sprint has loads of wireless spectrum. Something T-Mobile really needs more of.
The marketplace is changing. Wireless used to be just wireless. Today, wireless includes pay TV over wireless like what AT&T DirecTV NOW is doing. They send pay TV over the AT&T Mobility network letting users watch anywhere in the USA over their smartphone or tablet.
This is changing the pay TV marketplace. Verizon says they see AT&T success in pay TV and are going to enter themselves. Since their acquisition of DirecTV, AT&T has created DirecTV NOW, Anywhere TV which is their wireless or mobile TV over the AT&T Mobility network.
After AT&T acquires Time Warner, they will have access to loads of content. Just like they did with DirecTV, DirecTV NOW and wireless TV, I expect AT&T to make one plus one equal four or five.
AT&T Time Warner acquisition will transform industry again
Remember, the AT&T of today is a different company than the AT&T we knew decades ago. A little over a decade ago, the smallest baby bell, SBC acquired AT&T, BellSouth and Cingular. They went from the smallest to the largest player in the space, overnight.
They have been innovation leaders ever since. They were first with the iPhone. First into pay TV with services like Uverse and then DirecTV acquisition.
Now, they are also first into TV content with Time Warner. The deal closed right after they won the court battle. Time Warner is now part of AT&T.
AT&T and Time Warner will be one plus one equals three
That’s what AT&T does. That’s why they are the most innovative and rapidly changing companies in the industry. They lead, and others follow. If you want to know the direction of the wireless, wire line, Internet and pay TV industries, just follow them.
It will be very exciting to watch what AT&T does in the next few years with their new Time Warner asset. How they add one plus one and get four like they did with DirecTV NOW and wireless TV or Anywhere TV.
Verizon follows the successful moves and have done very well over time. T-Mobile started to recover after their merger with AT&T was denied in 2011 and they were given cash and spectrum from AT&T as a break-up fee.
If T-Mobile didn’t get their hands on that cash and spectrum from AT&T, I wonder whether they would be growing today. However, they are and that’s what counts. Now they want Sprint to get their hands on more spectrum.
This kind of change wave happens in every company and every industry every few years. Either companies ride the change wave and create the next one, or they simply ride it up then down again like Motorola did and that growth wave rides on without them.
Companies have a choice, lead, follow or get out of the way
Companies have a choice. They can either lead, follow or get out of the way. Leaders take the arrows but pave the roads and set up the new industry. Followers take an easier path, but don’t shape the direction the industry is heading. Both can be successful. The third category should just get out of the way as the change wave moves forward, leaving them behind.
This is important to understand whether you are a worker, customer, investor or executive in this industry. You always want to connect with those companies on the growth side of the growth wave. These are the companies like Apple, Google, Samsung, AT&T, Verizon, Facebook, Amazon and others who are on the growth side of the changing industry.
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