As a technology analyst I am invited to speak at a variety of meetings and conferences sharing my thoughts on companies in the rapidly growing and changing spaces including wireless, telecom, television and technology. While preparing for an upcoming speech, it is becoming quite clear that things are changing again. We are now entering another new and exciting time in this industry.
Seismic shifts are beginning. Shifts which will redefine the industry once again. Shifts like we have seen in the past, like when the Apple iPhone and Google Android operating system hit the marketplace. These shifts are causing long-term changes in leadership and direction of many segments.
Every company wants to win going forward, and a piece of that winning puzzle is positive PR, having the market see you as growing. I regularly share my opinion on the changing industry with reporters and the media as well as through my columns, speeches, reports and books. That’s why companies are always getting in touch to fill me in on their latest and greatest plans and new technology.
Speech on the changing wireless industry
When preparing for meetings and speeches I regularly have the opportunity to pull the camera back and look at the longer-term historical changes that are reshaping the telecom industry. This is so important to understand the direction we are heading.
I believe we are entering what we will consider to be an incredible growth opportunity in this industry. However, this growth opportunity is very different. The winners will be the companies focused on the right areas. And these areas are in many cases very different.
Wireless is the center of the universe going forward
There are many reasons the wireless industry is beginning to start another wave of transformation and growth. However, there is one important item that is not discussed. The wireless industry is the center of the new universe going forward. It is the heartbeat for growth not only in wireless, but in other industries as well. This is a huge new opportunity for both the wireless industry and other industries.
It’s important to remember there is more than one way to look at corporate performance. One way is from the investor perspective, and the other equally important way is from the customer perspective.
While investors simply want to make money, I believe companies who focus only on this perspective are setting themselves up for short-term gains and risk long-term losses and failure. Management must focus on staying on the growth side of both waves in order to stay relevant long term.
Focus on worker, customer, investor in that order
Companies generally perform best when they first focus on keeping their employees happy. Then they focus on keeping the customers happy. Then that keeps the investors happy. This is a successful formula which many companies use for quite a while. However, too many are just focused on the investor and that’s a problem.
This was the winning secret recipe of Herb Kelleher, founder of Southwest Airlines. If I could wave my magic wand, I would make every CEO think this way. This would provide for long-term growth keeping workers, customers and investors happy.
Too many companies screw up
Instead we see too many companies screw up this basic principal. As an example, consider the cable television industry with companies like Comcast, Time Warner Cable, Charter, Cox and others. They always had a singular focus. They always focused on the investor, not the worker or the customer.
Not caring about the customer yesterday is the reason the cable TV industry is having such trouble today. Customers remember. Suddenly cable television has competition from new companies and new technology and they are losing market share.
 Wireless TV or mobile TV
AT&T Uverse, AT&T DirecTV, Verizon FiOS and CenturyLink Prism are winning market share. In fact, AT&T is creating a new space called wireless TV or mobile TV. This lets customers watch television wirelessly using smartphones and tablets on the AT&T Mobility wireless network.
This is a big deal. This is another threat to traditional cable TV causing companies like Comcast to go talk with Verizon Wireless about coming up with a solution so they can continue to compete.
Update your focus
The problem with the cable television industry is they never focused on the customer. Now when they need the customer, the customer is not there for them. This is the long-term problem. And this problem was created by the cable television companies themselves.
That’s why it’s important to focus on the worker, then the customer and then the investor, in that order. If you don’t respect them, they won’t respect you.
The wireless smartphone handset business has seen its own wave of transformation in recent years. Leaders used to be Blackberry, Nokia and Motorola. No more. Today leaders are Apple with the iPhone and iPad, Google Android and Samsung Galaxy.
As you can see, a major transformation in leadership can reshape an industry at any time and very quickly.
Today’s wireless leaders
Today the leaders in wireless, telephone, cable television, Internet and many other areas are in the middle of a major transformation and reinvention. Yesterdays leaders are companies like AT&T, Verizon, Sprint, T-Mobile, Comcast, Time Warner Cable, Charter, Cox, Google, Apple, Samsung, Facebook, LinkedIn and many others.
Some of these leaders will hang onto their leadership position. They will continue to transform as their industry transforms itself. Others will falter. Some will be successful at following the path of industry leaders. Others will struggle and ultimately fail.
Growth wave impacts every company
Plus, there are so many smaller companies, also important to this industry, which don’t get the kind of attention they deserve. I’ll be writing about some of these in coming months. It’s just as important for these lesser known companies to be known.
Every segment and company rides a growth wave up, then it crests, then it falls. They must create and ride the next growth wave before they lose momentum from the one they are currently riding. This is happening to many in this space today. Some are creating the next growth wave and succeeding, while others are not and suffering.
GameStop and PayPal at the brink of transformation
Consider GameStop as an example. The gaming software business is changing from DVDs to downloads. So the question is will GameStop be successful like Netflix and change with the industry, or will they struggle like Blockbuster who ultimately failed? It’s still too early to tell, but they understand the issue and are working to create the next growth wave.
Consider PayPal as another example. PayPal is the long-time incumbent in the online credit card payment space. Many thought they were going to have a rough time with Apple Pay, Google Pay, Android Pay and others entering their space. However, PayPal seems to be holding their own as their sector morphs. New CEO Dan Schulman seems to have a handle on the pressures reshaping their segment.
Other industries are embracing wireless and are transforming themselves. Consider automotive, healthcare, banking, credit cards, retail and many others. This is the huge, new opportunity and risk afforded by the wireless industry. That means non-wireless companies can use wireless to become a big winner in new areas.
Questions investors are asking
These are the questions every investor is asking. This is an incredible marketplace, full of incredible growth opportunities and risks. There are so many companies who are the obvious movers and shakers. There are also so many who will obviously not change. However, even knowing which is which, is not guarantee of investment success.
So with all this said, that’s why it’s important to understand the changing industry, changing technology, changing leadership and changing opportunities and risks in every industry. Companies either lead, follow or fail. And it’s up to every investor to make the right choice. So let’s keep our eyes on these sectors and all the companies that are players here.
