>>AT&T WIRELESS SAYS IT WILL WIN 3G RACE<<
from The Bull Market Wireless Investor, 6/13/01:
us.f104.mail.yahoo.com
>>AT&T Wireless (AWE, $16, down 2) believes a universal mobile telecommunications system (UMTS) from Nokia will help the company deliver the first nationwide 3G network in the U.S. The companies have been developing AT&T Wireless’ EDGE technology (enhanced data rates for global evolution) to deliver streaming video and CD-quality sound to Wireless phones and devices. They now plan to test UMTS -- the standard AT&T Wireless believes will provide the foundation for its 3G Wireless multimedia features.
The company is still on schedule to begin offering 2.5G services later this year. With equipment from Nokia, AT&T Wireless plans to add EDGE and UMTS to its network between 2002 and 2003.
In addition to supplying radio network systems, Nokia is testing UMTS and the protocols necessary to create voice, data and video services on an Internet-protocol (IP) based network.
COMMENT: AT&T Wireless is fully committed to 3G technologies, and they’re at the forefront of this movement. Given the level of competition among national carriers pursuing the cherished 3G status, AT&T Wireless has made a bold claim here. We’re not sure it is actually going to come in first in the 3G race, but it should be close, and we like the company’s commitment.
But it isn’t going to be easy. As you can see above, the company is overlapping many Wireless protocols and technologies onto its existing platform. We’re a bit concerned that if the complications don’t slow AT&T Wireless’ network development, they will at least boost the costs of implementing a cohesive 3G network. By contrast, many of the company’s competitors are merely upgrading from a single code division multiple access (CDMA) network.
Still, in the long run AT&T Wireless is focused on offering highly advanced features over its Wireless network. This is important because with customer growth slowing, Wireless carriers are going to have to depend on new and innovative data services in order to fuel growth (this leads us well into article #3 below).
In the shorter term, meanwhile, we’re pleased by Nokia’s involvement. This company seems to be in the middle of all major developments and build-outs in the Wireless business. Unlike the major carriers, which are looking several years down the road before their investments pay off, this company is generating revenue from 3G right now. Despite its short-term troubles, Nokia is a beauty. We think 3G from AT&T Wireless will be a big hit as well.
MOBILE COMPUTING GROWTH SET TO EXPLODE
Wireless computing subscribers in North America will number 138 million by 2005, says a new research report on the industry. That’s up from 7 million subscribers in 2000. This tremendous growth will be driven by corporate use of Wireless applications, the rollout of packet data networks, and the falling cost of Wireless data services.
Although circuit-switched data service is currently the leading technology among Wireless subscribers -- driven largely by Wireless web offerings from Verizon (VZ, $54, down 2) and Sprint PCS (PCS, $21, down 2) -- packet data networks are expected to dominate by 2005. Packet data networks provide always-on connectivity, stronger coverage, quicker data speeds and combined voice and data plans. The increase in functionality and the evolution of Wireless handsets and devices such as PDAs (personal digital assistants) will be the main drivers behind increased Wireless use among businesses and consumers.
COMMENT: We’ve said it before and we’ll say it again: Wireless is going to be one monster of an industry. 138 million subscribers in North America by 2005 -- and 800 million Wireless data users worldwide by 2004!
Businesses in every aspect of Wireless are going to have an opportunity to profit from this upcoming boom, and that means investors will as well. Our favorite carriers, including Sprint PCS, Nextel Communications (NXTL, $15, down 2) and AT&T Wireless, will do exceedingly well by moving massive amounts of data across their Wireless networks. In addition, Nokia is going to continue to generate revenues from all sorts of Wireless avenues, including next generation handsets, infrastructure and software. The short-term might be a bit painful as Wireless subscriber growth slows, but the long-term still looks extremely bright.
This up-and-coming market is going to create a number of astounding opportunities for both new and established companies alike. These include device and display makers, chipmakers like Texas Instruments (TXN, $35, down 1), Wireless applications developers (small ones, but also large ones like Microsoft (MSFT, $72, down 1) and Sun Microsystems (SUNW, $17, down 1)), businesses in the Wireless local and wide area network (Wireless LAN and WAN) sectors, and firms in the Wireless security sector.
We’re keeping our current Wireless companies, and we’re going to ride them to some great long-term gains. But we’re also keeping our eyes out for up-and-comers that are going to score big in Wireless.
THE BULL MARKET WIRELESS PORTFOLIO TRACKER
This is how The Wireless Investor Portfolio ended on Tuesday with returns from the previous Tuesday, as well as the year-to-date (YTD) returns. If we added a particular stock during 2001, the YTD return is calculated from our add price (not the stock’s price at the beginning of the year).
This table is best viewed in the courier font so that all columns line up correctly. Company Price Week YTD
AT&T Wireless (AWE) $16 -10% -8%
Nextel (NXTL) 15 -11% -40%
Nokia (NOK) 23 -25% -47%
Powerwave Tech. (PWAV) 12 -7% -34%
Sprint PCS (PCS) 21 -8% 4%
Vodafone Group (VOD) 24 -7% -34%
Average Portfolio Rtn -11% -26% S&P 500 -2% -5%
Nasdaq -3% -12% <<
(They dropped QCOM from their wireless portfolio some time ago.) |
