New Mobile Technology Set In Motion, Would customers be interested?

Cellphone Companies have been debating for a while what its going to replace the 3G Networks that exist nowadays. Companies like AT&T, Verizon and Sprint are trying to come up with strategies to increase consumer demand now that many people have cutting edge cell phone devices.

3G Networks run as fast as DSL Lines. This works ok when you want to do tasks like transferring modest data files, talking, texting and even watching video. However, phone companies are already working on the next generation of technology which will be approximately ten times faster than the one today.

The race has already begun, and the Company that seems to be getting ahead is Sprint because of its alliance with Intel, Clearwire and other companies to build an ultrafast Wimax Network. Verizon is developing other system call Long Term Evolution.

However, is this really necessary?? Sometimes the introduction of new technologies can have an adverse effect on the consumers. Generally, companies create new technologies that force consumers to change their devices for new products they don't really understand. One example of this was the battle between HD DVD and Blu-ray. The introduction of these technologies caused a lot of confusion among costumers, billions of dollars were spent and for what? To win a market that didn't really exist or that is not the size that Companies thought it would be.

The next generation of cellular service might be jugded more than how if fuctions. However, if people think that its not worth upgrading their current service and get new subscription plans, none of this would matter.

This has to be taken into account during this weak economy period where people are beginning to use more prepaid phones in order to cut costs. Last year, prepaid phones sales grew 13%, 3 times faster than traditional cell phone plans. mostly because people want to avoid contracts and billing surprises that come with traditional cell phone plans. Cell phone companies hope that with the introduction of this techonology, their revenue stream would increase. However saving 15 to 20 a month is a big deal these days, so its very uncertain if people would be willing to adquire new devices and upgrade their monthly plans in order to get 4G and its benefits, which would be an additional cost.

Personally, I think that eventhough having a faster Networks sounds pretty cool, in this time of recession, it seems that investing more money in new devices and new services is something that people would very unlikely do.

Here are the links to the articles:

http://www.time.com/time/business/article/0,8599,1880538,00.html


http://www.nytimes.com/2009/02/21/technology/21prepaid.html?ref=technology