The annual wireless industry trade show, CTIA, had some interesting trends this year. Putting aside the fact that Las Vegas feels like a ghost town, cab lines are uncharacteristically short, and my personal frustration that I find myself agreeing with an arch-conservative economist Arthur Laffer’s editorial in today’s WSJ on how Obama’s estate tax policy creates perverse Vegas incentives (!), here were my top 5 Take-Aways from CTIA:
- <span The Lights Are Still On. The wireless industry is clearly a bright spot: secular trends for the industry’s growth and innovation remain strong. That said, the show was meaningfully affected by the recession. On the positive side, 2008 saw 1 trillion text messages (up 3x from previous year) and double-digit growth in revenue and subscribers. Content and applications are exploding as everyone is trying to follow iPhone’s pioneering moves and (finally) smart phones and the mobile Internet are becoming mainstream in the US. That said, conference attendance was down 20% as compared to last year by some estimates and show floor had a much, much emptier feel than usual.
- <span <span Innovation is happening, but VC investment isn't. Analyst firm Rutberg & Co reports that overall VC investment in wireless was down 30% in 2008 as compared to both 2006 and 2007, sharper than the 15-20% average VC investment decline in technology. I predict 2009 will also be a bad year for wireless VC investments. The conversations I had with VCs all rhymed:
- “There are very few big ideas left in wireless”.
- “We already have a number of chips on the table and don't see the need for more".
- <span <span <span “The bar is very, very high right now”.
- <span <span <span (most damning) “The big guys (carriers, handset players, operating system owners) own too much of the value chain – there’s too little room for entrepreneurs”.
<span <span <span Anyone else there have other observations? Comment away or send me an email. You can also follow me on Twitter at www.twitter.com/bussgang.