The top 10 wireless trends for 2008

December 31, 2007, 12:00 PM UTC

By Michal Lev-Ram

A lot happened in wireless this past year, from the debut of the iPhone to Verizon Wireless’ move to open its network. But 2008 promises to be just as eventful, starting with the Federal Communication Commission’s spectrum auction in January. Here’s a look at the 10 most significant events and trends in the coming year.

1. Wireless networks will remain the domain of wireless operators: There’s been talk that the upcoming 700-MHz spectrum auction could present an opportunity for a new carrier to emerge, given that companies like Google (GOOG) and even oil giant Chevron (CVX) have registered to bid. But most analysts agree it’s unlikely anyone but the current big mobile operators will win the showdown. “AT&T (T) and Verizon Wireless (VZ) will be the most aggressive bidders,” says Forrester Research analyst Charles Golvin. But regardless of who wins, the wireless world will change given an FCC requirement that the 700-MHz spectrum be open to any device.

2. The first Android phones hit the market: Taiwanese phonemaker HTC has said it expects to launch the first cell phone based on Google’s Android mobile platform by midyear, and other phonemakers are expected to follow. (Android is a wireless operating standard that aims to make the mobile data experience more Internet-like.)

3. Cameraphones will get even fancier: Have you checked out Nokia’s (NOK) N95 – a picture-taking machine that comes with a five-megapixel camera and still fits in your pocket? That’s the future of multimedia phones. “For the first time, in 2007 cameraphones became the majority,” says Mark Donovan, an analyst with research firm M:Metrics. “In 2008 we’ll see the technology continue to improve.” In the United States, 61 percent of phones already have built-in cameras, and there’s a growing range of uses for them. In addition to uploading and sharing photos directly over cellular networks, people will be able to take pictures of ads to get coupons sent to them via SMS or get product information by taking a shot of a barcode.

4. Mobile ads will come to a cell phone screen near you: Sure, estimates of mobile advertising revenues have often turned out to be overblown, but that doesn’t mean the industry isn’t making headway. In 2007, many of the big players – Google, Yahoo (YHOO) and Microsoft (MSFT) – made mobile ad-related acquisitions. Expect to see the fruits of that shopping spree start to appear later in 2008. It will be a while before subscription-based models lose ground to ad-based ones, much like what happened on the Internet, but the wireless industry is slowly opening up to ads.

5. WiMax will become available: This is the year Sprint (S) will launch its Xohm mobile broadband service in select markets like Chicago, Baltimore and Washington, D.C. By end of 2008, Sprint expects to reach 100 million customers with its new ultra-fast mobile data service. While Nokia’s Internet tablet will be one of the first compatible devices available on Sprint’s new network, analysts don’t expect to see affordable WiMax-enabled phones anytime soon.

6. Openness will continue to dominate the wireless lexicon: You can thank Google for this one – ever since the Internet search giant began lobbying the FCC to open up the 700-MHz spectrum, “open” has become the latest buzzword in the cellular world. At first the big mobile operators tried to fight it, but once they realized they couldn’t beat Google they joined in. Look for holdout AT&T to become more open to the possibilities of open in 2008.

7. Nokia will become a major mobile software player: With its new chief technology officer based in the Silicon Valley, a reorganization that will make software and services one of the company’s main business groups and the upcoming launch of its Ovi web portal, expect the Finnish phonemaker to become much more than a hardware player in 2008. The company’s buying streak (it’s already snapped up startups like photo-sharing service Twango and digital mapmaker Navteq) is likely to continue.

8. Getting lost will get harder: What, you don’t have a GPS-enabled phone? Don’t worry, you will soon. That’s because the FCC’s “Enhanced 911” rules is slowly forcing U.S. carriers to make their handsets GPS-capable. That in turn will drive more and more location-based services (think social networking and advertising) in 2008.

9. More touchscreens: The iPhone wasn’t the only touchy-feely phone to come out in 2007. There was also the HTC Touch and Verizon’s Voyager and Venus devices, which launched in time for the holiday season. But expect to see even more all-touch devices in 2008. According to ABI Research, over 100 million handsets with touchscreens will be shipped in the new year By 2012, that number is expected to reach 500 million.

10. Silicon Valley will become a wireless industry hot spot: The Valley is home to iPhone-maker Apple (AAPL), Android creator Google, Nokia’s new CTO and countless mobile startups. With the increasing focus on software and services – not just phone manufacturing –  Silicon Valley will become even more prominent on the wireless map.