After the recent earnings statements for both Verizon and AT&T painted a rosy picture for the present and future of wireless data, Om Malik finds evidence that it might not be all peaches and cream. Sierra Wireless, a wireless modem manufacturer, has cut its workforce by 10 percent in anticipation of tough times ahead. But with Verizon and AT&T raking in $6 billion on data, how can that be?
A research note from UBS explains things:
Last week, UBS Research in a research note pointed out that AT&T had 1.25 million 3G laptop subscribers as of the end of the fourth quarter of 2008. Net card additions had fallen 121,000 from the 186,000 additions in the third quarter and 166,000 in the second. This was “likely due to weakening spending at both businesses and consumers,” said UBS. Going forward, severe job losses and overall belt-tightening (including less travel) on the part of companies will reduce the number of 3G laptop subscribers as well. It is going to impact everyone — from AT&T to Verizon to Sprint.
The less travel part is going to be a problem. That’s what wireless data cards are perfect for. Without that, they just allow us to roam locally. It’s not as easy to justify the cost for hat.
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