“We have witnessed a jaw-dropping 21 percent divergence between the U.S. and the rest of the world in just four short years,” analyst Craig Moffett wrote in a January report. “The U.S. wireless market has steadily grown, first on the back of wireless voice and now, more recently, on the back of wireless data.”
Then there are the devices that don’t even require humans to connect to the network -- cars reporting maintenance problems to the dealership, medical monitoring devices, home-security and climate-control systems. Those industries are increasingly connecting their devices to wireless networks to create the “Internet of Things,” a market that will grow 17.5 percent a year worldwide from 2013 to 2020, according to researcher IDC. Developed markets like the U.S. will make up about 90 percent of these types of connections, IDC said.
‘1,200 Percent’
That means the old way of measuring the maturity of a market, known as penetration, is increasingly irrelevant. When mobile phones were still a new technology, a market penetration of 50 percent meant that half of the population still didn’t have a phone, leaving plenty of room for growth. Now, with tablets also connected to the network, many countries have more connected devices than they do people, leading to penetration rates above 100 percent. The U.S. rate was 104 percent at the end of last year, according to CTIA, the wireless industry group.
Investors in U.S. wireless networks are betting that penetration can expand to many times the population.
“In 2008 when we rolled out the open network, we talked about penetration rates of 400 percent and 500 percent -- I have to admit we were wrong,” Verizon’s McAdam said in March. “It probably ought to be 1,000 percent or 1,200 percent when you look at the Internet of Things.”