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Cell Phone Industry

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Alex Simpson

on 14 June 2011

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Transcript of Cell Phone Industry

Cell Phone Industry By: Alex, Mike, and Paul Description of Goods / Services Cell Phones
Devices used to communicate between people, by either text messages, or phone conversions Target Market The cell phone used to be only used for business, as people needed to be in contact instantly. Now teenagers are the target market, because its the newest technology that is easy to understand, and everybody wants one. Contracts
Used to lock customers into 1,2, or 3 years with a single cell phone, with the 3 year contract being the most commonly offered in Canada Monthly Plans
Customers pick this if they do not wish to be in a contract, also known as "Pay As You Go" Tablets
Basically a laptop with a touch screen, and without a keyboard, and can come with data plans to get internet anywhere using 3G towers. These are very popular right now, with most people are starting to use them instead of laptops. Internet Sticks
Used to get internet on a laptop by 3G, using the same towers as a cell phone History of the Cell Phone Industry 1926 - Radio Telephony was first used in trains, and by germans in WW2 to communicate

1940 - Motorola develops a walkie-talkie named the "Handie-Talkie" for the military. It was the size of a man's forearm.

1971 - AT&T submitted a proposal for cellular service to the FCC

1973 - Martin Cooper of Motorola makes the first handheld cell phone

1979 - 1G networks are first made in japan, connecting one cell phone to another

1982 - FCC approves and gives AT&T access to frequencies to use for cell phones

1991 - First GSM network and 2G radios. Cell phones were also made less "blocky" and more portable. 2G also allowed for text messaging, and downloading content such as ringtones

2001 - 3G networks start out in japan, and later in the mid-2000's, HSPA is made, also known as 3G+

2009 - 4G networks such a LTE and Sprint's WiMax begin to spread across the US, while Bell and Telus start to build 4G towers

2010 - First dual-core phones released, with quad-core phones already in the works for 2011 Competing Companies The 3 major companies in canada are: There are also some smaller companies that are owned by the major 3 such as:

Wind Mobile
Fido (Owned by Rogers)
Chatr (Owned by Rogers)
Koodo (Owned by Telus)
Solo (Owned by Bell)
Virgin Mobile (Owned by Bell)
President's Choice Mobile (Owned by Bell) Rogers Wireless Rogers Wireless started in the year 1983 in Toronto, Canada, and was called Cantel AT&T.

They run a GSM Network, which is a very mature network standard. They are also launching a 4G network this summer to compete with Bell and Telus

This also means all Roger's phones have a sim card, which is more secure and easier to transfer when buying a new phone.

Rogers was the first company to offer Android-powered phones in Canada, as well as the iPhone 3G and 3GS (Aside from Fido, although Rogers owns Fido).

Rogers has a subscriber base of almost 9 million

First network to deploy HSPA network in canada, providing high speed 3G Bell Mobility Telus Mobility Telus was founded in1984 in Alberta, Canada
Telus and Bell have a partnership with cell towers, but Bell gets priority bandwidth since Telus only rents them
Since they share with Bell, Telus gets access to a 4G network as well
Their feeder company, Koodo, is meant for students as it has cheap plans
They also have a partnership with Public Mobile to allow roaming in Eastern Canada
Telus has over 7 million subscribers, with well over half using a postpaid service Bell mobility was found in 1986 in Toronto, Canada
They now operate out of Montreal, Quebec
Bell also runs more feeder companies then the other major competitors
They were the first Canadian company to have a 3G network (Not to be confused with HSPA), and run a CDMA network
They now also have the first Canadian 4G network up and running
They have a special video calling plan for use on select phones, costing only $5 a month Who Regulates This Industry? The FCC (or Federal Communications Commission) is a Government Agency that must authorize licenses to carriers, such as Rogers, Bell, and Telus, so they can provide cell phone service to the public. They mostly look at the frequencies that cell phones use, and how much energy the radio in cell phones use. The second Government Agency to regulate this industry is the FDA (Food and Drug Administration). They look into how much cell phones affect health, and if there are any health issues with using them. If so, then they enforce carriers to warn consumers about any possible hazards, such as radition Industry Statistics Between the 3 main Canadian cell phone providers, they cover 95% of the wireless subscribers in Canada
Wind mobile has over 250,000 subscribers, which means the three main providers now see it as a threat
Bell Mobility has over 50% of the market share in Canada, due to the amount of feeder companies they have compared to Rogers and Telus
Rogers has the biggest subcriber base in Canada, with almost 9 million users, compared to Bell's well over 7 million, as well as Telus just reaching over 7 million
In Canada, the 3 - year contract is the most popular option when buying a phone, because the prices are very disproportionate to the 1 and 2 year contracts
Canadian service providers honor "Grandfathered" plans, which means if your on a plan and that plan is taken away and not offered to new customers anymore, your allowed to stay on it as long as don't change to another one
The US is usually ahead of Canada in cell phone industry growth since Canadian Tv ads do not advertise cell phone providers nearly as much as they do in the states
Prepaid plans are said to be the new big thing in cell phone industry growth, based on the fact that there so easy to get into, no signing anything, no getting stuck with the same phone and/or plan The cell phone industry is one of the biggest industries in the world right now.
Millions and millions of people use cell phones everyday, with more and more people subscribing everyday. They are now almost a requirement in any job, and now even kids in public school have them. Porter's Analysis Bargaining Power of Customers When it comes to buying a cell phone from a store or online, customers do not have very much bargaining power as the prices for plans and phones are usually set and locked by the phone provider. But when calling a company when you have a problem, such as your bill being wrong, or they charged you to much, then they will usually give you a deal such as discounts on your next bill, or a free feature. Suppliers The suppliers are probably the most important part of the cell phone industry. There are two main suppliers in the cell phone industry are:

The Manufacturers - These are companies such as Apple, RIM, Samsung, LG, HTC and Motorola, just to name a few, that make the actual cell phone and program it. Cell phone providers will pay these companies so they can have exclusive rights to a cell phone for a period of time, or to have a permanent exclusive phone. For example, Rogers had the iPhone 3G and 3GS for a limited time in Canada before any other carrier had it. They also have the Samsung Captivate as a permanent exclusive, so you can only buy it from them.

The Cell Towers - These towers are the things that send and recive calls, texts, data, and even help with location finding. Without these, cell phones would be pretty much useless. While Bell and Rogers own their own cell towers for use with their networks, Telus actually rents the towers from Bell (Which also means Koodo rents these towers). This saves Telus money as they don't have to spend more money on building towers, but also means that Bell gets priority bandwidth with its customers, since they own it. Threats of Substitute Products At first you would think that there is no alternatives to having a cell phone, as they all do the same thing. But that is not the case. Products such as the iPod Touch, WiFi Tablets, and really any WiFi enabled device. This is because there are apps that let you text cell phones and landline phones from your WiFi device for free.

Again you might think this is not a big deal because WiFi is not everywhere, but hotspots are popping up all over the place now, and soon there will be WiFi everywhere (Which is another big threat to the cell phone industry). Cell phone providers have set plans or texting and calling, but when people now how to do it for free without a contract or plan, they will pick the cheaper one, which will cost the companies a lot of money. Threat of New Entrants For almost any industry, new companies can damage and even destroy another company. With all the new ideas and new technology becoming available at what seems like lightning speed its very easy for a company to fall behind. For example, with Bell and Telus having an almost 4G network already up and running, Rogers won't have theirs up till summer time, which leaves them behind, and customers who want 4G speeds will not go to Rogers.

Smaller companies like Wind Mobile also pose a threat to big companies. This is because Wind covers a smaller but for a way cheaper price, thus stealing a lot of customers from the big three companies.

New cell phones can also throw a company ahead, or throw them way behind. If a new cell phone ends up being a best seller (Ex. iPhone) then it'll boost sells like crazy, but if it ends up being awful (Ex. Motorola Atrix) then it can cost the cell phone provider money. Future Trends The cell phone industry is rapidly growing everyday, with new tech coming out such as 4G, quadcore cpus, tablets, thinner more powerful phones, HD screens. So many thing improve everyday that its hard for companies to keep up, some even falling behind very fast.

The target market for cell phones keeps reaching to younger people.For example kids in public school now have cell phones as well, which means the target market is between the ages 13 - 50, as older people do not tend to buy cell phones nearly as much as younger people. The End!
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