The Energy Crisis and Mobility

So I was talking with a client recently about some forecast work we'd done on wireless technologies and markets, and a new question came up: how will the current energy crisis affect mobility going forward? This is a fair and indeed an important concern. Deriving an answer needs to begin with a look at whether the current crisis is a bubble or other aberration, or a fundamental sea change. If it's the former, oil could return to a more reasonable $50-$100/barrel as the speculators lose their shirts (because of a falloff in demand due to customers simply balking, or perhaps a short squeeze). If not, however, and energy costs stay high, will such spur the development of a replacement for oil that could potentially be substantially cheaper, or will high prices remain the norm forever?

The answer, of course, lies in the cause of the problem, but that is very difficult to diagnose. The OPEC  countries aren't exactly charities, and constraining supply under conditions of accelerating demand is an excellent way to drive up prices. The oil companies are making record profits. We don't seem to have enough refining capacity even if we could pump more oil. And, of course, the high costs involved in exploration and those pesky environmentalists who seek to restrict where we can drill both contribute to the problem.

Bottom line, at least from my perspective: this is a long-term problem. Standards of living will fall, at least modestly. Economic growth will slow, and globally. These effects, however, will be relatively short-lived, perhaps 10-15 years. Research into new energy sources will accelerate, and more efficient techniques across the board for using energy will emerge as well. Both air pollution and global warming will be modestly addressed. Sure, some industries will really take a hit, but that's what happens in properly-functioning economies. We deal with the problem. We progress and move on. This won't be easy, but it's not the end of the world.

So, how does all this affect mobility and demand for mobile products? WRT the former, a lot. We'll fly and drive less. Less time on airplanes is, IMHO, a good thing, as the experience of flying is now unpleasant at best. But local mobility will be only modestly affected. Most people will still drive to the grocery store, to visit Aunt Ruth, and to go to the office, and more will do so by public transportation where available. The situation is not so bad, and, indeed, cannot get so bad that we will fundamentally stay at home all the time. That's counter to our nature.

So I see no impact on the cellular industry here at all. None. Another billion handsets will be sold over the next year. This will, however, be accompanied by an accelerating falloff in demand for landline telephony services. There is, after all, less money to spend, and who needs two phone numbers, anyway? And I see very little impact on enterprise WLAN sales, although there will be slightly less demand for office space and more people working out of their homes, so this is potentially a long-term issue. Correspondingly, though, I see no problems with the residential WLAN space, which, if anything, will see good growth from people who, again, spend more time at home.

We're basically a pretty smart species, and the current crisis will motivate that greatness within us that does indeed surface from time to time. And mobile communications will remain a key element as the economy makes the transition.

• energy crisis
• mobile communications
• Mobility