Just the Tip of the Iceberg

Today Verizon announced it is purchasing Hughes Telematics for $612 Million in cash (approx premium of 176% over original share price). (Read more here: http://www.bloomberg.com/news/2012-06-01/verizon-to-acquire-hughes-telematics-for-612-million-in-cash.html)

The telco market is clearly starting to signal that they want to be more than a “dumb pipe” in the “connected world”. With Sprint’s offerings they are beginning to take to market, AT&T’s recent acquisitions to build a stronger services layer, and this news from Verizon I believe the consolidation and packaging process is starting to heat up for a 18 – 24 month sprint. Hold on to your hat folks!

If you add in here how the traditional cable companies (ex. Comcast) are entering into the connected home market with home monitoring and energy services, and how gaming platforms are partnering with cable companies to redefine media, the integration game is going to be hot for a while to come.

It is clearly a race for share of wallet AND share of mind of the emerging “Connected Consumer”. Consumers don’t want a fragmented experience between vehicle, home, work, and traditional mobile/computing. Seemless is the key and these acquisitions start to signal that the telco/carrier market wants to ensure they have the assets to be in the driver’s seat in that race.

Enabling the vision of the “connected world” requires many industries to come together. Partnership, cooperation, integration, and in this case acquisition are going to be key themes of successful strategies for the next few years. Firm’s that have these are core capabilities will have a leg up on the competition. Those that think they can control this rapidly changing market via traditional means will be left out by the emerging Connected Consumer.

Fun times for sure!

No regrets,

Gregg

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