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Mobile communication technology is the next big thing as far as the world of finance is concerned. Thus, it is not in the least bit surprising that AT&T (NYSE:T) is set to move into a bullish direction with its expansion plans. News has it that AT& T is set to diversify into the home security automation industry with its Digital Life, set to be released anytime soon. In fact, plans are under way to begin the trial versions in Dallas, and Atlanta, as early as this summer.

However, the real news is not as much as in the diversification into home security, but in the capabilities of the Digital Life. Digital Life is set to be an open-ended system that can be accessed from any PC, Tablet or Smartphone. Its major function is that it can be used to monitor your home from a mobile device using AT&T's IP-based wireless platform, which is spread across the 30,000 hotspots nationwide. Thus, you can open doors, control the air conditioning, shut of the showers and basically keep an eye on your house from any location.

The best part is that you do not necessarily need to be on the AT&T carrier before you can buy the product or use it. This move is a perfect marketing strategy that will make it possible for AT&T to sell its product to the customers of other carriers and possibly gain their trust and loyalty with the style of customer service that will be provided. In addition, this move will ensure that AT&T competes effectively with Verizon's (NYSE:VZ) Home Monitoring and Control Package. You can also be sure that the move will give it a wide customer base before the other competitors would even think of getting started with a similar product.

In quoting Glenn Lurie, President of Emerging Enterprises and Partnerships, "AT&T is bringing assets that this industry has never seen before."

Interestingly, it seems that Verizon is ready to give AT&T a good dose of competition with its recent announcement that plans are under way to form an alliance with COX Communications. The alliance is set to provide customers with excellent video, phone, and Internet and wireless services, which are available by signing up for a package through either party. This alliance will definitely see more people buying Verizon, because the alliance is set to give customers what no single carrier can provide at affordable rates.

Nonetheless, the reach of the alliance, at least for now, is still limited to Oklahoma City and Tulsa vicinities rather than the whole country. Thus, it may be hard to say what effect the decision will have on Verizon's stock for now. Nevertheless, if the pilot project should succeed, it may not be long before the alliance's products are offered to customers in a wider geographical base.

However, AT&T and its competitors may find it hard to continue on with the massive sales that they have on their smartphones. This assertion is made in lieu of the fact that the supply for smartphones may soon be lower than the demand. Qualcomm (NASDAQ:QCOM), which is the largest maker of chips in the world, had recently announced that it cannot keep up with the production of latest chips. More so, some other manufacturers have plans to get more machinery to help them to meet the demands.

These chips are essentially what oxygen is to man. The smartness of smartphones lies in the capabilities of these chips and, without chips, smartphones could not deliver what we have come to expect. Nonetheless, some alarmists have been crying woe and the news has already made some people conclude the worst for smartphone providers.

Nevertheless, I see a great opportunity for AT&T to record excellent profits and rise significantly with the trend. The dynamics of increased demand and decreased supply is the perfect dynamic that drives and increase in price. Thus, AT&T may increase the price of its smartphones or increase the price of other additional services on its smartphone.

However, AT&T will not be the only stock to rise with the trend because its competitors will not stand back and watch it purchase all the chips to make its own smartphones. In essence, there will likely be a stiffer competition to purchase the chips from the manufacturers. Thus, the manufacturer of the chips, Qualcomm in this case, may just stand to gain the most from the present market conditions.

Nonetheless, technology is never stagnant and the speed with which information technology moves is definitely alarming. Thus, we can expect a technology that is superior to the chips technology to arrive soon to power smartphones.

Interestingly, the face of mobile communication business may be changing with the recordable changes in consumer tastes. In a recent report released by Ericsson (NASDAQ:ERIC) there had been a recording of increased data usage over voice calls in terms of the complete cellular network traffic, as late as 2009. However, this trend seems to be on the increase and shows no sign of abating any time soon. Hence, the proliferation of the development of smartphones and other sophisticated mobile devices.

In fact, data usage in terms of emails, text messaging, chatting, surfing the web, viewing and downloading videos among others seems to be the major function of mobile phones while making voice calls has been relegated to the background.

The most interesting thing to note is that this change will lead to lots of changes for the players like AT&T, Vodafone (NASDAQ:VOD), Sprint (NYSE:S), and Verizon among others. However, AT&T will need to go the extra mile if it has any intention of competing with a competitor like Verizon effectively in this market, especially with Verizon's 4G LTE technology that is sweeping over the country at fast pace.

If Digital Life is as impressive as AT&T hopes, it may be a game changer. The company also said the same thing of its U-Verse product, which has not done much to replace the standard broadband market. Wait and see what the company does with Digital Life and assess any investment moves with that news. AT&T is currently trading around $33 at the time of writing. If Digital Life is a success, I anticipate the stock will establish new highs around $35 by early to mid 2013.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.