Mobile Breakfast Series–The Future of Mobile Commerce/Payments January 30, 2015
Posted by chetan in : US Wireless Market , add a commentGreetings,
In 2014, Mobile Commerce is going to generate over $100 billion+ in revenue. Mobile Commerce already accounts for over 12% of the digital commerce in the US. This is the revenue that didn’t exist a few years ago. We will talk to executives who are driving mobile commerce and who are powering the technology behind these billion dollar initiatives. Digital only retailers are likely to take 75% of the mobile commerce revenue share. How are the traditional players reacting to the threat and the opportunities? How does the difference in behavior on smartphones and tablets impact commerce? As we move into the Connected Intelligence Era, how will commerce change in both the physical and the digital worlds? How will Apple Pay transform the financial industry? We will tackle some of the thorniest questions in front of our industry.
Sam Liang, CEO and founder of Alohar Mobile (Alibaba)
Prat Vemana, VP – Mobile and Commerce, Staples
Sebastien Taveau, VP and Chief Developer Evangelist, MasterCard
Chetan Sharma, CEO, Chetan Sharma Consulting (moderator)
We will explore the mobile commerce opportunities and shifts in the ecosystem in detail across the globe. You don’t want to miss this one.
Registration: http://www.mobilebreakfastseries.com/register.html
Venue: Columbia Tower Club, 701 5th Ave #7500, Seattle, WA 98104
Date: Feb 17th 7:30 – 10:30am
Look forward to seeing you soon.
Regards,
Chetan
CES Observations 2015 January 16, 2015
Posted by chetan in : 4th Wave, 5G, CES, Chetan Sharma Consulting, Connected Intelligence Era, The Golden Age of Mobile, US Wireless Market, Worldwide Wireless Market , add a commentCES 2015 Observations
International CES – the annual gadget fest is a cauldron of hopes and aspirations of big and small entrepreneurs, crazy and whacky ideas, the place where roadmaps are laid bare – some obliterated by the time the show is over while others benefit from the infusion of interest and inspiration. The promise of the Connected Intelligence Era was in full display last week in Vegas where the faithful converge to get a glimpse of what’s to come. More than anything else it is the time to meet friends and colleagues that provide much more insights than any of the booths, launches, and press conferences could disseminate.
Here is the summary of our observations from 2015 CES.
Transcendence – Coincidentally my trip started by watching Transcendence – a story about the metamorphosis of man and machine. It was interesting to view the show from this angle and try to connect the dots of the future.
First, let’s do the numbers – CEA expects the overall electronics market to grow by 3% primarily because of growth in the new category of connected and emerging devices (also includes 4K Ultra HDTV) which are likely to reach $11 billion in revenue in the US market.
Connected Intelligence Landscape – CES lay bare the evolution of the connected intelligence landscape. Millions of end-points are propping up that communicate and interact in ways unexpected. We are all grapple with what it means to progress of technology and humanity and how can we harness the power of “connectivity” and “intelligence.” Some things are moving forward at a much faster pace for e.g. autonomous vehicles, self-watering plants, cancer detecting pills are all examples of connected computing and actionable intelligence. Selfie sticks – not so much.
The IoT Show – If CEA had switched its name to the “The IoT Show,” it won’t be too far off for all the major discussions at the show were around the promise of IoT. The number of companies having something to do with IoT grew manifold this year. Though nothing significant has emerged from the level tricks and trinkets, the overarching theme is that one will see hundreds of these floating around each consumer to prepare an aura of information and intelligence around them that anticipates problems, provides guidance, and keeps them from getting into trouble. But where is the money? As usual, it seems pretty clear that the money will be in the tools and components and not the actual end points. Big winners will be the component suppliers and software players who can tie all of the complexity together in an easy to use human language and interface. There is probably more money in battery packs right now than IoT sensors.
Wearables – Humankind’s first rendezvous with a wearable was back in 1286 in Italy when the Dominican friar figured out the art of making glasses. More progress has been made in this segment in the last 12 months than all the centuries’ prior. In my last year’s CES note, I surmised that the market will segment into high-end luxury (Apple, etc.) and low-end commodity (Chinese OEMs). This theory is unraveling in front of our eyes. Apple is due for its Apple watch splash this quarter and the Chinese are flooding the market. For every $150 fitbit, there was a $20 identical unit from a Shenzhen vendor. For every $200 basis watch, there was an identical watch for a fraction of the cost. Obviously, the Chinese firms need distribution to the western markets and it is not an easy problem to solve. On top of that zero marketing and brand loyalty means there is an opportunity for someone to step in a distribution platform and make a killing.
The value is in the intelligence – As I outlined in my Connected Intelligence paper, the “sensing” part of the ecosystem is going to be commodity. Any new performance enhancements will last only a few months if not days so the value has to be built beyond “sensing” and in “making sense of the data” part. The two big aggregation islands at the OS layers are obviously Android and iOS but there is room for someone to congregate these data points in hubs that control a home or an office, an airport or the mall. Historically, each new wave brings in its own set of aggregation pods – windows for PCs and Android/iOS for smartphones. So, it is likely we will see new plays in the IoT space.
Ma, the Robot is home now – the Robots are getting real in how they interact with humans that some of the science fiction movies look very real today. The Japanese are leading the way with robots and what can be done with them especially in the consumer environment.
Handsets – Just when we thought the market for > $5K mobile handsets was over, Lamborghini launches a $6.5K handset. One sale to an unsuspecting Saudi sheikh has been confirmed. For the rest of us, the market stays flooded with innumerable choices. As I mentioned in my year-end update, the Chinese OEMs control over 40% of the smartphone market now. It is going to be over 50% this year and strolling the show floor you can see why. The market is getting flooded with cheap Android devices. With some really good-looking Android smartphones at $25, the ability to charge more uniformly around the world is virtually gone. I even saw some Samsung look-alikes with 14K gold for only $120. You can’t tell the difference between the brands.
Autonomous Cars – Last year’s show was about connected cars. This year we moved to very possibility of autonomous cars. It is quite likely that a kid born this decade might never need a driver’s license. Thanks to the market push by Google and Tesla, this segment is moving incredibly and excitingly fast and we are going to see some fascinating science fiction concepts come to life over the course of the next 5 years. Regulations obviously need to be figured out but this train is moving so fast that we better get on board. On the operator front, AT&T continues to corner the US market with OEM deals.
3D printing – Is there anything you can’t print with 3D printers – organs, food, rockets, fuel – you name it, you got it. But will you?
Connected Home – Continuing the theme of IoT, connected home innovators were in full display mode. Solutions are starting to come together though they are still cumbersome, work only in silos, battery life is a problem, security is iffy, and the pricing is not attractive just yet for it to be a mass market but slowly and steadily we are cracking the code.
Healthcare – The CES highlight for me was to attend the talk by Dr. Eric Topol (if you haven’t read his new book, do so now). He is a great champion of technology transforming the health care system and as a result changing the doctor-patient relationship forever and for good. As he mentioned in his address, the healthcare profession hasn’t been challenged since the 200 BC. He listed an endless stream of companies who are changing how various aspects of health and wellness gets measured and analyzed that lays bare the futility of today’s healthcare system.
Security and privacy – Last year, we released paper on “IoT Data Privacy Framework.” FTC seems to agree with many of the arguments and concepts laid out in the paper for connected device privacy and security. The agency is expected to release its recommendations in a paper later this year. In general, security continues to be a hot topic with every keynote addressing it. Even President Obama is expected to make cyber security as one of the key themes of this year’s state of the union address.
Dish $20 – Probably the biggest surprise of the show came from the most unlikeliest quarters of the industry. Dish announced a $20 service that provides basic set of channels + the prized ESPN channel. Consumers are likely to switch in droves to accelerate the cord-cutting trend.
TV – What will be a CES show without some TV splash? 3D TVs have been a flop but consumers still crave for high-res and slim designs. Samsung, LG, Sony, and others continue to impress with new designs however pixel based strategy is getting old.
Samsung’s strategy – Samsung has taken the expected hit in the second half of 2014. At CES, some of the early elements of a strategy could be sensed out from the tea leaves – Tizen led IoT strategy, convergence of Samsung products glued by common interfaces, and rethink of the smartphone product lines around the globe. The company still needs to do a better job of telling its story.
Virtual Reality – There are many more players jumping into the VR space after the spectacular rise of Occulus last year.
Enterprise – A well-organized AT&T developer summit kicks off CES every year. As you might have gathered from my past writings, the new mobile money is flowing into the enterprises. Vertical industries and players who serve them are utilizing mobility, IoT, and cloud to change how they design their own business processes and instruments, manage their employees and engage with the customers. I am always impressed with what developers are able to come up with during Hackathons. It is surprising that the governments and corporations around the world don’t invest more in bringing entrepreneurs under a common umbrella to see the possibilities. AT&T also opened up its digital life platform for partners in the ecosystem.
Coolest keynote – Intel – Brian Krzanich excelled in driving home his three points around computing unleashed, intelligence, and wearable revolution. The new Realsense technology can expand the use cases from desktops to drones. Diamler’s Zetsche also scored points for bringing a cool looking autonomous concept car on the stage.
Overall, CES is a good show to sense the pulse of the industry at the start of the year and catch-up with colleagues who provide real insights into what’s going to be important.
Have a fabulous 2015
Chetan Sharma
Mobile Predictions 2015 January 1, 2015
Posted by chetan in : 4th Wave, 5G, Connected Intelligence Era, Mobile 2015, Mobile Future Forward, The Golden Age of Mobile, Wireless Value Chain, Worldwide Wireless Market , add a commentMobile Predictions 2015
http://www.chetansharma.com/MobilePredictions2015.htm
A very happy, healthy, and prosperous 2015 to you and your family. My thanks to all who participated in our 8th annual Mobile Predictions Survey. It is a unique polling of the insiders to get a glimpse into what the ecosystem is thinking about the future.
2014 was without a doubt an awesome year for the mobile industry. Not only the ecosystem perform well on almost metrics, it has started to open up the tent to bring in other industries as well which is where lot of the action is going to be in the next 5-10 years. As we discussed in the Connected Intelligence Paper, the Golden Age of Mobile is here and we are in for one heck of a ride.
They were so many milestones that it is hard to capture them in a short note but it is worth noting the steady climb of subscriptions past the human population, the continuous of apps and data revenue, and the disruption of vertical industries like transportation, travel, and health were probably the defining highlights of the year. The 4th wave is indeed in full-effect. Many incumbents are struggling to adjust and the torrent of startup innovation is changing the global landscape of how new revenue is generated in the ecosystem. By our count, there were at least 38 companies generating a billion dollars of more from 4th wave services. This is a whopping 442% jump from 2012. The average amount of data consumed by smartphones doubled in most LTE markets and we can expect a similar jump in 2015.
Just consider the amount of change we have seen in the first half of this decade: 483% growth in digital information, 12,816% growth in mobile data traffic, 339% growth in smartphone sales, 1,344% growth in tablets sales, 73% growth in data revenues, 433% growth in OTT revenues, 50% growth in mobile industry revenues, and 341% growth in mobile apps revenue. Can you imagine what the next 5 years will be like? Stay with us and we will keep you posted J
Our annual survey is a way to engage our knowledgeable community on the trends we are likely to see the next year. We put some of the pressing questions to our colleagues and industry leaders from all corners of the world. The aggregated view and the nuances help us in getting a sense of what’s to come. Executives, developers, and insiders (n=175) from leading mobile companies and startups from across the value chain and from around the globe participated to help see what 2015 might bring to surprise us. The survey draws upon the unique collective wisdom of the folks who are the center of the mobile evolution. Thanks for being part of our annual ritual.
25 names were randomly drawn for the limited edition of Mobile Future Forward 2014 Book and they have been notified. Welcome 2015!
Kind regards,
Chetan
1. What was most newsworthy in Mobile 2014?
The security and privacy breaches were rampant throughout the year, especially in the US so it is no surprise that it topped the big stories in 2014. The long awaited milestone of the number of mobile subscriptions passing the human population finally happened though it was anticlimactic. Apple Pay was a big story as well and the company has executed it perfectly so far. The likes of Uber and Airbnb continued to shake up the regulators and the logistics industry worldwide. The silent story of the year was the dominance of the Chinese OEMs who now control 40% of the smartphone sales. Samsung’s decline was quite predictable with competition on both ends. Will the company find a way to claw back to former prominence? The growth of a number of new 4th wave companies was also a big story for the year.
2. What will be the biggest mobile stories of 2015?
The connected devices are everywhere from our wrists to homes to streets. We might see some new device experiences in 2015. Foldable devices are rumored to be in the works. Will we grow past the rectangular screen in our hands? Mobile data will continue to define a bulk of the industry revenues. Will Apple watch be a big tipping point for the wearable market? 5G discussions have certainly heated up as we closed 2014 and we will see more noise and progress in 2015. Apple vs. Samsung has become an old story. Folks are expecting a change in leadership at the big 4. Net-neutrality is likely to be a big story in the first half of 2015.
3. Who are the top 4 important players in the mobile ecosystem?
Apple and Google continue to dominate the top two positions. While Samsung was still ranked #3, its influence waned a bit in 2014 while the stars of Facebook rose on the back of its mobile performance. Operators rounded out the top 5.Amazon and Microsoft suffered minor declines.
4. What will be the breakthrough categories in mobile in 2015?
Given the introduction of Apple Pay, there are a lot of expectations around mobile payments and commerce in 2015 and we could finally see the puncturing of the decade’s old financial system with some new energy and innovation. Other categories of interest are connected devices, wearables, health and fitness, and big data.
5. What will be the most popular consumer mobile applications in 2015?
Messaging continues to dominate the developing markets while there is more action around home automation, health, location in the developed world. Commerce and social remains hot everywhere.
6. What is likely to happen in the wearables category in 2015?
Will the wearables category stay niche or will the whole ecosystem grow? We are about to find out in 2015. Can Apple define the category like it did with the smartphones and can anyone besides make any money? Lot of questions, too early for the answers.
7. Who will dominate the mobile payment/commerce space?
We have been asking this question for the last 5 years and the financial institutions have always come out ahead. However, this year, Apple surged to the #1 position on the back of Apple Pay. Will Google, Facebook, Paypal, Amazon, Startups cede the category to Apple? Some M&As are coming up in the space.
8. Who will make the biggest mobile acquisition in 2015?
Facebook surprised many with their blockbuster acquisition of Whatsapp and many think that Google and Facebook will continue to duel it out for big acquisitions in the same. They could be easily trumped by any Operator M&As which tend to have gazillion dollar valuations.
9. Who is doing the most interesting work in the IoT space?
The space is fairly new and clearly startups are tinkering out with the most interesting stuff. Amongst the big companies – Google, Intel, Qualcomm, GE and AT&T are ahead of the curve.
10. Which solutions will gain the most traction for managing mobile data broadband consumption?
Wi-Fi accounts for bulk of the mobile data traffic in almost all major markets hence the rise of mobile offload as the preferred solution for managing data growth. But, LTE deployment, spectrum acquisition, and tiered pricing remained the top solutions for the operators.
11. Which category will generate the most mobile data revenue in 2015?
Messaging tops in Asia and Africa. Apps and advertising do well in rest of the world. OTT services are starting to have a meaningful impact everywhere especially in Japan and Korea.
12. When will mobile commerce be greater than ecommerce?
The tipping point is coming sooner than you think.
13. The company bringing the most successful mobile gadget of the year - 2014 and 2015?
Apple and Apple. Xiaomi’s stars are on the rise and Samsung’s in decline. Can Xiaomi find success beyond Asia? Can Samsung muster innovation to challenge Apple and swat the challengers at the bottom?
14. Mobile company of the year - 2014 and 2015?
There was no argument that Apple rebounded with vigor and was clearly the mobile company of the year. T-Mobile and Uber won honorable mentions for being #2. For 2015, folks expect Google to surge and Xiaomi might surprise.
15. Automation and Digitization of industries will lead to?
I have been thinking about the question of impact from automation and digitization. As we discussed in our Connected Intelligence Era paper, there is no clear consensus on which way things might proceed. Historical evidence suggests net-growth in jobs but will enough high-end jobs be created to counter the decline the services industry jobs? It will be fascinating to watch and study the impact over the course of the next decade. More people thought there will be net-decline in jobs than those who thought we will gain the number of jobs from automation.
16. Which of the following are likely to happen in 2015?
A trillion dollar company was sheer fantasy until recently but can Apple defy odds to become the first company to achieve the milestone? In 2015? Many people thought so. We data rollover plans before they became reality this year. Expect data-only plans to start surfacing this year. Microsoft might sell rest-off Nokia and Alibaba is likely to make its US debut frightening the retail industry. Soft SIM M2M and Tablets are already a reality, will the trend move to Smartphones? A number of companies are up for grabs in 2015 so we can see a fairly active M&A season right away.
17. Which operator is best positioned for the digital world?
AT&T continues to be viewed as the leading operator in the digital space with Verizon, Telefonica, Softbank, and DoCoMo also investing heavily for their share of the 4th wave economy.
18. What category will be impacted the most by mobile in the next 5 years?
Mobile is impacting pretty much every major vertical. Our panel picked health, home, auto, M2M, fitness, and enterprise as the top disruption categories.
19. Which segments are likely to get disintermediated the most by algorithms in the next 5 years?
Disruption disintermediates incumbents as Uber and Airbnb showed so valiantly in 2015. The top categories for disintermediation were: transportation, advertising, retail, real estate agents and car drivers. Doctors and journalists are also on the list.
20. Who was and will be the mobile person of the year?
2014 was no contest for Tim Cook as he brilliantly led Apple to unprecedented growth. Apple ended the year with the market cap of $656 billion. Q4 is going to be darn impressive with probably the best revenue quarter in its history on the back of a record breaking iphone quarter. John “uncarrier” Legere came in second, followed by Jack “IPO” Ma, Sundar “Android” Pichai, and Mark “Internet.org” Zuckerberg. Honorable mentions were: Travis Kalanick, Jeff Bezos, Lei Jun, Lowell McAdam, and Ralph de la Vega. For 2015, folks are expecting Sundar Pichai to edge out Tim Cook who was closely followed by Jack Ma, Mark Zuckerberg, Jeff Bezos, and Lei Jun. Honorable mentions for 2015 went to Tom Wheeler, Travis Kalanick, Satya Nadella, Glenn Lurie, and Hans Vestberg.
So there you have it. Clearly a very exciting year on the cards.
Thanks again to everyone who contributed. Warm wishes for a terrific 2015. Look forward to seeing you around.
Your feedback is always welcome.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in Feb 2015. The next Global Wireless Data Market update will be issued in Mar 2015.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Mobile 2014 - Highlights and Milestones December 29, 2014
Posted by chetan in : 4th Wave, Mobile 2014, Mobile 2015, Mobile Future Forward, The Golden Age of Mobile, Wireless Value Chain, Worldwide Wireless Market , 4 commentsDear friends,
At the dawn of the Connected Intelligence Era, mobile continues to shape the digital landscape of opportunities and disruptions. 2014 was an incredible year with some key milestones, tectonic plate tremors, and events of significant consequence for the decade. In no particular order, the highlights and milestones of Mobile 2014 were:
If you haven’t taken the adventure ride on our 2015 Mobile Predictions Survey, kindly do so today. Survey closes on 30th Dec. Results will be announced next week. Winners of the Mobile Future Forward 2014 Book will be notified next week as well. Thanks to all who have already taken the survey.
· For the first time since the iPhone was launched, Apple will generate over $100B from the sales of iPhone alone. Samsung has generated over $100B from phones (feature phones + smartphones) in 2013.
· For the first time, US exceeded $100B in data service revenues thus becoming the first nation to do so.
· The Android device ecosystem will suffer its first and most significant drop in profits in 2014 with over 50% decline in expected profits for the year.
· In 2014, the number of cellular connections exceeded the number of humans on the planet (though this can be disputed depending on how one counts the cellular connections).
· The number of smartphones sold in the world exceeded 1.2 Billion.
· The number of phones sold in the world exceeded 1.9 Billion.
· The worldwide revenue from smartwatches was approximately $1.7B in 2014. 75% of this revenue was generated in the US.
· The number of operators making $1B or more from data services reached 50.
· The number of Internet users will exceed 3 billion in 2015.
· The messaging revenue continued to decline in the western markets. The usage was replaced by IP messaging usage but the lost revenue was not.
· Facebook is now operating at a $10B run rate revenue from mobile. Twitter and Yahoo also exceeded $1B in mobile revenue for the year.
· Amazon remained the king of the mobile commerce world with over $15B in revenues from mobile. Profits resembled a lake in the Sahara desert.
· Xiaomi became the leading OEM in China but the profit profile put it in the Amazonian camp.
· The success of Alibaba brought the Chinese giant into the company of giants becoming the 4th biggest technology player by market cap.
· The security breaches were rampant throughout the year especially in the US. Pretty soon it will be hard to find a qualified person without their credit and/or personal data compromised.
· The IoT hype machine was in full gear in 2014. The bulk of revenue was concentrated in the industrial/enterprise market.
· Apple introduced the Apple Watch, which is expected to be in the market in Q1 2015. It will define what the wearables market looks like for the next couple of years.
· The FCC had a blockbuster IPO, I mean, the spectrum auction, with almost $45B collected in the proceeds.
· The noise from the Net-neutrality wars reached its peak with President Obama weighing on the future of the Internet.
· The Sprint-T-Mobile deal fizzled before it could be announced but that didn’t stop big M&As to surface in both North America and Europe. Expect the big mergers to continue in 2015.
· Facebook completed the blockbuster acquisition of Whatsapp, which surprised many, but just like the acq. of Instagram, it will prove out to be a very savvy deal and leave the imprint of Mark Zuckerberg as one of the smartest and the gutsiest CEOs out there.
· There were several key industry leadership changes most notably the promotion of Sundar Pichai as the number 2 at Google and the placement of Satya Nadella as the CEO of Microsoft.
· T-Mobile continued to make waves with its uncarrier moves and the price wars have pretty much ensnared all the operators now with everyone expected to experience revenue and/or profit declines in Q4 and beyond (at least in the short-term).
· China Mobile’s customer base exceeded 800M, which is almost twice the size of the western European market.
· The Indian mobile subscription base is expected to exceed the 1B mark in 2015.
· The Chinese device OEMs accounted for approximately 40% of the device sales in 2014 making it the most powerful bloc in the smartphone space by volume.
· The average data consumption continued to increase a good rate in the US with an average smartphone consuming over 2.2 GB/month by the end of 2014. Other LTE markets around the globe experienced similar or higher growth rates.
· In the western markets over 90% of the devices sold are now smartphones. Globally, the number was 65%.
· The noise around 5G has started to pick up around the globe with Japan and Europe being the loudest.
· 75% of service revenue in Japan now comes from data and digital services.
· 20% of the data service revenue in Japan now comes from digital or 4th wave services.
· IBM and Apple signed a historic deal to bring iOS to the enterprise putting a big dent in the windows enterprise ecosystem.
· NTT DoCoMo, KDDI, China Mobile, and AT&T generated > $1B from 4th wave services in 2014.
· In India, just like President Obama in the US, Narendra Modi ran an effective digital and social media campaign and uprooted its dynastic opponent in the biggest landslide victory in decades.
· There were at least 38 companies who generated $1B or more from 4th wave services.
· Brazil soccer world cup, Seattle Seahawks super bowl victory, and Sochi Olympics provided mobile moments for the industry when the usage spiked beyond everyone’s expectations.
· Ebola dominated the headlines for much of the year. Mobile couldn’t do much this time around but hopefully we will be better prepared next time.
· Mobile has become the universal language of protesters around the globe. Clashes/protests in the US, Hong Kong, Egypt, Palestine, Italy, etc. – mobile played a crucial role in connecting and organizing people.
· HBO’s decision to offer a standalone service was a major milestone in the industry. Will it open the floodgates in 2015?
· Apple introduced Apple Pay, which is starting to change the financial ecosystem and has laid the foundations for potentially significant disruptions in the coming years.
· Google accelerated the market development for connected car with almost every OEM planning to release some flavor of autonomous car before the decade is out.
· Uber was by far the most fascinating 4th wave company to watch in 2014 for it disrupted with color and flair around the globe.
What was the highlight for you this year? What are you looking forward to next year?
Your feedback is always welcome. See you in 2015.
Best wishes for a terrific new year.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
Request for input–Annual Mobile Predictions Survey 2015 December 8, 2014
Posted by chetan in : US Wireless Market , add a commentDear friends,
Trust that the end of a fabulous mobile year is treating you well. Wish you and yours a very happy holiday season and best wishes for a terrific 2015.
As is the tradition, we are doing our 8th Annual Mobile Predictions Survey for 2015. I would like to request your input in the process. We rely on our community and colleagues to help us understand the trends for the upcoming year.
The survey is available at https://www.surveymonkey.com/s/N26NKZT
The questions are:
1. What was most newsworthy in Mobile 2014?
2. What will be the biggest mobile stories of 2015?
3. Who are the top 4 important players in the mobile ecosystem?
4. What will be the breakthrough categories in mobile in 2015?
5. What will be the most popular consumer mobile applications in 2015?
6. What is likely to happen in the wearables category in 2015?
7. Who will dominate the mobile payment/commerce space?
8. Who will make the biggest mobile acquisition in 2015?
9. Who is doing the most interesting work in the IoT space?
10. Which solutions will gain the most traction for managing mobile data broadband consumption?
11. Which category will generate the most mobile data revenue in 2015?
12. When will mobile commerce be greater than ecommerce?
13. The company bringing the most successful mobile gadget of the year - 2014 and 2015?
14. Mobile company of the year - 2014 and 2015?
15. Automation and Digitization of industries will lead to?
16. Which of the following are likely to happen in 2015?
17. Which operator is best positioned for the digital world?
18. What category will be impacted the most by mobile in the next 5 years?
19. Which segments are likely to get disintermediated the most by algorithms in the next 5 years?
20. Who was and will be the mobile person of the year?
As an incentive, we will be giving away 10 copies of our exclusive edition Mobile Future Forward 2014 book (Connected Intelligence Era: Golden Age of Mobile) that is a collection of essays and interviews from some of the most influential mobile executives on the future of mobile.
Deadline: Dec 29th. Results will be released in early January.
Thanks and see you in 2015.
Kind regards,
Chetan Sharma
US Mobile Market Update – Q3 2014 November 10, 2014
Posted by chetan in : 4G, 4th Wave, 5G, AORTA, Chetan Sharma Consulting, Connected Intelligence Era, Mobile Cloud Computing, Mobile Ecosystem, Technology Cycles, The Golden Age of Mobile, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Market Update – Q3 2014
http://www.chetansharma.com/usmarketupdateq32014.htm
Summary
The US mobile data services revenue exceeded $25B for the first time and increased 23% YoY and 7% QoQ. The US market will easily exceed the $100B mark in data revenues in 2014 thus becoming the first nation to do so.
Verizon became the second operator after China Mobile to cross the milestone of 100 Million postpaid subs.
The average mobile data consumption (cellular) crossed 2GB/mo. In the US, it took roughly 20 years to reach the 1GB/user/mo mark. However, the second GB mark has been reached in less than 4 quarters. An entire year’s worth of mobile data traffic in 2007 is now reached in less than 100 hours.
From 2010 to 2013, the data pricing declined by only single digits YoY. However, in the first 9 months of 2014, the data pricing has plummeted by 77%. It is having an impact on the industry financials which might help clear the way to further M&A in the US market.
Smartphone penetration increased to 72% and roughly 93% of the devices sold now are smartphones.
Samsung suffered one of the biggest mobile revenue and profit declines in its history. As the dominant leader of the Android ecosystem, it is caught in the middle of two major trends that ironically enough Samsung had influenced.
After a relatively quiet year, Apple had a blockbuster quarter with new product introductions. The expected bigger screen device arrived and was an instant big hit. It is going to do really well in Q4. The 6+ was in severe short supply and in Q3, the ratio of 6:6+ was 10:1 in the US market.
Apple also introduced two new products – Watch and Apple Pay. While it is too early to figure out the overall impact of Apple Watch (it clearly will put some Swiss Watchmakers out of business), Apple Pay appears to more disruptive. Apple’s classic approach of embracing the ecosystem and thinking end-to-end might finally disrupt the otherwise staid financial sector.
4th wave services continue to grow at a very past face around the globe. We expect 37 companies to be generating a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.
T-Mobile recovered all of its postpaid losses since Q3 2009. At its peak, T-Mobile had cumulatively lost almost 5 million subscribers. However, in the last 4 quarters, the 4th place operator has added over 4.5M subs to recover in a dramatic fashion. Sprint on the other hand lost postpaid subs for the 11th straight quarter.
Due to its strong performance, T-Mobile has narrowed the gap with Sprint to roughly 1M subs. As expected, Sprint launched a series of price cuts to counter T-Mobile’s uncarrier moves to recapture the value share of the market. The Sept and Oct numbers show that Sprint has improved its performance but will it be enough to maintain its #3 spot that it has had forever?
The US market had the best net-add quarter in a decade and probably the 2nd best quarter in the history of the US wireless market.
The net-adds rebounded strongly in Q3 2014 on the back of strong performances by Verizon, AT&T, and T-Mobile. The ratio of non-phone to phone net-adds was 1.66. 62% of net-adds were connected devices.
Race To The Bottom?
The mobile data traffic has been doubling YoY in the US. The consumption is clearly growing with the introduction of new devices, network upgrades, and application enhancements. Operators are seeing tremendous pressure on data pricing due to the competitive environment. EBITDA declined for the second straight quarter.
From 2010 to 2013, the data pricing declined by only single digits YoY. However, in the first 9 months of 2014, the data pricing has plummeted by 77%. It is having an impact on the industry financials which might help clear the way to further M&A in the US market.
Samsung – Can It Rediscover Its Mojo?
Samsung suffered one of the biggest mobile revenue and profit declines in its history. As the dominant leader of the Android ecosystem, it is caught in the middle of two major trends that ironically enough Samsung had influenced. The bigger screen phone segment that Samsung seeded has become the fastest growing segment in smartphones. Apple following Samsung into the segment meant that it took away the single biggest differentiating factor and as such a serious impact on its high-end line. The lower end which yields higher volumes but much smaller ASP has attracted hordes of local developers in China, India, and Russia who have better logistics and operational advantage. Many of these players are becoming successful. To damage Samsung, they all don’t need to be successful, just enough to be in the market to sway the market. As such, Samsung has seen its share dwindle in the two biggest emerging markets.
Much of the current situation has been predictable for some time. While Samsung has ridden the smartphone wave masterfully, it hasn’t been able to build a platform moat, something that helps fundamentally differentiate its products in the sea of Android devices around the planet. They are not in a Blackberry or Nokia panic situation yet as some in the media have surmised. But, they need to figure a way out of the middle band. Unlike Nokia or Blackberry who were blinded by their success and ignorance, Samsung has shown it is a more nimble competitor. Samsung’s R&D and marketing is also second to none. Its diversified portfolio also helps in cushioning the drop in the phone segment. Historically, OEMs with such sharp revenue declines haven’t been able to arrest the decline. Can Samsung do it?
Operator M&A
In his classic book, “Competition in Telecommunications,” Nobel Laureate Jean Tirole wrote, “With digital technology, telecommunications, cable TV, broadcasting, and computers have become a single industry, which will be a critical element of our economies’ backbone. With the impending opening of competition, industrial restructuring is progressing at a fast pace.” The book was written almost 15 years ago. As I have written before, the computing and communications industries are merging into one and that collision is generating ripple effects some of which we are starting to understand (more on theConnected Intelligence Era trends here)
As expected Iliad gave up its dream of acquiring T-Mobile. The deal never made sense and had no market merit. This has left DT scratching for other options. The most likely scenario is that Sprint and T-Mobile try to get married in 2017 again or the FCC/DOJ have a change of heart due to declining financial performance of the two players. Another possibility is America Movil getting into the fray. And finally, some cable companies are likely to flex their muscles at an opportune time.
AT&T acquired Mexican operator Iusacell last week. If approved (and there is little reason why it won’t), it will make AT&T a clear leader in North America with almost 127 Million subscriptions. As we mentioned in our 4th wave series of papers, the number of operators will continue to shrink with fewer global operators who will seek to combine wireless and wireline assets to strengthen their moat. Perhaps, US Cellular should sharpen its pencil.
4th Wave Revenues
For the first time, US operators revealed some of their 4th wave (digital) services metrics publicly. Verizon reported $150M revenues from M2M and Telematics. At the current run-rate, this will be a billion dollar business by early 2016. AT&T reported 2M connected car connections and 140K home security connections. The connected car segment is clearly on its way to becoming a billion+ dollar business for AT&T. Sprint is also quite active on the 4th wave front but hasn’t shared any details yet.
Globally, we expect 37 companies to be generating a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.
Microsoft Freemium Moves
First it was the OS, Now it is the Office portfolio – Microsoft is leaving no sacred cow unturned in order to gain relevancy in mobile. However, it seems that for the Office apps, Microsoft is essentially doing what it did for Windows Mobile i.e. just pare down the desktop OS for mobile. It never worked. The Office apps on competitive platform is a good strategy but they are still the pared down versions of the desktop app. As such, while people are downloading these apps out of curiosity, they are really not using them. However, the recent moves do indicate a willingness to rethink the business models, the platforms, and the distribution models which is a good start.
Amazon’s Mobile Aspirations
While Amazon is the biggest mobile commerce player in the world by a distance, its hardware aspirations have failed to impress. As expected, the Fire Phone was a complete dud. As we explained previously, it never had a shot. It was Zuned out of the market in record time (Facebook Phone probably holds the world record but Fire Phone wasn’t too far behind). A product without any substantial differentiation doesn’t stand a chance in this crowded market. While Kindle tablets had a tempting price point that made them relatively successful, Fire Phone failed across all dimensions. Software mistakes can be iterated upon. Hardware mistakes show up on the balance sheet.
In the meantime, Amazon is poised to have a blockbuster mobile commerce quarter to make it one of the most dominant players on the 4th wave.
The Upcoming 5G wars?
I started my career when 1G was all the rage. My first 4G project was back in 2002. By some measures, we are already behind on the 5G discussions. In general, it takes 7-10 years before the standards are finalized and then the network technology lasts for approximately 20 years before a market moves onto the next generation of technology. US led in the growth of 1G (AMPS, TACS) followed by Europe on 2G (GSM, CDMA). Japan took the leadership role with 3G (WCDMA, EVDO) and US wrestled it back on 4G (LTE). Japan and EU are determined to lead on 5G and have been making very public statements and R&D investments about their ambitions on 5G. Japan of course has a very clear goal of having 5G by Tokyo Olympics in 2020. Am sure some operator(s) somewhere will jump the gun and start calling LTE-A+ as 5G around 2017-18 or sooner. You can expect a lot of activities both in public and private on 5G as companies and governments try to figure out a way to claim the 5G leadership mantle.
Apple Watch
After visiting the show floor at CES in January, we noted that “The space is going to get commoditized very quickly and it is likely going to get stratified into two major buckets – really cheap $10-20 wearables. The other bucket will be high-end fashion driven wearables.”
Earlier in the year, Xiaomi released a $13 tracker and Apple announced its new product in almost 5 years – the Apple Watch. The mid-market will be under tremendous stress.
Apple Pay
Mobile Payments has long infatuated mankind. Many players with deep pockets have invested in the segment but in truth, the market was waiting for Apple to show up and show up it did with the launch of Apple Pay. In an ambitious orchestration of the financial supply chain, Apple introduced a simple payment proposition. The basic strategy is for commerce to flow through iOS. The institutions are even paying a share of the transaction to Apple which previous payment explorers are watching in utter disbelief. Ladies and Gentlemen, get ready for iTunes 2.0.
What to expect in the coming months?
2014 has been a tremendous year for the mobile as it becomes omnipresence in every industry. We have already seen some massive moves, astounding acquisitions, and interesting strategic endeavors.
As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.
Against this backdrop, the analysis of the Q3 2014 US wireless data market is:
Service Revenues
· The US mobile data services revenues in Q3 2014 increased 7% and crossed the $25B market for the first time.
· The mobile data services revenue is on track to exceed the $100B mark in mobile data services revenue to become the first country to generate $100B from mobile data services.
· Verizon and AT&T dominated the quarter accounting for 70% of the mobile data services revenue and had 68% of the subscription base.
· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q3 2014. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.
ARPU
· The Overall ARPU rebounded to increase by $0.08.
· Data contribution to the overall revenues is now at 58%.
Subscribers
· The US market had the best net-add quarter in a decade and probably the 2nd best quarter in the history of the US wireless market.
· The US operators added 6.3M new customers with T-Mobile leading the pack.
· 62% of the net-adds in Q3 2014 were from the non-phone category. The net-effect has been that while overall subscriber count has increased, there has been a negative impact on the ARPU.
· Verizon’s tablet net-adds soared accounting for almost 71% of the overall tablets that were added in Q3. Verizon has caught up with AT&T on the tablet front.
· T-Mobile’s postpaid continued to see the positive growth for the sixth straight quarter. It has almost recovered all its losses that began in Q3 2009.
Shared Data Plans
· Shared data plans launched by Verizon and AT&T have been quite successful. The attachment rates have increased tremendously over the course of 2013-14 with more consumers opting for cellular tablets and connected devices. 57% of postpaid accounts at Verizon are now on shared plans. For AT&T, the number is even higher at 62%.
· Some more granular data plans for tablets have also spurred interest as the cellular broadband is becoming available on demand vs. expensive on premise Wi-Fi solutions.
· 50% of AT&T’s postpaid accounts are on 10GB+ plans.
4th Wave Progress
· The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 66% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 85% in mobile (of the total advertising revenue) up from 60% in 2013. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)
· In 2014, we are also seeing continued investments from the operators especially AT&T, Verizon, and Sprint in non-traditional segments like home security, healthcare, insurance, automotive, enterprise mobility, advertising, and security, and others. Collectively, this is already a multi-billion dollar business in the US.
· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.
Connected Devices
· Connected devices (non-phones) accounted for almost 62% of the net-adds in Q3 2014. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.
· Tablets form 70% of the connected devices sold.
· QoQ, the non-phone segment grew 30%.
Handsets
· Smartphones continued to be sold at a brisk pace accounting almost 93% of the devices sold in Q3 2014. Within the next two years, the feature phone category will practically be extinct in the US market.
· The smartphone penetration in the US is now at 72%.
· Android again outperformed iOS by a good margin. iOS is likely to bounce back in Q4.
· While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off. It renewed its entry into the battlefield with Windows phone last year but sales have been poor. While Microsoft has made steady progress in other regions, in the US, it’s not gaining any traction and its share remains at a measly 1-3%. (Read our paper to get more insights into why Windows hasn’t been able to make a dent so far).
· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 59M making it the leading LTE operator in the world (next year China Mobile will overtake Verizon to become the number 1 LTE operator by subscriptions). Other three operators are also deep into their LTE deployments. Verizon reported that 79% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.
Your feedback is always welcome.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in Feb 2015.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Interview with Matt Grob, EVP/CTO - Qualcomm September 18, 2014
Posted by chetan in : 4th Wave, AORTA, Chetan Sharma Consulting, Connected Intelligence Era, Internet of Things, Mobile Advertising, Mobile Applications, Mobile Future Forward, Wireless Value Chain, Worldwide Wireless Market , add a comment
Mobile Future Forward – Seattle – Sept 24th 8am-8pm
Registration (Registration closes this Friday)
In proud partnership with: Amdocs, Ericsson, HYLA Mobile, Intel, Mio Global, MoBack, Oracle Communications, Qualcomm, Synchronoss, and Tata Communications.
Mobile Future Forward Preview: Q&A with Matt Grob, EVP/CTO – Qualcomm
We are looking forward to welcome many of you to our Mobile Future Forward Summit next week. This is the final interview in the series and it is with our opening keynote speaker Matt Grob, EVP, Qualcomm Technologies and CTO. I am really excited that we will kick off the summit with Matt as he has deep experience and knowledge of the space and a compelling vision for the future. In his 23+ years at Qualcomm, he has been instrumental in taking many technologies to the market that we take for granted today. I had a chance to catch-up with Matt to give you a preview of our discussion at the summit next week.
MFF: The chipset roadmap gives us a sense of what new devices will emerge from the mobile platform. What are some of the things on the horizon that you are excited about, and that developers should pay attention to?
Matt: We continue to see a tremendous amount of innovation in smartphones. In the next 5 years, analysts estimate that nearly 8 billion smartphones will be sold worldwide. That amount is larger than the world’s population! With such scale, there’s no doubt that mobile will continue to be a focal point for technology R&D — with major advancements not only in the chipset feature set, but also in the evolution of software, and mobile networks. Many of the things we foresaw a few years back are already in commercial devices, things like LTE Advanced, Ultra HD, wireless charging, surround sound, and computational photography.
Moving forward, I’m pretty excited about further advancements in LTE, things like LTE in unlicensed spectrum, and LTE Direct. These technologies will make mobile networks much more capable and useful. On the device side, we’ll see more low-power processing and sensor technologies, and new developments in computer vision that will improve the context awareness capabilities of mobile devices.
And I’m personally passionate about the developments we’ll see in the field of machine learning — the evolution of processor platforms that mimic the way the human brain thinks and sees. This will be a game changer — since we finally will be able to “teach” our machines instead of simply “programming” them.
MFF: We know that rising data consumption is a challenging issue for mobile operators worldwide. Looking out over the next 5 years, what kinds of solutions do you anticipate? And how big a part will unlicensed spectrum play?
Matt: Although the numbers vary depending on the region, we continue to see solid growth in data demand. According to the CTIA, mobile network operators in the U.S. saw a 120% year-over-year (YOY) increase in data traffic in 2013, compared to a 69% YOY increase in 2012. In emerging regions, we are still in the early days of smartphone adoption, so we should expect further increases in data demand, as people adopt more advanced mobile devices.
We anticipated a day in which networks will have to deal with a thousand times more data traffic than they handle today. We called this the 1000x data challenge. To solve it, our industry has implemented a range of strategies. Of course spectrum is critical. We’ll need to squeeze more out of existing spectrum and we’ll need to find more of it. That’s going to involve taking advantage of multiple access schemes, including licensed, unlicensed, and shared access.
We’re also working on continuing the evolution and enhancement of LTE, including carrier aggregation strategies. Other network efficiencies will be achieved through advancements in 3G, 4G and Wi-Fi technologies. Another key strategy is network densification. We’re working to beef up mobile network infrastructure with the deployment of advanced small cells.
We’ll need all of these tools to address the continuing rise in demand for mobile data, because the fact is that people in every part of the world love their mobile devices, which is a pretty exciting challenge for our industry.
MFF: Mobile is changing so many industry verticals — health, auto, retail, energy, and more. Which verticals are you the most excited about, and why?
Matt: The huge scale of the mobile industry and the rapid design cycles associated with it are driving a tremendous amount of technology innovation. And those breakthroughs are now driving innovation in a growing number of other industry sectors. The components and capabilities that have been invented, integrated, refined, and dramatically cost reduced within modern smartphones are now poised to revolutionize and enable whole new categories of devices, sensors — and machines.
I’m particularly excited about how these mobile innovations will accelerate the evolution of robotics. Drones and robots are taking a lot of the technology developed for smartphones. Things like wireless connectivity, image stabilization, computer vision, precise outdoor and indoor location, and low power processing, are all now contributing to the evolution of robotics as well. And the scale of deployment of those technologies is making robots much more affordable as well. Today we can find hobby drones that sell for less than $1,000.
As part of our R&D effort at Qualcomm we’re building experimental robots that can learn to perform some menial tasks without prior programming, things like sorting toys and organizing them in bins. And all running on the same Snapdragon processors that power many of the most popular smartphones today. It’s exciting to see how smartphone technology is accelerating the development of general-purpose robots and drones, and I’m grateful to have a front row seat, not only as a witness that evolution, but also as a participant in the robotics revolution.
MFF: The “Internet of Things” continues to make headlines and holds great promise, but the growth has been slow due interoperability, security, regulatory, and other issues. What will it take to move past these issues and see the growth rate graph take the anticipated hockey stick shape?
Matt: Everything around us is becoming intelligent and connected, changing the way we interact with the world: phones, tablets, cars, appliances, and health devices. We use the term “Internet of Everything” (IoE) because not only “things” are getting connected, but also places and people.
The IoE is still in its early days, but the ecosystem is coming together to solve some of the key issues preventing the full realization of its promise. Until recently, most IoE products and services have existed in silos, as vertical solutions — without the capability to connect and interact with each other. The challenge is, how to create a horizontal, secure, interoperable environment. We believe that AllJoyn is key solution for moving the industry in the right direction. AllJoyn is an open, universal, and programmable software and services framework, initially developed by Qualcomm Innovation Center and now hosted by the AllSeen Alliance.
Qualcomm backs the AllSeen Alliance as it drives the AllJoyn open source project forward, as the common language for the Internet of Everything. The AllSeen ecosystem consists of a broad representation of cross industry leaders looking to enhance AllJoyn via open source contributions, and to commercially deploy smart connected devices that can discover, connect and communicate with each other across brands and device categories.
The consortium now counts more than 60 members, including many big names in technology and consumer electronics. This level of support increases our confidence about the future. I think we’re close to reaching a tipping point in the development of a truly interoperable IoE.
Hope you enjoyed the insights.
We look forward to seeing you next week.
Kind regards,
Chetan Sharma
Mobile Future Forward: Q&A with Dev Gandhi, CEO of moBack September 5, 2014
Posted by chetan in : US Wireless Market , add a commentMobile Applications are the lifeblood of the mobile economy. However, scaling the app from the early prototypes to an app that serves millions can be daunting. A number of players have come out with tools to assist the app developer community. We caught up with Dev Gandhi, CEO of moBack to ask about the state of the mobile app world.
MFF: What are some of the most common problems you see with the mobile app backend infrastructure?
DG: The most common mobile app backend infrastructure problems are:
- Implementing core services such as data persistence, push notifications, maps integration, social integration, analytics, etc.
- Building scalable infrastructure such as virtualization, storage, security layers, etc.
- Writing application business logic.
The main challenge for app companies is to to build these three layers within the project’s scheduled budget and time frame.
App developers can either build all three layers on their own by investing in business logic development, core services, and infrastructure dev ops or opt for third party cloud based service providers such as Amazon, thus saving cost and development time.
Infrastructure service providers such as Amazon only solve infrastructure issues while some service providers only provide core services.
moBack provides both core services as well as scalable infrastructure thus helping app developers focus solely on app development business logic.
MFF: Are app companies trying to do too much on their own? What APIs have proven to be most used and why?
DG: Yes, app companies need to build not only applications but also manage backend services and IT infrastructure. They need to invest in app developers, IT/Dev Ops engineers and hardware infrastructure.
Commonly used APIs are data persistence, analytics, push notifications, social sharing, and maps/geocoding. Most app companies leverage these core service APIs to build their apps.
MFF: What is the business model for the APIs?
DG: APIs are typically provided on a freemium model. App companies can sign up for a free account and start paying later based on usage (number of calls, bandwidth, and storage). This provides app companies a great way to scale without investing too much upfront.
MFF: Majority of the apps are not used after download. How can developers keep their users engaged for a long time?
DG: App companies need to think about various aspects of an application life cycle during design phase:
- App discovery (improving app downloads)
- App engagement (improving long-term app usage)
Application artifacts such as social sharing, gamification, push notifications and mobile messaging help increase engagement.
MFF: In this day and age of constant security threats, how does a developer keep the data secure and maintain user privacy?
DG: Data security and user privacy is usually an after thought when it comes to app design, in turn making apps vulnerable and exposed to security threats. It’s better to incorporate security and user privacy elements in an application design and architecture. Key elements to consider are:
- Using PKI infrastructure to encrypt both data at motion and data at rest.
- Anonymize user data for analytics and reporting purposes thus addressing user privacy concerns.
- Build ACL based privileges allowing granular access to administrators.
- Fine grained logging helps detect security infractions.
- Run security audits (penetration tests, etc.) during QA phase and fix exposed vulnerabilities.
- Apply security patches as early as possible.
Partner Event: FierceWireless: 5G and IoT
Posted by chetan in : US Wireless Market , add a commentAre you in Las Vegas for Super Mobility Week? Our partner FierceWireless will host the first panel The 5G Roadmap: How Do We Plan For Tomorrow’s Wireless Networks? on Tuesday, September 9 at 7am.
Sue Marek will moderate the panel
· Kristin Rinne, SVP, Network Technologies, AT&T Labs
· Mike Haberman, VP, Network Support, Verizon Wireless
· Arun Bhikshesvaran, VP of Marketing & CMO, Ericsson
· Aicha Evans, VP, Platform Engineering Group, Intel
· Chris Pearson, President, 4G Americas
On Wednesday, September 10, at Mike Dano will moderate a discussion on the Internet of Things: Uncovering the Top Growth Segments. His panel will be comprised of industry executives including:
· Chris Penrose, SVP Emerging Devices, AT&T Mobility
· Matt Thompson, GM, Developer Evangelism, Microsoft
· Alec Saunders, VP, Cloud Business, BlackBerry and member of the Industrial Internet Consortium
· Larry Zibrik, VP of Market Development, Sierra Wireless
· John Horn, President, RacoWireless
They will discuss the market segments where IoT technologies are blossoming now, and explore where the next opportunities may lie.
Both events are part of the official CTIA program. You may add these events to your existing show pass through the CTIA Web site.
There are just a few seats left at each event. Register today before they’re gone!
Mobile Future Forward: Announcing the Preliminary Agenda August 29, 2014
Posted by chetan in : 4G, 4th Wave, Connected Intelligence Era, Mobile Future Forward, The Golden Age of Mobile, Wireless Value Chain, Worldwide Wireless Market , add a commentHomework for the Summit
To get the most out of the summit, it is recommended that you familiarize yourself with the following research papers:
- Connected Intelligence Era: The Golden Age of Mobile
- Mobile 4th Wave: Evolution of the Next Trillion Dollars
- Operator’s Dilemma (and Opportunity): The 4th Wave
- Industry Transformation In the Networked Society
Morning Sessions (8:00am – 12:00pm)
Welcome – The Connected Intelligence Era
The major technology changes come in 40-50 year cycles. The telecom and Internet cycle that started in the 70s has perfectly setup the advent of the Connected Intelligence Era that is going to have a profound impact on the vertical industries, the global economy, and competitiveness of nations. At Mobile Future Forward 2014, we will discuss the emergence of this technology wave and its implications.
Chetan Sharma, President, Chetan Sharma Consulting
Fireside - Powering the Connected Intelligence Era
Matt Grob, CTO and EVP, Qualcomm
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Fireside - Industrial Internet: Transforming the Economy
Bill Ruh, VP – Global Software, GE
Hank Skorny, VP and GM, Intel
Steve Elfman, Former President, Sprint (moderator)
Fireside - Connected Intelligence: Platforms, Ecosystems, and Global Markets
Erik Ekudden, SVP, Ericsson
Benedict Evans, Partner, Andreessen Horowitz
Tim Bajarin, CEO, Creative Strategies (moderator)
Fireside - The Opportunities in the Golden Age of Mobile
Glenn Lurie, President and CEO, AT&T Mobility
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Afternoon Sessions (1:30 – 6pm)
Connected Intelligence Era through the lens of CIOs
Philip Fasano, CIO, Kaiser Permanente
David Webb, CIO, Equifax
Tim Campos, CIO, Facebook
Steve Mills, CIO, Motorola
Paul Brody, VP – Mobile Practice, IBM
Mark Fernandes, Managing Director, Sierra Ventures (moderator)
Connected Living
Kevin Peterson, President – Digital Life, AT&T Mobility
Liz Dickinson, Founder and CEO, MIO Global
Chris Putnam, SVP, Synchronoss
Josh Will, Chief Category Officer, Best Buy
Tim Wagner, SVP, Samsung
Dawn Chmielewski, Senior Editor, Re/code (moderator)
Growing the 4th wave Pie
Julie Moss-Woods, CMO/CEO – NG Business, Tata Communications
Rob Chandhok, President, Qualcomm
David Sprosty, CEO, Sprosty Network
Ed Lewis, Chief Strategy Officer, Syniverse (moderator)
Designing 5G and the Network of Tomorrow
Dr. Ron Marquardt, VP – Advanced Technology, Sprint
Dr. Hassan Ahmed, Chairman and CEO, Affirmed Networks
Glenn Laxdal, VP – Advanced Technology, Ericsson
Erik Moreno, SVP, Fox Networks
Harvesting the Opportunities in Mobile Commerce
Sharath Dorbala, Head of Mobile Financial Services, Amdocs
Andy Chu, VP – Mobile Commerce, Sears Holdings
Rajeev Tankha, Sr. Director - Applications, Oracle Communications
Mark Donovan, SVP, Comscore (moderator)
The Future of Consumer Engagement and Mobile Advertising
Vik Kathuria, Global Chief Media Officer, Razorfish
Erin Kienast, SVP, Starcom
Chia Chen, SVP, Digitas
Eric Mugnier, SVP, M&C Saatchi Mobile
Ujjal Kohli, Founder, Rhythm New Media (moderator)
Opportunities in the Emerging Markets
Mathew Oommen, President, Reliance
Andreas Gal, CTO, Mozilla
Nathan Eagle, CEO, Jana
Michael Fisher, Head of Intl. Biz Dev, Twitter
Cocktail Reception (6-8pm)
Chill, Network, and form partnerships for Life
Mobile Future Forward: Network Evolution: Q&A with Dr. Hassan Ahmed, CEO, Affirmed Networks August 26, 2014
Posted by chetan in : 4G, 4th Wave, 5G, Fourth Wave, NFV, SDN, Worldwide Wireless Market , add a commentMobile Future Forward – Seattle – Sept 24th - Connected Intelligence Era
Registration (limited seats)
In partnership with Amdocs, Ericsson, Intel, Mio Global, MoBack, Oracle Communications, Qualcomm, Synchronoss, and Tata Communications.
We are looking forward to welcoming you to our Mobile Future Forward Summit next month. We are doing interviews with some of the thought-leaders leading up to the event to give you a glimpse of the upcoming brainstorms. LTE has been the quickest deployment in the mobile industry history. However, the pace of change is so dramatic that the industry needs to come up with solutions on-demand. NFV, SDN, Cloud, 5G are being discussed at all major service providers. Japan is already planning a 5G rollout prior to 2020 Tokyo Olympics. EU is investing heavily to reclaim lost momentum. Affirmed Networks is in the middle of this evolution. We caught up with Mobile Future Forward speaker and industry veteran - Dr. Hassan Ahmed, Chairman and CEO of Affirmed Networks to get a pulse on the network architecture evolution trends that will define the next 5-10 years.
MFF: NFV gets thrown around in a lot of network evolution discussions. Why NFV? What does it mean to the operators and the larger ecosystem? And why should we care about it?
Hassan: This is an excellent question because it helps us to look past the buzzword and ask where the fundamental demand for NFV really comes from. Unfortunately it also requires a lengthy answer. Some may view NFV as just a natural evolution of technology in the networking space but that really misses the point. In fact, the transformation of networks away from a collection of isolated, custom built elements to a holistically orchestrated set of virtualized software functions is central to realizing the evolving business model of operators in the face of rising market demand for internet services. The move to NFV also represents one of the largest transformations in networking since the shift from TDM to IP technology. To illustrate the point, let’s examine the impact of NFV on mobile networks, arguably one of the first places we see the technology being adopted.
Data on mobile networks is growing by leaps and bounds. Application richness is growing rapidly as well with video leading the charge. Scaling networks has historically been a hardware game, i.e. building more and more powerful network elements as chips get faster while keeping the network architecture and software intact. Unfortunately this approach has run its course because mobile data today is growing faster than the rate at which hardware can be commoditized. Effective network scaling is now a game of parallel software that can take advantage of the computing performance curve. By reducing expensive custom elements to virtualized software functions that operate on data center servers, the cost of scaling is dramatically reduced. This is the first answer to why NFV. However, this isn’t the whole story.
Even after operators invest in scaling their mobile networks, IP service revenue flows over the top with the operator failing to participate in the service revenue equation (except for access, of course). Today’s networks are very inflexible. The entire service architecture of the network needs to become more intelligent so that service treatment can allow operators to enhance the revenue in their business models. With service function chaining and orchestration, NFV brings the necessary flexibility to simultaneously simplify network operation (thereby reducing opex) and increase service velocity for new revenue. So the market really demands cost effective scaling and enhanced service intelligence. Together, they create a compelling case for network transformation and NFV answers the call.
As you can imagine the impact on operators and the ecosystem is far reaching. NFV done well (since not all supposed NFV products are done well) dramatically shifts the operators network costs, simplifies network operation and allows the operator to derive new revenues from the internet economy. The business model impact is significant. Costs come down and revenue increases. However operators need to be wary of approaches that preserve the inflexibility of the legacy network by simply virtualizing old products. Fresh approaches are necessary to realize the business model benefits.
The ecosystem as a whole will be impacted as well. Operators will have more choice to “mix and match” applications rather than being beholden to a small number of vendors. In fact the fortunes of many of the legacy vendors will shift as IT companies and new software-centric vendors start to participate in the network infrastructure. The landscape of providers in the “intelligence” of the networks will look quite different 5-10 years from now than it does today.
For all of these reasons, I believe NFV, which will play out over some time, is a transformative force akin to the impact IP had on TDM networks. That’s why we should care. A decade from now, networks will be built, managed and monetized differently. Business models will be much richer and the landscape of vendors will shift significantly. The full impact of NFV will restructure the industry.
MFF: As network consumption grows and as it moves more and more to video, how does NFV help? Can it enable new business models?
Hassan: As we’ve already discussed, NFV impacts both cost and revenue. Video growth is challenging network capacity and NFV enables operators to cost effectively add capacity rather than succumb to profitless prosperity. However, I think your question is more about revenue and new business models that NFV’s service flexibility can enable.
NFV done well gives the operator the ability to quickly spawn new services. This allows for increased innovation and the emergence of new business models. Specifically in the case of video content, today the operator primarily focuses on content delivery. However there are many opportunities to create user experiences around events that can create a business relationship between the operator and the content provider. Consider an event like the Tour de France which appeals to a relatively small affinity group compared to say the Superbowl. Offering premium access to races with differentiated billing to subscribers who purchase a “Tour de France” viewing package is unthinkable in today’s network because the lengthy service creation process is too expensive for serving a small audience. However NFV can reduce the service creation to minutes and allow the operator to profitably capitalize on hundreds of “medium tail” sports and entertainment events through content partnerships. This is just a small example of how new business models can be forged when the tools are made available to the operator.
MFF: How should an operator think about offering cloud services to the consumers or their enterprise customers? Do they have shot at the game against Microsoft and Amazon?
Hassan: I think the operators have an excellent shot at the game. To be sure, some players like Amazon are leading the industry today. The revenue derived from cloud services today is impressive however I believe that we are very early on in the game. Much of the growth lies ahead of us. As operators move to a software centric network architecture they bring some critical advantages around managing scale and delivering reliable networks – arguably traditional strengths of the operator. When combined with service architectures that enable customers to control and customize the network capabilities they receive, a very compelling product is created.
If you believe that most computing/applications will move to the cloud over time, then the operators have a significant opportunity to capitalize on as this market grows. However success will require moving quickly. The large internet companies have shown what’s possible and the operators need to create networks that allow them to move in “internet time.”
MFF: The legacy network architecture hindered in launching new services quickly. How do things change with NFV, SDN, Cloud? What kind of impact does it have on the capex and opex for the operators? Is there a net gain or are we just shifting costs?
Hassan: We have discussed already how NFV brings considerably more service intelligence to the network. With service function chaining and orchestration, the speed at which new services can be created and deployed is greatly enhanced. This definitely creates a net gain. Opex is significantly reduced on a number of fronts from service creation and provisioning to space and energy cost. The cost of creating or modifying services comes down dramatically as the time to do so reduces to minutes from months. Significantly less labor goes into the NFV service model and that is a net gain.
Capex also declines significantly for a number of reasons. The most often stated one is the much lower cost of data center servers compared to custom hardware platforms comprising today’s network elements. In addition when servers are pooled in data centers, capacity is more efficiently managed requiring less hardware purchases. More efficient hardware deployment also leads to reduced space and power needs.
NFV represents a meaningful reduction in the cost of owning and operating a network.
MFF: How does rest of the ecosystem benefit from these network changes? Does it lead to more competition or collaboration?
Hassan: As you might imagine, it leads to more of both. Certainly, the NFV framework enables more innovation because it greatly simplifies the ability to add functions and capability to the network. The ease of experimentation is also greatly enhanced so we will see an expanding ecosystem fostering greater collaboration to enable increased and faster service innovation by the operators. Service transparency across operators should also result in cross-operator collaboration.
We will also see greater competition. Competition will not just be among operators differentiating on service offerings but among vendors. The move to NFV invites participation from IT companies that have historically had data center relationships with the operators but have not been suppliers in the network infrastructure. NFV blurs the line between IT and network and market share will shift away from some legacy providers to traditional IT suppliers.
NFV enables major structural shifts in the industry and heralds an exciting time in telecom.
MFF: What’s your view of 5G? What features do you think should define the next generation?
Hassan: That is a tough question. So much thought is going into 5G today trying to connect the art of the doable with perceived need. If past is prolog, then we will see applications and usage emerge that we didn’t imagine. However what we can imagine today is a rising importance of the network as applications and computing move to the cloud. We can imagine ever more powerful entertainment services and we can imagine a two order of magnitude increase in the number of connected devices as the Internet of Things emerges. Device to Device or vehicle to vehicle communication will enable lifestyle changes that we haven’t yet conceived of. In order for such a vision to be successful, the network must change meaningfully. Orders of magnitude more data capacity, data rates, connections combined with low latency to enable real time applications become fundamental requirements of a 5G network. Accommodating disparate networks must be seamless. In order to realize these capabilities, much of our attention focuses on the RAN and technologies that can create the data rates and capacities that we imagine. However, the network service architecture has to become increasingly flexible as well to create and service these disparate applications and provide user control. Today’s NFV evolution will create a foundation for 5G’s service architecture.
Thanks
Chetan Sharma
Connected Intelligence Era: The Golden Age of Mobile August 21, 2014
Posted by chetan in : 4th Wave, Chetan Sharma Consulting, Connected Intelligence Era, Fourth Wave, Technology Cycles, The Golden Age of Mobile, Wireless Value Chain, Worldwide Wireless Market , add a commentConnected Intelligence Era: The Golden Age of Mobile
- A Mobile Future Forward Research Paper
http://www.chetansharma.com/connectedintelligenceera.htm
This paper is the 5th paper in the Mobile Future Forward Series. It is a required reading for Mobile Future Forward participants.
History and Background
In 1925, a soviet economist Nikolai Kondratiev observed in his book “The Major Economic Cycles,” that the growth of human history has been intertwined with economic cycles that resemble waves spread across multiple decades (figure 1). The duration of the cycles might vary but the pattern repeats itself. If we study the technology revolutions of the last 300 years that have shaped human history – the industrial revolution, the age of steam and railways, the age of steel, electricity, and heavy engineering, and the current age of information and telecommunications, each of these cycles lasted on average 50 years. There was GDP growth with every cycle and with each technology cycle, we made earth a better place to live even though sometimes it might not seem that way.
Early in the 20th century, an Austrian economist, Joseph Schumpeter expanded on the theory of business cycles and development and wrote perhaps one of the most influential book in economics – “The Theory of Economic Development.” Schumpeter posited that the entrepreneurs changes the equilibrium of any business cycle and is the prime cause of economic development (figure 2), which proceeds in cyclic fashion along several time scales. In fashioning this theory connecting innovations, cycles, and development, Schumpeter kept alive the Russian Nikolai Kondratiev’s ideas of 50-year cycles.
In 2003, another economist Carlota Perez from Venezuela expanded on the Kondratiev cycle theory in her book, “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and the Golden Ages.” She drew upon Schumpeter’s theories of the clustering of innovations to explain why each technological revolution gives rise to a paradigm shift and a New Economy and how these opportunity explosions, focused on specific industries, also lead to the recurrence of financial bubbles and crises (figure 3). By analyzing the changing relationship between finance capital and production capital during the emergence, diffusion and assimilation of new technologies throughout the global economic system, Carlota’s book discussed some of the pressing issues in front of us.
This brings us to the present time. Where are we in the big economic cycles? Are we in the golden age of the last technology cycle of information and telecommunications that gave birth to the Internet and the modern wireless ecosystem as we know it or are we perhaps on the verge of a new age that will transform human history for the next 50 years? Given that the markers of transition are not always clear, we won’t know for sure which wave we are embarking on for some time but we are fairly certain that we are entering the golden period of the mobile industry.
There is also a strong possibility that we might be onto something new, something more transformative, something different that we would humbly propose is the start of theConnected Intelligence Era. These two operative words are going to define the next phase of human evolution. The confluence of mobile broadband network, smarter devices, pervasive connectivity, and our ability to program the intelligence around us is going to dramatically change every industry vertical from the ground up. Consider the health industry – sensors inside the body can send alerts days before a stroke, telemedicine can help direct a surgery in remote parts of Bhutan, mobile devices will educate and guide us on nutrition, wellness, and medicine compliance. In fact, technology might eliminate the need to go to a doctor completely except in the case of chronic diseases or an emergency. Some of this is already happening but we will see implementations on a global scale that will hopefully reduce the enormous burden on the global GDP.
Similarly, the travel and tourism industry is being transformed by intelligence at the fingertips of travelers in unfamiliar lands. The education segment especially in the developing world is being changed by the availability of affordable tablets. M2M is making the energy sector reinvent itself. In a few years, it will be hard to imagine a car without mobile broadband connectivity.
As we outlined in our Mobile 4th Wave paper series, change is in the air. Mobile is becoming the critical tool to drive human ingenuity and technological growth. Fueled by the revenue growth curves of voice, messaging, and access, the industry has flourished beyond anyone’s imagination.
We as an industry are on the verge of incredible milestones in human history. Very soon, for the first time, mobile connections will exceed humans on the planet. Mobile broadband networks are being deployed at the fastest pace ever. Smartphones are in such great demand that in some countries, feature phones are already going extinct. The trifecta of fast broadband networks, well-designed mobile computing devices, and the insatiable supply of content, applications, and services has unleashed consumer demand like never before.
The last thirty years of industry growth were primarily driven by network access to voice, messaging and data. The next thirty will be defined by access to services and solutions that are customized to the individual consumer lifestyles. Enterprises around the globe are also rethinking their business processes and business models and how they can take advantage of the connected intelligence around us. As an industry, we have reached an annual run rate of $1.7 trillion in revenues. But how will the next trillion dollars be generated? Which services are going to dominate? Which players will get the lion share of the revenue stream? How will regulators regulate? How are we going to deal with the vexing issues of privacy and security? How will consumers adapt to the changing dynamics and will we truly realize the potential of the 4th wave? The next decade will yield the answers and determine the new winners of the mobile ecosystem.
In this paper, we make the case that we are in the beginning of the “Golden Age of Mobile” and discuss its impact and the early years of the transformation some of which we are already starting to see.
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Your feedback is always welcome.
Thanks
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in Nov 2014. The next Global Wireless Data Market update will be issued in Sept 2014.
Disclaimer: Some of the companies mentioned in this paper are our clients.
We will be discussing many of the ecosystem and technology issues, opportunities and challenges for the coming years in our annual mobile executive summit Mobile Future Forward on Sept 24th in Seattle. Some of the confirmed speakers are: Bill Ruh, VP - Global Software, GE; Tim Campos, CIO, Facebook; Erik Moreno, SVP, Fox Networks; Glenn Lurie, President, AT&T; Steve Mills, CIO, Motorola Mobility; Hank Skorny, VP/GM, Intel;Dr. John Saw, CNO, Sprint; JD Howard, VP/GM, Lenovo; Dave Webb, CIO, Equifax; Dr. Hassan Ahmed, CEO, Affirmed Networks; Mark Fernandes, Managing Dierctor, Sierra Ventures; Ujjal Kohli, Founder, Rhythm NewMedia; Vik Kathuria, Global Chief Media Officer, Razorfish; Erin Kienast, SVP, Starcom Worldwide; Josh Will, Senior Category Manager, Best Buy; Steve Elfman, President, Sprint; Glenn Laxdal, VP, Ericsson; Matt Grob, EVP/CTO, Qualcomm; Julie Woods-Moss, CMO, CEO of Nextgen Business, Tata Communications; David Richter, VP, Uber; Paul Brody, VP & Mobile Practice Leader, IBM; Mathew Oommen,President, Reliance ; Andreas Gal, CTO, Mozilla; Chris Putnam, SVP, Synchronoss; Brian Angiolet, SVP – Consumer Product Innovation, Verizon; Sharath Dorbala, Head of Mobile Financial Services, Amdocs; Rajeev Tankha, Senior Director – Applications, Oracle; Andy Chu, VP – mCommerce, Sears Holdings; Philip Fasano, EVP and CIO, Kaiser Permanente;Erik Ekudden, SVP, Ericsson, Benedict Evans, Partner, Andreessen Horowitz; Dr. Mani Prakash, VP - R&D, Covidien; Dr. Corrina Lathan, CEO, AnthroTronix; Chia Chen, SVP, Digitas; Eric Mugnier, SVP, M&C Saatchi Mobile; Rob Chandhok, President, Qualcomm, and many more to come. We hope to see you there for the brainstorm.
Mobile Future Forward: Mobile Advertising: Q&A with Erin Kienast, SVP Starcom August 13, 2014
Posted by chetan in : Chetan Sharma Consulting, Mobile Advertising, Mobile Future Forward , add a comment“Advertising, once a gamble, has become under able direction, one of the safest of business ventures. Certainly no other enterprise with comparable possibilities need involve so little risk.”
- Claude Hopkins, Scientific Advertising, 1923
We are looking forward to welcoming you to our Mobile Future Forward Summit next month. We are doing interviews with some of the thought-leaders leading up to the event to give you a glimpse of the upcoming brainstorms. Mobile Advertising has been at the heart of the mobile economy. Seven years ago when I was co-authoring the book on the subject, it was clear to us that mobile will fundamentally transform advertising. Slowly but surely, we are getting there.
In our Mobile Advertising panel at the summit, with the help of some really experienced executives who deal with advertising day-in and day-out, we will explore the future direction of the advertising industry. One of the distinguished panelists is Erin Kienast, SVP at media agency Starcom USA. We caught up with Erin about her thoughts on the space.
MFF: What are some of the key characteristics of a very successful mobile advertising campaign? How do you measure success?
Erin: Success is dependent on overall campaign objectives so characteristics can vary drastically by initiative. First and foremost content is king with mobile so having mobile ready content is critical to driving success. Mobile offers such a small screen to deliver a message but it is one of the most impactful screens a marketer can deliver given personal nature of the device. Clearly articulating success metrics at the start of the campaign is critical to understand what exactly you are trying to achieve. Success can be measured at each phase of the purchase funnel; it is really dependent on what a marketer is trying to achieve. Sufficient spend is one area that often goes unnoticed when executing mobile campaigns. Mobile budgets still remain small compared to other mediums in market so spend is often passed over. It is critical to make sure there is sufficient spend backing a campaign to sustain presence in the market and allow a campaign to achieve overall objectives.
MFF: The mobile advertising industry has grown tremendously in the last 5 years, however, still there are many challenges remain for it to fully realize its full potential. If you had the power to knock-off the top 2 issues that could change the industry landscape, what would those issues be?
Erin: The top two issues are:
o Measurement/ROI: Until there is consistent measurement in place and solid ROI data, marketers will still remain hesitant to shift a larger percentage of dollars in the space. At the end of the day, marketers are tasked with moving product off of shelf and without having proven success that an investment is driving return, there will continue to be hesitancy.
o Content: Marketers and creative agencies are not prioritizing the building of mobile creative so we still do not understand the full creative capacity of the space. Now, marketers rely on partners to build a large percentage of mobile creative which results in inconsistency across partners and with other media in market for a brand.
MFF: You have been in the media business for a long time. How has the mobile world changed the consumer expectations and behaviors?
Erin: Consumers expect a brand to be there in a meaningful way. They are actually willing to provide personal information in return that they receive a meaningful brand experience. That is a major shift from TV and print advertising where consumers are not providing personal information. Consumers rely on mobile devices daily outside of previous work only usage. Consumers rely on phones for directions, recommendations, socialization, shopping, photography, weather, almost everything consumers do in life involves a mobile device. As a result, a brand must be there when a consumer is seeking them out but be there in a way that provides value. Before consumers did not expect and sometimes did not want a brand to interrupt an experience. Now it is welcomed if it is meaningful.
MFF: Where do you get your inspiration in creating unique solutions for clients?
Erin: I walk around and observe people in their natural environments on the streets, in restaurants, at sporting events, on public transportation, at the airport, etc. Observing and noting human behavior provides with me with the opportunity to capture ways to improve lives that currently doesn’t exist. People are inspiring, especially those I do not interact with daily. I love observing human behavior because it sparks a level of creativity and pushes my previous boundaries of thought to brainstorm without boundaries.
I also like to imagine the unimaginable then find a way to make it happen, even if it takes baby steps to reach full capacity. When it is said something cannot be done, I am inspired to find a way to make it happen and it’s proven successful time and time again.
MFF: As you look forward 2-3 years, what technology shifts in mobile excite you the most – things that will have a major impact on how advertising budgets are allocated?
Erin: Connectivity is the most exciting shift in my mind. Connectivity in terms of connected home, connectivity in store via lighting/beacons/camera monitoring, wearables, etc. Marketers are finding new ways to connect to consumers in more meaningful ways outside of a simple banner. The ability to deliver a brand message in a new way fueled by connectivity and devices that create connectivity is going to advance our culture in the next few years. The focus is less on traditional advertising outlets in the form of a banner and more on the technology. Take a washer as an example. Technology is advancing and these machines are becoming smart, connected to you mobile devices. How does a washing machine trigger a notification to purchase more detergent where consumers can purchase directly from their phone or tablet? This is where the future will be focused, less on creating large spots/banners, more on partnering with technology company to align with human behavior.
US Mobile Market Update – Q2 2014 August 7, 2014
Posted by chetan in : 4th Wave, Chetan Sharma Consulting, Connected Devices, Fourth Wave, Mobile Applications, Mobile Ecosystem, Mobile Future Forward, Mobile Patents, Wearables, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Market Update – Q2 2014
http://www.chetansharma.com/usmarketupdateq22014.htm
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Summary
The US mobile services revenues in Q2 2014 declined marginally by over $200M. The mobile data services revenue however continued to increase and is on track to exceed the $100B mark in mobile data services revenue. Data contribution to the overall revenues is now at 55%.
T-Mobile continued to outperform its competitors in net-adds. T-Mobile has almost recovered all its postpaid losses that started back in Q3 2009 and continued till Q1 2013. It should move into the positive territory next quarter. T-Mobile also crossed the 50M sub mark and is now within a striking distance of Sprint and could become the number 3 operator in the country before early 2015.
AT&T registered the lowest postpaid churn in its history at 0.86. For the industry buffs, the US record is held by Verizon which recorded the churn of 0.84 in Q2 2012. The world record is held by NTT DoCoMo for its churn of 0.44 in Q2 2010. In general, Japanese have the most loyal customer base in the world.
The net-adds in the US market is now primarily driven by connected devices (tablets and m2m). 84% of the net-adds in Q2 2014 were from the non-phone category. Tablets are driving the connected devices segment with 70% share. The net-effect has been that while the overall subscriber count has increased, there has been a negative impact on the ARPU which declined by 2.27%. All operators saw their ARPU decline.
Smartphone penetration increased to 70% and roughly 93% of the devices sold now are smartphones. Android beat iOS handedly in the quarter. For the first time, Verizon sold more iPhones than AT&T.
M&A Season
From 2005 to almost 2008, the combined entity of Sprint and T-Mobile would have been the #1 operator in the US. Up until 2004, the “Others” were collectively the number #1 operator in the US. However, through a series of acquisitions, exclusive device deals, and just better business performance, Verizon and AT&T have dominated the mobile landscape in the US since 2007. Now, AT&T and Verizon are tied at the top while the market awaits the question mark on how the #3 will shape up. Iliad provided some market entertainment that kept media scratching its head with its offer to buy T-Mobile last week. It was an unattractive proposition as it doesn’t fundamentally offer to alter the US market structure. There are other global operators who are eying T-Mobile as a way to enter the lucrative US market. It might all come down to how desperate is DT to offload T-Mobile.
Yesterday, Sprint abandoned its pursuit of T-Mobile and probably saved itself a couple of billion dollars of break-up fee. The regulatory hurdle in the current environment of mega-mergers was just too high to overcome at this time.
So, will there be further consolidation in the mobile industry? Short answer is – Yes. The only question is about the timing. As we noted in the last note, T-Mobile has complicated things by being successful in the short-term. A third player with 30% market share will of course be better but T-Mobile has been able to change the market by being the fourth at 15%.
Is Windows Phone getting Zuned Out of the Market?
In 2012, we described “Zuned Out” as a phenomenon wherein the market punishes the player (even incumbents and dominant ones) for late entry into the market. The fast follower strategy that had served Microsoft so well for a couple of decades is no longer a useful framework for competing. Either one needs to be a “really fast follower” like Samsung (though they did invent the big-screen device segment that Apple is now following) or a trend setter like Apple/Google to have some command of the control points in the ecosystem.
Google was tempted by the lure of the device business and to some extent was forced to buy Motorola. It took 10 quarters to realize that the device business is a different beast, that there was a DNA mismatch, but the exercise did provide some key business insights to the management team. Google shed the device business and kept its partners happy. Microsoft’s acquisition of Nokia followed a similar pattern. Nokia threatened to go Android and Microsoft had no choice but to acquire the beleaguered company that has been just devastated since it picked up Windows as its primary OS. It was clearly a mistake both by Nokia first and Microsoft after that. The new CEO (to his credit) shed a good part of the business in a mere 3 quarters (a clear admission of a mistake). While the impending decimation of the once vaunted Finnish brand was very obvious, the bigger question in front of Microsoft is “what to do with Nokia that’s remaining?” The current plan is to continue churning out the Lumia devices at different price points and see what happens.
As is well known, Microsoft is very strong in the enterprise and in the cloud. Will the new “productivity and platforms” strategy look at the market facts and focus on where the company can be a player and invent new categories and experiences? Or will it focus on just chasing the competitors that have infatuated it over the last decade? Productivity is more than Office and Platforms have moved to iOS/Android. The “core” of the computing market is very different from what it used to be.
The market share of the windows devices in the US last quarter was 1.3%. Globally, it fared marginally better at 2.7%. Granted that in some countries, Windows is starting to approach double digit market share, even Microsoft admits its mobile strategy is in shambles. After being in the US market for more than 2 years with billions spent in marketing and distribution, 1.3% share is nothing to write home about. Microsoft can get better traction in markets where new-subs are entering the ecosystem vs. replacement markets like the US. However, what market is telling us is that despite the blood, sweat, and tears that have been spent over the past few quarters, there is little appetite or need for another platform.
Also, there is this issue of competing with your partners – Microsoft outperforms its ecosystem partners by a distance. I wrote at the launch of the new windows OS that is was a fresh approach, the OS is very well designed and the devices coming out a quite good. However, the current data indicates that unless something changes drastically, windows phones might be on the verge of being “zuned out” of the market. And just like Zune, the fault will lie not in the product or the distribution or the marketing but rather in the timing of the market entry. Microsoft might be better off giving up on its device dream and just focus on services on top of the platforms that dominate. It might be time for hermit crab strategy.
IBM-Apple deal
Intuitively, we have known for a while that the application development environment was moving from windows to iOS and Android. In 2012, we actually measured that shift and found that SMBs were moving to the new platforms in droves. The paper concluded:
“We believe that the SMB segment is a leading indicator of how larger enterprises and consumers in general will adopt mobile data solutions to enhance productivity and reduce costs.”
Fast forward 2 years. Last month, IBM and Apple announced their historic deal that woke up lot of people in the enterprise world. Apple is just looking to find a more efficient channel into the enterprise to sell iOS devices but IBM’s embrace means that the investment in iOS UX and app infrastructure will start to move more directly. Given that IBM is positioned well in all important enterprises across all industry verticals is a big coup for Apple. It also demonstrably indicates the shift from Windows to iOS and Android as the computing platform of choice.
Amazon phone
Amazon phone has been talked about for more than three years. It finally arrived but disappointed. While there were some interesting tech innovations seamed together to provide some differentiation, without any service pricing innovation (and the fact that it is only available on one operator), its fate seems similar to that of the Facebook phone.
Unraveling of Nokia
The mobile (more broadly digital) markets continuously remind us how brutal can the markets be if one is not quick enough to adjust strategies. As the old saying goes, “the bigger they are, the harder they fall.” Motorola was founded in 1928 and only a skeleton of the old glorious days remain as a subsidiary of Lenovo. An 80+ year old firm disappeared very quickly.
In the case of Nokia, the decomposition was even more stunning. A company founded in 1865 had 40%+ of the phone market only 7 years ago, employed tens of thousands of employees around the globe. After the latest round of rightsizing, only a few thousand remain (at least for the short term). Blackberry experienced a similar slide downwards. The cycle of complacency spares no one. The bigger the host, the more lethal the complacency virus is. This decomposition process is actually healthy for the ecosystem. Though the process is traumatic for those who are in the middle of it, it lays the fertile ground for new ideas and startups to germinate, and the cycle continues.
The bifurcation of the wearables market
After visiting the show floor at CES in January, we noted that “The space is going to get commoditized very quickly and it is likely going to get stratified into two major buckets – really cheap $10-20 wearables. The other bucket will be high-end fashion driven wearables.”
Last month, Xiaomi released a $13 tracker and Apple is expected to announce its wearable next month. The mid-market will mostly disappear.
What to expect in the coming months?
2014 has had an excellent start and rest of the year is looking great with a slew of announcements and activities planned for the rest of the year. We have already seen some massive moves, astounding acquisitions, and interesting strategic moves.
As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.
Against this backdrop, the analysis of the Q2 2014 US wireless data market is:
Service Revenues
- The US mobile services revenues in Q2 2014 declined marginally by over $200M.
- The mobile data services revenue however continued to increase and is on track to exceed the $100B mark in mobile data services revenue to become the first country to generate $100B from mobile data services.
- Verizon and AT&T dominated the quarter accounting for 68% of the mobile data services revenue and had 68% of the subscription base.
- Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q2 2014. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.
- Revenue from new subs has declined to roughly 2%.
ARPU
- The Overall ARPU declined by $1.15. Average voice ARPU declined by $1.53 while the average data ARPU grew by 1% Q/Q.
- Data contribution to the overall revenues is now at 55%.
Subscribers
- The US operators added 3.2M new customers with T-Mobile leading the pack.
- 84% of the net-adds in Q2 2014 were from the non-phone category. The net-effect has been that while overall subscriber count has increased, there has been a negative impact on the ARPU which declined by 2.27%.
- Verizon’s tablet net-adds soared accounting for almost 48% of the overall tablets that were added in Q2. AT&T has the most number of tablets on its network but others are starting to catch-up.
- T-Mobile’s postpaid continued to see the positive growth for the fifth straight quarter. It has almost recovered its losses that began in Q3 2009.
- As other operators have started to gain in connected devices, AT&T’s share dropped to 46% though it continues to lead by a distance.
- AT&T registered the lowest postpaid churn in its history at 0.86. For the industry buffs, the US record is held by Verizon which recorded the churn of 0.84 in Q2 2012. The world record is held by NTT DoCoMo for its churn of 0.44 in Q2 2010.
Shared Data Plans
- Shared data plans launched by Verizon and AT&T have been quite successful. The attachment rates have increased tremendously over the course of 2013-14 with more consumers opting for cellular tablets and connected devices. 50% of postpaid accounts at Verizon are now on shared plans. Non-phone devices are performing 5x compared to phones.
- Some more granular data plans for tablets have also spurred interest as the cellular broadband is becoming available on demand vs. expensive on premise Wi-Fi solutions.
- 49% of AT&T’s postpaid accounts are on 10GB+ plans.
4th Wave Progress
- The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 62% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 81% in mobile (of the total advertising revenue) up from 60% in 2013. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)
- In 2014, we are also seeing continued investments from the operators especially AT&T, Verizon, and Sprint in non-traditional segments like home security, healthcare, insurance, automotive, enterprise mobility, advertising, and security, and others. Collectively, this is already a multi-billion dollar business in the US.
- The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.
Connected Devices
- Connected devices (non-phones) accounted for almost 84% of the net-adds in Q2 2014. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.
- Tablets form 70% of the connected devices sold.
- QoQ, the non-phone segment grew 10%.
Handsets
- Smartphones continued to be sold at a brisk pace accounting almost 93% of the devices sold in Q2 2014. Within the next two years, the feature phone category will practically be extinct in the US market.
- The smartphone penetration in the US is now at 70%.
- Android had its best showing in the US market with 60% share of the quarter. In Q3, Apple is expected to announce its next iPhone that will pull it back into contention for the top stop for the second half of the year.
- While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off. It renewed its entry into the battlefield with Windows phone last year but sales have been poor. While Microsoft has made steady progress in other regions, in the US, it’s not gaining any traction and its share remains at a measly 1-3%. (Read our paper to get more insights into why Windows hasn’t been able to make a dent so far).
- Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 54M making it the leading LTE operator in the world. Other three operators are also deep into their LTE deployments. Expect the “fastest network” marketing to continue for at least another six more quarters. Verizon reported that 76% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.
- Verizon and AT&T sell more iPhones than Android while the reverse is true for T-Mobile (by a big margin) and Sprint. There is always a beauty contest amongst operators as to who sold more iPhones. For the first time, Verizon sold more iPhones than AT&T.
Mobile Patents/IP
- 24% of the patents granted by the USPTO were mobile related. Samsung, IBM, Microsoft, Sony, and Ericsson make the top 5 patent players in mobile. We will have more details in our coming paper on Mobile Patents Landscape next month.
- US companies comprise of 50% of the top 50 list followed by Japan, China, and South Korea.
- Samsung was again the leader in mobile patents granted in 2013 in the US and worldwide. Samsung was followed by IBM, Qualcomm, RIM, LG, Sony, Microsoft, Ericsson, Google, and AT&T for the top 10 companies by mobile patent grants in 2013.
- Google made an entry into the top 10 overall mobile patents list for the first time. AT&T did the same for the mobile patents granted in 2013.
- US Mobile Operators dominate the top 10 operator rankings: Patent top 10 Rankings: AT&T, NTT DoCoMo, Sprint, Verizon, Telecom Italia, Swisscom, T-Mobile, Orange, SK Telecom, and TeliaSonera.
- Mobile Infrastructure Patent top 10 Rankings: Samsung, Ericsson, Alcatel-Lucent, Qualcomm, LG, Intel, Siemens, Fujitsu, NEC, and Panasonic.
- Mobile OEM Patent top 10 Rankings: Samsung, Microsoft, Sony, Nokia, Google, LG, RIM, Siemens, Fujitsu, and Panasonic.
- The top 5 categories for patents grants in the US for 2013 were Telecommunications, Digital Multiplexing, Digital Processing – Data Transfer, Digital Processing – Financial, and Computer Graphics.
- The top 10 filers of mobile patents in the US were IBM, Samsung, Microsoft, Sony, Qualcomm, Nokia, Ericsson, Google, LG, Intel and Apple. It was the first time that Samsung, Microsoft, Google and Apple showed up in the top 10 patent filers list together.
- Facebook’s mobile patent filings increased by 177% YoY.
Your feedback is always welcome.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in Nov 2014. The next Global Wireless Data Market update will be issued in Sept 2014.
Disclaimer: Some of the companies mentioned in this paper are our clients.
We will be discussing many of the ecosystem and technology issues, opportunities and challenges for the coming years in our annual mobile executive summit Mobile Future Forward on Sept 24th in Seattle. Some of the confirmed speakers are: Bill Ruh, VP, GE; Tim Campos, CIO, Facebook; Erik Moreno, SVP, Fox Networks; Glenn Lurie, President, AT&T; Steve Mills, CIO, Motorola Mobility; Hank Skorny, VP/GM, Intel; Dr. John Saw, CNO, Sprint; JD Howard, VP/GM, Lenovo; Dave Webb, CIO, Equifax; Dr. Hassan Ahmed, CEO, Affirmed Networks; Mark Fernandez, Managing Partner, Sierra Ventures; Ujjal Kohli, Founder, Rhythm NewMedia; Vik Kathuria, Global Chief Media Officer, Razorfish; Erin Kienast, SVP, Starcom Worldwide; Josh Will, Senior Category Manager, Best Buy; Steve Elfman, President, Sprint; Paul McNamara, VP, Ericsson; Matt Grob, EVP/CTO, Qualcomm; Julie Woods-Moss, CMO, CEO of Nextgen Business, Tata Communications; David Richter, VP, Uber; Paul Brody, VP & Mobile Practice Leader, IBM; Mathew Oommen, President, Reliance ; Andreas Gal, CTO, Mozilla; Chris Putnam, SVP, Synchronoss; Fareed Adib, Global Head of Telecom Partnerships, Google; Brian Angiolet, SVP – Consumer Product Innovation, Verizon; Sharath Dorbala, Head of Mobile Financial Services, Amdocs; Rajeev Tankha, Senior Director – Applications, Oracle; Andy Chu, VP – mCommerce, Sears Holdings; Philip Fasano, EVP and CIO, Kaiser Permanente; Erik Ekudden, SVP, Ericsson, and many more to come. We hope to see you there for the brainstorm.
Mobile Future Forward: Connected Living and Lessons from Emerging Markets July 30, 2014
Posted by chetan in : Connected Devices, Emerging Markets, Mobile Future Forward, Wireless Value Chain, Worldwide Wireless Market , add a commentIn one of my interview with Time magazine last year, I alluded to the “Connected Intelligence Era” that is slowly but surely touching the various technology microcosms. It is transforming how we live and expect technology to behave. Glenn Lurie at AT&T has been investing in “Connected Living” products and services for well over 5 years in areas such as home security, health, and connected cars. Similarly, Tom Nagel is leading Comcast’s strategic initiatives to drive value from a connected home. Chris Putnam at Synchronoss has been working with service providers to help make some of these visions possible. We will explore the multi-trillion dollar “Connected Living” market with some of the leading global experts in the space.
Not too long ago, emerging markets used to follow the developed markets in technology adoption. While some of it is still true, many emerging markets are adapting and leapfrogging at a fast pace. Companies operating in India and China are often coming up with innovative solutions for the constrained environment and the lessons can be applied anywhere. We are fortunate to have two industry leaders who are leading the way. Mathew Oommen is a long time industry veteran who is doing some terrific technology work at Reliance. Similarly, Andreas Gal is leading Mozilla in mobile in LatAm and Asia.
Opportunities in Connected Living
· Glenn Lurie, President, AT&T
· Tom Nagel, SVP, Comcast Cable
· Chris Putnam, SVP, Synchronoss
Lessons from the Emerging Markets
· Mathew Oommen, President, Reliance
· Andreas Gal, CTO, Mozilla
We at Chetan Sharma Consulting are deeply involved in these changes and use our global mobile executive brainstorm forum to kick-off another year of ideas, networking, and industry collaboration. Our work on the 4th wave has shaped strategies of players around the world and we continue to strive to bring you the best of “global mobile thinking” at Mobile Future Forward.
When: Sept 24th in Seattle.
We are excited to partner with the industry leaders and thank them for their ongoing support: Amdocs, Ericsson, Intel, Oracle, Qualcomm, Synchronoss, and Tata Communications.
Some of the confirmed industry leaders are:
· Dan Hesse, CEO, Sprint
· Bill Ruh, VP, GE
· Tim Campos, CIO, Facebook
· Erik Moreno, SVP, Fox Networks
· Glenn Lurie, President, AT&T
· Steve Mills, CIO, Motorola Mobility
· Hank Skorny, VP/GM, Intel
· Dr. John Saw, CNO, Sprint
· JD Howard, VP/GM, Lenovo
· Dave Webb, CIO, Equifax
· Dr. Hassan Ahmed, CEO, Affirmed Networks
· Mark Fernandez, Managing Partner, Sierra Ventures
· Ujjal Kohli, Founder, Rhythm NewMedia
· Vik Kathuria, Global Chief Media Officer, Razorfish
· Erin Kienast, SVP, Starcom Worldwide
· Josh Will, Senior Category Manager, Best Buy
· Steve Elfman, President, Sprint
· Jason Hoffman, VP, Ericsson
· Matt Grob, EVP/CTO, Qualcomm
· Julie Woods-Moss, CMO, CEO of Nextgen Business, Tata Communications
· David Richter, VP, Uber
· Paul Brody, VP & Mobile Practice Leader, IBM
· Tom Nagel, SVP, Comcast Cable
· Mathew Oommen, President, Reliance
· Andreas Gal, CTO, Mozilla
· Chris Putnam, SVP, Synchronoss
.. more to come
We will be announcing new speakers and partners through the course of the summer and look forward to seeing you in September.
Thanks
Mobile Future Forward: Enterprise Mobility: IBM July 24, 2014
Posted by chetan in : US Wireless Market , add a commentLast week Apple and IBM announced their historic Enterprise Mobility deal. Microsoft in a series of memos and presentations this month declared that it is essentially betting the company on redefining productivity. In one of the hottest mobile segments – IoT – Enterprises are the ones who are driving the most revenue and tangible value. Enterprise mobility is getting redefined in so many respects – from the use of sensors to drive tactical decisions, from securing a global and mobile workforce, from creating collaborative moments of productivity, from putting true “analysis” and “data” at the fingertips of managers and field engineers, that it will see a complete transformation of what the world thinks of enterprise mobility. We saw some of these trends coming in our work with AT&T last year.
The Apple/IBM deal can have a significant impact on how enterprises use devices and think of applications. We are fortunate to have Paul Brody, VP and Mobile Practice Leader at IBM, one of the leaders who was behind this deal from day 1, to talk about how enterprises worldwide are thinking about mobility, workflows, operations, ROI, and business models. Paul has a deep global understanding of the enterprise challenges and has the experience of coming up with solutions. He joins a stellar cast of leaders to discuss the present and the future of enterprise mobility.
Rethinking Enterprise Mobility
· Tim Campos, CIO, Facebook
· Steve Mills, CIO, Motorola Mobility
· Dave Webb, CIO, Equifax
· Paul Brody, VP/Mobile Practice Leader, IBM
· Mark Fernandez, Managing Partner, Sierra Ventures (moderator)
We at Chetan Sharma Consulting are deeply involved in these changes and use our global mobile executive brainstorm forum to kick-off another year of ideas, networking, and industry collaboration. Our work on the 4th wave has shaped strategies of players around the world and we continue to strive to bring you the best of “global mobile thinking” at Mobile Future Forward.
When: Sept 24th in Seattle.
Registration (Summer Saver Expires 7/25 – Friday)
We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson, Intel, Oracle, Qualcomm, Synchronoss, and Tata Communications.
Some of the confirmed industry leaders are:
· Dan Hesse, CEO, Sprint
· Bill Ruh, VP, GE
· Tim Campos, CIO, Facebook
· Erik Moreno, SVP, Fox Networks
· Glenn Lurie, President, AT&T
· Steve Mills, CIO, Motorola Mobility
· Hank Skorny, VP/GM, Intel
· Dr. John Saw, CNO, Sprint
· JD Howard, VP/GM, Lenovo
· Dave Webb, CIO, Equifax
· Dr. Hassan Ahmed, CEO, Affirmed Networks
· Mark Fernandez, Managing Partner, Sierra Ventures
· Ujjal Kohli, Founder, Rhythm NewMedia
· Vik Kathuria, Global Chief Media Officer, Razorfish
· Erin Kienast, SVP, Starcom Worldwide
· Josh Will, Senior Category Manager, Best Buy
· Steve Elfman, President, Sprint
· Jason Hoffman, VP, Ericsson
· Matt Grob, EVP/CTO, Qualcomm
· Julie Woods-Moss, CMO, CEO of Nextgen Business, Tata Communications
· David Richter, VP, Uber
· Paul Brody, VP & Mobile Practice Leader, IBM
.. more to come
We will be announcing new speakers and partners through the course of the summer and look forward to seeing you in September.
Thanks
Mobile Breakfast Series–IoT–London July 3, 2014
Posted by chetan in : 4th Wave, Chetan Sharma Consulting, Internet of Things, IoT, Mobile Breakfast Series, Mobile Ecosystem, Mobile Future Forward, Smart Cities, Wireless Value Chain, Worldwide Wireless Market , add a commentWe hosted our Europe Mobile Breakfast Series in London last month in partnership with Telefonica and they have been gracious host for the series. The topic of discussion was “Internet of Things: Exploring the next big thing in mobile.” Regular readers will notice that it is the same topic we covered in our Seattle breakfast event in March. IoT is gaining lot of share of the news cycle and investments from big companies like GE and Caterpillar to startups like Fitbit and Smart Things. Many traditional computing and communications players like Telefonica, AT&T, Intel, Qualcomm, Microsoft, Google and others are also plunging full-steam ahead into the segment.
I have written about the notion of the coming “Golden Age of Mobile” and IoT, IMHO fits right into that growth strategy. In previous notes, I suggested that:
It is very clear to us that we are entering the ‘Connected Intelligence’ era. These two operative words are going to define the next phase of human evolution and are going to dramatically change every industry vertical from the ground up.
We are starting to see the signs in all directions. We had assembled a great panel to delve into some of the early opportunities, solutions to problems, and the traction areas. Executives from BMW, Intel, Telefonica, and Worldsensing were at hand to share their opinions and experiences in the space.
Dominik Fromm is responsible for expanding BMW Group’s Mobility Services in the United Kingdom under the BMW, MINI and BMW i brands. Strategy, Mobility and Financial Services have been his professional focus in recent years. The current work builds on this wealth of experience, gained whilst working in the United Kingdom and in BMW’s global headquarters in Munich.
Raine Bergstrom is a vice president in the Software and Services Group at Intel Corporation and general manager of API Services. He takes the lead on market and product definition, as well as the execution of API management. He also defines the IoT Services Platform strategy, helping deliver a true end-to-end IoT solution for some of Intel’s largest customers.
Carlos de otto Morera is an economist educated in the United Kingdom. He has now 15 years of international experience including entrepreneurial experience in mobile, hardware and Internet startups. Created the largest online music platform in Spain from 2008 till 2012. Deeply passionate about his job designing and manufacturing connected products. Currently running Thinking Things, connected Hardware initiative from Telefónica.
Mischa Dohler is Chair Professor in Wireless Communications at King’s College London, UK. He is Distinguished Lecturer of IEEE ComSoc, Senior Member of the IEEE, and Editor-in-Chief of ETT. He frequently features as keynote speaker and had press coverage by BBC and Wall Street Journal. He is a tech company investor and also entrepreneur, being the cofounder, former CTO and now with the Board of Directors of Worldsensing.
So, as you can see, we had quite an eclectic group of individuals with diverse backgrounds and perspectives.
To recap, as we stand today, here are some of the forecasts:
In 2011, Ericsson forecasted 50 Billion Connected Devices by 2020
In 2012, Cisco agreed with the forecast and said they too expect the same number of connected devices and in 2013 came out with a paper talking about a $14.4 Trillion economy powered by IoE
In 2013, GE came out with their research and paper on the Industrial Internet powered by sensors and calculated that we could see $10-15 trillion dollar impact on the GDP in the next 20 years.
The salient points of the discussions were:
- IoT has been around for a long time, it just existed in different form factors and was called something different. for e.g. Telemetry has been used for many decades in the transportation and utility space. IoT started with some of the first DARPA projects and then moved into the academia, however commercial interest into the space started around 5 years ago and we are seeing the confluence of many trends in the current incarnation of IoT.
- Sensors and IoT could fundamentally change how people live, how cities are organized, how people commute, and how we as consumers interact with objects, things, and people around us.
- Dominik had interesting perspectives around what type of an auto company might BMW become in the future and they are experimenting with different business models and technologies to see how best to serve the customer and adjust to changing dynamics. BMW becoming an MVNO and offer an Uber like service for BMW customers in an autonomous fashion is within the realm of possibilities.
- Carlos talked about the need for modular design and talked about how Thinking Things is solving that problem for various enterprise customers. He gave examples of medical analysis companies, logistics, and transportation and by using componentized sensors, they have been able to operationalize into their work flow and reduce costs.
- The medical analysis company carries a large number of fridges from one lab to another (around the continent). It is very important for them to ensure the quality of samples contained. Thanks to sensors they can track temperature around the clock of all fridges and samples around Europe.
- Similarly a logistics companies needed help with tracking expensive items being deliver around the world. Sometimes these items, especially expensive ones get stolen. Sensors can be inside these packages and inform whenever these packages have been open, so central systems are aware in real time of any wrong doing.
- There was a consensus that the money in IoT is right now in the enterprise where companies are willing to pay top dollars to reduce costs and gather better insights into their supply chain, partners, and customers. Consumer IoT is largely limited to wellness devices which have limited appeal and home security services which are still a bit expensive for mass consumption. However, this is likely to change as there is more streamlining, commoditization, and interest from the developer community.
- Mischa talked about some of the work his company Worldsensing is doing in the smart cities space with parking, car counting, journey estimation, and in general getting a better grip of the city.
- There was a consensus that the eventual value is going to be in the “data” and not really in the hardware or the basic services both of which will be gradually commoditized. Data will enable companies to figure out better ways to monetize as well as kick off new services.
- A new opportunity for data brokers is on the horizon where data is treated like currency in transactions and the marketplace could enable many participants to bring their value-add to the table.
- Raine talked about the concept of data segmentation e.g. red data, proprietary data not for sharing; yellow data – you pay for use, and green data that is available for everyone to use. This is what might drive some of the data brokerage economy.
- Intel has bet heavily on IoT to the point that it gets its own line item on the financials. The company reported that its 2013 revenue from IoT was $1.8 billion with an operating income of $550 million.
- IoT data could allow companies to completely change their business model for e.g. GE now rents its engines vs. selling them and makes more money doing that.
- There was some debate about the role of the operator in the IoT value chain beyond connectivity and whether they can manage to move beyond their traditional core business or not. Initiatives like Thinking Things at Telefonica or Digital services at AT&T are indicative of a strong interest from the operators to move beyond connectivity. It is still early in the game.
- With IoT there is a discussion around the fragmentation with no set of common standards that can help bind various IoT hardware components together. AllJoyn is there. Android is taking a shot at it and numerous proposals in the burner but it will take some work to harmonize the standards that makes the IoT platform attractive to the developers without whom the IoT traction will suffer.
- APIs are one way to bring things together on a platform and that’s Intel’s approach to provide value and attract developers.
- Regulatory support is critical for the segment as it starts touching various vertical industries like automotive, retail, energy, etc. and also in the context of personal data. Europe is obviously much more stricter on the consumer privacy issues than rest of the world and it seems the regulators are trying to get ahead of the problem by at least starting to talk about them.
- IoT can also help auto manufacturers in managing liability which is a big cost center for OEMs in addition to providing more relevant and real-time data useful for car bookings and navigation.
- GE is a great microcosm of IoT as they are across almost all verticals and are using data capabilities to build service solutions for different industries.
- How should startups think about IoT? well, for one, don’t get too excited about the technology was the informed opinion of the panel. Rather, focus on the business problem and really understand how this helps the specific buyer who is writing the checks.
Overall, it was a great discussion on the practical aspects of IoT and the audience was great in keeping us honest. I always enjoy interacting with the London mobile crowd and this time was no different. My thanks to the attendees, the partners, the speakers, and to Telefonica for making this event possible.
Given the importance of the topic, we will be dealing with it again at our annual summit Mobile Future Forward on Sept 24th in Seattle and will have more speakers talking about their perspectives and experiences on IoT including GE.
Mobile Breakfast Series - Q&A with Prof. Mischa Dohler, cofounder Worldsensing June 12, 2014
Posted by chetan in : US Wireless Market , add a commentWe are really looking forward to seeing many of you next Tuesday. Here is the final installment of the Q&A series with our speakers. Prof. Dohler has been looking at the IoT space for a long time as a researcher, entrepreneur, and an academic.
We caught up with Prof. Dohler to get a preview of our upcoming Mobile Breakfast Series event in London on June 17th.
You have looked at the IoT opportunity both as an academic as well as an entrepreneur. What’s your sense of the opportunity? Are we beyond IoT being a theoretical exercise?
IoT was a dream 25 years ago with the first DARPA projects; it started to migrate from an interesting academic exercise to industrial innovation via standards work/etc. about 15 years ago; and has become commercial reality some 5 years ago. The potential market is enormous, the problem is that the market has not fully developed yet. This will require time and money. IoT is thus an enormous opportunity today, yes!
You have done quite a bit of work in the Smart Cities space? How does the implementation impact the common man? How should governments think about funding such initiatives? Does it offer any significant competitive advantage to the city?
The problems of Smart Cities today had been summarized in a recent blog of mine under https://connect.innovateuk.org/web/design-sig/article-view/-/blogs/designing-smart-cities-in-2013.
It boils down to "smart" (ie IoT, Big Data, etc.) not properly synch’ing with "city" (i.e. infrastructure providers, etc). Despite the enormous potential of bringing smartness into cities, very little is visible today. The problem with the uptake is that the market is not developed yet, which means that innovative companies have to survive long sales cycles, etc., etc. Difficult times, still!
If you look 5-10 years out, what are some of the exciting developments in R&D that we will start seeing in real-life?
The most exciting thing for me would be if wireless finally really became invisible - and I hope by 2020 we won’t have to stress out which technology we use to connect our IoT devices. Another exciting area is the combination with robotics since the IoT would allow us to collect data; Big Data process it; and robotics act on it - and thereby close the data cycle.
The IoT space is quite fragmented right now. Will that hinder progress? Where will the value lie in the value-chain?
The value currently is in the verticals, and with some specific industries, such as health, transport, construction, and oil/gas. Once these verticals have expanded, the horizontals will start to become important because one can leverage the true Big Data value by cross correlating data sets which each individual vertical cannot do.
Venue: Telefonica, 20 Air Street, London, W1B 5AN London, UK
When: June 17th. Breakfast and Registration: 8-9am, Panel Discussion: 9-10:30am, Networking: 10:30-11:30am
Internet of Things: Exploring the next big thing in mobile
Prof. Mischa Dohler, King’s College, London and Cofounder, Worldsensing
Dominik Fromm, GM – Mobility Services, BMW
Carlos de otto Morera, CEO, Thinking Things, Telefonica
Raine Bergstrom, VP and GM, Intel
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Look forward to seeing you next week.
Mobile Breakfast Series: IoT Q&A with Telefonica June 9, 2014
Posted by chetan in : Internet of Things, IoE, IoT, Mobile Breakfast Series, Worldwide Wireless Market , add a commentWe are delighted to have Carlos de otto Morera, CEO of Thinking Things at Telefonica join the panel next week. Carlos is an economist educated in the United Kingdom. He has 15 years of international experience including entrepreneurial experience in mobile, hardware and Internet startups. He created the largest online music platform in Spain from 2008 till 2012. He is deeply passionate about his job designing and manufacturing connected products. Carlos is joined by execs from BMW, Intel, and Worldsensing and we will be exploring the opportunities in the “Internet of Things” world.
We caught up with Carlos to get a preview of our upcoming Mobile Breakfast Series event in London on June 17th.
Why did you and Telefónica start Thinking Things? Is it about simplification or are there more benefits to the modular approach?
Telefónica R&D created the Physical Internet Lab to design specific solutions using connected hardware. After a few projects for different customers, the Lab realized that we were always tackling the same problems: sensoring or measuring, communications and intelligence (SW) for many different types of problems. Thinking Things was created so all those cases could be solved through a seamless solution that allows you to measure, collect and act on the information. It has been designed in a way that allows anyone unfamiliar with hardware to create specific solutions to specific problems thanks to connected hardware. This modular approach allows one to create objects with different functionalities by simply buying new modules with different sensors on top of the basic modules.
What are couple of examples of how it is being used today?
Thinking Things is being used currently by one of the largest Medical Analysis companies in Europe. This company carries a large number of fridges from one lab to another (around the continent). It is very important for them to ensure the quality of samples contained. Thanks to Thinking Things they can track temperature around the clock of all fridges and samples around Europe.
We are working together with large logistics companies to help them track expensive items being deliver around the world. Sometimes these items, especially expensive ones get stolen. Thinking Things can be inside these packages and inform whenever these packages have been open, so central systems are aware in real time of any wrong doing.
How can developers be involved in using the Thinking Things toolkit?
Thinking Things has been designed for all those app and web developers and digital product designers that need and want to build new connected products and services. We provide them with an easy to use, plug and play solution where, by buying our connected hardware are able to build such products and services. Thinking Things comes with battery, different types of sensors and a connections device together with cloud services so by just using our API, you can build any software specific solutions on top.
Our back-end software allows you to access your data, as well as allows you to create rules and ways to interact with the devices.
What are you doing on the software-side of things and with data?
Thinking Things is a hardware project within Telefónica. But it’s a connected product so we developed our own front-end and back-end software platform to satisfy the needs of Thinking Things users and developers. On the front-end side of things, we provide users with all necessary functionality so you can use Thinking Things right away. In any case we are aware of the fact that developers want to build their specific solutions therefore we provide an open API so they can freely create on top of the framework.
Data as of today will be used by owners of end products and their end customers for whatever purpose those products are created. We foresee though that considering that a large variety of products can be built, data generated may be of interest to third parties allowing both Telefónica and developers to exploit it commercially.
Venue: Telefonica, 20 Air Street, London, W1B 5AN London, UK
When: June 17th. Breakfast and Registration: 8-9am, Panel Discussion: 9-10:30am, Networking: 10:30-11:30am
Internet of Things: Exploring the next big thing in mobile
Prof. Mischa Dohler, King’s College, London and Cofounder, Worldsensing
Dominik Fromm, GM – Mobility Services, BMW
Carlos de otto Morera, CEO, Thinking Things, Telefonica
Raine Bergstrom, VP and GM, Intel
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Look forward to seeing you next week.
US Mobile Market Update – Q1 2014 June 2, 2014
Posted by chetan in : 4G, 4th Wave, AORTA, ARPU, Chetan Sharma Consulting, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Market Update – Q1 2014
The US mobile data service revenues grew 4% Q/Q and 23% Y/Y to $25.9B in Q1 2014. In 2014, we expect US to become the first country to cross the $100B mark in mobile data services revenue. We have also started to see digital services appear in the revenue maps as more companies rely on mobile to generate their revenues.
With the acquisition of Leap, AT&T has virtually tied Verizon for market share at 34%.
T-Mobile continued to impress with 66% share of the net-adds. Even Verizon felt the heat in Q1 resulting in a subpar performance. Smartphone penetration increased to 68% and roughly 93% of the devices sold now are smartphones.
M&A Season
FCC must have cancelled all summer vacations for its staff as it is going to have a busy summer. As expected, Comcast made a bid for Time Warner and AT&T for DirectTV. Encouraged by the M&A season, Softbank is going to make a run for T-Mobile and pop the question to the FCC – so what do you think?
This in addition to the net-neutrality religious wars that have been triggered.
So, how will this all end-up?
It’s complicated.
The basic problem is that the communications and computing worlds have collided and nobody told the politicians. One can’t develop a policy framework in vacuum. It has to synchronize with the real world and with the facts on the ground. In my travels around the globe, I find that some of the most underdeveloped countries have better policy framework than some of the developed nations. Obviously, they don’t have the legacy to work with but they are more progressive in terms of national competitiveness and creation of jobs as the central underpinning of their framework.
As we noted in our 2011 research paper, “Competition and the Evolution of the mobile markets,” the mobile markets gravitate towards three player composition. Over time, every market approaches this equilibrium. We looked at the world’s top 36 markets and the average HHI (Herfindahl-Hirschman Index) for these markets is 0.344. If we just look at the developed markets, the HHI is 0.327. The US market HHI stands at a relatively lower number of 0.25 which is right at the cusp of what DOJ calls heavily concentrated and moderately concentrated markets. In fact, 30 of the 36 markets are over this line and that includes pretty much every developed market except UK.
If and when Softbank proposes the T-Mobile merger, the HHI will increase to 0.28 and will clearly cross the DOJ marker of heavily concentrated markets. For contrast, the cable industry is at 0.13 HHI. Clearly, just looking at HHI is inadequate and misleading as we showed in our paper back in 2011.
In heavy Capex industries, it is natural to have consolidation. It allows more efficient deployment of the capital or else everyone gets bloodied in the turf war as is evident in Indian mobile market which is on the verge of a major restructure.
In the last 20 years, the share of top 3 operators has grown from roughly 40% to 80%. The number of mobile subscriptions have grown 14x during the same time period.
So, will there be further consolidation in the mobile industry? Short answer is – Yes. The only thing up for debate is whether it happens in this administration or the next. As we said in the last note, T-Mobile has complicated things by being successful in the short-term. A third player with 30% market share will of course be better but T-Mobile has been able to change the market by being the fourth at 14%.
FCC’s dilemma is that it can’t evaluate these proposed mergers in isolation and Congress hasn’t done a good job of clearly defining FCC’s authority.
It is going to be an interesting summer for sure.
What’s next for Microsoft?
With a new CEO at the helm, Microsoft made some key (albeit late) changes to its strategy: Office for non-windows devices, zero-rating the OS licensing fees, doubling down on the enterprise class Surface. In light of the plummeting PC sales, Microsoft is trying to figure out its place in the post-PC world. Surface 3 is good device but there are also significant hurdles. Having failed to stem the tide of iPad and Android tablets, Microsoft seems to be focusing on the high-end by trying to change the discussion around the wisdom of carrying multiple devices.
One of the basic problem that the current strategy faces is that of articulating a valid value proposition. On the pricing axis, it doesn’t make a dent. MacBook Air is still the best notebook around and iPad is still the best tablet and you can get both of them for $1500 while a comparable Surface configuration will set you back $1200-1300, a drop of less than 20%. The reason Kindle and other sub $200 tablets got some traction was that the price difference was 60%. It forced Apple to reconsider and launch the mini to secure the mid-tier.
However, it is smart of Microsoft to fight the battle on the top end in the enterprise where their biggest strength lies rather than in the low-mid tier consumer segment which is nothing but a bloodbath for new OEMs.
The mobile ecosystem will clearly benefit from a stronger Microsoft but it has to address some key strategic questions for its partners and customers. It has started to shed some legacy constraints, is getting some product thinking behind its strategy, and is becoming more open which is a good start.
About that Google Car
The autonomous car that Google showcased earlier this week is probably the most interesting technology development in the last couple of years (in addition to whatever Elon Musk does). Given that going from point A and point B is so central to our civilization, a rethink of how it should be done is going to have profound effect on not only the existing value chains and industries but more fundamentally, how humans organize themselves as social beings. There are a number of exciting and terrifying (for some) questions in front of us – how quickly will autonomous cars become the norm in major markets – 5 years? 15 years? What does this do to the driver segment? Auto sales? Cost of transportation? Design and investment of infrastructure? Privacy and security of data? Mobile network infrastructure to support a radical societal architecture? Will tech companies become car OEMs? Should they? How quickly will the regulators catch-up? Months? Years? Decades?
I do think Google car is a perfect embodiment of the connected intelligence era and this is going to have such profound implications that we haven’t yet built a model to grasp its impact (more to come on this topic).
What to expect in the coming months?
2014 has had an excellent start and rest of the year is looking great with a slew of announcements and activities planned for the rest of the year. We have already seen some massive moves, astounding acquisitions, and interesting strategic moves.
As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.
Against this backdrop, the analysis of the Q1 2014 US wireless data market is:
Service Revenues
- The US mobile data service revenues grew 4% Q/Q and 23% Y/Y to $25.9B in Q1 2014. For the year 2014, we expect US to become the first country to generate $100B from mobile data services.
- Verizon and AT&T dominated the quarter accounting for 68% of the mobile data services revenue and had 68% of the subscription base.
- Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q1 2014. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile operators.
- Revenue from new subs has declined to roughly 2%.
ARPU
- The Overall ARPU declined by $0.51. Average voice ARPU declined by $1.27 while the average data ARPU grew by $0.76 or 3% Q/Q.
- As noted in the last update, the average industry percentage contribution of data to overall ARPU is now over 50%. US became the 7th nation to achieve this feat. Japan at 70% leads the industry.
Subscribers
- In terms of total subscribers, thanks to the Leap acquisition, AT&T is virtually tied with Verizon at 34% share in terms of market share. Verizon hasn’t ceded the top spot since its acquisition of Alltel in 2008/9.
- The US operators added 3.5M new customers. In a first, T-Mobile added twice the amount of new customers compared to the rest of the top 3 combined.
- T-Mobile’s postpaid continued to see the positive growth for the fourth straight quarter. Verizon was impacted significantly with the smallest postpaid net-add quarter in two years. Sprint continued its losses in the postpaid segment. While T-Mobile is on its way to recover from the postpaid losses of the last few years, Sprint’s tally of postpaid losses over the last 5 years stands at 7.4M.
- AT&T continued to lead the connected device segment with 48% market share.
Shared Data Plans
- Shared data plans launched by Verizon and AT&T have been quite successful. The attachment rates have increased tremendously over the course of 2013-14 with more consumers opting for cellular tablets and connected devices. 50% of postpaid accounts at Verizon are now on shared plans. At AT&T, tablets are performing 2-3 times better than smartphones in postpaid net-adds.
- Some more granular data plans for tablets have also spurred interest as the cellular broadband is becoming available on demand vs. expensive on premise Wi-Fi solutions.
- 45% of AT&T’s postpaid accounts are on 10GB+ plans.
4th Wave Progress
- The number of players making $100M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 59% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 80% in mobile (of the total advertising revenue) up from 60% in 2013. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)
- In 2014, we are also seeing continued investments from the operators especially AT&T, Verizon, and Sprint in non-traditional segments like home security, healthcare, insurance, automotive, enterprise mobility, advertising, and security, and others. Collectively, this is already a multi-billion dollar business in the US.
- The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.
Connected Devices
· Connected devices (non-phones) accounted for almost 50% of the net-adds in Q1 2014. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.
· Tablets form 63% of the connected devices sold.
· YOY, the connected devices segment grew 23%.
We hosted our IoT Americas session last quarter with Verizon, Ericsson, Samsung, and adidas and are planning our IoT Europe panel with Telefonica, BMW, Intel, and Worldsensing in London on June 17th.
Handsets
· Smartphones continued to be sold at a brisk pace accounting almost 93% of the devices sold in Q1 2014. Within the next two years, the feature phone category will practically be extinct in the US market.
· The smartphone penetration in the US is now 68%.
· Android had its best showing in the US market with 54% share of the quarter. Q2 is expected to strong as well.
· While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off. It renewed its entry into the battlefield with Windows phone last year but sales have been poor. While Microsoft has made steady progress in other regions, in the US, it’s not gaining any traction and its share remains at a measly 3%. (Read our paper to get more insights into why Windows hasn’t been able to make a dent so far).
· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 48M making it the leading LTE operator in the world. Other three operators are also deep into their LTE deployments. Expect the “fastest network” marketing to continue for at least another seven quarters. Verizon reported that 73% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.
· Mobile operators also announced their VoLTE launches.
· Verizon and AT&T sell more iPhones than Android while the reverse is true for T-Mobile (by a big margin) and Sprint. There is always a beauty contest amongst operators as to who sold more iPhones. AT&T again bested its rivals by selling roughly 36% of the iPhones in the US.
Mobile Patents/IP
· 24% of the patents granted by the USPTO were mobile related. Samsung, IBM, Microsoft, Sony, and Ericsson make the top 5 patent players in mobile. We will have more details in our coming paper on Mobile Patents Landscape next month.
· US companies comprise of 50% of the top 50 list followed by Japan, China, and South Korea.
· Samsung was again the leader in mobile patents granted in 2013 in the US and worldwide. Samsung was followed by IBM, Qualcomm, RIM, LG, Sony, Microsoft, Ericsson, Google, and AT&T for the top 10 companies by mobile patent grants in 2013.
· Google made an entry into the top 10 overall mobile patents list for the first time. AT&T did the same for the mobile patents granted in 2013.
· US Mobile Operators dominate the top 10 operator rankings: Patent top 10 Rankings: AT&T, NTT DoCoMo, Sprint, Verizon, Telecom Italia, Swisscom, T-Mobile, Orange, SK Telecom, and TeliaSonera.
· Mobile Infrastructure Patent top 10 Rankings: Samsung, Ericsson, Alcatel-Lucent, Qualcomm, LG, Intel, Siemens, Fujitsu, NEC, and Panasonic.
· Mobile OEM Patent top 10 Rankings: Samsung, Microsoft, Sony, Nokia, Google, LG, RIM, Siemens, Fujitsu, and Panasonic.
· The top 5 categories for patents grants in the US for 2013 were Telecommunications, Digital Multiplexing, Digital Processing – Data Transfer, Digital Processing – Financial, and Computer Graphics.
· The top 10 filers of mobile patents in the US were IBM, Samsung, Microsoft, Sony, Qualcomm, Nokia, Ericsson, Google, LG, Intel and Apple. It was the first time that Samsung, Microsoft, Google and Apple showed up in the top 10 patent filers list together.
· Facebook’s mobile patent filings increased by 177% YoY.
Your feedback is always welcome.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in Aug 2014. The next Global Wireless Data Market update will be issued in July 2014.
Disclaimer: Some of the companies mentioned in this paper are our clients.
We will be discussing many of the ecosystem and technology issues, opportunities and challenges for the coming years in our annual mobile executive summit Mobile Future Forward on Sept 24th in Seattle. Some of the confirmed speakers are Dan Hesse, CEO, Sprint; Tim Campos, CIO, Facebook; Ben Fried, CIO, Google; JD Howard, GM and VP, Lenovo; Erik Moreno, SVP, Fox Networks; Glenn Lurie, President, AT&T; Steve Mills, CIO, Motorola Mobility; Mark Fernandez, Partner, Sierra Ventures; Dave Webb, CIO, Equifax; John Saw, CNO, Sprint; Hank Skorny, VP/GM, Intel; Hassan Ahmed, CEO, Affirmed, and many more to come. We hope to see you there for the brainstorm.
