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CES 2016 roundup January 11, 2016

Posted by chetan in : 4th Wave,5G,CES,Chetan Sharma Consulting,Connected Intelligence Era,Internet of Things,IoE,IoT,Mobile 2016,The Golden Age of Mobile,Worldwide Wireless Market , add a comment

CES 2016 roundup

As has been the tradition for the last few years, Cool Toys Association kicked started the year with its annual gadget fest. Ever since the iPhone launch, the industry keeps waiting for a company riding on a unicorn coming from the heavens to surprise us with a technology that we haven’t considered before. However, the romantic notion of someone taking our breath away invariably leaves many disappointed as we get relegated to the incremental improvements of the future. However, CES remains the premier show to lay the foundations of the discussions and debates for the year. Most of the products launched and showcased at the event don’t make it past the show floor but an incredible diversity of devices, applications, services, players, and ideas is on display. Additionally, the deals that are struck away from the limelight makes it one of the most important shows in the tech space.

As usual, I kick-started my CES with the AT&T Dev Summit which provides a good barometer of the initiatives for the year in the operator ecosystem. I also had an opportunity to participate on the WSJ’s panel on innovation to talk about broad industry trends that last beyond 2016. This note provides a summary of our observations from the show.

The Numbers: CTA forecasts the US spending on gadgets to increase 1.6% to $224 Billion in 2016 with smartphones accounting for quarter of that spending. Wearables, drones, robots, and some of the non-traditional devices are starting to appear on the spreadsheet now. As we mentioned in our Connected Consumer Research last year, the spending habits of US consumers are changing. Bulk of spending is still on services like data, internet, and cable with mobile data capturing the most share of the household IT budget.

The march towards Autonomous Intelligence: Each year, we are making incremental progress towards to what seems today a utopian autonomous intelligence state where computers observe anomalies and problems and just fix and address them without human intervention. We have written about this at length in our Connected Intelligence series of papers and will continue to explore the subject in more papers this year. The inevitable emergence of trusted data brokers that help us tie disparate data sources, products, services will be a key development in the coming years.

The current incumbents have a big leg up. In my mind, Google has by far the best machine learning engine. You get a sense of the power of Google’s AI when you travel in remote parts of the world and get a highly accurate representation of human movement – in real-time. It is stunning. Google has better understanding of what’s happening on the ground than any other entity or government in the world.

Facebook has the best repository of emotion movement though the AI engine needs work. Similarly, Amazon knows more about commerce movement than any other player. A number of their products are launched because of this key insight. Apple obviously has good understanding of what their iOS base is doing and while it is smaller than any of the three players mentioned above in their respective areas, in aggregate, it has a potent repository of human behavior and movement. Some mobile operators have technology that can give them insights into some of these trends but their subscriber base is limited and unless they expand beyond their traditional base, they will always be at a disadvantage vis-à-vis the Internet giants.

Intel again gave an excellent keynote of the computing capabilities that are going to enable new interfaces, experiences, devices, and applications. When will computing sense what I am thinking?

Self-driving cars – The biggest headlines at CES this year was for self-driving cars. CES looked like an auto-show. Tesla and Google have forced auto OEMs to dust off their self-driving plans and accelerate their public unveiling because that’s what the cool kids are doing. The notion of self-driving cars has gone from a geek fantasy just a few years ago to the reality on the ground at breathtaking speed. Competition does wonders to the innovation process. The tech to safely deliver a self-driving car is already here. Social-acceptance and regulatory issues will likely to delay the full-blown introduction for sometime.

However, a more interesting development is the marrying of a self-driving fleet with the Uber service model. That’s where a lot of disruption is going to take place. GM’s monstrous $500M investment in Lyft is a defensive bet in that future. Don’t be surprised by some interesting M&A activity in the sector. As, hardware gives way to software domination, new models and players will shift the industry marketecture.

Lot of media companies are busy figuring out how to entertain the consumer with all the new time that will become available in the self-driving cars.

IoT – IoT was a big headline last year, 2016 was just the continuation of what we saw in 2015. Pretty much anything imaginable was connected. Chipset guys are going to stay employed for sometime. The challenge for many new players is still going to be the distribution. Most of the money today is flowing to the system integrators and they can play the role of the segment godfathers of IoT if they play their cards right. Platforms are yet to consolidate around a few accepted technologies and players so we will continue to see the fragmentation and jostling for advantage this year.

Robots – Softbank’s Pepper again stole the show by displaying its humane side. Robots for elderly, kids, and the lonely will become mainstream.

Drones – The drone ecosystem seems to be growing as fast as the self-driving cars (obviously massively different price points). Regulators are more active in understanding what’s going on and how to provide a shape passage to innovation in the space. There are some really interesting use cases both in the consumer and the enterprise space.

Netflix moves – You know what is better than US media domination? Global media domination. Netflix launched its services to pretty much the entire world minus China which remains a closed market for most western services.

3D printing – 3D Printing. Yup, Check!

Connected Home – Connected home has disappointed so far. The pricing is still too high for mainstream adoption and products lack imagination. However, some startups are coming up with both new products that are built from the ground up as well as service models that will get traction. 2016 will continue to be the year of experimentation in the space.

Connected Devices. Unconnected Data – Current set of connected devices are primarily focused on sucking up the data but there hasn’t been much work on connecting the data across devices. If you own an Apple Watch and an iPhone and were having a stroke, Apple watch will duly note that your vitals are deteriorating fast but it will just sit on that data and pray that someone finds you to help out. It has access to a communication tool that could be used to seek immediate help via a call or text but it doesn’t. Data stays unconnected and as such useless in real-life situations. We need more work on the intelligence layer that connects the data and makes it useful. This can be applied to connected devices at home, car, office, city, and pretty much any set of devices and sensors around us.

Smart City – Smart City initiatives are starting to take hold. From governments to industrial players to mobile operator ecosystem, everyone wants a piece of it. Probably, the biggest announcement in the space was from AT&T which is putting together a coalition of the willing to explore the scalable framework for a smart city. Atlanta, Chicago, and Dallas get the first nod. The biggest problem with Smart City is not the tech which is available for most part but the funding and execution. With a majority of the cities in the US in the bankruptcy zone, money is hard to come by. Even if did, cities are notorious for lousy execution and waste of resources. Hopefully, being led by some of the industry players will provide the necessary guidance and new business models to bring many of the big cities into the 21st century. Dubai, Helsinki, Seoul, and Oslo might provide a better inspiration of how to go about making your cities smart. Who wants to live in a dumb city anyway?

Virtual Reality – VR is going mainstream. Will it become the OS for new experiences? By when? What will be the applications and services? Vertical segments? Lot of open questions but we are slowly starting to answer them. Facebook launched its much awaited Oculus, HTC had its Vive and a score of new players emerged on the VR landscape.

IP dilemmas – The federal agents swooped into the CES show floor and took evidence from the booth of Hangzhou First International Trade (maker of the wheeled skateboard) – something that doesn’t happen that often. The pace of introduction of digital products is accelerating at such a pace that it is extremely difficult to protect your IP specially for smaller innovative players. The copycat ecosystem comes so fast that before you know it, you are history. IP tussles used to be the domain of the industry giants but smaller innovators are now getting impacted. The sheer volume of products that use your IP will overwhelm you. But, CES gives a good window into the haves and the have-nots. The federal agencies have their work cut for now.

Samsung – Samsung has studied the history of the mobile industry well. That’s why it is nervous. The fact that they are struggling to maintain their top spot is not surprising, it was expected. in fact, the entire trajectory was very easy to predict. What’s astonishing is that, even after being at the center of the digital explosion with hands into virtually every segment, it hasn’t been able to launch an integrated product strategy. It should have been a leader in IoT but is not. It should have used TV as the home hub to connect everything digital in the house but it hasn’t. it should have led the industry in standards and best practices but it seems confused of its role in the larger ecosystem. In the meantime, Google, Apple, and others are doing circles around them. With a new management team in place, a renewed focus on software, will 2016 be different?

Security & Privacy – Almost every major discussion thread had an underlying question around security and privacy and what can and is being done about it.

Auction – FCC is pretty jazzed about the upcoming spectrum auction. It will be fascinating indeed.

The foldable screen – we have waited for a computing screen that can fold like a newspaper for over 15 years. I first wrote about it in my Wireless Internet book in 2000. We might be still a few years away from full commercialization. Sometimes, these things just take time. A flexible screen could lead to breaking of the rectangular screen mold that is starting to get boring. Full marks to LG for bringing the screen to the market.

Vaporware – There was plenty of hand waving. Some managed to fool the press into feeding into the frenzy like Faraday Future (apparent competitor to Tesla), Ehang flying cars.

Uber in Vegas – Every year, CES attendees to the torture of the Vegas taxis and the highly inefficient system of transportation. For the first time, Uber and Lyft were in action and it definitely help at times. The taxi cabal hates the entry of the new brethren in the market but will learn to live with it.

Next stop, DLD Munich.

Have a great 2016.

Best wishes

Mobile Predictions 2016 January 3, 2016

Posted by chetan in : US Wireless Market , add a comment

Mobile Predictions 2016

http://www.chetansharma.com/MobilePredictions2016.htm

2016 mobile industry_predictions_survey_chetan_sharma_consulting from Chetan Sharma

 

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A very happy, healthy, and prosperous 2016 to you and your family. Hope you had a good holiday and area ready to take on the new year with vigor and purpose. My thanks to all who participated in our 9thannual Mobile Predictions Survey. It is a unique polling of the insiders to get a glimpse into what the ecosystem is thinking about the future.

As I have mentioned before, we are entering the Connected Intelligence Era and the mobile industry is growing beyond its traditional borders to transform every vertical industry and by extension – the global GDP. Proof is in the numbers. 7 Zettabytes of digital information created. 1.3 billion smartphones sold. 31 Exabytes of mobile data traffic (which btw will grow 15x+ in the next 5 years). 72 million wearables sold. 16 billion connected devices. Almost half trillion dollars in data revenues. Quarter billion dollars in OTT revenues. At least 62 companies generating a billion or more from 4th wave. At least 8 companies generating a billion or more from IoT.

The improving economy empowered consumers to spend more. Europe is starting to come out of the 2008 recession. Asia is on fire. Any slow-down in China has been picked up by startups in India who are transforming the commerce landscape. Even remote islands like Tonga are LTE-enabled and citizens everywhere have access to high-speed broadband networks. Affordability remains a key issue to address to bring in the next billions into the fold.

IoT emerged as a big category last year and we are just starting. While the potential is unlimited, industry needs to come together on a number of issues around fragmentation, security, policy, and privacy. The fact that we are selling more non-phone devices than phone devices on cellular networks in the US should be a hint of things to come. 2015 saw a wave of consolidation and we will continue to see stronger player get more aggressive this year across domains which is very exciting. We passed the mid-point of this decade and most certainly, the next five years are going to be full of action, surprises, and transformation. Stay with us and we will keep you posted.

We do our annual survey to engage our knowledgeable community on trends and events to keep an eye on. The composite view gives a glimpse into the future scenarios. Executives, developers, and insiders from leading mobile companies and startups from across the value chain and from the around the globe participated to educate us on what to expect of 2016. The survey draws upon the unique collective wisdom of the folks who are making it happen. Thanks for being part of the annual ritual.

25 names were randomly drawn for the limited edition of the Mobile Future Forward 2015 book and they have been notified. Congrats.

Welcome 2016!

Kind regards,

Chetan

What was most newsworthy in Mobile 2015?

2015 was a year of change in the mobile industry. The rise of Uber and its ilk are transforming traditional decades old industries in front of our eyes. T-Mobile’s impact on the mobile industry was felt far and wide and these two ended up being our top two stories of the year. Closely followed the continued rise of connected devices, IoT, and the mobile revenues around the globe. The emergence of Chinese players on the global platform is shifting things around. Apple’s tussle with Samsung subsided in the back pages of 2015.

What will be the biggest mobile stories of 2016?

2015 saw the launch of Google-Fi, 2016 might see the expansion of the concept by other players. Connected devices of all shapes and sizes will continue to transform the ecosystem and consumer mindset. We might see new experiences in VR and flexible displays introduced this year. Spectrum auctions and regulatory tussles will be a key story in 2016. Apple car rumors will continue. Mobile commerce growth in India was a big story in 2015 and will continue to only become more dominant this year.

Who are the top 4 important players in the mobile ecosystem?

Apple and Google continue to be the top 2 most important players in the mobile ecosystem. The biggest shift was that Facebook replaced Samsung at number 3 and Operators consolidated their position at number 4. There are 5-10 global operators who are influential in the direction of the industry. Will Samsung make a comeback in 2016 under the new leadership remains to be seen and will be the story to watch this year. While Microsoft ranked low, 2015 saw a shift from its failed strategy something we have advocated for many years. Can it recapture the love of the developers? It will be key to its future role in the ecosystem.

What will be the breakthrough categories in mobile in 2016?

For the second year in a row, Mobile Payments was voted as the key category for 2016 followed by Big data and analytics, Enterprise IoT, Connected Devices, and Mobile Security.

What will be the most popular consumer mobile applications in 2016?

Mobile applications are transforming many industries and 2016 will only accelerate this trend. Amongst the most popular app categories: Mobile Health and Wellness, Location Based Services, Mobile Payments and Commerce, Messaging which could emerge as the next major mobile OS this year, social and IoT.

Who will dominate the mobile payment/commerce space?

The introduction of Apple Pay last year shifted the long held view that Financial guys will dominate the space. However, the enthusiasm seems have subsided and the Visa and Mastercards of the world are back in the driver seat. Apple will continue to play an industry defining role. Operators have largely been marginalized mostly due to self-inflicted strategy blunders. Google could have played a more significant role but is operating on the edges. Amazon and Facebook can be disruptors in the space but so far haven’t shown must gusto to shape the industry.

Who will make the biggest mobile acquisition in 2016?

Google continues to be the player that startups and investors hope will help make their payday. Significant service provider M&As are also on the cards as they were in 2015. Facebook is perhaps the gustiest acquirer. Microsoft looking to stay relevant in the ecosystem is likely to be bolder and more strategic in its acquisitions in 2016.

Who is doing the most interesting work in the IoT space?

We are in the early phases of the connected intelligence era and startups seem to be doing the most interesting work in creating new solutions, hardware, and services. However, the big boys are investing heavily as well. Google, AT&T, GE, and Intel all are putting in a lot of resources and for some of them, IoT is already a multi-billion-dollar business. We expect several acquisitions in the space throughout the year.

What protocol will dominate IoT communications?

There is a race to dominate the IoT communications protocol layer. The emergence of Sigfox and Lora is similar to the introduction of WiMax which failed but played the role of rallying the GSM players to work on LTE. Similarly, NB-LTE has been rushed and positioned to address the IoT opportunity. In the absence of any widely adopted protocol, WiFi continues to dominate the remainder of the IoT industry and is likely to play a very important role in the coming years.

Which solutions will gain the most traction for managing mobile data broadband consumption?

WiFi continues to play a very important role in handling mobile data demand. 70-80% of the consumption these days in most developed markets is taking place over WiFi (and hence fixed broadband). This hasn’t dampened the demand for cellular data though and it continues to increase albeit at a lower rate. Alternate business models like sponsored data and 5G have started to enter the conversation and we expect more discussion on the subject this year.

Which category will generate the most mobile data revenue in 2016?

The revenue trends are following the expected trajectory. Mature mobile markets have revenues divided between apps, access, OTT, and advertising. In the emerging markets, messaging (including SMS) still plays an important role though access is starting to generate some serious revenues for almost all mobile operators around the globe.

Which region will end up leading the world in 5G by 2020?

4G has been dominated by North American operators. There is a real race underway to take the honors for 5G. The collective wisdom right now is that Korea will end up kick-starting the 5G deployments though Verizon the US has stated its intention to be the leader. Europe and China also have several initiatives to make their mark in the race to 5G.

When will mobile commerce be greater than ecommerce?

We are at the tipping point in North America and Europe with Asia close behind.

The company bringing the most successful mobile gadget of the year – 2015 and 2016?

Since the introduction of the iPhone in 2007, Apple continues to dominate the race. Though 6s didn’t have as great of a reception as 6, it was enough for Apple to once again take the honors for the year. It is expected that while others will make some minor gains, Apple is again going to dominate in 2016.

Mobile company of the year – 2015 and 2016?

Besides Apple, Uber and Facebook really excited the industry – Uber with its breathtaking valuation curve and Facebook with its impressive revenue curves. T-Mobile with its many un-carrier moves shaped the US market decisively and unseated Sprint at #3 for the first time. The big two also had to respond to the pricing changes that TMO introduced. Operators beyond the US borders were also impacted as the tier-2 operators tried to copy TMO moves in their respective markets. AT&T with its heavy investments in the connected intelligence space is likely to make news in 2016. Google will continue to be an important player. The new corporate structure might help the company to be more aggressive. Amazon continues to be a juggernaut in the mobile commerce space – bigger than anyone else and with its complete hold over the consumer psyche, it will make further gains in the space.

Automation and Digitization of industries will lead to?

This is still an early area of discussion. We are still trying to understand how societies will be shaped by automation. Will past provide any guidance or are we unchartered territory. Arguments can be made on both sides. We continue to study the data points to inform our view on the subject. Opinions haven’t changed much since last year though there is a slight uptick in the number of people expecting automation to impact them negatively.

Which of the following are likely to happen in 2016?

Apple didn’t reach the trillion-dollar market cap but remains on course though 2016 could be a challenging year for the company. Wall Street has lofty expectations from the company that continues to defy expectations with its monstrous revenue and profits each quarter. It is a company unlike any other on the planet and remains a subject of intense curiosity amongst industry participants. Last year, the survey predicted Amazon opening a retail store which the company readily obliged. Data-only smartphone plans will start to become common. Some benevolent acquirer will end Yahoo’s misery run. Sprint and T-Mobile will continue to be the subject of M&A speculation. 5G marketing drama will intensify. Microsoft might make a comeback in devices. 2016 will keep us on our toes with its many unexpected turns and tribulations.

What category will be impacted the most by mobile in the next 5 years?

IoT, Home Automation, Health and Wellness, and Autonomous Cars are the most exciting categories for the year.

Which segments are likely to get disintermediated the most by algorithms in the next 5 years?

Algorithms can disintermediate a lot of industry job segments. At the highest risk are advertising agencies, transportation, real estate agents, retail, and car drivers. Fascinating trends to follow.

Who was and will be the mobile person of the year?

In the past executives from device companies have dominated the top honors. However, the mobile person of the year for 2015 was John Legere (first time someone at the mobile operator took the honor). With his colorful persona, he has reshaped the industry in many ways. Tim at Apple, Mark at Facebook, Sundar at Google, and Jeff at Amazon rounded out the top 5. The stars for 2016 are predicted to be Sundar Pichai, Tim Cook, Jeff Bezos, Mark Zuckerberg, Satya Nadella, and Jack Ma. Honorable mentions went to Lei Jun, Travis Kalanick, Masayoshi Son, Ralph de la Vega, Glenn Lurie, Marcelo Claure, Tom Wheeler, Steve Mollenkopf, Jony Ive, Nikesh Arora, Brian Krzanich, and many others.

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 2016.

Disclaimer: Some of the companies mentioned in this update are our clients.

Request for input – Mobile Predictions 2016 Survey December 8, 2015

Posted by chetan in : US Wireless Market , add a comment

Greetings,

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 2016.

As is the tradition, we are doing our 9th Annual Mobile Predictions Survey for 2016. 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/r/MOBILEFUTURE

The questions are:

1. What was most newsworthy in Mobile 2015?

2. What will be the biggest mobile stories of 2016?

3. Who are the top 4 important players in the mobile ecosystem?

4. What will be the breakthrough categories in mobile in 2016?

5. What will be the most popular consumer mobile applications in 2016?

6. Who will dominate the mobile payment/commerce space?

7. Who will make the biggest mobile acquisition in 2016?

8. Who is doing the most interesting work in the IoT space?

9. What protocol will dominate IoT communications?

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 2016?

12. Which region will end up leading the world in 5G by 2020?

13. When will mobile commerce be greater than ecommerce?

14. The company bringing the most successful mobile gadget of the year – 2015 and 2016?

15. Mobile company of the year – 2015 and 2016?

16. Automation and Digitization of industries will lead to?

17. Which of the following are likely to happen in 2016?

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 2015 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.

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Deadline: Dec 29th. Results will be released in early January.

Thanks and see you in 2016.

Kind regards,

Chetan Sharma

Mobile Future Forward | Standard Saver expires Friday | Registration closes next week September 18, 2015

Posted by chetan in : US Wireless Market , add a comment

Greetings,

In 2013, Time Magazine said that Mobile Future Forward is one of the best and most important conferences on mobile. Folks in our community know why.

We are putting the final touches to preparations for our Mobile Future Forward Summit coming up in a few days. There are some outstanding leaders, inventors, legends, professors, investors, startups, visionaries, and doers from around the globe in the mix and we are preparing for an outstanding day of brainstorm that will have implications on your assumptions, product plans, and strategic direction of your vision. The IP quotient of MFF speakers is the highest of any such gathering in the world.

We will be presenting a lot of data to back up our assumptions about various views of the emerging landscape, there will be discussion around IoT, 5G, architectures, applications, vertical industries such as retail, commerce, health, transportation, travel, insurance, media, advertising, and others. We have a brilliant panel on how to transform data into revenues. Will dig deeper in cyber security, VR, payments, spectrum demand, and much more. We will focus on what a connected enterprise means? What are the expectations of a connected consumer? What are the new business models? And most importantly, the new revenue flows – where is the “real” money in the value chain?

One of our guests last year put it succinctly:

The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did. – North American Leader – IoT and Mobile, IBM

We expect to sell out so please grab your seats today. Standard Saver expires this Friday (9/18) and registration closes next week.

Summit Partners: Our heartfelt thanks to our terrific summit partners who made it all possible: Ericsson, Neustar, Oracle Communications, Overture Networks, and Tata Communications.

The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 29th.

We hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds.

Thanks and best wishes.

Chetan Sharma

NEW BOOK: Connected Intelligence – Reimagine Everything

Posted by chetan in : US Wireless Market , add a comment

 

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We are pleased to announce that our Mobile Future Forward Book for 2015 will be published and become available exclusively to Mobile Future Forward participants on Sept 29th. As is the tradition, the book has some brilliant essays from our speakers – the thought leaders and mobile industry senior executives, on trends, opportunities, innovations, and user experiences. More importantly, these thought-pieces highlight how some of the leading companies are gearing themselves to execute in the Connected Intelligence Era. The book provides a perfect platform for our day long brainstorm about what the next 5 years in mobile will look like. We have extraordinary speakers and am really looking forward to the discussions throughout the day.

The essays are:

1. The History and the Future of Connected Intelligence – Chetan Sharma, CEO, Chetan Sharma Consulting

2. The New Strategic Competitive Advantage: Connected Intelligence – Doug Suriano, SVP and GM, Oracle Communications

3. Staying Ahead of the Wave – Glenn Lurie, President and CEO, AT&T Mobility

4. 5G Era: When Networks Transform Everything – Hossein Moiin, CTO and EVP, Nokia Networks

5. 5G: The Past, Present, and Future of Mobile Industry Evolution – Chetan Sharma, CEO, Chetan Sharma Consulting

6. Connecting with the Connected Consumer – Raja Rajamannar, CMO, Mastercard

7. Securing the Future of Connected Cars  – Sarla Sharma, COO, Chetan Sharma Consulting

8. The Cell Phone Redefined – Martin Cooper, Chairman, Dyna LLC

9. Interoperability – The Essential Step to Realizing the IoT Vision  – Hank Skorny, SVP – IoT, Neustar

10. Mobile Patents Landscape: An In-depth Quantitative Analysis – Chetan Sharma, CEO, Chetan Sharma Consulting

11. The Future of Money – Vijay Shekhar Sharma, CEO and Founder, Paytm

The goal of the Mobile Future Forward Summit is to explore the future of the mobile industry, to create new connections, to openly discuss and debate new ideas. By bringing together a really diverse group of individual leaders – both speakers and audience, we are able to create an environment for constructive dialogue that will hopefully help in formulating your own strategies and product plans.

Thanks to all the authors and their respective organizations for making this year’s book possible.

Chetan Sharma

The History and the Future of Connected Intelligence September 2, 2015

Posted by chetan in : 4th Wave,Chetan Sharma Consulting,Connected Devices,Connected Intelligence Era,Internet of Things,IoE,IoT,Mobile Future,Mobile Future Forward , add a comment

The History and the Future of Connected Intelligence

A Mobile Future Forward Research Paper

http://www.chetansharma.com/historyofconnectedintelligence.htm

Last year we introduced the concept of “Connected Intelligence” and how it is going to shape the next era of computing, communications, and technology. While to some this might seem as something new, folks who have been tinkering on the edges know that this evolution has taken place over more than 200 years. The concept of connectivity and intelligence have been around for decades. Early form of communication between two end points has existed since early 1800s. In fact, intelligence organizations in military and espionage have been using the basic techniques for the last two centuries. Even the industrial folks recognized the need for end-point sensors to communicate data of “things” that are outside the constant purview of humans.

The oil and gas industry has been using basic telemetry for almost half a century. The history of connected intelligence is very long. The present day evolution is the culmination of the several trends of the last two centuries. From the early days of telemetry to significant developments in machine to machine to connecting objects to the internet via Internet of Things have played a critical role in this journey. Along the same lines, the telegraphy, the phone, and the cellular industry have over the same time period changed how bits are transferred from point A to point B. To appreciate where we are going, we need to marvel at the historical achievements of the pioneers of past. In this paper, we will take a look at how the notion of connected intelligence has evolved over the last two centuries and where do we go from here.

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Your feedback is always welcome.

Chetan Sharma

We will be taking a deep dive into the Connected Intelligence Ecosystem and Opportunities in our upcoming summit Mobile Future Forward on Sept 29th.

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 2015.

Mobile Future Forward: Reimagine Everything August 28, 2015

Posted by chetan in : US Wireless Market , add a comment

Mobile Future Forward means business. We got so many deals done that it is a no brainer to attend again this year – CEO and founder, Mobile Startup

Mobile Future Forward connects a lot of high-level people with very progressive thinking and it is at the cutting edge of how technology is absorbed – MD, Leading Private Equity Firm

Mobile Future Forward is the most intellectual conference – CEO and founder, Connected Watch Company

Dear Friends,

Here is a pop quiz to end the week.

When was the first instance of what is today known as IoT recorded?

a) 1991

b) 1980

c) 1812

d) 1836

e) 1901

f) 1930

g) 1958

Each year represents a milestone in the history of Connected Intelligence. The advent of telegraph, radar, telephone, wireless paved the way for 200 years of innovation evolution. Inventors such as Schilling, Gauss, Weber, Morse, Bell, Bose, Marconi, Ericsson, Galvin, Cooper (as you know Marty is joining us at MFF this year), and scores of other extraordinary individuals saw what others couldn’t and changed the trajectory of human civilization. However, the first instance of connected things took place before any of these remarkable individuals came to the scene.

The correct answer is 1812.

If you picked the right answer, you just won an automatic entry into the CI Historian Hall of Fame.

The first use of data transmission was recorded by P.L. Shilling who reported that the Russians telemetered the successful firing of remotely activated mines to stem the French invaders during the war of 1812. After that the notion of connected devices was used quite extensively in wars, weather reports, space exploration, transportation, medicine, entertainment, and the like. The taxonomy changed as different breakthroughs were incorporated into connected devices. From Telemetering, we went to Telemetry to M2M to now IoT. This has set us up nicely for a an explosive “Connected Intelligence” age to reimagine everything, each minute task, every revenue flow, every industry. We will explore “The History and the Future of Connected Intelligence” in the Mobile Future Forward 2015 paper that comes out next week.

In the meantime, we are busy preparing for the summit in four weeks and we have some brilliant minds that will test your thinking and grow your appetite for more.

Registration (First Come, First Served)

Additionally, here are some of the highlights of what we will be discussing during our annual brainstorm:

Connected Intelligence and the evolution of media consumption

Media remains a core part of our society. The entertainment, education, sports, drama, movies, and news events keep us captivated but how does the media creation, delivery, and engagement evolve with the new set of tools.

· Robert Gelick, SVP and GM – Digital, CBSInteractive

· Sanjay Macwan, SVP and CTO of NBCUniversal Media Labs

Disruption is my middle name

Every company present at Mobile Future Forward is disrupting the markets in their own ways, some more fundamentally than others, some more dramatically than others. We will look at the disruption of traditional industries and creation of new ones.

· Sunil Daluvoy, Head of Business Development, Uber Everything

· Dr. João Barros, Founder & CEO, Veniam

· Ralph Derrickson, President and CEO, Carena

5G and the Future of the Network

The 5G discussion is gaining significant momentum at all levels. We will have folks who understand the technology, the standards, and the economics better than most.

· Hossein Moiin, EVP and CTO, Nokia Networks

· Craig Moffett, Partner, MoffettNathanson

· Mark McDiarmid, VP, Radio Network Engineering, T-Mobile

· Bob Azzi, Executive Managing Partner, Argylegriffin

Leading the Connected Intelligence Era

At AT&T, Glenn Lurie saw the emergence of the 4th wave before many of his peers (some still don’t see it). Under his stewardship, AT&T has become a trusted partner and leader in many of the emerging areas such as connected car, enterprise services, IoT, digital home, etc. We will explore the opportunities, the learnings and what does it take to prepare a big company for the Connected Intelligence Era.

Connected CIOs

CIOs play a critical role in keeping their company ahead of the curve in terms of tools and technology. We will have CIOs from different industries address the challenges and the solutions needed to prepare the enterprise for the connected age.

· Dr. Tony Yen, MD, CMIO, EvergreenHealth

· Julie Woods-Moss, CEO, Tata Communications NextGen Business

· Mark Showers, CIO and EVP, Reinsurance Group of America

· Mark Fernandes, Managing Director, Sierra Ventures

Incredible India

India’s tech sector is on fire. It is the fastest growing economy with many terrific unicorns driving excitement and real revenue. We will have the top two companies who will educate us on what’s working in mcommerce in India and why.

· Anand Chandrasekaran, Chief Product Officer, Snapdeal

· Vijay Shekhar Sharma, Founder and CEO, Paytm

Convergence of industries, platforms, and opportunities

The IT and Telecom industries have collided and no one understands this better than Oracle as they work with all of the top 100 IT and Telecom clients around the globe. Hear from the executive who runs the global communications business on what’s changing in the enterprise and the wireless world and why.

· Doug Suriano, SVP and GM, Oracle Communications

Funding the next unicorn in the Connected Intelligence Era

It requires a different kind of mindset to invest in the next unicorn that can reshape an industry or the ecosystem. Meet the VCs who have a keen eye on finding such companies

· Tim Chang, Managing Partner, Mayfield

· Lo Toney, Partner – Catalyst Fund, Comcast Ventures

· Bubba Murarka, Partner, DFJ

· Colin Greenspon, Managing Director, Mithril

We will have discussion around Man and Machine, Industrial IoT, Building blocks of Connected Intelligence, New Platforms and Tools, Security, Robotics, Vertical Industries, and a ton more. We will have startups that will blow your mind, projects from the giants that will surprise you, and technology break-throughs that will inspire you.

What will be the $ flows, where are the early opportunities and successes, what are the use cases? We will tackle them all at Mobile Future Forward on Sept 29th. We welcome you to join us in the discussions and contribute to the collective knowledge of our industry. Give us your one day, and we will give you the next 5 years in mobile.

A number of key industry partnerships and relationships are formed at Mobile Future Forward. Make sure you are not left behind.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson, Neustar, Oracle Communications, and Tata Communications.

· Glenn Lurie, President & CEO, AT&T Mobility

· Dr. Eric Topol, Chief Academic Officer, Scripps Health

· Rima Qureshi, Chief Strategy Officer, Ericsson

· Hank Skorny, SVP – IoT, Neustar

· Raja Rajamannar, CMO, Mastercard

· Sanjiv Ahuja, Chairman, Tillman Global Holdings

· Hossein Moiin, CTO, Nokia Networks

· Craig Moffett, Partner, MoffettNathanson

· Josh Will, SVP – Mobile, Best Buy

· Tim Chang, Managing Partner, Mayfield

· Prof. Shyam Gollakota, University of Washington

· Mark Fernandes, Managing Director, Sierra Ventures

· Mark Showers, CIO and EVP, Reinsurance Group of America

· Doug Suriano, SVP and GM, Oracle Communications

· Vishal Gupta, Chief Products and IoT Officer, Silent Circle

· Marty Cooper, Chairman, Dyna

· Vijay Shekhar Sharma, Founder and CEO, Paytm

· Julie Woods-Moss, CMO, CEO – Nextgen Business, Tata Communications

· Andrew Hopkins, Managing Director – IoT, Accenture

· Lo Toney, Partner – Catalyst Fund, Comcast Ventures

· Robert Gelick, SVP and GM – Digital, CBSInteractive

· Bob Azzi, Executive Managing Partner, Argylegriffin

· Anand Chandrasekaran, Chief Product Officer, Snapdeal

· Dr. Tony Yen, MD, CMIO, EvergreenHealth

· Sunil Daluvoy, Head of Business Development, Uber Everything

· Dr. João Barros, Founder & CEO, Veniam

· Sanjay Macwan, SVP and CTO of NBCUniversal Media Labs

· Mark McDiarmid, VP, Radio Network Engineering, T-Mobile

· Bubba Murarka, Partner, DFJ

· Colin Greenspon, Managing Director, Mithril

· Kelly Fitzsimmons, CEO and Founder, Harqen

· Sam Shawki, CEO and Founder, MagicCube

· Ralph Derrickson, President and CEO, Carena

.. 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. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks.

Chetan Sharma

Mobile Future Forward: Uber, CBS, NBC, Veniam join the program August 14, 2015

Posted by chetan in : 4th Wave,Chetan Sharma Consulting,Connected Intelligence Era,Mobile Future Forward , add a comment

Mobile Future Forward means business. We got so many deals done that it is a no brainer to attend again this year – CEO and founder, Mobile Startup

Mobile Future Forward connects a lot of high-level people with very progressive thinking and it is at the cutting edge of how technology is absorbed – MD, Leading Private Equity Firm

Mobile Future Forward is the most intellectual conference – CEO and founder, Connected Watch Company

Dear Friends,

One of the trends I have talked about is the impact of connected intelligence ecosystem on other industries. As we mentioned in our research earlier this year, US became the first country in 2014 when the 4th wave revenues eclipsed the access revenues. The universe on top of the IP layer is expanding faster than ever. We will go deeper into this facet of global growth using specific industry examples. Transportation is one of the categories that has captured the imagination of the ecosystem worldwide. Uber has become synonymous with disruption. The promise of connected cars, autonomous vehicles, and the media consumption when we will have all this time is not science fiction anymore but a tantalizing reality of the near future.

The Media landscape is changing right before our eyes. Consumption is up, distribution is changing, consumer expectations have diversified. Billions of dollars are at stake.

We have some exceptional speakers to help us think through the changes that are upon us:

Robert Gelick, SVP and GM of Digital Platforms at CBS Interactive is tasked with building CBS Interactive Entertainment experiences across multiple platforms.

Sanjay Macwan, SVP and CTO of NBCUniversal Media Labs is looking at advanced technologies that will shape our media experiences.

Sunil Daluvoy, Head of Business Development for Uber Everything is a Google veteran who has worked on new products such as Google Fiber, Wallet, and Adsense.

Dr. João Barros, Founder & CEO, Veniam is a professor in Portugal and a global entrepreneur who is building the networking fabric for the Internet of Moving Things. Extremely fascinating results. This company is going places.

Registration (4th Wave Saver expires next week)

Additionally, here are some of the highlights of what we will be discussing during our annual brainstorm:

5G and the Future of the Network

The 5G discussion is gaining significant momentum at all levels. We will have folks who understand the technology, the standards, and the economics better than most.

· Hossein Moiin, EVP and CTO, Nokia Networks

· Craig Moffett, Partner, MoffettNathanson

· Bob Azzi, Executive Managing Partner, Argylegriffin

Leading the Connected Intelligence Era

At AT&T, Glenn Lurie saw the emergence of the 4th wave before many of his peers (some still don’t see it). Under his stewardship, AT&T has become a trusted partner and leader in many of the emerging areas such as connected car, enterprise services, IoT, digital home, etc. We will explore the opportunities, the learnings and what does it take to prepare a big company for the Connected Intelligence Era.

Connected CIOs

CIOs play a critical role in keeping their company ahead of the curve in terms of tools and technology. We will have CIOs from different industries address the challenges and the solutions needed to prepare the enterprise for the connected age.

· Dr. Tony Yen, MD, CMIO, EvergreenHealth

· Erez Yarkoni, CIO and EVP, Telstra

· Mark Showers, CIO and EVP, Reinsurance Group of America

· Mark Fernandes, Managing Director, Sierra Ventures

Incredible India

India’s tech sector is on fire. It is the fastest growing economy with many terrific unicorns driving excitement and real revenue. We will have the top two companies who will educate us on what’s working in mcommerce in India and why.

· Anand Chandrasekaran, Chief Product Officer, Snapdeal

· Vijay Shekhar Sharma, Founder and CEO, Paytm

Convergence of industries, platforms, and opportunities

The IT and Telecom industries have collided and no one understands this better than Oracle as they work with all of the top 100 IT and Telecom clients around the globe. Hear from the executive who runs the global communications business on what’s changing in the enterprise and the wireless world and why.

· Doug Suriano, SVP and GM, Oracle Communications

We will have discussion around Man and Machine, Industrial IoT, Building blocks of Connected Intelligence, New Platforms and Tools, Security, Robotics, Vertical Industries, and a ton more. We will have startups that will blow your mind, projects from the giants that will surprise you, and technology break-throughs that will inspire you.

What will be the $ flows, where are the early opportunities and successes, what are the use cases? We will tackle them all at Mobile Future Forward on Sept 29th. We welcome you to join us in the discussions and contribute to the collective knowledge of our industry. Give us your one day, and we will give you the next 5 years in mobile.

A number of key industry partnerships and relationships are formed at Mobile Future Forward. Make sure you are not left behind.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson, Neustar, Oracle Communications, and Tata Communications.

· Glenn Lurie, President & CEO, AT&T Mobility

· Dr. Eric Topol, Chief Academic Officer, Scripps Health

· Rima Qureshi, Chief Strategy Officer, Ericsson

· Hank Skorny, SVP – IoT, Neustar

· Raja Rajamannar, CMO, Mastercard

· Sanjiv Ahuja, Chairman, Tillman Global Holdings

· Hossein Moiin, CTO, Nokia Networks

· Craig Moffett, Partner, MoffettNathanson

· Josh Will, SVP – Mobile, Best Buy

· Tim Chang, Managing Partner, Mayfield

· Prof. Shyam Gollakota, University of Washington

· Mark Fernandes, Managing Director, Sierra Ventures

· Erez Yarkoni, CIO and EVP, Telstra

· Mark Showers, CIO and EVP, Reinsurance Group of America

· Doug Suriano, SVP and GM, Oracle Communications

· Vishal Gupta, Chief Products and IoT Officer, Silent Circle

· Marty Cooper, Chairman, Dyna

· Vijay Shekhar Sharma, Founder and CEO, Paytm

· Julie Woods-Moss, CMO, CEO – Nextgen Business, Tata Communications

· Andrew Hopkins, Managing Director – IoT, Accenture

· Lo Toney, Partner – Catalyst Fund, Comcast Ventures

· Robert Gelick, SVP and GM – Digital, CBSInteractive

· Bob Azzi, Executive Managing Partner, Argylegriffin

· Anand Chandrasekaran, Chief Product Officer, Snapdeal

· Dr. Tony Yen, MD, CMIO, EvergreenHealth

· Sunil Daluvoy, Head of Business Development, Uber Everything

· Dr. João Barros, Founder & CEO, Veniam

· Sanjay Macwan, SVP and CTO of NBCUniversal Media Labs

.. 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. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks.

Chetan Sharma

US Mobile Market Update – Q2 2015 August 12, 2015

Posted by chetan in : 4G,4th Wave,5G,AORTA,Connected Intelligence Era,Emerging Markets,Fourth Wave,The Golden Age of Mobile , add a comment

US Mobile Market Update – Q2 2015

http://www.chetansharma.com/usmarketupdateq22015.htm

Summary

The US mobile data market grew by 3% QoQ and 14% YoY. The overall services revenue declined again by 1%. The device revenue increased by 21% which helped the overall revenue to grow by 3%.

The biggest news of the quarter was as we had suggested last year – T-Mobile finally going past Sprint to become #3 for the first time. TMO continues to add the bulk of postpaid phone subs and it helped the company reverse the declining postpaid ARPU trend that had been so prevalent for the last three years. AT&T’s postpaid ARPU also stabilized

All four operators delivered historic low churn rates and are running much tighter operations. Net income improved 11% YoY.

After seeing steep declines in 2014, the mobile data pricing has started to inch up in 1H 2015. The emphasis of unlimited is paving way for shared data plans and the data buckets per account keep on inching up. In fact, many low-to-mid tiers have seen a price increase. Some of the upper enterprise tiers have seen the prices double. This bodes well for the margins and revenue in 2H 2015.

Smartphone penetration increased to 78% and roughly 95% of the devices sold now are smartphones. The smartphone penetration amongst postpaid users is now 84%.

The iPhone again dominated with 75% of the smartphone profits. While the Android profits improved 41% QoQ, the smartphone business remains a challenge for a number of Android OEMs.

As we have suggested for the last couple of years, Microsoft finally got rid of Nokia and is focusing its energy on software and services.

4th wave services continue to grow at a very past face around the globe. IoT as a category is also making steady progress with a number of players reporting multi-million dollar revenue quarters most notably Intel with over a billion dollars in revenue in the first six months. Fitbit reported $736M in 1H with a whopping 49% margin.

T-Mobile Ascension to #3 – a historical perspective

One year ago, we suggested that T-Mobile is likely to become the #3 operator in early 2015. Given the current trends, the T-Mobile’s ascension to the #3 spot was rather anticlimactic.

In the service provider land, switching rank based on organic growth is rare. Most of the times, the rank switches because of M&A. This has been true for most part for US mobile operators over the last 30+ years. The top two positions in the last 20 years have been held by AT&T and Verizon who have taken turns to hold the #1 spot. The #3 and #4 rankings haven’t changed since 2004. In fact, when Sprint acquired Nextel, T-Mobile had less than half the customers of Sprint Nextel. However, aided by the Metro PCS acquisition, while Sprint added only 13M subs in 11 years, T-Mobile added more than 3x – 37M. Nextel proved to be a really bad operator acquisition – the company is still reeling from that decision.

At the time of the Nextel acquisition, T-Mobile’s share of the market was roughly 10%. By the end of 2015, T-Mobile’s share will increase to almost 17%. During the same 10 year period, Sprint’s share has declined from 23% to 16%. Verizon and AT&T controlled 51% of the market in 2005. Now that share stands at 68%. Rest of the market has virtually dissipated in light of the fierce competition.

US mobile operator consolidation – what’s next?

Like any other market and like what you would expect in a maturing industry, the US mobile operator segment has consolidated in predictable ways. 20 years ago, AT&T fresh from its McCaw Cellular acquisition led the market with 3.95M subs at 14.5% share. Today, it still leads the market with 124M subs at 34% share. In the last 20 years, the market has whittled down to four national players. As we discussed back in our 2011 paper, in every market, the competitive and regulatory forces narrows down the field to 3 players. The top 3 players controlled 40% of the market in 1995. With T-Mobile ascending to #3, by the end of 2015, the top 3 will have almost 90% of the market. This is no different than other major mobile markets. Barring India (which will follow this trend soon as well), each market either by design or by market forces has consolidated to three major players.

The US regulators have resisted the trend and it has worked out better for the consumers as competition has led to better deals and non-stop new offers. However, as we suggested in our paper, market forces are often more powerful than the regulatory ideology. In the last two years, since the Softbank acquisition, T-Mobile’s marketcap has doubled while Sprint’s has been cut down into half. T-Mobile is only slighty ahead in the subscriber count but in terms of marketcap, it is 2.5x more valuable than Sprint. Instead of being the hunted, it has become the hunter. On the other hand, without a substantial infusion of external investment, it will be a challenging few quarters for Sprint.

Given that there are only a few legit big suitors left for T-Mobile or Sprint, the market is waiting for a major acquisition to happen in the next 12-18 months.

US Service Revenues: Turnaround?

In 2014, data pricing came down by 77% to historic lows. However, in the first half of 2015, price/GB hasn’t really come down any further than the lowest levels seen in 2014. In fact, some categories even saw a jump as some of the promotions went away. It is also notable that both T-Mobile and Sprint are de-emphasizing (though the plans are still available) unlimited data plans and instead they are promoting their shared bucket data plans. This is good for profitability.

Though Sprint saw its position slip, the churn number looked much better than past quarters. AT&T and Verizon have managed their respective companies to historic low churn numbers. T-Mobile has literally cut down its churn rate by 50% over the last three years.

The fierce competition has put pressure on the service revenues which declined (YoY) for the first time in the history of the industry in Q1 2015 by 2%. In Q2 2015, the service revenues still declined by 1% but there are some early signs of stabilization.

T-Mobile’s postpaid ARPU which has been in decline for three years increased QoQ (YoY it still declined). For AT&T, the postpaid ARPU stayed flat. For Verizon and Sprint, the postpaid ARPU declined but by less amount than it did in Q1.

The industry also delivered better EBITDA and Net Income numbers which shows the operators are running a tighter operation compared to last year.

One data point doesn’t make a trend and we need to study the numbers of the next two quarters, if the industry has stemmed the decline or it was just a blip.

Microsoft’s turbulent history with mobile

In 2001, of all the major computing brands, Microsoft probably had the clearest view of the things to come in mobile. It was working with several leading players in Japan where imode was taking the country (and the world) by storm. It did make incremental progress with Windows CE but never really embraced mobile as a strategic pillar of growth until Satya became the CEO. However, his first task was to undo the mistakes of the previous administration and he had no choice but to untangle Microsoft from the Nokia deal. It has just taken this amount of time to write-off one of the biggest corporate mistakes in the industry.

As we have been saying for the last couple of years, Microsoft should abandon the strategy to fight Apple on Apple’s turf and instead focus on services and the cloud where it has historically been more agile. However, ceding the platform has its repercussions and it is not clear how far the current strategy will take the company. Microsoft is focusing early on IoT so as to not miss the next big wave but it seems like the strategic architecture to attack the market remains old school.

Nokia – final nail in the coffin and quickest destruction of a loved consumer brand

Nokia’s decision to pursue Windows OS will go down in the industry history as the biggest blunder of all times. By putting all eggs in one broken immature basket, Nokia’s fate was sealed from day one. Barring any strategic brilliant maneuvers from Microsoft, the seeds of demise of a fabled brand were sown, the writing was on the wall. The company’s board had made poor decision to let things go out of control. In its heydays, Nokia’s marketcap was almost $250 billion – many times that of Apple. With the launch of the history-shattering device in 2007, Apple laid the foundations of irrational behavior amongst its competitors. Nokia’s board did an extremely poor job of navigating the company out of turbulent waters. There was no strategy, no plan, just a misguided Hail Mary pass. More than the burning platform, the decision to switch to windows set forth in motion an inextricable trajectory into an inferno. Will the phoenix rise from the ashes in 2016 remains to be seen.

The verdict on Apple Watch

Quarterly sales of 2.5M units with almost a billion dollars on debut would have been hailed by the press and critics alike. But given that it was Apple’s name behind the watch, expectations were lofty and it led many to prejudge the platform and its future. People often forget what the first version of iPhone or even iPad felt like. While there are a number of issues with the Apple watch, it is just too soon to have a final say on the platform. While the potential marketsize is every wrist on the planet, the overall size just by definition will be smaller than the smartphone base. As developers learn to understand how to use the dual screens of watch and phone, as they master the different language of vibrations, taps, heartbeats, and notifications, as they connect the signals of health to the dots of care, we will see if the platform can deliver on its promise.

Android vs. iOS: The fight for profit continues

HTC’s losses from Android operation were really bad. LG barely eked out a profit from its quarter. Apple accounted for 75% of the industry profits in Q2 2015 down from Q1 but up 13% YoY. Samsung better than last quarter but is nowhere near the peak it hit two years ago. Overall, the revenue for the Android ecosystem declined 5% QoQ while the profits increased 41%.

4th Wave/IoT Revenues

Qualcomm reported $1B in IoT revenues (chips used in city infrastructure projects, home appliances, cars, and wearables) in 2014. Intel is on track to exceed $2B in IoT revenue this year. Fitbit is likely to eclipse $1.5B in revenue with an astonishing 48-50% margin. AT&T’s IoT business is over a billion dollars. Verizon’s annual run rate is over $650M now. Google is approaching half a billion in IoT revenues. There are numerous other players who are doing sizable IoT revenues. We haven’t even gotten to the Industrial part yet where the savings and earnings are into billions (we will cover them in a future paper).

In other 4th wave segments, 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 76% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 88% in mobile (of the total advertising revenue) up from 60% in 2013.

Alphabetizing Corporations

In the late breaking news, Google restructured the businesses under Alphabet. I have been thinking about this from the 4th wave point of view. Various business are quasi-conglomerates of many multi-million and even multi-billion dollar businesses. In fact, we wrote about it in May – Unicorns at incumbents. Mobile operators should think their various businesses as building blocks that can be under a holding company. For example, at some point access can be a separate company just focused on operating the pipes while the content company is focused on creating the best content for various distribution channels. Connected car is easily a separate business, so is Industrial IoT which can be further broken by verticals etc. This might give a better yield and return to the shareholder rather than holding them under the core entity.

Connected Consumer

· On average, each US household will spend approximately $3800 on access and devices in 2015.

· Roughly 80% or $3000 of the US household spend will go to access of services such as cellular voice, mobile data, cable, landline voice, and broadband internet.

· Roughly 20% or $800 of the US household spend will go to devices such as computers, smartphones, feature phones, wearables, tablets, e-readers, connected cars, drones, robots, connected home, and other connected devices.

· 41% of the household access spend will go to cellular phones (for voice and data services).

· As a standalone category, mobile data is the biggest category approaching $1000 in yearly household spend.

· In the last 5 years, mobile data spend has risen the most and landline voice has declined the most. Cellular voice spend has also gone down while cable and broadband spend have seen relatively modest uptick.

· In devices, smartphones is by far the biggest spend category. Consumers spend almost 3x on smartphones than they spend on personal computers. Smartphones will account for more than 50% of the US household connected spend in 2015.

· New categories such as wearables, connected cars, drones/robotics, and connected homes have started to make a tangible impact on consumer spend.

· US consumers will spend more on wearables than feature phones in 2015.

· Chetan Sharma Consulting conducted its annual Connected Consumer survey of 1000 US households. The results confirmed the ongoing increase in the number of connected devices/household.

· The number of connected devices per US household is now 5.3 with over 37% of the households in the 4-8 range.

· Almost 6% of the households have 15 or more connected devices.

· More details are available at: http://chetansharma.com/connectedconsumer15.htm

Quad Moves

AT&T closed its DirectTV acquisition. Verizon acquired AOL. Similar moves are afoot in Europe and other regions. Regular readers won’t be surprised. Video is a key offering for many service providers and by bundling quad plays, operators can further lower the churn. Content will continue to play a big role in how various offerings get bundled. The traditional cable bundle is being pulled apart in favor of more al carte OTT offerings. Media companies will have to figure out how they play in the new converged world. The ones that have been sitting on the sidelines will have to make some moves in the wireless ecosystem to stay relevant in the long-term.

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.

Our paper on 5G covers the past, present, and future of the network evolution.

What to expect in the coming months?

1H 2015 was a tremendous year for the mobile as it becomes omnipresence in every industry. We saw some massive moves, astounding acquisitions, and interesting strategic endeavors. 2H promises to be an exciting for the industry as well.

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 2015 US wireless market is:

Service Revenues

· The US mobile data services revenues in Q2 2015 increased 3% QoQ and 16% YoY.

· After crossing the $100B in data revenues last year, the US market is set for explosive growth and is likely to cross $130B in data revenues in 2015.

· Verizon and AT&T dominated the quarter accounting for 70% of the mobile data services revenue and had 67% of the subscription base.

· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q2 2015. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 1%.

· Data contribution to the overall revenues is now at 65%.

· The postpaid ARPU increased for T-Mobile for the first time in 3 years. AT&T’s stemmed the decline of the last two quarters while others continued to see the pressure on postpaid ARPU.

Subscribers

· The US market increased its net-adds to 5.8M. AT&T and T-Mobile led with 2M+ net-adds.

· Verizon led in postpaid net-adds though a bulk of the net-adds are coming from tablets.

· AT&T added 1M cars to its tally to reach 4.5M in connected cars on their network – probably the highest of any mobile operator in the world.

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 last two years with more consumers opting for cellular tablets and connected devices. 77% of postpaid accounts at AT&T are now on shared plans.

· 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.

· The number of accounts on 15 GB or more have quadrupled over the last year for AT&T.

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 76% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 88% 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”)

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $165 million revenue from M2M and Telematics. At the current run-rate, this will be a billion dollar business by 2016. The current annualized run rate is $650M.

· AT&T reported 1M net-adds on the connected car platform.

Connected Devices

· Connected devices (non-phones) accounted for almost 62% of the net-adds in Q2 2015. 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.

· For AT&T, Connected cars started to form a significant base of the connected devices segment with 47% of the new connections coming from cars.

Handsets

· Smartphones continued to be sold at a brisk pace accounting almost 95% of the devices sold in Q2 2015. The feature phone category is practically becoming extinct in the US market.

· The smartphone penetration in the US is now at 78%.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 76M making it the #2 LTE operator behind China Mobile which has more than twice LTE subs. Other three operators are also deep into their LTE deployments. Verizon reported that 87% 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 Nov 2015.

Disclaimer: Some of the companies mentioned in this update are our clients.

We will be discussing a number of critical industry themes and future impacting topics at our annual summit Mobile Future Forward with some incredible thought-leaders from around the globe. Speakers, Sponsors, and the executives at Mobile Future Forward invite you to participate in the discussion on Sept 29th in Seattle. Join Glenn Lurie, President & CEO, AT&T Mobility, Dr. Eric Topol, Chief Academic Officer, Scripps Health, Rima Qureshi, Chief Strategy Officer, Ericsson, Hank Skorny, SVP – IoT, Neustar, Raja Rajamannar, CMO, Mastercard, Sanjiv Ahuja, Chairman, Tillman Global Holdings,Hossein Moiin, EVP and CTO, Nokia Networks, Craig Moffett, Partner, MoffettNathanson, Josh Will, SVP – Mobile, Best Buy, Tim Chang, Managing Partner, Mayfield, Prof. Shyam Gollakota, University of Washington, Mark Fernandes, Managing Director, Sierra Ventures, Erez Yarkoni, CIO and EVP, Telstra,Mark Showers, CIO and EVP, Reinsurance Group of America, Doug Suriano, SVP and GM, Oracle Communications, Vishal Gupta, Chief Products and IoT Officer, Silent Circle, Marty Cooper, Chairman, Dyna, Vijay Shekhar, Founder and CEO, Paytm, Julie Woods-Moss, CMO, CEO – Nextgen Business, Tata Communications, Andrew Hopkins, Managing Director – IoT, Accenture, Lo Toney, Partner – Catalyst Fund, Comcast Ventures, Robert Gelick, SVP and GM – Digital, CBSInteractive, Sujeet Chand, CTO and SVP, Rockwell Automation, Bob Azzi, Executive Managing Partner, Argylegriffin, Anand Chandrasekaran, Chief Product Officer, Snapdeal, Dr. Tony Yen, MD, CMIO, EvergreenHealth, and many more

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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 2015.

Connected Consumer 2015 August 5, 2015

Posted by chetan in : 4th Wave,Connected Devices,Connected Intelligence Era , add a comment

Global

· With each passing day, more consumers are connected and are using more connected devices. The connected intelligence era is starting to take shape.

· It is not just a western market phenomenon, the connected age is reaching the far corners of the planet.

· The total number of connected devices will reach 16 billion by the end of 2015.

· The biggest category of the devices will still be feature phones followed by smartphones and personal computers.

· By 2020, Industrial and Smartphones will become the top two connected devices categories.

US

· There are two broad connected categories of consumer spend: Access and Devices.

· On average, each US household will spend approximately $3800 on access and devices in 2015.

· Roughly 80% or $3000 of the US household spend will go to access of services such as cellular voice, mobile data, cable, landline voice, and broadband internet.

· Roughly 20% or $800 of the US household spend will go to devices such as computers, smartphones, feature phones, wearables, tablets, e-readers, connected cars, drones, robots, connected home, and other connected devices.

· 41% of the household access spend will go to cellular phones (for voice and data services).

· As a standalone category, mobile data is the biggest category approaching $1000 in yearly household spend.

· In the last 5 years, mobile data spend has risen the most and landline voice has declined the most. Cellular voice spend has also gone down while cable and broadband spend have seen relatively modest uptick.

· In devices, smartphones is by far the biggest spend category. Consumers spend almost 3x on smartphones than they spend on personal computers. Smartphones will account for more than 50% of the US household connected spend in 2015.

· New categories such as wearables, connected cars, drones/robotics, and connected homes have started to make a tangible impact on consumer spend.

· For the first time, US consumers will spend more on wearables than feature phones in 2015.

· Chetan Sharma Consulting conducted its annual Connected Consumer survey of 1000 US households.

· The number of connected devices per US household is now 5.3 with over 37% of the households in the 4-8 range.

· Almost 6% of the households have 15 or more connected devices.

· In terms of geography, US Northeast households had the highest number of devices per households.

· In terms of urban density, urban, rural, and suburban neighborhoods exhibited similar propensity to acquire connected devices.

· In terms of household income, households with annual income of $150K or more had almost 10 connected devices. Next income bracket was $75-100K with 6.6 connected devices.

· US operators have been seeing a bulk of their net-adds come from connected devices (for more details, please refer US Wireless Market Updates).

· In the most recent quarter (Q2 2015), 62% of the net-adds were from non-phone devices such as tablets, cars, and m2m (more details to come in our Q2 2015 US Wireless Market Update next week).

We will be taking a deep dive into the Connected Intelligence Ecosystem and Opportunities in our upcoming summit Mobile Future Forward on Sept 29th.

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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 2015.

Mobile Future Forward Update July 20, 2015

Posted by chetan in : 4th Wave,Connected Intelligence Era,European Wireless Market,Internet of Things,IoE,IoT,Mobile Future Forward,Wireless Value Chain,Worldwide Wireless Market , add a comment

Dear friends,

Over the past couple of years, I have talked a lot about the “Connected Intelligence” Era which is a superset of the Industrial Internet and IoT. We already have plenty of data points to indicate the rise of the next technology era enabled by sensors and software. While consumer gizmos get the headlines, the real money is in the enterprise segment though in some verticals, the two start to merge e.g. health, retail, energy, etc. To give you a sense of the disparity in terms of dollars, consider the following:

This year the US wearables segment will do over $4B in sales. A leading industrial giant founded more than 90 years ago is looking to capture 2-4x revenue of the entire wearables industry in one year with the help of IoT as it empowers them to create new service and revenue models.

Leading facilities management companies are looking to automate the entire building management process and reduce the maintenance costs by over 50% in a matter of months. The “industrial” side of IoT is likely to capture 90% of the new multi-trillion-dollar revenue that will be injected into the global economy. Obviously, benefits will flow into the consumer economy as well.

The Connected Intelligence stack is very complicated right now but that’s true with any new technology wave. 10-20 years ago, most markets had dozens of mobile operators. Today they are generally limited to 3-4. We will see the layers collapse and new players emerge.

“The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did.” – North American Leader – IoT and Mobile, IBM

At Mobile Future Forward, we will explore where is the money in IoT, discuss several use cases that are being implemented around the world, the required building blocks, the areas of collaboration and competition, and how our community can help the industry reach its full potential quicker. Mobile Future Forward is a summit that makes you think. We will have folks from startups who challenge our thinking and industrial giants who are moving at a fast pace to deliver outcomes.

We welcome you to join us in the discussions and contribute to the collective knowledge of our industry. Give us your one day, and we will give you the next 5 years in mobile.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson, Neustar, Oracle Communications, and Tata Communications.

Registration (Summer Saver expires next week)

Some of the confirmed leaders are:

•  Glenn Lurie, President & CEO, AT&T Mobility

•  Dr. Eric Topol, Chief Academic Officer, Scripps Health

•  Faisal Masud, Chief Digital Officer, Staples

•  Rima Qureshi, Chief Strategy Officer, Ericsson

•  Hank Skorny, SVP – IoT, Neustar

•  Raja Rajamannar, CMO, Mastercard

•  Sanjiv Ahuja, Former CEO, Orange

•  Hossein Moiin, CTO, Nokia Networks

•  Craig Moffett, Partner, MoffettNathanson

•  Josh Will, SVP – Mobile, Best Buy

•  Tim Chang, Managing Partner, Mayfield

•  Prof. Shyam Gollakota, University of Washington

•  Mark Fernandes, Managing Director, Sierra Ventures

•  Erez Yarkoni, CIO and EVP, Telstra

•  Mark Showers, CIO and EVP, Reinsurance Group of America

•  Doug Suriano, SVP and GM, Oracle Communications

•  Vishal Gupta, CTO – IoT, Silent Circle

•  Marty Cooper, Chairman, Dyna

•  Vijay Shekhar, Founder and CEO, Paytm

•   Julie Woods-Moss, CMO, CEO – Nextgen Business, Tata Communications

•   Andrew Hopkins, Managing Director – IoT, Accenture

•   Lo Toney, Partner – Catalyst Fund, Comcast Ventures

.. 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. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks.

Chetan Sharma

CEO, Chetan Sharma Consulting

http://www.chetansharma.com

New Paper: Empowering the Digital Telco Transformation with Convergent Charging and Policy June 23, 2015

Posted by chetan in : 4G,4th Wave,Connected Devices,Connected Intelligence Era,Convergent Charging,Mobile Cloud Computing,Oracle,Policy,The Golden Age of Mobile,Worldwide Wireless Market , add a comment

Empowering the Digital Telco Transformation with Convergent Charging and Policy

http://www.chetansharma.com/convergentcharging.htm

Commissioned by  Oracle Communications

convergentcharging_s

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Introduction

In 2014, the mobile industry passed an amazing milestone – the number of mobile subscriptions (SIM cards) surpassed the human population. While these connected devices represent a smaller subset of the global consumer base, mobile has had a significant positive impact on literally every aspect of our lives, the supply-chain of trillion-dollar industries and national GDPs. At the heart of this transformation is the digitization of information, processes and democratization of opportunity. The three dynamic forces of network evolution, smartphones and applications brought the fundamental change in the industry. Faster networks meant quick access to content and applications. Smaller yet powerful computers in smartphones translated into billions are coming into the digital fold. The new applications and services have empowered consumers to discover ways to enrich their lives and entrepreneurs to reimagine the world.

The changes have also meant that the traditional ways of doing business and thinking about revenue streams is largely over in most parts of the world. Many mobile operators who dominated the industry for the first 30 years recognize this and are transitioning to become a digital telco, but a vast majority are caught in the cycle of inaction.

For mobile operators to stay relevant and participate in the digital economy, they have to drastically change their processes and how they manage their services, launch new products, enable the ecosystem and think about digital services. At the heart of this transformation is the ability to launch and nurture new services whether it is one of their own or that from the larger ecosystem. The flexibility needed to launch at the speed of thought is essential to competing in the digital world.

Additionally, as the network becomes complex with millions of network nodes and billions of end points, we need a good framework for policy management to help manage the flow of data and thus manage the network.

Changing market dynamics due to economy and competition is also forcing service providers to consider a multi-play strategy, which helps protect the subscriber base whilst increasing revenue. As various services are integrated across different access means, one still has to maintain a single view of the customer to both lower the operational cost as well as better understand consumer’s interests and preferences. Without a tight integration on the back-end, this won’t be possible.

Finally, the communications and the IT industries are merging. Digital is changing the expectations of both the consumers as well as the enterprises. The digital economy is providing an opportunity to service providers to transform the business processes and become a digital platform where new applications and services can blossom. The massive growth in connected devices and applications means we need a more robust framework for policy and charging. One of the core strengths that service providers have is their billing relationship with the customer. The architecture required to support evolving use cases needs a rethink.

In this paper, we will explore the emerging trends that necessitate the urgency for a more agile infrastructure. We will discuss how new revenue opportunities in communication, commerce, health and retail need a more robust framework to manage growth and keep service providers relevant in the value chain.

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Your feedback is always welcome.

Chetan Sharma

Mobile Breakfast Series–5G–July 16th June 5, 2015

Posted by chetan in : US Wireless Market , add a comment

Dear friends,

Hope you are enjoying the advent of summer.

For our next mobile breakfast series event, we will tackle one of the hottest topic in the industry – 5G.

LTE is here and now. What’s next?  The networking wizards of the industry will put their heads together to help define 5G. What features are essential? How will our understanding of the data consumption on the 4G networks help define 5G? How should we tackle video and signaling? How do we tackle IoT? What applications will motivate 5G? What does the timeline look like for 5G? Will 5G enable new business models? How are we going to have a sustainable spectrum strategy? Will 5G empower operators to justify the investments? This panel will take a look at the fundamental elements of 5G that will be a key layer for the Connected Intelligence Era.

Our guest speakers are:

Dr. Ron Marquardt, VP – Technology Innovation & Architecture, Sprint

Mark McDiarmid, VP – Radio Network Engineering, T-Mobile

Two of the best network engineers anywhere so am really glad to have them. 5G will impact everyone and every industry. Get an early glimpse into what’s coming.

Background Reading

Registration is open now

Portion of the proceeds will be donated to the Nepal Earthquake Relief Efforts.

Thanks and see you in July.

Regards,

Chetan

Ps. Don’t forget to save your seat for the fall Mobile Future Forward Summit. Early bird expires next week.

Mobile Future Forward 2015 Update June 4, 2015

Posted by chetan in : US Wireless Market , add a comment

Greetings,

Trust your summer is going well. The connected intelligence ecosystem continues to expand with each passing day. From startups like Prosyst, Axeda, 2lemetry getting acquired to mobile operators and chip manufacturers building billion dollar IoT businesses to Google proposing Brillo and Weave, there is tremendous activity all around. On the consumer front, wearable revenue is expected to cross $5B for the first time. In the industrial sector, investments and cost-savings are even bigger.

Partners and speakers at Mobile Future Forward are key companies and executives who are shaping the connected intelligence journey. We are delighted to add more speakers to the roster (see below). At the summit, each topic gets a thorough deep-dive to explore the intricacies of opportunities and challenges. Participants leave with a clearer picture of where the technology world is headed and more importantly what should they do about it, who to partner with, and what to ignore as noise.

At Mobile Future Forward (now in its 6th year), we delve into the nuances of innovation that trigger seismic activity which shapes the future generation of experiences, applications and services. This unique executive summit is a true meeting of the great minds who go beyond the headlines and hype to examine the growth trajectory of the future. It is a daylong data-driven brainstorm designed to make you think. The experts and visionaries from around the globe will gather in Seattle on Sept 29th to explore the world of possibilities, envision the opportunities, and inspire the entrepreneurship spirit within us to achieve more, faster.

We welcome you to join us in the discussions and contribute to the collective knowledge of our industry.

Registration is open now (Early bird expires next week)

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson and Neustar.

Mobile Future Forward is causing everyone to think about what’s the next big thing. – CEO, Global Mobile Operator

Mobile Future Forward is the most intellectual conference  – CEO and founder, Connected Watch Company

The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did. – North American Leader – IoT and Mobile, IBM

Some of the confirmed industry leaders are:

· Glenn Lurie, President & CEO, AT&T Mobility

· Dr. Eric Topol, Chief Academic Officer, Scripps Health

· Faisal Masud, Chief Digital Officer, Staples

· Rima Qureshi, Chief Strategy Officer, Ericsson

· Hank Skorny, SVP – IoT, Neustar

· Raja Rajamannar, CMO, Mastercard

· Sanjiv Ahuja, Former CEO, Orange

· Hossein Moiin, CTO, Nokia Networks

· Craig Moffett, Partner, MoffettNathanson

· Prof. Shyam Gollakota, University of Washington

· Tim Chang, Managing Partner, Mayfield

· Josh Will, SVP – Mobile, Best Buy

.. 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. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Chetan Sharma

CEO, Chetan Sharma Consulting

http://www.chetansharma.com

US Mobile Market Update – Q1 2015 May 18, 2015

Posted by chetan in : 4G,4th Wave,5G,AORTA,ARPU,Chetan Sharma Consulting,Connected Devices,Connected Intelligence Era,IoE,IoT,LTE,Mobile 2015,Mobile Future Forward,Tablets,The Golden Age of Mobile,US Wireless Market,Wearables,Wireless Value Chain,Worldwide Wireless Market , add a comment

US Mobile Market Update – Q1 2015

http://www.chetansharma.com/usmarketupdateq12015.htm

image

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Summary

The US mobile data services revenue grew 4% Q/Q and 15% Y/Y. The overall services revenue declined 1%. The device revenue for the operators grew by 41% allowed the overall service revenues to grow 5% Y/Y.

We are forecasting that the mobile data service revenues will increase by 22% to $132 Billion in 2015. Verizon will become the first operator to generate more than $50B from data services in 2015.

After acquiring lusacell and Nextel Mexico AT&T became the biggest North American operator with over 136 million subs.

The average mobile data consumption (cellular) is approximately 2.5GB/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 75 hours.

From 2010 to 2013, the data pricing declined by only single digits YoY. However, in 2014, the data pricing has plummeted by 77%. In Q1 2015, the data pricing stayed pretty steady.

The intense competition amongst the operators meant a 6% rise in OPEX QoQ and a 12% decline in CAPEX YoY. The income declined 4% while EBITDA grew modestly at 2%.

Smartphone penetration increased to 76% and roughly 95% of the devices sold now are smartphones.

4th wave services continue to grow at a very past face around the globe. At least 37 companies generated a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.

The difference between Sprint and T-Mobile number of subs is just 300K subs now – the narrowest it has ever been. Like we suggested mid-last year, T-Mobile is likely to become the number three operator. This is more or less just a symbolic event with the transfer of bragging rights. Overall, churn was low for all operators in Q1 2015.

T-Mobile accounted for over 40% of the overall net-adds for the year with AT&T and Sprint coming in second at 26%. Verizon slipped to a distant fourth with only 8%.

Operator’s non-phone net-adds were 4 times that of the phone net-adds, highest it has ever been in the history of the industry.

M2M+Connected car is a billion dollar revenue stream for AT&T. M2M+Telematics will become a billion dollar stream for Verizon by 2016.

In our 4th wave series of papers, we had postulated for years that the 4th wave revenues will become bigger than any of the previous curves. This finally happened in 2014 in the US market with the revenues from the 4th wave applications and services built on top of the IP access layer surpassed both voice and data revenues.

Apple Watch – New Interaction Models

Apple is never the first one to introduce a new consumer gadget but it is generally the first to make it work for the market so allies and enemies are all eager for Apple to come in and create awareness. For me, the exciting part wasn’t the watch itself though it clearly the best smartwatch available in the market but the new interaction models it introduced. The reincarnation of Morse code in the language of vibrations and heartbeats. The splitting of screen on two different computers on the body is quite fascinating and has design implications for the developers. It will take time for us (as consumers and developers) to understand and absorb the advantages of such a model. The transmission of signals from the body is enormously powerful in creating the preventive care culture around the globe. The story on wearables is just starting out.

Q1 2015 – 4th wave in action

For a casual observer of the industry, Verizon’s acquisition might have come as a surprise but for the students of the 4th wave, it was normal course of action.  In my talks, I often say that for service providers to compete with the OTTs, they have to become OTTs themselves. One could argue if AOL was the right company for this strategy but large operators are opening up their checkbooks to do cross-domain acquisitions. AOL brings a new billion dollar revenue stream however it doesn’t solve the basic fragmentation problem that operators have. They can’t effectively compete with Google and/or Facebook without covering the entire market. Without domination (in market share) or collaboration, the opportunity will remain small and might even vanish in due time.

As we mentioned earlier this year, globally, 37 companies generated (not valuation) a billion dollar or more in revenue from 4th wave services in 2014 – a 311% jump from 2012.

Unicorns at incumbents

Tech press and the startup world is infatuated with unicorns. The billion dollar is a magical marker that inspires the ecosystem to be in the elite club but what about when a new unicorn stream is created at an incumbent? It rarely makes waves. At a 100+ year old incumbent, even less so. AT&T has been lighting up connected cars faster than any other mobile operator in the world right now. While 3.5M connected cars might not instill excitement, one must consider the replacement cycles of automobiles which is several times that of a smartphone.

Our estimates suggest that the connected car segment will become a billion dollar business for AT&T by 2016. The M2M+Connected Car revenue stream is already a billion dollar business for AT&T. Verizon is also slowly getting there. Their M2M+Telematics revenue stream should reach an annualized revenue stream of over a billion dollars by 2016. Some operators in Europe are also making inroads into the new connected devices revenue streams. Similarly, the likes of Microsoft and Google have created new billion dollar revenue streams in mobile. As a separate entity, these will be decacorns but don’t get appreciated when residing with the parent company.

Google Fi – Google Fiber for Wireless

When Google-Fi was announced, there was plenty of media frenzy around Google going after the operators. Folks who wrote such articles don’t understand the business of either Google or the operators. Google is a brilliant strategist which does some projects to push its strategy in the ecosystem. The goal is generally not a new revenue stream but twisting the value-chain enough to serve its purpose long-term.

However, there are couple of direct and subtle signals that Google did send to the markets. First, there are some technical tricks that Google was able to pull off to make WiFi/Cellular handoffs to work. Second, and perhaps more important is that the control point moved from the network to the device which at scale can be the biggest disruption the mobile industry has ever seen. It is not easy to pull off given the interdependency of OEMs to the operators. But sometime in the future, it is not hard to envision that for every session, the device (and associated cloud infrastructure) initiates the auction amongst the available networks and picks one based on performance, pricing, revenue share, and other parameters. That day is not here yet but service providers should start planning for this scenario.

WiFi-first network has good potential and we will see many of them pop up around the globe but getting scale is the biggest question mark in such endeavors (beyond some technical issues of seamless interop).

One should also remember that while WiFi usage in the US is 3x that of cellular usage, the use of WiFi hasn’t really slowed down the cellular data growth one bit. They both are growing at approximately 100% Y/Y.

Post-PC – Apple has no peer

There are has been a lot of debate around the PC and Post-PC worlds. Apple has benefited from the transition to the Post-PC universe like no other company. Its Post-PC revenue in Q1 was four times the Post-PC revenue of Google, Microsoft, Facebook, and Amazon combined. Largely due to the iPhone, Apple has been able to carve out a dominant space on the current wave of computing.

Service provider M&A

When Comcast initially announced the merger with Time Warner, it looked like a slam dunk but it was swiftly rebuffed by the regulators. This sets up an interesting 18 months for the US market. Unless there is a change in power (democrats to republicans), the big mergers in the same domain are off the table. So, how do existing behemoths grow? They start to look overseas (e.g. AT&T acquiring Mexican operators), look sideways (e.g. AT&T acquiring DirectTV) or look upwards (e.g. Verizon acquiring AOL). There are still a number of questions posed to the likes Comcast, Time Warner, Dish, T-Mobile and Sprint. Will this finally force Comcast to be a more active mobile player by acquiring one of the two smaller operators? Will the regulators allow such a move? Is Sprint back in the equation? How anxious is Deutsche Telecom to offload its US assets? How will Dish use its spectrum assets? We might see all these questions answered in the next 18 months or not.

Net-Neutrality and Zero-Rating Debates

In the tech world few things ignite the discussion with religious fervor as the net-neutrality debates. From Washington DC to New Delhi, from Brussels to Santiago, net-neutrality and zero-rating have inflamed passions. Most of the times those fighting on either sides have no clue about the issues at hand and what are they fighting for. Ask a protester on the street about the intricacies of net-neutrality and you will get blank looks or confused answers. Both issues boil down to “transparency” and “control” – who gets to decide what and what are they going to disclose. The answer to many of these debates is fairly simple – ensure there is enough competition and put the (granular) “control” and the “responsibility” in the hands of the customer for e.g. they should decide which apps should make it into the “Zero Rating” club for them. The problem goes away at least in principle.

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.

We have summarized our thoughts on 5G in this paper – 5G: The past, present, and future of the mobile industry evolution. I have been giving a number of talks on 5G in North America and Europe and many of these will be made public in due course.

What to expect in the coming months?

2014 was a tremendous year for the mobile as it becomes omnipresence in every industry. We saw some massive moves, astounding acquisitions, and interesting strategic endeavors. 2015 promises to be an exciting year for the industry as well.

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.

The next 10 years will generate almost 1000 Trillion dollars in global GDP, which is 60% more than the last 10 years. What will be significant is how the “Connected Intelligence” built using networks, sensors, and software is going to transform every industry, every nation. We will covering the future of the mobile industry in-depth at our Mobile Future Forward summit this fall on Sept 29th.

Against this backdrop, the analysis of the Q1 2015 US wireless data market is:

Service Revenues

· The US mobile data services revenues in Q1 2015 increased 3% and reached $30B.

· After crossing the $100B in data revenues last year, the US market is set for explosive growth and is likely to cross $130B in data revenues in 2015.

· 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 Q1 2015. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 2.71%. 

· Data contribution to the overall revenues is now at 62%.

· The postpaid ARPU continues to decline for all operators with all but Verizon suffering double digit YoY losses.

Subscribers

· The US market had 4.6M net-adds. Probably for the first time, Verizon finished last in terms of net-adds for the quarter. T-Mobile led with 1.8M net-adds mostly postpaid.

· T-Mobile added almost as many postpaid subs as rest of the three operators combined.

· Connected devices (excluding tablets) had the best net-add performance followed by tablets.

· T-Mobile led in the phone category while remaining three operators added more than 1M non-phone customers.

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. 70% of postpaid accounts at AT&T are now on shared plans.

· 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 70% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 89% 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”)

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $150 million revenue from M2M and Telematics. At the current run-rate, this will be a billion dollar business by 2016.

· AT&T reported 684K net-adds on the connected car platform. We estimate that connected car will become a billion dollar revenue stream for AT&T in 2015. Connected cars accounted for 62% of the connected devices for AT&T.

Connected Devices

· Connected devices (non-phones) accounted for almost 52% of the net-adds in Q4 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.

· For AT&T, Connected cars started to form a significant base of the connected devices segment with 68% of the new connections in the segment coming from cars.

Handsets 

· Smartphones continued to be sold at a brisk pace accounting almost 95% of the devices sold in Q1 2015. The feature phone category is practically becoming extinct in the US market.

· The smartphone penetration in the US is now at 76%.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 71M making it the #2 LTE operator behind China Mobile which has more than twice LTE subs. Other three operators are also deep into their LTE deployments. Verizon reported that 86% 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 Aug 2015.

Disclaimer: Some of the companies mentioned in this paper are our clients.

Announcing Mobile Future Forward 2015 May 13, 2015

Posted by chetan in : 4th Wave,5G,Connected Intelligence Era,Mobile Future Forward,The Golden Age of Mobile,US Wireless Market,Worldwide Wireless Market , add a comment

Dear friends,

The next 10 years will generate almost 1000 Trillion dollars in global GDP, which is 60% more than the last 10 years. What will be significant is how the “Connected Intelligence” built using networks, sensors, and software is going to transform every industry, every nation. At Mobile Future Forward (now in its 6th year), we delve into the nuances of innovation that trigger seismic activity which shapes the future generation of experiences, applications and services. The unique executive summit is a true meeting of the great minds who go beyond the headlines and hype to examine the growth trajectory of the future. It is a daylong data-driven brainstorm designed to make you think. The experts and visionaries from around the globe will gather in Seattle on Sept 29th to explore the world of possibilities, envision the opportunities, and inspire the entrepreneurship spirit within us to achieve more, faster.

We welcome you to join us in the discussions and contribute to the collective knowledge of our industry.

Registration is open now.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson and Neustar.

 

Mobile Future Forward is causing everyone to think about what’s the next big thing. – CEO, Global Mobile Operator

Mobile Future Forward is the most intellectual conference  – CEO and founder, Connected Watch Company

The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did. – North American Leader – IoT and Mobile, IBM

Some of the confirmed industry leaders are:

· Glenn Lurie, President & CEO, AT&T Mobility

· Dr. Eric Topol, Chief Academic Officer, Scripps Health

· Faisal Masud, Chief Digital Officer, Staples

· Rima Qureshi, Chief Strategy Officer, Ericsson

· Hank Skorny, SVP – IoT, Neustar

· Raja Rajamannar, CMO, Mastercard

· Sanjiv Ahuja, Former CEO, Orange

· Hossein Moiin, CTO, Nokia Networks

.. 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. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks and have a great spring.

Chetan Sharma

Webinar: Empowering the Digital Telco Transformation May 12, 2015

Posted by chetan in : US Wireless Market , add a comment

Oracle and Chetan Sharma Consulting will be hosting a webinar on how Convergent Charging and Policy can enable a telecom service provider to become a more digital player in the ecosystem. It will coincide with the release of a paper I have been working on.

Convergent Charging and Policy – Empowering the Digital Telco Transformation

The mobile industry is transforming the global markets in fundamental ways. The communications and the IT industries are merging. Digital is changing the expectations of both the consumers as well as the enterprises. The digital economy is providing an opportunity to service providers to transform the business processes and become a digital platform where new applications and services can blossom. The massive growth in connected devices and applications means we need a more robust framework for policy and charging.
This webinar will discuss the changing service provider landscape and the tools required to manage this transition.

Chetan Sharma, CEO, Chetan Sharma Consulting

Richard Hallett, Senior Director, Product Marketing, Oracle Communications

When: May 27 2015 7:30 – 8:30am PDT

Registration

Vancouver Mobile Breakfast Series Recap: Mobile Commerce and Payments April 16, 2015

Posted by chetan in : 4th Wave,Chetan Sharma Consulting,Mobile 2015,Mobile Breakfast Series,Mobile Commerce,Mobile Future Forward,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

We hosted our second event of the year in Vancouver (our first in Canada) earlier this week and had a great time. I have been going to Vancouver for 20+ years and have been thinking about doing something north of the border. It is also one of my favorite cities in the world. By strange coincidence, all 3 of our MBS cities outside Seattle have been Olympic cities – Atlanta, London, and now Vancouver. I guess we will have to go to Beijing or Seoul next.

With the help of my good friend Pankaj Agarwal and his team at Optimus Information and Wavefront, we were able to plan out a sold-out event. We continued the theme of Mobile Commerce and Payments given that it is such a hot topic right now and brought together three startup CEOs who are right in the middle of the action.

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The mobile ecosystem is evolving exactly we envisioned it in our 4th wave paper in 2012. The 4th wave is becoming the most dominant portion of the revenue stream as was witnessed from the revenue results in 2014 in the US.

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As I have said before in various public forums, one of the metrics I use to track progress in any segment is the number of $1B businesses being created each year. In 2012, there were only 9 companies mostly large enterprises like AT&T, Apple, Google, and Amazon that had > $1B digital businesses. However, in 2014, this number jumped to 37 with several new entrants – from known brands like Twitter, Walmart, and Xiaomi but several companies unknown to the western world like WeChat, FlipKart, Otto Group, GungHo, Suning Appliance, and others. While most of the concentration of digital wealth in the US, China is emerging very strongly as a player to reckon with. In fact, how China and US companies interact and play will perhaps define the next 10 years. While other economies like India, EU will play a role, I find China and US to be the most fascinating.

The speakers were:

Sam Gadodia, CEO & Co-Founder, Lotusflare

Sam co-founded LotusFlare with couple of his colleagues from Facebook with the objective to make mobile internet more accessible across the globe. Prior to LotusFlare, Sam worked at facebook and worked with Mobile Operators’ on SMS, Zero rating and other initiatives to drive growth on FB mobile app. Before this, Sam built and scaled TeleSign, one of the leaders in mobile authentication and verification space. Sam also co-founded and successfully built Global eProcure, a leading SaaS based SCM analytics Company with operation spanning from North America to Asia. While at Global eProcure, he received the Stevie award and was named by American Business Awards as Best Operation Executive.

Michael Gokturk, CEO & Founder, Payfirma

Michael Gokturk is the kind of entrepreneur who takes a company public in 3 years then launches a new business 3 days later. In 2011, Michael founded Payfirma with the goal of disrupting the highly competitive payments market by creating a solution to merge online, in-store and mobile payments. He has since grown Payfirma from the first company to introduce mobile payments in Canada into one of the top multichannel payment platforms. Before Payfirma, Michael founded and was the CEO of Versapay. A payments company specializing in point of sale systems and electronic bill presentment and payment (EBPP).

Ajay Hans, CEO and Co-Founder, Mobetize

Ajay Hans, Founder of Alligato Inc. and Co-Founder of Mobetize Corp brings over 15 years of diverse experience in the development, marketing and implementation of complex billing and payment related software technologies dedicated for MNO’s and MVNO’s. Ajay has overseen Mobetizes’ strategic vision and tactical execution since inception. He has held senior executive positions with leading telecom software technology companies where he successfully implemented solutions for brands including SaskTel, Sprint and AT&T.

Chetan Sharma, CEO and Founder, Chetan Sharma Consulting (moderator)

The three panelists are involved in advertising, payments, and commerce working with all parts of the value chain – banks, operators, startups, credit card companies, retailers, etc. We had a very interesting discussion that covered a breadth of topics.

The salient points of the session were:

In summary, mobile commerce remains a hot area and we are approaching a tipping point wherein mobile commerce dominates ecommerce in all parts of the world. I really enjoyed the moderation and questions from the audience. My thanks to Optimus Information and Wavefront for being our partners for the event. and thanks to the Vancouver mobile community for embracing us with open arms.

Our next event is going to be in our annual mobile summit – Mobile Future Forward on Sept 29th in Seattle. Stay tuned for announcements and details.

Mobile Patents Landscape – An In-Depth Quantitative Analysis – 4th Ed – 2015 April 1, 2015

Posted by chetan in : 4G,5G,Intellectual Property,Mobile Patents,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile Patents Landscape 2015

– Fourth Edition

http://www.chetansharma.com/MobilePatentsLandscape_2015.htm

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Highlights

· The study looked at over 7 million patents granted in the US and Europe. The analysis focused on the patents granted to 65 technology companies in the mobile space.

· The gap between the number of mobile patents granted in the US vs. Europe widened again. US now accounts for roughly 79% of the mobile patents granted in the two jurisdictions.

· US companies comprise of 48% of the top 50 list followed by Japan, China, and South Korea.

· By the end of 2014, over 26% of all granted patents in the US were mobile related. In 2001, the percentage was 5%. In Europe, roughly 10% of the patents granted were mobile related.

· IBM recaptured its top spot from Samsung to become the leader in mobile patents granted in 2014 in the US while Samsung dominated Europe. Samsung still dominates the overall rankings. Samsung was followed by IBM, Microsoft, Sony, Ericsson, Qualcomm, Nokia, Google, Alcatel-Lucent, and Blackbery for the top 10 companies by mobile patent grants in 2014.

· Google was number 5 in mobile patent grants in 2014. Apple was behind at number 8.

· Despite dwindling market fortunes, Blackberry continues a healthy patents grant rate and appears in several top 10 categories.

· US Mobile Operators dominate the top 10 operator rankings: Patent top 10 Rankings: AT&T, NTT DoCoMo, Verizon, Sprint, British Telecom, Telecom Italia, T-Mobile, Swisscom, Orange, and SK Telecom.

· Mobile Infrastructure Patent top 10 Rankings: Samsung, Ericsson, Qualcomm, Alcatel-Lucent, LG, Intel, NEC, Siemens, Broadcom, and HP.

· Mobile OEM Patent top 10 Rankings: Samsung, Microsoft, Sony, Google, Blackberry, LG, Fujitsu, Panasonic, NEC, and Siemens.

· The top 5 categories for patents grants in the US for 2014 were Digital Multiplexing, Telecommunications, Digital Processing – Data Transfer, Digital Processing – Financial, and Computer Graphics.

· The top 10 filers of mobile patents in the US were Samsung, IBM, Qualcomm, Microsoft, Intel, Google, Apple, LG, Sony, and Ericsson. It was the second time that Samsung, Microsoft, Google and Apple showed up in the top 10 patent filers list together.

· Some of the Chinese companies started to increase their filings substantially. Notable amongst them are: Alibaba, Xiaomi, Mediatek, and Huawei.

· Huawei appeared in the top 10 rankings in Europe for the first time.

· Information security category saw the highest jump in patent filings in 2014.

Introduction

The idea of Intellectual Property (IP) is as old as the debates Aristotle used to have about philosophy and society. All mature civilizations and societies come to appreciate the value in preserving the IP created by its citizen and give the rights to the benefits that such IP creates. IP is enshrined in laws and principles of doing trade and business. It is also how nations outmuscle each other over long periods of time to become dominant economies.

In a knowledge economy, the very competitiveness and durability of the nation’s prosperity depends on how well the framework of IP and patents works in the country and the steps it takes to avoid theft and misuse of the laws while enforcing the rules and regulations on the books. IP has been an integral part of the economic engine of the western world for many decades if not centuries. Over the past two decades, nations and corporations have competed on the creation, funding, execution, and protection of the new ideas.

Mobile is first computing based technology that will encompass the entire human race and then some. In 2014, the number of cellular connections went past the human population. Additionally, the rise of IoT and Wi-Fi-led usage has meant that the use-cases for mobile and the impact it can have across verticals have exploded. Mobile has outgrown its own universe and now expanded to segments such as health, industrial, retail, education, agriculture, and more. As such, the intellectual property being generated has become very mobile centric. In 2014, the US crossed a major milestone, more than a quarter of the overall patents that were granted had something to do with mobile.

Mobile expertise and by extension the IP is being developed by more companies around the globe beyond the traditional ecosystem players such as Samsung, IBM, Microsoft, Qualcomm, and Ericsson. Billion dollar mobile companies are emerging from India, China, and Europe. Africa and Latin America are not far behind. As expected, mobile has removed the artificial boundaries of time and distance and empowered developers across regions. Mobile is also leveling the playing field, increasing the opportunities for entrepreneurs far and wide. A dreamer in Nairobi has as good a shot at success as anyone else in the west.

All the innovation and economic activity has also increased the patent activity around the world. While US remains the leader in terms of overall quality and quantity. China and its companies are starting to flex some muscles on the big stage. In 2014, China went past the European leaders Germany, France to become the 3rdplayer behind US and Japan to file the number of patent applications. While US, Europe, and Japan remain the overall leaders in patents both in quantity and quality; China’s is at the top in terms of growth rate. Amongst the top 3 filers, Huawei and ZTE are from China (Qualcomm was the third player on the list).

According to the US Patent Office (USPTO), in 2014, the number of patents granted grew over 8% by the end of 2014 for the same time period. The numbers of foreign filings are now in the majority for both the applications filed as well as the patents granted.

As we look into the mobile related patents, the growth is much more striking. The number of mobile related patents that were granted by the USPTO and the EPO increased significantly over the course of last decade. The US market saw a 440% increase while the European market saw a 71% increase in mobile related patent grants.

Another interesting fact is that in 2014, for the first time, over a quarter of all patents granted in the US were mobile related. This grew from around 2% in 1991 and 5% in 2001. In Europe, roughly 9% of the patents granted are now related to mobile. Europe saw a decline of 4% in mobile patents in contrast of 16% growth in the US market.

It is also interesting to note that a number of new Asian companies like Mediatek, Alibaba, and Xiaomi have stepped up their IP efforts and substantially increased the filings in the US.

Chetan Sharma Consulting analyzed over 7 million patents granted by the USPTO and EPO over the last two decades to understand how mobile has become a key enabler for all technology companies. Furthermore, we looked at patent granted to the top 65 technology companies who are active in the mobile space to understand their relative strengths and weaknesses in the mobile patents landscape. This study is fourth in the series that does an in-depth quantitative analysis of the mobile patents landscape.

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 May 2015.

Disclaimer: Some of the companies mentioned in this paper are our clients.

New Paper: 5G – The past, present, and future of the mobile industry evolution March 16, 2015

Posted by chetan in : 4G,4th Wave,5G,Chetan Sharma Consulting,Connected Intelligence Era,European Wireless Market,Mobile 2015,Mobile Ecosystem,Mobile Future Forward,Mobile Payments,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

5G – The past, present, and future of the mobile industry evolution

A Mobile Future Forward Research Paper

http://www.chetansharma.com/5G.htm

NA_Wireless_Market

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Introduction

The deployment of LTE otherwise known as 4G is in full swing. Operators in US, Japan, Korea, Finland, Australia, and others started deploying the new technology some years ago and are nearing completion of their network build out. Others in Europe and Asia are on an aggressive schedule to catch-up. We can expect that a majority of the operators will have LTE up and running in the next couple of years. Operators have sunsetted 2G. In some instances they even stopped investing in 3G and are putting all of their investments in the 4G bucket. As mobile networks transition to all IP, operators will be able to re-farm their spectrum assets for 4G deployments. Beyond LTE, operators are looking at LTE-A to provide more efficiency and network bandwidth to consumers.

In mature LTE markets like the US, Korea, and Japan, the talk has shifted to the next generation technology evolution – 5G. Even Europe, which still has a long way to go before their 4G is built out have set their sights on 5G to recapture the mantle and the pride of the GSM days. Korea and Japan led the world in 3G but lost the lead of 4G to the US. They both are eager to be considered leaders in 5G. Japanese government has set the ambitious goal of having 5G by the Tokyo Olympics in 2020. US regulators have started to talk about 5G and the future spectrum needs as well.

Since the launch of 1G networks in late seventies and the eighties, we are now onto the 5th iteration of the network technology evolution. We have gone through a lot of technology skirmishes but with 4G and likely with 5G, we are narrowing the differences between technology options giving significant technology scale advantages to the ecosystem.

As network technologies have evolved, the application landscape has changed as well. 1G or AMPS was all about basic voice services. GSM and CDMA (2G) digitized mobile and we saw basic messaging and data services introduced into the market. 3G (WCDMA, EVDO) introduced the potential of data services to the ecosystem and the consumers. The launch of iMode in Japan became the poster child of data services for much of the 3G evolution around the globe. Midway in the 3G growth, new players like Apple and Google entered the ecosystem and laid the foundation of unprecedented data and application growth. Business models and control points in the ecosystem changed overnight. The insatiable data demand led to the acceleration of the 4G services in many leading markets. For the first time, the network technology was data-led. We are clearly moving towards an IP infrastructure where voice is just another app running on the data network.

In fact, data is the primary revenue engine for the services providers and rest of the ecosystem. In Japan, almost 80% of the revenue now comes from data services. In the US, we are approaching 60%. Other nations are not far behind. Even the emerging markets have caught up very fast and in some instances leap-frogging their western counterparts in certain application and services segments.

All through last four generations, the fundamental business model of “metering” remained the same. Barring some exceptions, there has been a direct correlation of usage and revenues. Will 5G be any different?

Another significant standard that has evolved is Wi-Fi. The impact of Wi-Fi on the mobile ecosystem can’t be overstated. It has become so pervasive that we have ask the question how long before nationwide Wi-Fi first networks start to make a run for the wallet share in major markets. How will Wi-Fi fit in with 5G, will the two standards merge?

Will 5G offer new business models or explore a different relationship between usage and cost? Will consumers warm up to the idea of value-based pricing? Or Will access just become a commodity layer like water and electricity and most of the value will reside in the platform and application layers? Though we have started to see the shifts (as discussed in detail in our 4th wave series of papers), how fast will future accelerate? Will the ecosystem landscape be markedly different than what we have in place today?

We won’t know the answer to some of these questions for a while but it is worth exploring the lessons from the past and potential disruptions that 5G could bring to the ecosystem that benefits the end customers. In the end, it might not be about the technology at all but about the business models that shape the technology landscape. This paper explores 5G through the lens of the past and explores the wireless world beyond 2020.

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 May 2015. We will be discussing 5G and its impact on the ecosystem in more detail at Mobile Future Forward.

Disclaimer: Some of the companies mentioned in this paper are our clients.