Mobile World Congress 2013 Recap March 6, 2013Posted by chetan in : 4G, AORTA, Chetan Sharma Consulting, European Wireless Market, LTE, Mobile World Congress, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , trackback
“Welcome to Spain, Thank you for your business,” remarked the immigration officer and thus started my yearly pilgrimage to the grand slam of mobile – The Mobile World Congress 2013. It is truly a global event with participants from virtually all countries looking to do business, learn a thing or two, and ponder over what the year will bring forth. The show moved to a new venue which made the logistics work much better for attendees and exhibitors but the venue lost its charm and character. We used this opportunity to feel the pulse of the industry and understand where things are headed. This note summarizes our observations from the show.
While there was no blockbuster announcements or products that will knock your socks off, several interesting trends emerged that will keep the industry exciting to watch in 2013.
The perennial search for the #3 ecosystem continues: Windows sales have disappointed thus far, Blackberry has launched new devices but hasn’t quite hit the mark. So, while consumers seem perfectly happy with iOS and Android, industry’s desire to have a third robust ecosystem is palpable. The biggest announcement in that regard was from Firefox OS and in a matter of 12 months, it has not only forged a strong alliance with operators, it is actually getting ready to ship phones. It is going to be targeting the low-end of the market which is a smart strategy but a lot depends on the range of price points of the devices and how quickly it can attract the developer ecosystem. Given that Android device price points are hovering around $50 and it is a mature ecosystem with great developer reach and support, it will be challenging to convince consumers to go the Firefox route. However, if the price points are attractive enough, with the distribution power of some key operators, we could see some early traction. Ubuntu, Jolla, and Tizen were also vying for attention.
LTE everywhere: LTE deployment is growing at a very fast pace. The US market is ahead of the curve with almost national footprint from Verizon followed by substantial coverage from the remaining three operators. Elsewhere, operators are gearing for deployment once some of the spectrum issues/auctions are sorted out.
The 4th Wave has arrived: Last year, we put forth a framework for future mobile industry revenues in our 4th wave paper. Since then, the framework has been embraced by many leading operators around the globe. It was good to hear operators talking more about services rather than data plans. Several areas were discussed by the leading tier 1 operators such as health, retail, education, cloud, M2M, automobile, enterprise, security, connected living, home security, commerce, identity and privacy, big data and analytics. Operators who are able to steer their giant organizations to focus on services will be able to survive the commoditization of access. We will have more say on the subject later this year.
Yo OTT, luego existo: which is Spanish for “I OTT, therefore I am” To be a player in the digital world, one has to be an OTT provider for communications and beyond. The interesting dichotomy of the communications OTT business is that very few will survive. The end state of a majority of them (if not all) is either an M&A with a telco or an Internet player or they run out of cash. The new breed of OTTs has forced the lumbering giants to think different about their customers and their markets.
Mobile Broadband, Cloud, and Apps: The troika of broadband network access, the cloud infrastructure and the applications are creating a sea change in the enterprise, especially the SMB segment. It is also changing how developers see the enterprise segment as the opportunity migrates from windows to iOS and Android. We conducted some in-depth research in the space and will have more to share later this year. Our Mobile Breakfast Series later this month will be dealing with the topic of Cloud and SDN in more detail.
Redefining Monopoly: The mobile and internet worlds have collided but the regulatory regimes haven’t changed. European operators seemed to indicate that it is time to reassess what a monopoly really means and the rules should apply to all layers of the ecosystem stack and that means devices and OSs as well.
Device Launches: All major OEMs are following the Apple playbook as far as the device announcements are concerned. To garner media attention, it is best to announce the “hero” devices away from major shows. Just like CES earlier this year, MWC lacked any big device announcements. Nokia announced mid-low tier devices to expand its portfolio that will help it in unit sales. ZTE, Huawei, LG, Asus, NEC, Sony, HTC, HP, Asus, Acer, Lenovo all had new devices to display but media’s eyes are set on Samsung’s Galaxy release later this month.
Local OEMs: Traditional OEMs are facing some healthy competition from new entrants in local markets. Players like Fly and Yotaphone in Russia are giving the veterans a run for their money. By both innovating with new features but also by customizing the devices for the local market (e.g. bigger battery that last 3 days), they are creating their own niche. After gaining good market share in Russia, Fly is expanding into other markets.
Connected Cars: When the biggest operator by revenue announces a deal with the biggest car manufacturer, people take notice. GM and AT&T announced LTE cars by 2015 which will pretty much force the entire auto industry to provide broadband connectivity in a hurry. However, the auto industry has misplaced expectations on apps and any incremental revenue they might be able to harness from them.
Samsung Knox, Blackberry – can you hear me now: Android is probably the most insecure mobile platform out there. Blackberry has long been the gold standard, iOS has improved, Windows has security features built in but security has always been a step-child of Android. Samsung’s Knox announcement elevates Samsung’s role in the mobile enterprise and to some extent takes over some of the development capability of Android that are squarely aimed at Blackberry. The container security feature set with MDM integration is well thought out and opens up the mobile enterprise market for Samsung especially in North America and Western Europe.
Spectrum and Regulations: While spectrum was a universal issue with the operators, more is better, European operators were particularly vocal about the state of the regulatory affairs on the continent. Regulators, they complained, are killing the industry by cutting of revenue opportunities, are fostering too much competition, too much taxation, and too involved in the operations of the operators. This is leading to declining revenues and turmoil at the operators. There might be some unintended consequences of weakening operators and regulators will have to grapple with some interesting questions that a free market economy will pose in the coming days.
TU Go – Take your phone number everywhere: In our opinion, Telefonica has done the best job of dealing with the digital world in putting forth an org structure that can crank out applications and services at Internet speed. TU Go is a new service (launched in UK) that allows users to take their phone number to any supported device and use it for calling and texting – number in the cloud at its best.
NFC is dead, Long Live NFC: Vodafone CEO’s frank admission that he doesn’t expect to make much money from NFC gave the audience a bit of a pause. Several NFC initiatives have floundered without clear goals or vision. Instead of working together, the industry has remained fragmented and thus the lack of scale has hampered progress. For too long, the industry has focused on payments but the opportunity lies in the engagement with the customer. For better or for worse, the financial industry has sequestered its commission for the foreseeable future. We saw some clever NFC implementations to drive consumer engagement and commerce in retail environments, primarily in Europe.
Consolidation looms: The question that is on everyone’s mind but was hardly discussed at the show was the coming onslaught of consolidation at virtually all layers of the ecosystem.
Developing Markets: Connecting the next billion was a recurring theme. The smartphone penetration in the developing world is in the single digits. More than that, introducing consumers to a computing platform for the first time is an exciting opportunity. Creating services that are tailored to the local environment remains an opportunity that can have a profound impact on society. Our own work with the UN/ITU has shown the transformative role of mobile in almost every walk of life. The device unit growth is coming from the developing markets and as they get connected, the world becomes flatter, and the competitive dynamics in a globalizing world will create for some interesting policy and political battles.
M2M and Internet of Things: As we wrote in our book “Wireless Data Services” back in 2004, the connectivity is becoming pervasive. The module costs are coming down fast and the desire to measure and track every number that is important in our lives is creating a massive opportunity. However, privacy, battery life, environment, security remain key issues that need to be tackled.
Identity as a business opportunity: In a digital world where access to information and resources depend on verification of your identity, the guards and keepers of the identity information have a big role to play. As such, “identity” management is emerging as an opportunity that can be monetized. In the online world, Facebook has become the dominant way to integrate apps and services. In the mobile world, operators can play a significant role in authentication and verification. Will the two worlds collide? Fasten your seat belts.
The Post PC world: As an experiment, for the MWC trip, I carried just the Nexus 7 tablet and an iPhone. I felt liberated. In the past, for day trips, I have relied just on iPad/iPhone for taking care of my computing needs. For this trip, I wanted something that I can carry in jacket pocket. Nexus was good enough for taking simple notes, email, browser and even some phone calls. I could easily switch back-and-forth between the tablet and the phone, and the combined battery life lasted the whole day.
· Google’s absence from the show puzzled many
· The enthusiasm for RCS/Joyn seems to have subsided as reality sets in
· Nokia is broadening the reach of its HERE platform to other operating systems
· AT&T/Ericsson showed WebRTC demo
· Facebook announced messaging partnerships with operators in developing countries
· Small cells remained a hot topic though seen more of a compliment for the macro network
· Signaling traffic continues to grow at a faster pace than the data traffic as more LTE devices come on the network
· Qualcomm launched RF360 solution to deal with frequency band fragmentation which is serious problem for LTE roaming
· Yotaphone with its dual screen (front and back) and NEC Medias with its stacked up screens had something fresh to offer in the devices space when 99% of the devices look the same
· Virtualization is the new black in mobile networks
Best booth: Ericsson’s networked world theme was well thought-out and provided a unique exploratory view of the opportunities and technology evolution. A close second – Connected City.
Best party: There won’t be an MWC without the bevy of parties every night. Qualcomm again stole the show with the jam-packed confluence of the mobile elite.