2013 – The year in mobile December 23, 2013Posted by chetan in : 4G, 4th Wave, Applications, Chetan Sharma Consulting, Connected Devices, Devices, Disruption, Enterprise Mobility, European Wireless Market, Fourth Wave, IP Strategy, Intellectual Property, Mergers and Acquisitions, Mobile 2013, Mobile Applications, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 41 comments
Mobile Predictions 2014 Survey: We launched our annual mobile predictions survey for 2014 last week. For all of you have already contributed – many thanks! Rest – will appreciate you filling out the short survey and helping us in analyzing 2014. We even have prizes J. We will have the full analysis from the survey during first week of January.
2013 – The year in mobile
Just like there is no “year of electric cars” or “year of razor blades” or “year of the Greek yogurt,” there is no “year of mobile” or “year of this or that.” However, as we have seen over the 30+ years of mobile evolution, the next year is better than the previous one and so on and so forth. So, 2013 ends in the long tradition and continuum of human endeavor to make significant progress in multiple mobile dimensions and make an impact on individuals and societies alike. 2013 proved that connectivity has become the core of our fabric and we are entering the “connected intelligence era” that will enable the Golden Age of Mobile.
In no particular order, here were some highlights of mobile 2013:
Number of mobile subscriptions ~ humans: the total number of mobile subscriptions got tantalizing close to the number of humans on the planet. Next year, we will go past the milestone but it shows the pervasiveness and strength of the mobile technology that it has become the basic part of our Maslow’s hierarchy.
More data please: As smartphones approach the 2B mark, the data appetite of consumers showed no signs of abating. In Sweden, the mobile broadband subs are consuming over 7GB/mo. In the US, some Android devices are consuming over 4 GB/mo on average. Operators will need to continue to refine their pricing and margin models as the demand for more spectrum will continue.
The dominance of Samsung and Apple: The tussles in the device segment has all the intrigue and juxtaposition of a Shakespearean drama and the ups and downs of a Pavarotti’s masterpiece. Through sheer muscle tenacity and the execution speed of Usain Bolt, Samsung was able to firmly dominate 2013 despite Apple’s grip on the high-end smartphone market. These two account for almost 50% of the smartphone shipments and almost all of the profits in the space. Apple continued to set the tone for the market with the launches of new iPhones and iPads. Though iOS trails Android in raw deployment, it trounces it in consumer usage. It is also remarkable how quickly consumers upgrade to the latest iOS in stark contrast with the Android fragmentation. Apple finally got access to the big Chinese market.
The disappearance of the legacy device brands: Nokia, Motorola, and RIM were dominant players a few years ago but Apple ensured the smartphone script is rewritten. They all made serious strategic errors one after another and while Nokia and Motorola have found new families to host their aspirations, their story should be a reminder of the turbulent cycles of the device business and that the complacency virus spares no one. The rise of the local OEMs should keep everyone on their toes in 2014.
Android juggernaut: In 2013, Android continued to create distance with Apple in terms of downloads, easily going past the mind boggling 1 billion milestone. Android has changed the industry for the better. While there is trouble in the house, Android will continue to play a major role in the device and app ecosystem in 2014.
The growth of OTT Services: As we discussed in our 4th wave paper earlier this year, OTT Services will be the biggest growth segment for the next decade. In 2013, the segment grew 50% ahead of any other telecom segment. Young IP messaging stalwarts fundamentally altered the messaging landscape with Whatsapp performing exceptionally. SMS usage and revenue numbers were impacted worldwide.
The digital revenue streams are very distributed with diverse players such as Facebook, Twitter, Starbucks, Expedia, Uber, Pandora, Amazon, AT&T, Telefonica, Verizon, DoCoMo, Netflix, China Mobile, Rovio, Square, Softbank, Ebay, Hertz, Apple, Google, and Microsoft. In our work with players around the world this year, it is clear that there is significant energy and application in mining the opportunities on the 4th wave. With nascent efforts in Bhutan, Vietnam, Malaysia to moonshots in the US and Europe, mobile is rewriting the rules in virtually every industry. Fasten your seat belts for another fast paced year in 2014.
Post-PC beat PC+: Apple expertly wrote the post-PC narrative and while the PC+ crowd has a legit argument, perception is often reality and there in no doubt that from here on out, the industry will be talking about the post-PC world in one voice. Even Microsoft will grudgingly admit to the transition and likely shift its strategy accordingly. As we wrote long time ago, Tablets have fundamentally altered the computing paradigm. In our SMB research released earlier this year, it was clear that smartphones and tablets are the tools of choice for the enterprise and that is not only altering the device business but also the software landscape. Mobile broadband, the cloud, and the applications are altering the enterprises – big and small. Microsoft should take solace from a tough year of progress. Blackberry is practically done and Microsoft has established itself as the distant but a viable third mobile ecosystem. Had it not been for a series of strategic mistakes, Microsoft might have made better inroads in 2013.
LTE launches: LTE is the fastest growing generation of cellular technology in the history. With over 250 networks launched, the desire to launch IP networks quickly is on top of the agenda. US leads with all major operators having substantial LTE deployments but other nations are fast catching up. While there has been quite a bit of focus on LTE, WiFi has been emerging as the white knight and its importance only grew in 2013 with 60-70% of the mobile data traffic being carried by WiFi networks in most of the countries. It might lead to some interesting business models in the coming years. 5G entered the industry lexicon.
M&As: It is natural for fast growing and competitive industries to consolidate. 2013 wasn’t any different. There were some blockbuster and expected M&As: Microsoft acquired Nokia, Softbank surprised with Sprint/Clearwire acquisition, Verizon finally got hold of its destiny from Vodafone. As we have eluded to several times in our past research notes, we expect the global M&A to continue with several block buster deals slated for 2014. Stay tuned.
Patent wars: In maturing markets, patent wars are the unfortunate part of the ongoing battle for dominance. Mobile saw its share of patent wars. With roughly quarter of the USPTO grants becoming mobile related, it shouldn’t come as a surprise though.
Regulatory tussles: Regulators are generally always behind in understanding a fast growing industry. It was clear in 2013, that the convergence of the computing and communications world has left the regulatory world woefully short of expertise and imagination. Governments around the world will do better by hiring folks from the industry to get a grip of the fast-paced every-changing dynamics of the mobile world as the very competitiveness of a nation depends on it. From spectrum to privacy, from competition to commerce, regulators need to get up to speed on unexpected trajectories of the new world.
Security and Privacy: From Snowden revelations to industrial espionage, from credit card data loss to enterprise security, the security and privacy of mobile data, applications, networks, and devices became front and center of the security and privacy debate.
Operator disruption plays: In the telecom space, the #4 player generally doesn’t have a big impact on the overall mechanics of the industry. However, when it has nothing to lose, it can provide a potent dose of disruption to the market. Free in France and T-Mobile in the US were examples of that this year. In France, by offering cheap mobile data services at low margins, the newcomer altered the economics of the segment tumbling the incumbent revenues by 10%. In the US, through a series of financial and marketing maneuvers, T-Mobile was able to alter its net-add trajectory and had meaningful sub gains for the first time in three years. Also, for the first time, T-Mobile forced the top three to react to its moves and not the other way around. It also inspired other smaller players in other countries to rethink their strategies.
Connected devices: The promise of M2M and connected devices has been there for some time. Internet of Things has morphed into the gimmicky Internet of Everything. While the hockey stick curve hasn’t arrived yet, there was plenty to celebrate with the introductions of Google Glasses, wearables, smart watches, connected autos, glamorous thermostats, winking light bulbs, home security and energy management solutions and much more. GE is spending billions for its “industrial Internet” initiative. A nice platform has been set for continued feverish growth and product introductions in 2014.
Mobile’s impact on commerce: Mobile is changing every industry but its impact on commerce is particularly notable. In the 2013 holiday season (according to IBM), mobile made 17% of the online sales increasing over 55% from 2012. Tablet users spent $126/order.
Meteoric rise of mobile apps: In 2010, we evaluated the impact mobile apps will have on the industry. Much of the growth has been expected, however the players who lead in revenue and downloads have fluctuated across the various platforms. In 2013, Google started to match Apple in downloads though Apple easily wins in the revenues category and thus still remains more attractive to the developers though the gap is closing.
There was much more – Twitter IPO, Surface, Moto X, spectrum scandals, Facebook’s love for mobile, Google mobile advertising dominance, the rise of the Chinese OEMs, decline of HTC, and several other events captivated our attention.
I am positive that 2014 is going to be another terrific year for mobile. The progress and surprises will come from all quarters. New players will emerge, new business models will take hold, and we will make significant progress. I am also sure that you all will do your part in shaping the mobile cosmos.
Would love to hear from you. How was your 2013? And what are you looking to do in 2014 that will change the mobile world? Please be sure to fill out our annual predictions survey for 2014.
With best wishes for an outstanding 2014.
2012 Mobile Industry Predictions Survey January 3, 2012Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, BRIC, CTIA, Carnival of Mobilists, Carriers, Connected Devices, Disruption, Enterprise Mobility, European Wireless Market, IP Strategy, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile Traffic, Networks, Patent Strategies, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 12 comments
2012 Mobile Industry Predictions Survey
First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2012. My thanks to all who participated in our 2012 Mobile Predictions Annual Survey. It gives our community an insider’s view of trends.
2011 was a terrific year for the mobile industry. With all its ups and down, consumers embraced devices, applications, services, and technology with more gusto than ever before. In the waning hours of 2011, we crossed the 6 billion subscriptions milestone. While the first billion took 19 years, this last billion only took 15 months.
Smartphones are selling like hot cakes. We estimate that by the end of Q4 2011, over 60% of the devices sold in the US were smartphones and over 30% of the global sales were for the evolved brethren of the primordial featurephones. Sparked by insatiable consumer demand for mobile data, LTE and HSPA+ networks are sprouting all over the planet with US leading the charge for broadband deployment.
Our annual survey is a way for us to engage our community on the trends for the next year. We put some of the pressing questions to our colleagues and industry leaders. We are able to glean some valuable insights from their choices and comments, some tangible shifts, and get a sense of what’s to come. Executives, developers, and insiders (n=150) from leading mobile companies and startups from across the value chain and around the world participated to help see what 2012 might bring to keep us on our toes. What makes this survey unique is that it draws upon the collective wisdom of folks who are at the center of the mobile evolution.
Fifteen names were randomly drawn for the limited edition of the Mobile Future Forward 2011 book. The winners are:
Tor Bjorn Minde, Head of Ericsson Labs, Ericsson
Sunder Somasundaram, Industry Solutions Practice Director, AT&T
C. Enrique Ortiz, Mobile Technologist, About Mobility
Russell Buckley, CMO, Eagle Eye
Marianne Marck, VP – Engineering, Starbucks
John Foster, President, ZED USA
Angel Luis Saez, Sr. Director, Orange Spain
Dilip Mistry, Senior Director, Microsoft Asia
Phyllis Reuther, Advanced Analytics Lab, Sprint
Gene Keenan, VP of Mobile, Isobar
Elizabeth Day, Director of Finance, Trilogy International
Alan Cole, Research Staff Member, IBM T.J. Watson Research Center
X J Wang, VP – GM China, Vesta Corp
Michelle Lee, Director, SK Telecom
Hemant Chandak, Sr. Analyst, Cisco Systems
Thanks again to everyone who contributed. We will be calling on you again next year. It has been a terrific year for us at Chetan Sharma Consulting and we are looking forward to an engaging and productive 2012.
Be well, do good work, and stay in touch.
Thanks and with warm wishes,
Your feedback is always welcome.
Now onto the 2012 Mobile Industry Predictions Survey Results.
1. What was most newsworthy in Mobile 2011?
Android had a spectacular rise in 2011 around the globe. Android OEMs collectively shipped the most number of devices and while margins shrank, they were able to put a united front to iOS. 2011 will always be remembered for the passing away of the industry transformer Steve Jobs. His work directly or indirectly touched billions of souls around the planet, many times over – something rarest of human beings are able to achieve in their life time. Regulatory tussles and significant increase in IP disputes also occupied the headlines. Amazon announced its intention for the mobile space with the launch of Kindle Fire.
2. What will be the biggest mobile stories of 2012?
As we look towards 2012, our panel voted for the continued growth of mobile data as the biggest story followed by Amazon’s entry into the mobile space. Some key questions for the year are: Will Microsoft/Nokia devices will make any meaningful progress? Will RIM survive the year? How does Google manage the fragmentation, decline in margins (for the OEMs), and the IP issues? Will any high-profile security and privacy mishaps lead to more regulatory entanglements? Facebook IPO and its mobile ambitions? How do operators manage the data demand? Which M&As will capture industry’s attention? Will Apple continue to dominate on both smartphone and tablet front? What does Apple do with mobile payments? and much more. Clearly, it is going to be a terrific year.
3. Who will be the most open player in the mobile ecosystem in 2012?
File this in the “perception is reality” folder. Despite all the criticism, Google has maintained its strong position as the most open player in the mobile industry.
4. What applications will define 4G?
Still looking for a killer-4G app? Video, cloud computing, and access will continue to drive 4G demand and growth.
5. What will be the breakthrough category in mobile in 2012?
For a second year in a row, the panel voted for mobile payments and mobile commerce as the top two category that will find their voice. Mobile advertising has become mainstream so it lost its ranking in the top 3.
6. What will be the most popular consumer mobile applications in 2012?
Apps preferences vary by regions depending on a whole range of factors. Messaging and Commerce are the top two categories for the developing world while consumers in the developed nations are likely to gravitate towards commerce and location based services.
7. Which will be the most dominant (unit sales) tablet platform in 2 years?
iOS and Android will dominate the tablet landscape for the next 24 months. A late entry by Windows 8 tablets could make a dent but don’t count on it.
8. Who will make the biggest mobile acquisition in 2012?
2011 had its fair share of block-buster acquisitions, some successful while others were not. Our panel expects Microsoft and Google to continue making the biggest acquisitions.
9. How will the "Apps vs. Mobile Web" debate shape up in 2012?
It seems like the pendulum is swinging towards the mobile web though hybrid solutions are likely to stay with us for a long time.
10. Who will define the mobile payment/commerce space?
The financial companies safely locked in the mobile payments space and while the value chain is fairly complicated and definition confusion abounds, the likes of Visa, Operators and Google will continue to drive the payments/commerce space.
11. Which solutions will gain the most traction for managing mobile data broadband consumption?
Managing data growth and margins drives all strategies at mobile operators these days which in turns drives the value chain. 4G, tiered pricing, and mobile offload continue to be the top solutions if one has the spectrum that is.
12. Which category will generate the most mobile data revenue in 2012?
Messaging, access, apps, and advertising are the four broad categories that drive mobile data revenues around the world. The developing markets rely on messaging while the developed markets are increasingly looking to access as their dominant form of revenue generation.
13. What will help mobile cloud computing gain traction in 2012?
Mobile cloud computing will continue to be defined by enterprise, storage, and media needs.
14. Which enterprise segment will mobile impact the most?
Best buy is becoming the next Circuit City. Other retailers will follow unless they can successful reinvent themselves. Health is more regulatory driven so the progress will be slow though it is ripe for a complete overhaul and developing nations are moving much faster in this space.
15. What will be the dominant revenue model for apps in 2012?
In-app revenue model made good strides in 2011 but the combination of the various available revenue models will be the norm for most application developers.
16. What mode of mobile payments will get traction in North America and Western Europe in 2012?
2011 was the year to set the ground work for growth in the mobile payments space. Given the investment and focus, we are likely to see more movement and consumer involvement in 2012 with proximity based solutions and commerce of physical goods on mobile.
17. What will be the most successful non-mobile-phone category in 2012?
Tablets dominate. Period.
18. Which of the following are likely to happen in the near future?
The is a significant shift in computing taking place right in front of our eyes wherein tablets are replacing laptops and even desktops in the enterprise. European operators have been experiencing tough times while some of the Asian operators are flush with cash, they might make their move in 2012 though regulatory hurdles might prove to be an issue. 33% of the nations will have elections in 2012, maybe which will move mobile voting to the forefront in some nations. Our panel thought there is a better chance of humans discovering water on another planet than rise of another significant mobile OS.
19. Which areas will feel the most impact from Regulators in 2012?
Net-neutrality and market competitiveness will keep the regulators busy in 2012.
20. Who was the mobile person of the year?
Clearly, Steve Jobs was an easy choice but who will replace him 2012? Jeff Bezos has an early lead followed by Andy Rubin and Mark Zuckerberg. Angry Birds representing the developer community will be in for another terrific year. Other honorable mentions were Tim Cook, Paul Jacobs, Sanjiv Ahuja, Dan Hesse, and Glenn Lurie.
A lot to look forward to in the New Year. My thanks to all who participated and we hope you found it useful as you embark on your journey for a successful 2012.
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Feb 2012. The next Global Wireless Data Market update will be issued in Apr 2012.
Disclaimer: Some of the companies mentioned in this survey are our clients.
New Paper: Managing Growth and Profits of Connected Devices September 6, 2011Posted by chetan in : 3G, 4G, Connected Devices, Devices, Disruption, Mobile Applications, Mobile Future Forward, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , add a comment
Paper is sponsored by Synchronoss Technologies
Mobile industry is the most dynamic global industry today. The connected mobile universe touches more than 4.5 billion consumers on the planet and these devices have effectively become an integral part of our daily lives. The pace of innovation and product introduction has also accelerated. The lifecycle of mobile network technologies, devices, applications is shrinking rapidly. While the 1G cycle lasted almost 20 years, the 2G cycle shrank to approximately 15 years. Though many countries are still launching 3G, the expected span for 3G in the US is likely to be 10 years. Similarly, on the device front, the average replacement cycles have decreased from over 24 months to less than 12 months in many mobile markets and demographic segments.
Mobility is also getting ingrained in the everyday objects, which make up for a fundamental reassessment of how things are done across industries in almost every region of the world. It is not just the phones and the data cards that are being enabled by the broadband connectivity but also the everyday electronic devices such as the tablets, eReaders, automobiles, picture frames, and cameras.
It is fairly apparent that mobile data is driving the growth in most developed nations. While voice is a stronger component in the developing nations today, it is the demand for mobile data and the lure of data revenues that is even forcing countries like China and India to embrace 4G at a much faster pace than they did 3G. The impact of data services is reflected in the operator financials. In Japan, Softbank became the first major operator to have more revenues come from data than voice. Others are following. In the US, over 37% of the revenues are coming from data services and the data revenues will account for over 50% of the revenues by early 2013.
The changing dynamics of the industry poses some serious questions about the supply-chain, product and service introduction cycles for the operators and the OEMs, and the management of the cost structure and margins of the business. If these elements are not effectively managed, both the competitiveness and the ROI of the products will be severely impacted. Solutions to these problems must be repeatable, future-proof and –upgradeable, and cost effective, else the solutions won’t scale at the pace needed to manage the growth.
Participants in the ecosystem must identify cost reduction opportunities and streamline operations to take out limitations driven by legacy and drive convenience and seamless user experience for the consumer. Only then can the product introductions be sped up and the desire to maximize profits come to fruition. In this paper, we look at the issues and opportunities around connected devices and the solutions and strategies that will make the ecosystem more vibrant, scalable and sustainable.
Download the paper (1MB)
Of course, we will be discussing this topic in great detail at the Mobile Future Forward summit next week where the central theme is “Connected Universe. Unlimited Opportunities” I will be interviewing Glenn Lurie, President AT&T and Danny Bowman, President, Sprint on this very subject.
Your feedback is always welcome.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Mobile Future Forward – Disruption is in the air July 25, 2011Posted by chetan in : AORTA, Applications, Devices, Disruption, Mobile Future Forward, Networks , add a comment
As you know, Mobile Future Forward is fast approaching and we are very excited about the thought-leaders and attendees who are participating. One of the first panel discussion is going to be on the disruptive forces in the ecosystem, from network to devices to applications.
Sanjiv Ahuja, CEO of LightSquared and Jason MacKenzie, President, HTC Americas are going to the headline the panel. Sanjeev and Jason are both industry veterans and have a great sense of the disruptive forces needed to take the industry to a different level.
Sanjiv Ahuja is the chairman and CEO of LightSquared.
In 2007 Sanjiv founded Augere, a company delivering affordable, genuine wireless broadband to underserved customers in developing markets such as Bangladesh and Pakistan. He is also the founder and chairman of Eaton Telecom, a telecommunications infrastructure company with a presence in 12 African countries.
From 2004 until 2007, Sanjiv was chief executive officer of Orange.
Jason Mackenzie, President, HTC North America and Latin America
Previously vice president of HTC North America, Jason Mackenzie has been promoted to president of HTC North America and Latin America. As president, Mackenzie will continue to drive HTC’s strategy and market growth in North America and Latin America where he has contributed to HTC’s strong performance. As one of HTC’s founding North American members in 2005, Mackenzie has led HTC’s strong growth in North America.
Disruption is in the Air
Disruption is the fundamental tenet of progress. Whether it is the technologies, the business models, the players or the alliances, disruptive forces are essential in making things better for the consumer and the larger ecosystem. Is 4G a game change? What does the wholesale business model do to the data economics? Is the halving of the device lifecycle good or bad? Who manages the customer and where does the value shift? Meet the two leaders who are working to disrupt the mobile industry.
Sanjiv Ahuja, CEO, LightSquared
Jason MacKenzie, President, HTC Americas