jump to navigation

2013 – The year in mobile December 23, 2013

Posted 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.

Yours truly

Chetan Sharma

US Mobile Market Update Q3 2013 November 14, 2013

Posted by chetan in : 4G, 4th Wave, Big Data, European Wireless Market, Fourth Wave, Mobile Applications, Mobile Cloud Computing, Mobile Commerce, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

US Mobile Market Update Q3 2013

http://www.chetansharma.com/usmarketupdateq32013.htm

Download PDF (2MB)

Summary

The US mobile data market grew 5% Q/Q and 15% Y/Y to reach $22.8 billion in mobile data revenues. Data is now 48% of the US mobile industry service revenues and as we had forecasted a few years back, the cross-over point of 50% might occur next quarter. For the year 2013, we are expecting $90 Billion in mobile data service revenues for the US market making it the number one market in mobile data revenues ahead of Japan and China. Q4 2013 is looking to be another record breaking holiday quarter for the industry at many levels, which is setting up 2014 quite nicely.

For the quarter, the market added 2.2M new connections, a strong reversal from the paltry 139K last quarter. T-Mobile continued to impress after its strong reversal in industry metrics last quarter on the back of a series of marketing and pricing initiatives that seem to be gaining traction and having an impact on its image and fortune.

Given that Apple didn’t launch the device until Sept and then had severe supply-chain constraints, Android had its best quarter against iOS with 54% share in the US market.  However, iOS is likely to catch-up in Q4.

Smartphones are now past the 64% mark in the US and continue to sell at a brisk pace accounting for almost 90% of the devices sold in Q3 2013. Apple led the smartphone sales amongst the top 4 operators with 42% share for the quarter. While the US penetration of smartphones is 64%, the 64% of the sub base is concentrated in only 40% of the households thus leaving plenty of growth in the marketplace. Overall, connected devices remains the highest growth segment with 6% Q/Q growth.

Smartphone and Connected Device Growth

Though China has overtaken (primarily because of the sheer size of its population) US in terms of the overall smartphone penetration, US remains the market where OEMs have to be really successful in order to be consider a serious player on the larger canvas. Though the likes of Xiaomi and the Micromax have had good success in their local markets (and still have a great amount of growth left), the prized market to make a sizable dent in their overall revenue and margins is the US market. This is primarily due to handset subsidy that allows consumers to easily own premium brands at bargain-basement prices in addition to the higher disposable incomes. This has helped the ASPs to go up in this market unlike some of the other markets where they have been going down.

US also boasts four leading-edge LTE networks that allows the ecosystem to innovate at the edge, literally. Having access to fast mobile broadband impacts human behavior, application and service development and everything in between. As such, US has become the laboratory for many experiments that benefit the larger ecosystem. This absolutely doesn’t mean that innovative things are not happening in other parts of the world. Far from it. But the “enabling layer” of networks, devices, and platforms is in its most advanced stage in the US. This layer allows folks to build applications and services that will power the global economy.

So, in order to be considered credible in the smartphone space, one must have a decent scorecard in the US today. The pendulum could of course swing and China could take the lead. In fact, US and China are the G2 nations of the mobile world.

While there have been murmurs in the market about smartphone saturation, the upgrade cycles will keep up the demand for more devices in 2014.

Like any ecosystem or a market, there are winners and there are companies who couldn’t perform to their potential. Enough ink has been spilt on Blackberry to reiterate what was quite predictable. The only interesting tidbit that emerged was that as we expected, Lenovo made a serious run for it and the Canadian government stopped it. It is ok for Canadians to use Lenovo laptops but not the smartphones? Of course, the reasons were complicated and different from what have been generally reported. Can Blackberry make a comeback under a savvy CEO? If they continue with the same OS, it is hard to see how?

Apple for the first time launched two models – 5s and a slightly lower priced 5c. It seems like the strategy might have been two fold a) get the supply-chain ready for more than one new model at a time and b) given an additional option to the consumers (in the US) who used to go for a level down version. Since the supply chain was under pressure, it is hard to get a clear picture of what might be happening but the iPhone 5s/c launch allowed Apple to raise the percentage of new devices sold. In fact, based on the weekly sales data from ITG Research, they might have managed to flip the ratio. For e.g. in Sep and Oct 2012, the old models sold 3:1. During Sept-Oct 2013, the new models outsold the old models by 1.7:1. 5s outsold 5c 1.6:1.

The big block-buster deal of Q3 was Microsoft’s acquisition of Nokia. It was clearly one of the outcomes Nokia was on the path of the day it chose Windows Phone OS. Microsoft got an effective OEM distribution and design system for really cheap but how long will it take to turn things around? Its mobile fate might largely depend on who the new CEO is.

Tablets are making a tremendous impact in the post-pc era. In the US market, we are already approaching 100M unit sales/year run rate. While Android tablets have taken market share from iPad, Apple remains the undisputed king of the category primarily because of superior hardware and a more robust ecosystem. Android tablets can be cheap but also unreliable, the life expectancy of such tablets can be 50% or so compared to the iPad. The usage is even less. Microsoft launched a credible challenger in Surface but there have been so many missteps that it is not (yet) in the picture of the post-pc transition. 

There has also been quite a bit of excitement about smart watches, smart glasses, smart cars, smart homes, and on and on. However, we must remember that just because device is growing in the era of the smartphones, it doesn’t makes them smart. In fact, most of these devices are where smartphones were in the late nineties – basic, functional, and full of possibilities. The evolution, however, will be much quicker. Google is one company that is pushing the boundaries of across multiple dimensions. Regulators and policy makers better come up to speed on the emerging landscape quickly.

A good test of a platform’s importance is to find out what happens if the platform shuts down for 5 minutes – how much panic and revenue drop does that create in various parts of the world? Another measure of the platform is the value it creates by launching new companies and ideas. For mobile, the answer is fairly obvious.

The Fourth Wave and the shift towards services

It is evident that there is a subtle shift from devices/access to services/solutions. In our paper on the topic Operator’s Dilemma (and opportunity): The Fourth Wave, I proposed that we need a new framework to think about the next generation of revenue opportunities. The fourth curve opportunities are massive but require a different skill set and strategic approach than the past three curves. As predicted, we are starting to see the impact of the 4th wave on a global scale and some operators have started to break out the 4th wave revenues in their financials. Operators with better balance sheets will also look for global expansion especially in Europe where economic impact on the telecom operators has been severe, however the M&A efforts will be complicated by respective governments desire to keep control of the national infrastructure provider.

We had a very successful Mobile Future Forward Summit last quarter. It was dedicated to exploring the 4th wave in more detail across multiple dimensions and verticals. The dialogue was incredible and validates the march towards the 4th wave that is redefining industries across the spectrum including the wireless industry itself, at its core. Some of these tectonic shifts aren’t very apparent and visible but as I have spent time working with some of the leaders in New York, Silicon Valley, London, Abu Dhabi, Barcelona, Hanoi, Singapore, Dallas, New Delhi, and Seattle this year, it has become abundantly that mobile industry is at a key inflexion point that is changing industries and the power structures, creating new opportunities and new revenue streams. In my interview at Mobile Future Forward, Ralph de la Vega, CEO of AT&T Mobility indicated that the ARPU from Digital Life customers is higher and the churn is lower. So, the fourth wave services have a direct impact on existing revenue streams as well. Conversely, absence of such services doesn’t yield a pretty picture.

FCC chairman and regulations

Amidst all the cacophony of device launches, acquisitions, and investments, FCC finally got its new chairman. Tom Wheeler is one of the savviest operative in the space with better grasp of the ecosystem, policy, law, and politics than most of his predecessors, so it will be interesting to see what the next FCC era brings over the next 3 years. Clearly, Incentive Auctions will be one of the most critical items on the agenda but some other issues like the potential T-Mobile acquisition and net-neutrality issues are likely to become important as well. Regardless, we are in for an interesting ride.

What to expect in the coming months?

2013 has been quite a year for the mobile industry and as we head into the holiday season, it’s a consumer’s market with plenty of choice and competition.

As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q3 2013 US wireless data market is:

Service Revenues

ARPU

Subscribers

Shared Data Plans

4th Wave Progress

Handsets

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 March 2014. The next Global Wireless Data Market update will be issued in February 2014.

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

New Research Paper: The ABCs of SMB Transformation: Apps, Broadband, and the Cloud May 6, 2013

Posted by chetan in : 3G, 4G, 4th Wave, AORTA, Applications, Chetan Sharma Consulting, Connected Devices, Enterprise Mobility, European Wireless Market, Mobile Cloud Computing, Mobile Ecosystem, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

The ABCs of SMB Transformation: Apps, Broadband, and the Cloud

- A collaboration between Chetan Sharma Consulting and AT&T

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

clip_image001

Download pdf (1.5 MB)

Introduction

In 2013, the US mobile data revenues will exceed $90 billion accounting for over 165% growth in the last 5 years. This makes US the biggest market for mobile data solutions and services. The smartphone penetration in the US went past 50% by mid-2012. The number of applications available to consumer has quadrupled in just the last two years. While the growth in the smartphone segment has been quite impressive, the tablet adoption rate has been the highest in the consumer electronics history. The advent of mobile broadband, powerful computing devices, reliable cloud services and applications have changed the computing landscape forever.

At the same time, the Consumerization of IT is changing the face of the enterprise architecture as well. This is felt more acutely in the small-and-medium business (SMB) segment. US is also the biggest enterprise market in the world and the SMB segment represents the more agile and technology-savvy of the ecosystem. In fact, we think it is a leading indicator of how technologies are going to be adopted in the enterprise ecosystem, what trends will prove to be disruptive, which vertical segments will embrace efficiency, and most importantly, how should we think about the ever-changing landscape as we look towards rest of the decade.

Small businesses are at the heart of the US economic engine. They represent roughly 45% of the non-farm GDP. Every administration, every president focuses on small business growth and job creation. Given the importance of small businesses to the economy, it is worthwhile to look at how their technology needs are changing. Additionally, it is important to understand how they are adopting technology and the impact it is having on their productivity, competitiveness, and efficiency. The technology adoption is also putting some of the traditional industry segments at risk while creating several new growth areas.

To understand the impact of mobile broadband, devices, and cloud applications, we conducted a survey of eighty SMB companies of different shapes and sizes across the US serving different verticals constituting over ten thousand employees. We also looked at the data from over twelve thousand companies in the SMB segment and over twenty thousand larger enterprises. Additionally, we conducted a series of interviews to better understand the motivations, requirements, and feedback of these companies. These companies have been in business for twenty years on average with over two years of experience with mobile data solutions. By understanding how they use and benefit from mobile data solutions, we can better identify the course of enterprise mobility in the US and around the world.

Some interesting findings:

· Small and medium businesses are leading indicators of technology adoption. As referenced in this paper, SMB smartphone and tablet penetration is more than 90 and 65 percent respectively; whereas national smartphone and tablet penetration is roughly 55 and 22 percent. 

· Mobile First to Mobile Only. Last year, we proposed that we will start moving from mobile first to mobile only economy. We said that we are approaching a pivot point wherein the mobile first doctrine is going to move to mobile only. We are starting to see strong evidence of that shift. In our survey, roughly 30% of the SMBs are transitioning from desktops/notebooks to smartphones/tablets. Business software and solutions are being transformed by the use of smartphones and tablets. With this shift, we’ve seen the emergence of a generation of app developers focusing primarily on the mobile app platform.

· Mobile broadband, cloud, and apps are providing real and tangible ROI. The SMBs in the survey saw an average savings of 40 minutes per worker per day, which translates into significant impact on profits over the course of the year.

Your feedback is always welcome.

Chetan Sharma

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

Mobile World Congress 2013 Recap March 6, 2013

Posted by chetan in : 4G, AORTA, Chetan Sharma Consulting, European Wireless Market, LTE, Mobile World Congress, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 6 comments

“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.

The Miscellaneous:

· 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.

2013 Mobile Industry Predictions Survey January 2, 2013

Posted by chetan in : Chetan Sharma Consulting, Connected Devices, European Wireless Market, IP Strategy, Mobile Commerce, Mobile Ecosystem, Mobile Predictions, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2013. My thanks to all who participated in our 2013 Mobile Predictions Annual Survey. It gives our community an insider’s view of the trends and predictions for the New Year.

2012 was a terrific year for the mobile industry. Mobile data continued to drive most of the mobile growth around the world. Mobile also started impacting every major vertical industry around the globe. In fact, mobile has become so ingrained in the fabric of business productivity and social interaction that it is not longer the new growth engine, it has become the engine.

The competitive dynamics stayed quite vibrant in 2012. We saw epic battles in the markets as well as in the courts. 2012 also saw the PC value chain struggling for relevance while the smartphones and tablets unit sales captured all the attention and headlines.

As we peer into 2013, we will see the total number of cellular subscriptions eclipsing humans on the planet. The connected device made steady progress. Anything that should be connected is being connected - creating a web of new opportunities and challenges.

LTE has become the fastest deployed cellular technology in the approximately 35 year history of the industry. Broadband combined with connected devices and applications are changing the way we live, we interact with others, do business, and consume information.

The European economic crisis impacted many players especially the large telcos, making the transition to digital ever more urgent. As voice and messaging revenue curves decline and access revenue approaches its high mark in the next few years, investment in the fourth curve becomes critical for all players.

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=200) from leading mobile companies and startups from across the value chain and from around the world participated to help see what 2013 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. The survey provides a view of how they see the upcoming year for mobile.

30 names were randomly drawn for the limited edition of the Mobile Future Forward 2012 book. The winners are:

Thanks again to everyone who contributed. We will be calling on you again next year.

Be well, do good work, stay in touch, and stay away from Triskaidekaphobiacs.

Thanks and with warm wishes,

Chetan

2013_2

What was most newsworthy in Mobile 2012?

2012 was a spectacular year for smartphones. Smartphones in most western nations are now over 80% of the devices sold every quarter. China will soon become the biggest market by unit volume and the rest of the world is catching up fast as we see sub-$50 Android devices flood the market. Apple vs. Samsung has become akin to Lakers vs. Celtics of the eighties or the India vs. Pakistan rivalry in cricket. The passion and intense competition between the two super powers was clearly the headline of the year. That pushed the Android vs. iOS tussles as the subheading for 2012. As we enter into 2013, the legacy computing aka PC players will need to reinvent themselves or expect substantial decline in their fortunes.

2013_3

  1. What will be the biggest mobile stories of 2013?

2013_4

The role of mobile data in industry’s growth has been cemented by the insatiable appetite for higher speeds, more apps, and social interaction and is expected to continue at a feverish pace as LTE roles out around the world and the developing world catches up. We are likely to see the Apple and Google rivalry intensify. One is a master of hardware and the other of software. Both have their Achilles heel and much is at stake in the coming year. Many expect Microsoft’s Windows to make progress to lay claim to become a viable 3rd ecosystem. 2013 will try to answer that question.

Who will be the most open player in the mobile ecosystem in 2013?

2013_5

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

2013_6

Many in the industry talk about Apple, Google, Facebook, and Amazon as the most important platform players in the business today. However, when it comes to mobile, in addition to the defacto top-two, our survey picks Samsung as number three by a good margin. Samsung has become a strong player in the digital ecosystem that commands attention and respect. The top 10-15 global operators play a strong role in the mobile ecosystem and collectively edged out Amazon and others for the number four spot. Facebook and Microsoft while strong in the desktop world have a lot to prove to be considered a top tier player in mobile.

What will be the breakthrough categories in mobile in 2013?

2013_7

Our industry seems fascinated with the potential of mobile payments and voted it to be the top mobile applications and services category for 2013. Given the importance of Cloud in all apps/services, it is no surprise that it is part of the top 2. Mobile Commerce, Big data, and connected devices rounded up the top 5.

What will be the most popular consumer mobile applications in 2013?

2013_8

There are regional variations when it comes to the popularity and revenue potential of mobile applications. Messaging, mobile commerce, and social dominate the developing world while location based services replaces messaging in the developed world as the key mobile application. Mobile health and gaming made a strong show in both regions.

Which will be the most dominant tablet platform in 2 years?

2013_9

So far, iOS has dominated the tablet landscape. With iPad, Apple has effectively carved out the mid-high tier of the tablet space. Android players are losing or barely making any revenue from this device category. Windows tablets are priced so high that it is trying to compete with laptops rather than the tablets. Our panel expects Android to catch-up in unit sales and iOS to dominate the revenues by good margins. Windows is likely to stay a marginal player.

Who will make the biggest mobile acquisition in 2013?

2013_10

Microsoft and Google both have big cash balanced to make some sizable acquisitions in 2013. Microsoft lacks traction and attention and will try to make a move but which player can give them an edge? Apple also needs to beef up its software operations significantly but doesn’t have the history of big acquisitions. Operators are also looking to become OTT players themselves and might make moves to shore up their strategic interests. Many participants think that Nokia and RIM have seen their final year as an independent entity.

How will the "Apps vs. Mobile Web" debate shape up in 2013?

2013_11 

In 2012, many expected the resurgence of “mobile web” but it hasn’t panned out that way. Google has doubled up on apps, Facebook realized HTML5 isn’t going to cut it, and the expectations pendulum swung back to the apps and might stay there for 2013.

Who will dominate the mobile payment/commerce space?

2013_12

Three years ago, mobile payments/commerce seemed to be the “blue ocean” opportunity but financial guys have firmly protected their turf, at least for now. Hopes were high for operator led initiatives but the enthusiasm has tapered off. Startups like Square are doing more to disrupt the payments space than some of the established players. The only exception is PayPal, which has so far been able to create good distance with the competitors. Microsoft has surprisingly been absent in a critical space.

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

2013_13

4G, mobile offload, and tiered pricing have been most effective in managing the costs of mobile data consumption though spectrum has garnered more of the noise share.

Which category will generate the most mobile data revenue in 2013?

2013_14

Access dominates the developed world while messaging has the lion share in the developing world. We will see access becoming the dominant category in the emerging markets fairly soon.

Which European operator is likely to emerge stronger from the current economic climate?

2013_15

European operators have been battered by struggling economy and regulatory changes. Many are rethinking their strategy, shedding off assets, and just trying to keep their head above water. The leaner operations and refocused strategic direction might help them recover better when the economy improves. While our global panel picked Vodafone to have the strongest recovery, our European panel picked Telefonica to emerge stronger.

When will mobile commerce be greater than ecommerce?

2013_16

A majority of the panel thinks that mobile commerce will eclipse ecommerce in revenues generated by 2015 in North America and Asia and by 2020 for the rest of the world. There are already strong signs that commerce is shifting from online to mobile.

The company bringing the most successful mobile gadget of the year - 2012 and 2013?

2013_17

Apple continues to produce the most desirable devices. iPhone and iPad dwarf everything else and easily was the company with the most successful gadget in 2012. However, the panel expects Samsung to best its rival in 2013. Google and Amazon might mount a credible challenge but their chances of producing something truly dominating remain low.

Which platform has a credible shot at becoming a viable and durable 3rd ecosystem in mobile?

2013_18

Windows 8 phones finally launched in 2012. The design is solid, the OEM support is growing, the number of apps are rising and while it is still a long ways to becoming a credible 3rd ecosystem, it has the best shot at becoming one. The only rival seems the HTML5-based OS initiatives. The application developer community actually voted for HTML5 over Windows as the 3rd ecosystem that has some chance of competing with iOS and Android which completely dominate in revenues and unit sales respectively.

Mobile company of the year - 2012 and 2013?

2013_19

Samsung eclipsed Nokia and Apple to become the most dominating device player in unit volume in almost all major markets. The speed with which it is churning out devices has pretty much crushed the rest of the Android ecosystem and is going head-to-head with Apple. For this performance, the panel voted Samsung to be the mobile company of the year for both 2012 and 2013 with Apple and Google close behind.

Which of the following are likely to happen in 2013?

2013_20

The rumor chamber is ablaze with the possibilities of Apple TV, smartphones from Amazon and Microsoft, and data-only plans to make their appearance in 2013. Square and Twitter could be the hot acquisitions of the year though Twitter is likely to chose IPO glory. Will Samsung fork Android? Will Sprint and T-Mobile merge? Will European operators get acquired? These are some of the questions that are likely to keep the media on their toes this year.

Which operator is best positioned for the digital world?

2013_21

As we outlined in our research paper “Operator’s Dilemma: The Fourth Wave,” the business of being a mobile operator is at a critical juncture and operators are investing heavily into creating the digital business. AT&T, Verizon, NTT DoCoMo, Softbank, and Telefonica are already generating billions of dollars from these initiatives and lead the operator contingent in the digital world.

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

2013_22

In the past, Steve Jobs was consistently the person of the year in mobile. In 2012, Tim Cook effectively managed to produce record profits for the investors and navigated Apple to keep its “most valuable enterprise” title intact for the year. Apple is still the company on top of the hill. JK Shin of Samsung was voted number two for 2012. For 2013, the landscape changed. Our panel overwhelmingly voted Jeff Bezos to impress us the most in 2013. Amazon has done a good job disrupting the device model and with its strong commerce expertise, it is looking to take on both Google and Apple at the same time. Andy Rubin of Google with the 1 billion Android units milestone coming up this year will be a good contender for the title as well.

There were several other leaders who impressed in 2012 e.g. Paul Jacobs (eclipsing Intel in market cap), Jack Dorsey (disrupting the mobile payments market with Square), Masayoshi Son (for Sprint acquisition and global ambitions), Dan Hesse (for navigating Sprint through rough waters), Glenn Lurie and Matthew Key (for leading the digital transformation of the two giants – AT&T and Telefonica respectively), Rhen Zhengfei (for making Huawei into a dominating infrastructure provider), Lowell McAdam (for making Verizon the number 1 mobile data operator in the world) and Ralph de la Vega (for making AT&T the number 2 ahead of NTT DoCoMo).

All in all, a great collection of thoughts and comments. Thanks again to everyone who participated. Have a great 2013.

Mobile Future Forward 2012 Update - Connected Universe. Monetizing Opportunities. June 25, 2012

Posted by chetan in : AORTA, Applications, European Wireless Market, Mobile Cloud Computing, Mobile Commerce, Mobile Future Forward, Mobile OEMs, Mobile Operators, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

Greetings,

Hope all’s well. Just a quick update on how the program is shaping up.

We have been working steadily on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle) and I am very pleased to announce the preliminary program. We will provide an update as we continue to refine the program and announce more speakers. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.

I am delighted to be partnering with some of the leading players in the mobile ecosystem: Intel, Ericsson, Synchronoss, and Tekelec.

Steve Elfman, President, Sprint will give us an update on the state of the wireless industry – the opportunities and the investment areas. Glenn Lurie, President, Emerging Enterprises and Partnerships at AT&T Mobility will provide us with a glimpse into the world of emerging devices and opportunities. Both Steve and Glenn are mobile industry veterans with decades of experience and their perspective will be invaluable for our Mobile Future Forward community.

Mobile commerce has been a hot topic lately. We have two terrific speakers – Mung Ki Woo, Head of Mobile at Mastercard Worldwide and Antonio Benjamin, Global CTO at Citi to lay the roadmap of the mobile commerce ecosystem evolution.

When it comes to retail, brands, and technology, there are not many people with deeper insights than Stephen David, former CIO of Procter & Gamble. He is a highly sought-after advisor to global brands around the world. I have had the good fortune to work with him in the past and his grasp on how wireless is going to disrupt retail is just brilliant. We are delighted to have him back to have a conversation about mobile, brands, retail, and IT.

As you can see below, we have an outstanding group of executives who are responsible for changing the industry every day. Their viewpoints and commentary will be invaluable. The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.

Confirmed Speakers

· Steve Elfman, President, Sprint

· Glenn Lurie, President, AT&T

· Renee James, SVP, Software and Services Group, Intel

· Wim Sweldens, President, Alcatel-Lucent Wireless

· Michael Bayle, SVP and GM, ESPN Mobile

· Martin Fichter, President, HTC

· Stephen Bye, CTO, Sprint

· Bobby Morrison, President, Verizon Wireless

· Erik Moreno, EVP, Fox

· Stephen David, former CIO, Procter & Gamble

· Ed Cantwell, SVP, West Wireless Health Institute

· Jana Messerschmidt, VP, Twitter

.. More to come

· Mung Ki Woo, Head of Mobile, Mastercard Worldwide

· Antonio Benjamin, Global CTO, Citi

· Biju Nair, EVP and Chief Strategy Officer, Synchronoss

· Hank Skorny, VP/GM, Intel

· Jack Kennedy, EVP, News Corp Digital Media

· Marianne Marck, VP – Engineering, Starbucks

· Tim Chang, Partner, Mayfield

· Vish Nandlall, CTO and EVP, Ericsson

· Carlos Domingo, President and CEO, Telefonica R&D

· Kevin Packingham, SVP – Product Innovation, Samsung

· Frank Meehan, Executive, Horizons Ventures

· Oke Okaro, Global Head of Mobile, Bloomberg

Discussion Topics

· Looking back from Mobile 2020 – the last 10 years

· The fight for developers – Apps, APIs, and Dollars

· Will Privacy get in the way of mobile growth?

· PostPC era and the tablets – commerce, engagement, and consumption

· Quantified Self. Quantified Enterprise – how to benefit from big data?

· Gamification of Everything – How to reinvent business models and revenue streams

· When will Mobile Commerce eclipse Ecommerce? And How?

· Mobile Broadband – LTE is here and now. What’s Next?

· Mobile Competitive Policy – Balancing competitiveness, consumer interests, policy, and innovation

· nScreen Connected Consumer – Expectations, Solution roadmap, and Revenue flows

· Operators vs. OTT – Competition, Co-opetition, and the new landscape. Measuring the seismic shifts.

· Big (Mobile) Data – Collection, Management and Use of Data

· Mobile Cloud Computing – Innovation, Competition, and Business Models

· Mobile CIO Prism – Disruption in the enterprise. Opportunities for growth and cost reductions

· Managing networking growth in the Yottabyte Era – strategies to tame signaling and data tsunamis

· Mobile Platforms and Ecosystems – The Cycles and the Eternal Debate

· Mobile Security – BYOD, Hacking, Protecting, and Monetization

· Emerging Markets, Emerging Opportunities

· Battle for the Home – Devices, Apps, Networks

· Retail channel transformation – how are we going to shop and who makes money?

I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds. Registration is open now. Early bird will expire July 10th. The last two events were sold out so be sure to grab your seat to one of the most anticipated mobile gathering of the year.

Thanks.

Kind regards,

Chetan Sharma

Mobile Breakfast Series Recap – Atlanta – Connected Devices, Cloud, and Consumer June 24, 2012

Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, Connected Devices, European Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Devices, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

We started doing Mobile Breakfast Series in Seattle back in 2009 and after hosting10 straight events, it was time to expand the wings and explore other cities. The first stop in this journey was Atlanta and we worked closely with our partners at “Wireless Technology Forum” to make it a successful event last friday. I also had the good fortune of participating in WTF’s event the night before. Both events focused on Connected Devices and their impact on the consumer, the ecosystem and the value-chains thus making it a “connected week” in Atlanta.

IMG_6329

IMG_6336

IMG_6333

IMG_6316

IMG_1291

IMG_6338

As I mentioned, the night before the event, I had the opportunity to present and moderate a panel on Connected Devices with Glenn Lurie, President of Emerging Enterprises at AT&T and Jeff Smith, CTO at Numerex. Both are movers and shakers in the space and it was such a pleasure meeting with many WTF members and interacting with the top-notch panelists. The event was recorded and is available on WTF’s Youtube Channel.

We hosted the Atlanta Mobile Breakfast Series Event in Atlanta at the Commerce Club of Atlanta which has beautiful views of the Atlanta area.

There is an old Chinese saying, “When the wind of change blows, some build walls others build windmills.” Our industry is going through tremendous change; it won’t be an exaggeration if I say that the tectonic plates are moving and moving fast. The motion is being forced both by the economic conditions but also the technology and business progress. I have been around the industry long enough but it still amazes me – the stuff that’s in the pipeline and how quickly consumers absorb it.

The topic of our discussion was Connected Devices, the Cloud, and the Consumer. With connected devices, I am referring to the broad availability of devices that are connected to data networks – so they include smartphones, tablets, connected auto but also wellness devices like fitbit, energy meters, dog collars, medical devices, etc. as of last year, the subscription penetration was at 6B, next year, we will have more connections than people on this planet. In another 5-7 years, we might touch 20 Billion sensors on the planet. So you can see the growth is going to be astronomical.

Another phenomenon is that of cloud. If a startup mentions Cloud in their presentation to a VC, the valuation doubles, you say mobile, and it quadruples. I don’t know how many of you are a fan of Mark Weisier, the Xerox Parc researcher who pioneered what became “always on, always connected” tagline of pervasive computing. It was more than 20 years ago, we finally are seeing that with the help of broadband networks, amazing devices, and open business models, information is truly available at the fingertips.

The third leg of our discussion was the consumer – their appetite for new and the latest is creating this tremendous opportunity that is shaping their behavior and expectations.

We had an awesome panel to discuss things in detail. First I discussed the topic with David Christopher, Chief Marketing Officer at AT&T Mobility. As most of you might be aware, AT&T is leading not only the US but the globe in their efforts to bring connected solutions to the market. I work around the world with top operators, and I can tell you there is no exciting place in mobile right now than right here in the US of A. US is leading in innovation, technology, and business model. We had lost touch after 1G and US truly teaching rest of the world how to do 4G right. David has a terrific background – a product and operationally driven CMO at one of the world’s biggest mobile operator and it was a delight to have him on the panel.

I have known both Biju Nair and Louis Gump for sometime – several decades of mobile expertise. Louis is with CNN, has been running their mobile efforts which are top-notch. He is a recognized leader in the mobile advertising space and given that CNN’s properties span across multiple screens, he has really great insights as to how consumers behave across n-screens.

Biju is a hard core technologist, has been working at solutions that make Louis’ stuff work across networks and devices. Many of you might not know but Synchronoss where Biju is the Chief Strategy Officer and Products EVP, powers online activation at AT&T. If you bought the iPhone over the last few years at AT&T, there is a good chance your order was processed by Synchronoss.

Highlights from the discussion below:

The team at Chetan Sharma Consulting really enjoyed taking the Breakfast Series to Atlanta. My thanks to the terrific team at WTF for their support and to the Atlanta Mobile Community for making the event so successful. Finally, the event wouldn’t have been possible without the support of our series partner – Synchronoss.

As you might be aware, our fall mobile executive summit – Mobile Future Forward is going to be on Sept 10th. Registration is open. We are likely to sell out so grab your tickets early.

Next Stop – London for our first venture across the pond. On June 29th, we host the discussion on Operator/OTT – The way forward with Telefonica, Orange, Rebtel, and Horizons Ventures. Read Frank Meehan’s pre-event interview about the topic here.

Operators and OTT - The Way Forward - London

Operator traditional revenue streams are under threat esp. voice and messaging. Access margins will continue to stay under pressure. OTT players are coming in fast and furious and it is not just the big ones like Google but also players like Whatsapp, Voxer, Viber and others. How do operators play in the new landscape – lessen the decline of their traditional revenues while investing in new areas that improve their overall margins and revenues. Do they play the role of an enabler, a utility player, or become the OTT player themselves? In a software-driven world, how do they stay nimble? On the flip side, what are some things that operators can provide to the OTT players that make them successful, take them to the market quickly and maintain a long-term healthy and mutually-beneficial partnership? Operators still generate 70% of the global mobile industry revenues, so they are an important part of the chain but how do they ensure they have an equally relevant share in the profits. The panel will discuss how operators and OTT players think about the challenges and the opportunities, the competition and the coopetition.

CTIA Wireless 2012 Recap May 14, 2012

Posted by chetan in : 3G, 4G, AORTA, CTIA, Carriers, European Wireless Market, Infrastructure Providers, Mobile Breakfast Series, Mobile Future Forward, Mobile Operators, Worldwide Wireless Market , add a comment

CTIA Wireless 2012 Recap

http://www.chetansharma.com/ctiawireless2012.htm

CTIA returned to New Orleans after many years and it was great to see the city revitalized and ready to host the wireless show. Overall there were no big announcements, no blockbuster deals, no zingers from speakers that made the headlines. However, it was good to take the pulse of the industry. We met with several prominent industry executives, long-time colleagues, and new entrepreneurs. This note presents the summary of my observations from the show.

Mobile Web and Apps – I had the opportunity to chair the Mobile Web and Apps event and kick off the proceedings with an opening keynote on the State of the Mobile Industry. It was based on our recent global market update that we released last week. In fact, many CEOs and speakers including FCC Chairman Genachowski frequently referenced from the research throughout the show. Wireless Week did a nice cover story based on the talk. There was good discussion and debate about what’s working and what’s not, how developers try to create demand and monetize eyeballs, the issues of security and privacy. Mastercard announced its payment developer APIs program. In fact, the show had the presence of all the major credit card companies. Payments, wallet, and commerce were the big talking point.

Operators vs. OTT – The theme of Mobile World Congress continued at CTIA with the topic dominating in both open forums as well as behind closed doors. While most of the ink has been focused on how OTT players are killing operator revenue streams, there is the untold story of operator collaboration with the OTTs. I wrote a piece on the topic for Synergy magazine “Mobile Operators and OTTs: Building a win-win.” The manner in which operators respond to the OTT opportunity/threat will end up defining their future in the years to come. Some operators like TeliaSonera have reacted by throwing their hands and just charging extra for OTT services while others like Telefonica are launching innovative services. We have looked at this topic in-depth for many years and have some more new research coming out in the next few weeks. Stay tuned.

The challenge for some of the operators is in stark display. While T-Mobile’s Bobsled app garnered (95% users non-TMO customers) 1 million users, Viber announced the 70 million milestone. To be a relevant app, one needs scale. Operators have the advantage of providing better call quality. The call quality on many mobile VoIP services is subpar and enterprise customers (and consumers) will pay a premium for better call quality.

Digital Life and New Revenue Streams – In the US, AT&T dominates the connected devices spaces. Indeed in terms of rolling out new services, it is a step ahead of the competition. AT&T has been showing the Digital Life concepts at Mobile World Congress and at CTIA they announced the trial and actual product availability in 2013. This clearly bodes well for the industry for there are many adjacent industries where operators can play an important role. Other operators should pay close attention. We will be discussing the Connected Devices opportunities in detail at our Atlanta Mobile Breakfast Series Event on June 22nd with AT&T, Synchronoss, and CNN.

Traffic Growth and Signaling storm – As we have mentioned in our various research papers and research updates, mobile traffic is roughly doubling YOY in most major markets including the US. While data traffic hogs the headlines, signaling is becoming a menace to network management esp. Android which tends to be more inefficient in handling network resources. We will have a more in-depth discussion of these topics in our upcoming Yottabyte research paper.

TMO Acquisition – Last year, AT&T’s proposed acquisition of T-Mobile rocked the industry and kept the regulators busy for better part of 2011. While there were no blockbuster announcements, T-Mobile’s acquisition of MetroPCS along with Nokia and RIM’s long-term prospects remained popular water cooler topics.

Nokia’s revival – Nokia has a lot to prove. Its future is riding on the success of the Lumia series of devices in 2012.  Though it hasn’t exactly set things on fire, the sales are actually doing fine. It is amongst the top selling devices at AT&T and is showing stickiness. However, Nokia is getting crushed in other markets, so the net impact on overall cash position can be significant if it is not able to arrest the downfall in the next 3-4 quarters.

Small Cells – A couple of years ago, small cells and HetNets were just talking point. Now, operators are weaving them into their execution plans as they lay out their 4G networks. Given that mobile data growth is going to stay front and center for the foreseeable future, expect to hear about small cells and HetNets for some time to come.

TMO $4B network deal – Generally, the network deals of this size takes many quarters to iron out. T-Mobile moved fairly quickly to iron out its LTE rollout plans and its vendors.  Not surprisingly, the spoils of the deal went to Ericsson and NSN. In light of the collapse of LightSquared, this deal might provide NSN a lifeline to continue operations for a few more years.

Mobile Wallets and Mobile Payments – While 2012 will not be the year of mobile payments; it certainly is the year of mobile wallets launches and lots of them. Every financial institution worthy of its salt has launched a wallet. We are just going through the early turbulence cycle of this new segment. However, the opening up of the payment APIs from the financial industry is leading to some compelling experiences and use cases.

NFC was absent – The talk of NFC as a payment solution was noticeably muted. We have always said that NFC will have more impact from other solutions than payment.

Verizon – LTE – Competing on LTE, the fight to build the fastest and biggest LTE network is on. Verizon has an early formidable lead but in 2013 rivals will start to catch-up.

Messaging innovationAs I mentioned to the NY Times and discussed it in our annual global mobile update, messaging revenue has started to decline in some countries. Some operators in Europe are in a state of panic. Chaos creates new opportunities. While operators have just given up on fighting the OTT war, others are gearing with new apps and services of their own (TU Me from Telefonica, Bobsled from T-Mobile, On from Orange). Several startups are also helping the operators innovate on the messaging front. SMS was invented in the early nineties but operators didn’t really take messaging to the next level for the last two decades. I met with a number of companies which are doing some interesting work on the messaging side – like ZipWhip, Maxx Wireless, OpenMarket, and others. Some of these companies are still in the stealth mode and expect to make some waves in the coming months. We will be taking this topic head-on in our Mobile Breakfast Series in Seattle (w/ AT&T, Groupon) and London (w/ Telefonica, Orange, Horizons Venture, Rebtel)

Sprint Guardian, and other apps – in line with generating more revenue form other apps, Sprint guardian was launched with Safely and the service is seeing pretty good traction in the early days and might be able to increase the lifetime value of the customer. Other US operators have similar services available on their network as well. Operators will have to invest heavily in VAS ecosystem and services to arrest the declining revenue in other segments.

FCC, Spectrum and Regulations – FCC continued to make its case for more spectrum via incentive auction. With a change of guard expected next year, it will be interesting to see how some of these efforts pan out. FCC should create parallel incentive programs like a $1B prize for tangibly solving the spectrum crisis w/o the need of new spectrum.

Absence of large players – The lack of any major announcements was only rivaled by the absence of the former CTIA heavyweights like Samsung, Alcatel-Lucent, Nokia, Motorola, and Microsoft. Others had fairly low-key presence.

Regulations – Regulations lag the technology industry progress and it is getting to the point that they might end up hindering growth esp. related to communication, privacy and monetization of network assets. It is time to consider bringing all communication, and data privacy rules under the same umbrella so both the telecom and Internet players are guided by the same set of principles.

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, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Nov 2012.

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

Global Mobile Market Update 2012 (Annual Edition) April 30, 2012

Posted by chetan in : 3G, 4G, AORTA, BRIC, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Mobile Breakfast Series, Mobile Future Forward, Mobile Operators, Mobile Patents, Mobile Payments, Patent Strategy, US Wireless Market, VoIP, Wireless Value Chain, Worldwide Wireless Market , 7 comments

http://www.chetansharma.com/GlobalMobileMarketUpdate2012.htm

Global Mobile Market Update

  

State of the Global Mobile Union - 2012

  1. Total Global Mobile Revenues to hit $1.5 Trillion in 2012, over 2% of Global GDP

– Top 10 operators control 42% of the global data mobile revenues

  1. Mobile Services Revenue exceeded $1 Trillion for the first time in 2011

– The number of mobile operators with > $1 Billion in yearly data revenues will touch 50 in 2012

  1. Total Global Mobile Data Revenues went past $300 Billion in 2011

– Non-messaging data now owns 53% of the global mobile data revenues

  1. Mobile Operator Profits have more than doubled over the last 10 years.

– However, the wealth is not divided evenly. Asia’s share has tripled at the expense of Europe whose profit share has declined by 50%

  1. Total Global Subscriptions to exceed 7 Billion in early 2013

– China exceeds 1 Billion, India 950 Million. Subscriber growth is in Asia, Revenue growth is in Asia+North America

  1. China and India represent 27% of subscriptions but only 12% of the global service revenues

– US represents only 6% of the subscriptions but 21% of the global service revenues, 26% of the data revenues, and 27% of the global CAPEX

  1. Mobile Devices are now exceeding traditional computers in unit sales + revenue

– 70% of the device sales in the US are now smartphones. Device Replacement cycle is shrinking

  1. Samsung and Apple now account for 50% of the smartphone unit share and 90% of the profit share

– Difficult environment for other OEMs esp. when ZTE and Huawei are coming strong from the bottom. It will be difficult for pure play device OEMs to survive long-term

  1. Tablets (iPads) has created a new computing paradigm that is having a significant impact on commerce, content consumption, and developer investments

– Apple will continue to dominate the segment and iOS will be the leading OS for the segment. Amazon, ZTE, Huawei, to chip away at the sub-$200 tier.

  1. Mobile Broadband (4G) is being deployed at a faster rate than previous generations, first time data is leading the charge

– Over 1.5 Billion broadband connections by 2012

  1. Global Mobile Apps revenue has completely (and irreversibly) tilted to off-deck

– The decline is directly proportional to the increase in smartphone penetration by region

  1. All major markets are consolidating with the top 3 players at 85% of the market

– Regulators will have to be more prudent and proactive about managing competitiveness and growth

  1. Mobile data traffic 2x YOY in most markets. Mobile Data will be 95% of the global mobile traffic by 2015

– Many countries are facing spectrum exhaust in the next 2-3 years (in certain markets)

  1. Mobile Signaling takes up 2x the resources as Mobile Data Traffic

– Signaling traffic is growing faster than the data traffic on broadband networks

  1. Connected device segment is growing at the fastest pace in the western markets

– Operators will have to quickly adapt their strategies to stay relevant in this segment

  1. Several multi-billion dollar opportunity segments are emerging

– Mobile Advertising, Mobile Commerce, Mobile Wellness, Mobile Games, and Mobile Cloud Computing to name a few

  1. Mobile Ecosystem has become very dynamic and unpredictable

– The 5 Platform Amigos – Apple, Google, Amazon, Microsoft, and Facebook dominate though the first two have the real power

  1. Mobile Operator Revenue is under pressure from OTT Players

– OTT Share of the Global Mobile Revenues increased to 4%

  1. OTT players forcing operators to up their game

– Operators are partnering, launching their own OTT apps, increasing tariffs to manage the margins

  1. Intellectual Property has become a key component of long-term product strategy

– 21% of all patents granted in US are mobile related. Top 20 control 1/3rd of the overall mobile patent pool

  1. Mobile Patent Rankings: US – IBM, Microsoft, Nokia. Europe – Alcatel-Lucent, Nokia, Samsung. Overall – Nokia, Samsung, Alcatel-Lucent

– OEMs – Nokia, Samsung, Sony. Service Providers – AT&T, NTT DoCoMo, Sprint

  1. In 3-5 years, with few exceptions, if a company is not doing majority of its digital business on mobile, it is going to be irrelevant

– Majority (by a good margin) of the consumer interactions with brands will be on mobile

  1. Mobile has become the single most important digital channel for engaging consumers and it shows

– In the US, mobile revenues were > all Ecommerce And > Music, ISP, Hollywood, and Cable revenues combined

  1. We have entered the mobile 3.0 era where “data” is all that matters and it disrupts the value chains

– Data will drive majority of the network growth, Contextual data will drive majority of the VAS growth

  1. There will be more changes in the next 10 years than in the previous 100

– The value chains will keep disrupting every 12-18 months by the new players and business models. Several verticals are already getting redefined e.g. retail, health, education, etc.

The Big Picture

The global mobile industry is the most vibrant and fastest growing industry. We expect the total revenue in the industry to touch approximately $1.5 Trillion in 2012 with mobile data representing 28% of the mix. Mobile data services revenue stood at 33%. Global Mobile Data revenues eclipsed $300 Billion for the first time in 2011. It is also the first year in which non-messaging data revenues will make up the majority of the overall global data revenues at 53%.

By the end of 2011, the global subscriptions exceeded 6 Billion. The first 1 billion took over 20 years and this last one took only 15 months. The primary growth drivers are India and China which are cumulatively adding 75M new subs every quarter. China became the first country to eclipse the 1 billion mark in March 2012. India is likely to arrive at the milestone by early 2013.

Smartphones are driving tremendous growth around the globe. Amongst the major markets, US leads with 69% sales. The global figure stands at approximately 32%. Some operators expect 90-95% of their device sales to be smartphones in 2012. In terms of the actual smartphone penetration, we expect the US market to eclipse the 50% mark in 2012.

China leads in the number of subs but US dominates in both total and data revenue. A number of emerging nations are now in top 10 – Brazil, India, Russia, Indonesia, Pakistan, Mexico while once dominant – Korea, UK, Italy, Germany have dropped off or slipped in rankings.

Global Mobile Data Growth

Japan continues to be the leader in mobile data with NTT DoCoMo, KDDI, and Softbank Japan ahead of the pack in terms of mobile data revenue and data as a % of total ARPU. Country average is now at 60%.

Next, Australia and the US have made good inroads in the last two years. In fact, if we look at the overall data revenue, US is much further ahead than any other nation due to the size of the market.

While India has the highest subscriber growth rate in the world right now, the revenue generating opportunity remain down right anemic compared to other major markets with average dropping down to $2.50 in overall ARPU. Even with significant subscriber base, there is going to be a general lack of opportunity in the market for the next couple of years relative to other markets.

Devices – Changing Landscape

Apple has had the tablet space to itself. Thus far the response from the competitors has been tepid esp. on the pricing dimension. Apple has had such a mastery over the supply-chain and months ahead of the competition that by the time they figure out details, Apple already locks up the pricing advantage for the cycle. OEMs try to catch-up on the features but can’t do on the margins. OEMs can grow the pie by bringing products at a better price points that helps attract different demographics to the mix. Microsoft can make good inroads into the space with its Win8 tablet release in 2012 but it will be again in a catch-up mode as the iOS ecosystem will be even more robust by then. The cheaper Android tablets will do well in the market. As expected, tablets will pretty much eliminate the need for netbooks and are starting to eat into the desktop/laptop revenue.

Apple and Samsung are strong on the top. Huawei and ZTE are coming up strong from the bottom. The middle tier players will have a tough time going forward.

It will be difficult for pureplay device OEMs to survive long-term.

Nokia and RIM are under severe market scrutiny as investors and developers leave in droves. Lack of product planning and execution has left their market share in disarray. Nokia’s valuation has been cut into half. Nokia’s release of N9 shows the engineering and creative design depth but a lot is riding on the first generation of Nokia Windows Phones (Lumia). While the market hasn’t shown much appetite for Windows phone thus far, a good family of devices might be able to slow the loss trajectory and position the combined team for the up-for-grabs 3rd spot in the ecosystem. Given that the computing is shifting to mobile devices, we can expect some of the weaker desktop/laptop players will exit the industry.

Majority of the tablet use is in the WiFi mode because the primary use case is indoors and WiFi gives a better (and cheaper) user experience. However, of the users who use cellular, the churn is low. Once operators start to roll out user-friendly family data plans across multiple devices, we can expect the cellular activation go higher (e.g. Rogers, Vodafone Spain) but will still be dominated by WiFi overall.

Mobile VAS and OTT – The Big Picture

• The traditional operator revenue streams of

– Voice – declining and under threat from VoIP

– Messaging – flattening/declining and under threat from IP messaging

– Access – rising but margins are shrinking fast

– VAS – declining in proportion to the growth of smartphones

• Operators are fighting back with

– Voice – launching their own VoIP apps e.g. Bobsled from T-Mobile, partnering with VoIP players e.g. Skype integration, charging for VoIP apps e.g. TeliaSonera €6/month

– Messaging – launching their own IP messaging apps e.g. Huddle from AT&T, partnering with IP messaging players e.g. Whatsapp partnership

– Access – Tiering

– VAS – launch their own VAS apps and industry vertical apps and services

Managing Mobile Data Traffic and Profits

As a result of the data tsunami, there are two types of opportunities that are being created, one that take advantage of the data being generated in a way that enhances the user experience and provides value and the other in technologies that help manage the traffic data that will continue to grow exponentially.

To be able to stay ahead of the demand, significant planning needs to go in to deal with the bits and bytes that are already exploding. New technical and business solutions will be needed to manage the growth and profit from the services. Relying on only one solution won’t be an effective strategy to manage rising data demand. A holistic approach to managing data traffic is needed and our analysis shows that the cost structure can be reduced by more than half if a suite of solutions are deployed vs. a single dimensional approach and thus bringing the hockey stick curves of data cost more in line with the revenues and thus preserving the margins.

The decision making process within the operator organizations will need to be streamlined as well. Operators should also consider creating a senior post which focuses on both the cost side and the solution side so they can devise and institute a sustainable long-term policy and keep the margins healthy.

Mobile Intellectual Property

• The IP tussles are playing out as expected

• Players with strong IP portfolios will be able to command better negotiating positions, new revenue streams, competitive positioning over the long-term

• On average mobile companies file patents 1.7 times more in the US vs. Europe

• Mobile Patent Leaders in US: IBM, Microsoft, Nokia

• Mobile Patent Leaders in Europe: Alcatel-Lucent, Nokia, Samsung

• Mobile Patent Leaders in Infrastructure: Samsung, Alcatel-Lucent, Ericsson

• Mobile Patent Leaders in Devices: Nokia, Samsung, Sony

• Mobile Patent Leaders in Service Providers: AT&T, NTT DoCoMo, Sprint

• Top 20 control 1/3rd of the total mobile communications patent pool

Mobile Competitive Dynamics

The Rule of Three is evident in all major markets. While the percentage market share might vary, on an average, the top 3 control 93% of the market in an given nation. It doesn’t matter if the market is defined by “controlled regulation” like in China, Korea, and Japan or if it is “open market” driven in markets such as the US, UK, and India. Eventually, only top 3 operators control the majority of the market. There are niches that others occupy but they are largely irrelevant to the overall structure and functioning of the mobile market.

Markets such as US and India experienced similar competitive environment in their hyper-growth phase. For the US, this phase was in the nineties-mid-2000s while India has been experiencing the similar environment in the last 3-4 years. In both cases, at the start there are 5-6 players with no more than 25% market share but higher than 10% of the mix but gradually the market forces enable consolidation. Over a period of 18 years, US is settling into a “top 3” operator market. India’s brutal price wars are going to trigger the consolidation in the next 12-24 months and will eventually settle into a structure similar to other markets.

The competitive equilibrium point in the mobile industry seems to when the market shares of the top 3 are 46%:29%:18% respectively with the remaining 7% being allocated to the niche operators. To achieve some semblance of equilibrium in the market the top operator shouldn’t have more than 50% of the market share and the number three player shouldn’t have less than 20%. This helps create enough balance in the market to derive maximum value for the consumer.

Mobile operators will face some hard choices in developing and protecting the role they want to play in a given region and the ecosystem at-large. The strategy they choose will have a direct impact on the expected EBITDA margins, investment required over the long-haul, how investors view them, and on the competitive landscape of the country. Given, the fast pace of globalization, new rules and trends might emerge over the course of this decade that further define “communications” and “computing” as we know.

Key Industry Micro-Milestones

  1. Apple captures 70% of mobile device profits – defies gravity, obliterates competition
  2. Apple mobile appstore downloads exceed 25 Billion, 100 Million on Mac – can you spell domination
  3. Samsung ends Nokia’s 14 year reign as the device king – brutal execution
  4. Android 300M activations – Juggernaut
  5. Paypal does $7B in mobile transaction volume
  6. Square does $5B in commerce transaction volume
  7. Google > $5B in mobile revenues
  8. Microsoft revenues from Android > Windows Mobile
  9. Pandora’s 70% usage is on mobile, Twitter’s 60% of the usage is on mobile – heading towards a mobile-dominant world
  10. Facebook Instagram Acquisition $1B – Mobile only acquisition to beef up mobile strategy
  11. Angry Birds approaches a billion downloads
  12. ESPN does 3.1 billion minutes on mobile in 3/12 – Mobile is where the action is
  13. Skype traffic over 150 billion minutes – OTT pressure
  14. KPN messaging volumes decline 15% YOY – OTT pressure
  15. Mobile Security threats grow 7x in last two years, Android threats up 3000% – Mobile IS IT
  16. Cisco BYOD ratio – 70% (up 52% in 2011) - BYOD is creating new opportunities for vendors
  17. US data traffic over 130 quadrillion bytes/month in 2011 – Data traffic 2X YOY, welcome to the yottabyte era
  18. Fandango sells quarter of its ticket on mobile – commerce is happening
  19. Expedia does > $1B in mobile commerce – see above
  20. Microsoft Nokia Multi-Billion partnership – It takes two to tango
  21. Lightsquared fails – Keep your friends close, enemies closer
  22. Google Motorola $12.5B – IP becomes key to strategy
  23. Nortel Patent acquisition $4.5B – IP becomes key to strategy
  24. AT&T/T-Mobile Failure – DOJ/FCC put down the gavel
  25. 40% of Kenya’s GDP comes from mobile money – impact of mobile is pervasive
  26. Millennial Media IPO at $2B – first public market validation of the mobile advertising space
  27. HP gives up on Palm – Competition forces Corporate Schizophrenia

What to expect in 2H 2012

• More Tiering, faster pace of change of plans. More options, family data plans

• Cost reduction is as important as revenue generation. More players will align their value-chains and cost structures

• Facebook IPO is probably going to be the single biggest event in the technology industry in the next few months.

• Radios will start connecting the digital world with the physical world with significant disruption opportunity

• Mobile Payment Networks will remain intact for the near future as the ecosystem largely focuses on building value on top of the existing exchange platforms

• The intersection of Social, Location, Identity, and Gaming is creating new opportunities

• With connectivity becoming pervasive, mobile will fundamentally start to alter the legacy infrastructure – retail, health, education, energy, computing, travel, entertainment

• Significant tablet adoption in the enterprise directly impacting the traditional computer manufacturers

• Both HTML5 and Apps will continue to grow, the relevancy to any given application will depend on the reach and economics requirements. HTML5 is not going to replace Apps.

• Mobile data growth will double again in 2012. Significant opportunities in managed and understanding of mobile data growth

• Regulators will need to evolve to keep up with the trend to keep their nation globally competitive

• More IP scuffles before licensing settlements

• Consolidation of weaker players, more global M&A

• Significant progress in emerging areas like mHealth, mPayments will come from the developing world while the western countries get mired in regulatory and legacy mess

• Several players face challenging times ahead and 2012 will be critical in their turn around sojourn.

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, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

Mobile Patents Landscape – An In-depth Quantitative Analysis April 17, 2012

Posted by chetan in : 3G, 4G, AORTA, European Wireless Market, Infrastructure Providers, Intellectual Property, Mobile Advertising, Mobile Applications, Mobile OEMs, Mobile Operators, Mobile Patents, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

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

 

clip_image002

Introduction

In April 2012, in its report on Intellectual Property, the US Patent Office (USPTO) concluded that the entire US economy relies on some form of IP, because virtually every industry either produces or uses it. The foreword of the report said,

“Innovation protected by IP rights is key to creating new jobs and growing exports. Innovation has a positive pervasive effect on the entire economy, and its benefits flow both upstream and downstream to every sector of the U.S. economy. Intellectual property is not just the final product of workers and companies—every job in some way, produces, supplies, consumes or relies on innovation, creativity, and commercial distinctiveness. Protecting our ideas and IP promotes innovative, open, and competitive markets, and helps ensure that the U.S. private sector remains America’s innovation engine.”

Intellectual property 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. Increasingly, the role of mobile devices, networks, and applications has become an important component of the growth story worldwide.

To say that the mobile devices have become the remote control of our lives would be an understatement. Mobile phones stay attached to us almost 24 hours a day. From waking us up in the morning to keeping us connected and entertained, from speeding up a commerce transaction to being a trusted advisor; mobile is fundamentally changed how we as consumers behave and how societies and cultures evolve over time. As a result, there has been a big influx of investment and innovation over the last decade. This surge of activity has also translated into increased number of patent filings in the two major jurisdictions of US and Europe. Even the developing countries like China and India have seen a significant increase in patent activity in the country. In fact, in terms of filings, China’s share of the global patent grants has increased from 0.8% in 1996 to 15% in 2010 placing it third behind Japan and the US and well ahead of Korea and Europe.

According to the US Patent Office (USPTO), in 2011, the number of applications reached over 535,000 growing by almost 54% from a decade ago. Similarly, the number of patents granted grew 35% to 224,505 by the end of 2011. The numbers of foreign filings are now in the majority for both the applications filed as well as the patents granted. In Europe, similar trends were observed where the EPO (European Patent Office) patent grants increased by 46%.

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 390% increase while the European market saw a 173% increase in mobile related patent grants.

Another interesting fact is that as of Q1 2012, over 21% of the patents granted by the USPTO now are mobile related. This grew from around 2% in 1991 and 5% in 2011. In Europe, roughly 9% of the patents granted are related to mobile.

Chetan Sharma Consulting analyzed almost 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 patent landscape. In a first of its kind study, the paper presents and discusses these findings in more detail.

Read the full paper

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, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

Mobile Internet 3.0: How Operators Can Become Service Innovators and Drive Profitability February 23, 2012

Posted by chetan in : 3G, 4G, ARPU, BRIC, Carriers, China, Connected Devices, Devices, Enterprise Mobility, European Wireless Market, Mobile Cloud Computing, Mobile Health, Security, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

MI3s

Mobile Internet 3.0

How Operators Can Become Service Innovators and Drive Profitability

Sponsored by Juniper Networks

Download PDF

The mobile ecosystem is going through significant shifts in consumer behavior, the value-chain alignment, and the strategies required in managing the profitability of the service business. Operators around the world are experiencing tremendous mobile data growth. While the mobile data revenues are increasing, the margins are decreasing for many operators. As the percentage of the smartphones on the network increases, the data business is primarily becoming an access business which is difficult to sustain over the long-haul.

Additionally, it is becoming clear that the long-term value will be in the portfolio of value-added services (VAS). As we slowly migrate into the Mobile Internet 3.0 world where mobile data becomes the primary source of service revenues, operators have a fundamental choice to make – either learn to live with the utility business that pushes the margins downwards by 30-50% or selectively compete and/or collaborate with the OTT (over the top) players where they can offer compelling solutions and packages to their customer base and beyond.

Operators who are fully able to grasp the changes occurring in the ecosystem and are willing to refocus will position themselves for higher profitability in the coming years.

A fundamental rethink of the network and the business models is required. Rather than leaving all the VAS business to others, operators should look at ways to launch new services, to micro-segmented consumer base, to enable APIs and services that the developer ecosystem can build on, and to look at the core network to enable incremental revenue streams.

The pace at which the new services are launched needs to accelerate and the marginal cost of the introduction needs to go down significantly. By architecting the “network as a platform,” operators will have more flexibility in deploying an open and programmable network that not only provides operational efficiencies and insights but also paves the way for new generation of services such as mobile cloud, mobile security, health care, and identity management.

The paper looks at the global trends in mobile data and the need for new approaches to operator services that can help increase the mobile data margins and help operators play a more decisive and enabling role in the mobile ecosystem. The paper provides an operator blueprint for succeeding in the Mobile Internet 3.0 era by discussing the operating principles and the long tail of VAS. Several strategies and application areas are analyzed that can help operators in building a viable VAS strategy and sustainable profit streams.

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 Mar 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

2012 Mobile Industry Predictions Survey January 3, 2012

Posted 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

http://www.chetansharma.com/MobilePredictions2012.htm

Download PDF

 

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:

  1. Tor Bjorn Minde, Head of Ericsson Labs, Ericsson

  2. Sunder Somasundaram, Industry Solutions Practice Director, AT&T

  3. C. Enrique Ortiz, Mobile Technologist, About Mobility

  4. Russell Buckley, CMO, Eagle Eye

  5. Marianne Marck, VP – Engineering, Starbucks

  6. John Foster, President, ZED USA

  7. Angel Luis Saez, Sr. Director, Orange Spain

  8. Dilip Mistry, Senior Director, Microsoft Asia

  9. Phyllis Reuther, Advanced Analytics Lab, Sprint

  10. Gene Keenan, VP of Mobile, Isobar

  11. Elizabeth Day, Director of Finance, Trilogy International

  12. Alan Cole, Research Staff Member, IBM T.J. Watson Research Center

  13. X J Wang, VP – GM China, Vesta Corp

  14. Michelle Lee, Director, SK Telecom

  15. 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.

Thanks

Chetan Sharma

Now onto the 2012 Mobile Industry Predictions Survey Results.

2012Survey-a

1. What was most newsworthy in Mobile 2011?

 2012Survey1

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?

 2012Survey2

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?

 2012Survey3

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?

 2012Survey5

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?

2012Survey5

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?

 2012Survey6

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?

 2012Survey7

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?

 2012Survey8

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?

 2012Survey9

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?

 2012Survey10

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?

 2012Survey11

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?

 2012Survey12

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?

 2012Survey13

Mobile cloud computing will continue to be defined by enterprise, storage, and media needs.

14. Which enterprise segment will mobile impact the most?

 2012Survey14

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?

 2012Survey15

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?

 2012Survey16

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?

 2012Survey17

Tablets dominate. Period.

18. Which of the following are likely to happen in the near future?

 2012Survey18

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?

 2012Survey19

Net-neutrality and market competitiveness will keep the regulators busy in 2012.

20. Who was the mobile person of the year?

 2012Survey20

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.

Mobile Breakfast Series – Mobile 2012: Trends and Opportunities December 15, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, Connected Devices, Enterprise Mobility, European Wireless Market, Patent Strategies, Patent Strategy, Privacy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

We held our 8th Mobile Breakfast Series event earlier today. As is the tradition, we delved into discussing the trends and opportunities for the coming year. As usual it was a sold out crowd with terrific panelists representing different parts of the value chain.

image 012 011

016

2011 has been a fascinating year – with all the mergers, sky rocketing data growth especially in the US market. 2011 will also be remembered for the passing away of Steve Jobs, the man who helped change the global mobile industry over the course of the last four years. Locally, lots happening – Microsoft/Nokia alliance is launching new devices, Amazon has entered the mobile space with both feet, mobile gaming remains hot, and on a broader scale, we are going through the process of mobilification of everything.

Mark Anderson, CEO of Strategic News Service. I have known Mark for over 15 years now as one of the early subscribers to his wonderful newsletter. My good friend and coauthor Joe Herzog introduce me to Mark and since then I have been influenced by his writing. If you follow my blog, the name AORTA or Always On Real Time Access was coined by Mark in the late nineties and he generously allowed me to use it. Mark has also been writing about the carry-along-PC aka tablets for sometime and won the bet with bet with Michael Dell on the growth of this sector. He just finished off his annual predictions for 2012, so we had a lot to talk about.

Laura Marriott is CEO of Neomedia which is doing some pioneering work in the mobile barcode/mobile marketing space. But she is more famous for her work at the Mobile Marketing Association where she helped grow the industry and the association to make it a thriving enterprise.

Satya Mallya is Director at Orange. For those of you don’t know Orange is one of the top European Operators but he is based in the silicon valley working on some cool projects. He has been in the telecom space for almost 20 years working at Bell Labs, Octel and two startups

Brian Fling is CEO of pinchZoom a mobile agency that helps big brands like BBC, Paypal, Delta and others understand mobile design and development. He is passionate about mobile user experience, has spoken and written extensively about the subject.

Jay Emmet is GM OpenMarket, SVP, Amdocs and knows the messaging, commerce space on the back of his hand. Very successful stints at mblox, ATG and others. Knows the operator world really well and has been straddling both the on-deck/off-deck world for a long time.

We touched on a range of subjects from IP to platforms, from privacy/security to mobile commerce and payments, from Microsoft to Amazon .. and so on and so forth. Below is the summary of the discussion:

It was a joy to moderate this terrific panel that kept audience glued to their seats till the very end. Thanks all for coming. We have some terrific events planned for 2012, Stay Tuned.

Until then, Wish you and yours a very happy and stress-free holiday season and enormously successful and prosperous 2012.

And don’t forget to fill out our Annual Mobile Predictions Survey for 2012. There are prizes for 10 lucky winners.

ps. As I mentioned in the opening, WA state dept has a wonderful program to help startup with their travel to Mobile World Congress in Barcelona next year. Details here. Startups should check it out.

US Wireless Data Market Update Q3 2011 December 12, 2011

Posted by chetan in : 3G, 4G, AORTA, Applications, CTIA, Carnival of Mobilists, Carriers, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Payments, Mobile Search, Mobile Traffic, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 5 comments

 

 

http://www.chetansharma.com/usmobileupdateQ32011.htm

Download PDF

Summary

The US mobile market continued its blistering pace of growth and ecosystem restructuring. While China and India lay claim to the fastest growing markets on the planet, the many of the meaningful and impactful trends are originating out of the US market with software at the epicenter of creation, growth, change, evolution, and destruction.

The US wireless data market grew 5% Q/Q and 21% Y/Y to reach $17B in mobile data service revenues in Q3 2011 and is on course to increase Y/Y by 22% to $67B in 2011.

As predicted, Samsung overtook Apple as the leading smartphone OEM. However, Apple will continue to dominate profit share for the foreseeable future.

Smartphones continued to be sold at a brisk pace accounting for 57% of the devices sold in Q3 2011. Operators are averaging 70% of their postpaid sales as smartphones with Android dominating though iPhone leads in mindshare. The featurephone as a device species is on the verge of extinction.

Mobile Ecosystem Complexity

As expected, Amazon entered the mobile tablet space with a killer value proposition - $200 for a tablet, something the market sorely needed. While other OEMs tried to compete with Apple on performance (and have been retreating from the market one by one), Amazon is entering the battle on its own turf – a hardware platform built on Android with a slew of services to underwrite the device discount. Incumbent OEMs just can’t compete with that strategy without a complete rethink of their product strategy. What happens when Amazon’s strategy migrates to handsets? While Kindle Fire is not a serious threat to Apple iPad, and the current version has a lot of deficiencies, Amazon has carved out a nice market for itself that will continue to grow in the coming days. In some sense, with its tight integration of commerce, cloud, and advertising, it has out-maneuvered even Google.

Amazon’s impact will be felt by many others in 2012 as its strategy becomes more apparent. Retailers will be facing the brunt of the wave that Amazon represents i.e. etailers supplanting physical retailers. Don’t be surprised if Amazon purses Apple like stores to showcase its merchandize and puts a dagger at the heart of retail.

Google has done a masterful job of shepherding Android through the turbulent platform waters and make it the dominant mobile platform in terms of shipments.

Microsoft and Nokia finally introduced the Windows devices and it has at least given them a fighting chance in 2012, though a far more competitive offering would be needed to make any significant market share or revenue share inroads. Microsoft’s Xbox/Kinect integration remains its best card for 2012.

In a severe case of corporate schizophrenia, HP first launched webOS devices, then backed away, then thought of re-launching only to give it away to open source. Similarly, RIM faces critical test in 2012 and all its hopes are pinned on the new OS that is expected to come to the market sometime next year.

Mobile is changing the way we spend

It is very clear that mobile will be at the center of the human evolution for years to come. Mobile collapses time and distance and as such impacts every facet of our lives. While we have come to know the mobile phone as a communications device, their role in our daily lives has been expanding. From checking emails, paying for tickets, sending money transfers, taking pictures of your kids, watching soccer World Cup live, checking commodity pricing, to emergency response to mHealth (mobile Health), mobile devices have become an essential tool to help us navigate our day.

Mobile also plays a key role in how we go about the most basic transaction in a given day that keeps the economy humming – spend. We discussed this and more in the paper “How Mobile Will Change The Way We Spend”  that was released last quarter.

What to expect in the coming months?

All this has setup an absolutely fascinating 2012 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems.

As usual, we will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q3 2011 US wireless data market is:

Service Revenues

ARPU

Subscribers

Applications and Services

Handsets

Mobile Data Growth

Global Update

Mobile Future Forward

Our annual mobile thought-leadership summit - Mobile Future Forward was a grand success. Our thanks to all those who attended as well as to the speakers, sponsors, and well-wishers for making it happen. Planning for 2012 summit are underway and we will keep you posted as plans develop.

More information at http://www.mobilefutureforward.com

Mobile Predictions Survey 2012

As is the tradition, we are running our annual Mobile Predictions Survey for 2012. Will appreciate your input in understanding the trends and news stories that will make 2012 another big year in mobile. Winners of the survey get our fabulous limited edition Mobile Future Forward 2011 book that contains 19 essays from the global leaders in the mobile industry. (Mobile Predictions Survey Results for 2011 here)

Your feedback is always welcome.

Thanks.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, 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 paper are our clients.

New Paper - How Mobile Will Change The Way We Spend – A Mobile Future Forward Paper August 5, 2011

Posted by chetan in : 3G, 4G, AORTA, CTIA, Connected Devices, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Future Forward, Mobile Payments, Mobile Search, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

How Mobile Will Change The Way We Spend

A Mobile Future Forward Paper

clip_image001

The Mobile Future Forward 2011 Book will contain 18 essays from thought-leaders around the globe and is going to be distributed exclusively to the Mobile Future Forward attendees on Sept 12th. The book is published by FutureText, UK.

The essays from the Mobile Future Forward speakers and industry luminaries are:

1. How Mobile Will Change The Way We Spend – Chetan Sharma, President, Chetan Sharma Consulting

2. The Mobile Cloud Connected Enterprise – Abhi Ingle, VP, Advanced Mobility Solutions, AT&T

3. Mobile and Health Possibilities – Subba Rao, CEO, Razi Health

4. Buying a Mobile Device in 2014 – Frank Meehan, CEO, INQMobile

5. Surviving and Thriving in the Age of Mobile Internet – An MNO Game Plan – Manoj Leelanivas, SVP and GM, Juniper Networks

6. Mobile Future Forward Interview with Steve Elfman – President, Sprint Nextel

7. Is Mobile Local Advertising Finally Poised to Take Off? – William Hsu, SVP and CPO, AT&T Interactive

8. Implications of a Connected Society – Danny Bowman, President, Sprint Nextel

9. Big Data and Mobile – Braxton Woodham, Head of Engineering, AVOS

10. Broadband for All – Sanjiv Ahuja, CEO, LightSquared

11. Wireless Competition and Innovation – Stephen Bye, CTO, Sprint Nextel

12. The Future of the Personal Information Economy: Enabling Success Across the Mobile Ecosystem – Ken Denman, CEO, Openwave

13. T-Commerce – Carving Out and Extending E-Commerce – Ramneek Bhasin, SVP and GM, TheFind

14. The Case for Building a Mobile Broadcast Content Delivery Network – The Critical Piece to Fulfilling Mobile Data Demands of the Future – Erik Moreno, SVP, FOX Network

15. Connected Devices – Redefining the Channel – Biju Nair, Chief Strategy Officer, Synchronoss Technologies

16. How Mobile Can Turn Retailers Into Media Companies – Dale Nitschke, CEO, Ovative Group

17. The Future of (Mobile) Communications – Carlos Domingo, CEO, Telefonica R&D

18. Competition and the Evolution of Mobile Markets – Chetan Sharma, President, Chetan Sharma Consulting

Download (http://www.mobilefutureforward.com and click on the White paper image)

 

Executive Summary

In his 1943 paper titled “A Theory of Human Motivation”, the famed philosopher Abraham Maslow theorized his observations of human needs and curiosities. His pyramid came to depict the human hierarchy of needs. If we map the physiological, safety, love, esteem, and self-actualization needs onto how much we spend as a community, it correlates rather well. As you would expect, human spending behavior is tightly tied to the basic needs. The amount of money we spend on these basic needs might vary by demographics or region but in aggregate, we tend to spend the most for the things that are the bottom of the pyramid – shelter, food, and water.

Over time, entrepreneurs have used technology to drive fundamental changes in consumer behavior for e.g. Microsoft with personal computers, Google with search, Apple with devices, Facebook with social connections. Of course, the web of interconnection, the various vertical industries that map against the human needs is very complex and as new technology cycles come into play, inventors get busy with enhancing performance sometimes by manifold to keep up with the insatiable demand and appetite to do more.

It is very clear that mobile will be at the center of human evolution for years to come. Mobile collapses time and distance and as such impacts every facet of our lives. While we have come to know the mobile phone as a communications device, their role in our daily lives has been expanding. From checking emails, paying for tickets, sending money transfers, taking pictures of your kids, watching soccer World Cup live, checking commodity pricing, to emergency response to mHealth (mobile Health), mobile devices have become an essential tool to help us navigate our day. As we alluded to earlier, it is not just the traditional phones that have cellular connection these days; we are slowly but surely moving into an era where a majority of electronic devices from small tags to giant billboards will have a communication channel that both machines and humans can interact with.

Mobile also plays a key role in how we go about the most basic transaction in a given day that keeps the economy humming – spend.

In this paper, we will take a look at how the connected universe of devices and sensors are going to impact the way we spend and how all this creates new opportunities to meet the basic human needs.

Your feedback is always welcome.

Thanks

Chetan

State of the Global Mobile Industry – Half Yearly Assessment 2011 July 7, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Connected Devices, Devices, Enterprise Mobility, European Wireless Market, IP, IP Strategy, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, Student Paper Contest, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 6 comments

 

 

http://www.chetansharma.com/globalmobileupdate1H2011.htm

Download PDF (56 pages, 3 MB)

The big picture

The global mobile industry is the most vibrant and fastest growing industry. We expect the total revenue in the industry to touch approximately $1.3 Trillion in 2011 with mobile data representing 24% of the mix. Global Mobile Data revenues are expected to eclipse $300 Billion for the first time in 2011. It is also the first year in which non-messaging data revenues will make up the majority of the overall global data revenues at 53%.

We expect the total number of subscriptions to exceed 6 billion by the end of 2011. The first 1 billion took over 20 years and this last one is going to take only 15 months. The primary growth drivers are India and China which are cumulatively adding 75M new subs every quarter. Indian and China are also entangled in the race to the billion. At the end of Q2 2011, China was ahead by 50M but India is adding subscriptions at faster rate and is likely to eclipse China before Q2 2012. By then, both nations are expected to exceed 1 Billion in total subscriptions making up 31% of the global subscriptions.

In Q1 2011, US became the first major market to exceed the 50% mark in smartphone sales. The global figure stands at approximately 26%. Some operators expect 90% of their devices sales to be smartphones by the end of the year. In terms of the actual smartphone penetration, we expect the US market to eclipse the 50% mark in 2012.

China leads in the number of subs but US dominates in both total and data revenue. A number of emerging nations are now in top 10 – Brazil, India, Russia, Indonesia, Pakistan, Mexico while once dominant – Korea, UK, Italy, Germany have dropped off or slipped in rankings.

The number of mobile operators with more than $1B in data revenues will increase to 47 in 2011. This number was only at 13 in 2005.

Japan continues to be the leader in mobile data with NTT DoCoMo, KDDI, and Softbank Japan ahead of the pack in terms of mobile data revenue and data as a % of total ARPU. In 2011, it became the first major market to have more than 50% of its mobile revenue from data services. Next, Australia and the US have made good inroads in the last two years. In fact, if we look at the overall data revenue, US is much further ahead than any nation due to the size of the market.

While India has the highest subscriber growth rate in the world right now, the revenue generating opportunity remain down right anemic compared to other major markets with average dropping down to $3.50 in overall ARPU. Even with significant subscriber base, there is going to be a general lack of opportunity in the market for the next couple of years relative to other markets.

Mobile Trends for 2011

1.Total Global Subscriptions to hit 6 Billion

–India and China racing to a billion a piece

2.Total Global Mobile Revenues to hit $1.3 Trillion, almost 2% of Global GDP

–Top 10 operators control 43% of the global mobile revenues

3.Total Global Mobile Data Revenues to eclipse $300 Billion

–Non-messaging data now owns 53% of the global mobile data revenues

4.Mobile Devices are now exceeding traditional computers in unit sales + revenue

–Majority of the device sales in the US are now smartphones. Device Replacement is shrinking

5.Mobile Broadband (4G) is being deployed at a faster rate than previous generations

–Over 1 Billion broadband connections by 2011

6.Global Mobile Apps revenue has shifted to off-deck

–The decline is directly proportional to the increase in smartphone penetration by region

7.All major markets are consolidating with the top 3 players at 85% of the market

–Regulators will have to be more prudent and proactive about managing competitiveness and growth

8.Mobile Data Traffic will be 95% of the global mobile traffic by 2015

–Many countries are facing spectrum exhaust in the next 5 years

9.Connected device segment is growing at the fastest pace

–Operators will have to quickly adapt their strategies to stay relevant in this segment

10.Several multi-billion dollar opportunity segments are emerging

–Mobile Advertising, Mobile Commerce, Mobile Wellness, Mobile Games, and Mobile Cloud Computing to name a few

11.Mobile Ecosystem has become very dynamic and unpredictable

–Apple, Google, Amazon, and Facebook have become the most important revenue generating mobile platforms

12. There will be more changes in the next 10 years than in the previous 100

– The value chains will keep disrupting every 12-24 months by the new players and business models

13. Intellectual Property has become a key component of long-term product strategy

– Top 20 control 1/3rd of the overall mobile patent pool

Devices

Apple has had the tablet space to itself. Thus far the response from the competitors has been tepid esp. on the pricing dimension. Apple has had such a mastery over the supply-chain and months ahead of the competition that by the time they figure out details, Apple already locks up the pricing advantage for the cycle. OEMs try to catch-up on the features but can’t do on the margins. OEMs can grow the pie by bringing products at a better price points that helps attract different demographics to the mix. Microsoft can make good inroads into the space with its Win8 tablet release in 2012 but it will be again in a catch-up mode as the iOS ecosystem will be even more robust by then. The cheaper Android tablets will do well in the market. As expected, tablets will pretty much eliminate the need for netbooks and are starting to eat into the desktop/laptop revenue.

Nokia and RIM are under severe market scrutiny as investors and developers leave in droves. Lack of product planning and execution has left their market share in disarray. Nokia’s valuation has been cut into half while the newcomer HTC edged past the industry giant in a remarkable story of the year. Nokia’s release of N9 shows the engineering and creative design depth but a lot is riding on the first generation of Nokia Windows Phones. While the market hasn’t shown much appetite for Windows phone thus far, a good family of devices might be able to slow the loss trajectory and position the combined team for the up-for-grabs 3rd spot in the ecosystem. HP’s acquisition of Palm is finally bringing some new products to the market but the lack of an effective ecosystem means lack of traction in 2011. Given that the computing is shifting to mobile devices, we can expect some of the weaker desktop/laptop players will exit the industry.

Tablets are primarily being used in the WiFi mode because the primary use case is indoors and WiFi gives a better (and cheaper) user experience. Once operators start to roll out user-friendly family data plans across multiple devices, we can expect the cellular activation go higher but will still be dominated by WiFi overall.

The number of connected devices per subscriber and per family will continue to increase over the course of this decade. As the cost structure and margin profile for these devices will be different, we are likely to measure performance of various operators using margin analysis for e.g. while the ARPU for connected devices is 5-10 times lower than the postpaid subscribers, the margins are typically higher due to lower costs of sales, marketing, support, and subsidy. As such the overall impact is dilutive ARPU but higher margins. So, instead of focusing on just the ARPU, the efficiency of operators will be measured in how well they maintain average margin per user (AMPU) and average margin per connection (AMPC).

Managing the data growth

As a result of the data tsunami, there are two types of opportunities that are being created, one that take advantage of the data being generated in a way that enhances the user experience and provides value and the other in technologies that help manage the traffic data that will continue to grow exponentially.

To be able to stay ahead of the demand, significant planning needs to go in to deal with the bits and bytes that are already exploding. New technical and business solutions will be needed to manage the growth and profit from the services. Relying on only one solution won’t be an effective strategy to manage rising data demand. A holistic approach to managing data traffic is needed and our analysis shows that the cost structure can be reduced by more than half if a suite of solutions are deployed vs. a single dimensional approach and thus bringing the hockey stick curves of data cost more in line with the revenues and thus preserving the margins.

The decision making process within the operator organizations will need to be streamlined as well. Operators should also consider creating a senior post which focuses on both the cost side and the solution side so they can devise and institute a sustainable long-term policy and keep the margins healthy.

Competitive landscape

The Rule of Three is evident in all major markets. While the percentage market share might vary, on an average, the top 3 control 93% of the market in an given nation. It doesn’t matter if the market is defined by “controlled regulation” like in China, Korea, and Japan or if it is “open market” driven in markets such as the US, UK, and India. Eventually, only top 3 operators control the majority of the market. There are niches that others occupy but they are largely irrelevant to the overall structure and functioning of the mobile market.

Markets such as US and India experienced similar competitive environment in their hyper-growth phase. For the US, this phase was in the nineties-mid-2000s while India has been experiencing the similar environment in the last 3-4 years. In both cases, at the start there are 5-6 players with no more than 25% market share but higher than 10% of the mix but gradually the market forces enable consolidation. Over a period of 18 years, US is settling into a “top 3” operator market. India’s brutal price wars are going to trigger the consolidation in the next 12-24 months and will eventually settle into a structure similar to other markets.

The competitive equilibrium point in the mobile industry seems to when the market shares of the top 3 are 46%:29%:18% respectively with the remaining 7% being allocated to the niche operators. To achieve some semblance of equilibrium in the market the top operator shouldn’t have more than 50% of the market share and the number three player shouldn’t have less than 20%. This helps create enough balance in the market to derive maximum value for the consumer.

Mobile operators will face some hard choices in developing and protecting the role they want to play in a given region and the ecosystem at-large. The strategy they choose will have a direct impact on the expected EBITDA margins, investment required over the long-haul, how investors view them, and on the competitive landscape of the country. Given, the fast pace of globalization, new rules and trends might emerge over the course of this decade that further define “communications” and “computing” as we know it.

Apps and Services

As expected, mobile commerce and payment discussions are dominating the ecosystem. There is clearly a lot of investment and marketing dollars being spent. However, the traditional payments networks are largely intact. The new opportunities are being built on top of the existing payment platforms with convenience (Square) and offers and advertising (Google Wallet, ISIS, Groupon). Beyond payments, mobile is getting ingrained into every vertical and every facet of our lives – from healthcare to education, from energy to entertainment, from communication to socialization. And we are in the early innings of figuring out the business models, ecosystem leaders, user behavior, regulatory needs, and the overall impact on society.

Ecosystem Dynamics

It is very clear that the ecosystem dynamics can change very quickly, one just can’t take the competitive and friendly forces for granted. In the past, the silos and segments were clearly defined with little overlap. However, over the course of last couple of years, players have been migrating and surfing in segments across the board - from Apple to Visa, from P&G to AT&T, from Facebook to Time Warner, from Google to Best Buy, every company wants to capture the mindshare and piece of the consumer’s pocketbook. The fine line between partners and competitors can get obliterated in a quarter. Apple is competing with Cisco, Comcast is going after AT&T’s business, Visa and Verizon want to be the payment channel of choice, Amazon is gunning for Microsoft’s enterprise business. One product launch, one acquisition, can change the game in an instant.  And this is only the beginning.

Mobile is fundamentally reshaping how we as consumers spend from housing and healthcare to entertainment and travel, from food and drinks to communication and transportation. Mobile not only influences purchase behavior but also post purchase opinions. When the share button is literally a second away, consumers are willingly sharing more information than ever before. Mobile is thus helping close the nirvana gap for brands and advertisers who seek to connect advertising to actual transactions. The long-term battle is however for owning the context of the users. Having the best knowledge about the user to help drive the transaction is the simply the most valuable currency of commerce.

Mobile Future Forward

We will be discussing the global mobile ecosystem – the challenges and the opportunities at our annual mobile thought-leadership summit – Mobile Future Forward - brought to you in partnership with our terrific partners – Qualcomm, Millennial Media, Real Networks, AT&T Interactive, Synchronoss Technologies, OpenMarket, Ericsson, and Openwave. Hope to see you in Seattle on Sept 12th.

Some of the distinguished guests include:

Abhi Ingle, VP – Advanced Mobility, AT&T Wireless; Amit Gupta, SVP and CTO, INQMobile; Bob Gessel, VP/Head of Technology and Network Strategy, Ericsson; Braxton Woodham, Head of Engineering, AVOS; Carlos Domingo, CEO, Telefonica; Charlie Herrin, SVP - Products and Technology, Comcast; Dale Nitschke, former President, Target; Danny Bowman, President - Connected Devices, Sprint Nextel; David Messenger, EVP, Head - Online/Mobile, American Express; Erik Moreno, SVP, Fox; Gibu Thomas, SVP - Online/Mobile, Walmart; Glenn Lurie, President, AT&T Wireless; Hank Skorny, Chief Strategy Officer, Real Networks; Janet Schijns, VP, Verizon Wireless; Jason McKenzie, President, HTC-Americas; Jay Emmet, GM, OpenMarket; Jeremiah Zinn, EVP, MTV; Jerry Batt, CIO, PulteGroup; John SanGiovanni, Cofounder, Zumobi; Ken Denman, CEO, Openwave; Ken Wirth, President, Alcatel Lucent Wireless; Kris Rinne, SVP - Networks, AT&T Wireless; Mark Rolston, Chief Creative Officer, Frog Design; Matt Oommen, President, Reliance Communications; Mikael Back, VP of Products and Portfolio Management, Ericsson; Mike Mulica, President, Synchronoss Technologies; Paul Palmieri, CEO, Millennial Media; Prof. Cliff Nass, Human Computer Interaction, Stanford University; Rob Glaser, Partner, Accel; Sanjiv Ahuja, CEO, LightSquared; Stephen Bye, CTO, Sprint; Steve Mollenkopf, EVP and Group President, Qualcomm; Subba Rao, former CEO, Tata DoCoMo; Suja Chandrasekaran, CIO, Timberland; Will Hsu, Chief Product Officer, AT&T Interactive

More information at http://www.mobilefutureforward.com

Your feedback is always welcome.

Thanks and have a great 2H 2011.

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, and articles. The next US Wireless Data Market update will be released in Aug 2011. The next Global Wireless Market update will be issued in Jan 2012.

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

Mobile Future Forward Student Paper Contest June 15, 2011

Posted by chetan in : 4G, AORTA, Connected Devices, European Wireless Market, Indian Wireless Market, Mobile Future Forward, Student Paper Contest, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

To create the future, we must first be capable of imagining it
- Gary Hamel and C.K. Prahalad, Competing for the Future, 1994


The Event

It was the most satisfying experience of my career. The contest and the Mobile Future Forward summit made me reevaluate my research and career from a fresh perspective.
- Lun Huang, Phd Student - Electrical Engineering, Illinois Institute of Technology, 2010 Mobile Future Forward Student Paper Contest Winner


Being selected as one of the winners of the contest presented me with an absolutely enriching experience. The most exciting part of the experience was the opportunity to interact and network with top industry leaders from all major mobile companies.
- Smruti Parichha, Grad Student - Dept of Computer Science and Engineering, University of California, Riverside 2010 Mobile Future Forward Student Paper Contest Winner

Mobile Future Forward is an executive summit attracting some of the most influential minds who are shaping the mobile industry. The experts and visionaries from around the globe will discuss the mobile industry 2-5 years forward, envision what the user experience and use case scenarios look like, discuss and debate the challenges and opportunities in the journey to that vision.

The Contest

The best student paper contest is open to universities and research institutes around the world. Your task is to help us imagine new technologies, new experiences, new applications and services, new use cases, new business models of the mobile future. The paper can be on a specific technical or business subject within the mobile industry from mobile teleportation to fuel cells to a new enterprise collaboration tool and everything in between. The idea is to let your imagination fly without any restrictions and dream of what’s possible in the next 5-10 years. Papers can be about technical solutions to the most pressing problems, about new revenue models, about your vision of how mobile will be used in the future, etc. Paper length: 1000-1500 words.

 

The Prize

Authors of the top two outstanding papers will get a paid trip to attend the conference and mingle with the who’s who of the wireless industry. Winners will also be eligible for more prizes. Please send in your entries by July 15th, 2011 tocontest@mobilefutureforward.com including a copy of your current student ID. Use of graphics and illustrations is encouraged. While an indication of interest is not required, it is appreciated. A panel of industry experts and executives will vote on the best papers. They will be ranked on originality, ambitiousness, creativity, depth, and clarity of vision. The goal of the contest is to bring out and reward the best thinking from the leaders of tomorrow.

 

2010 Student Paper Contest

Lun Huang of Illinois Institute of Technology and Smruti Parichha of University of California, Riverside wrote the top two winning papers respectively and were invited to meet with the senior executives in the mobile industry and attend the Mobile Future Forward Executive Summit. Our thanks to all the students who participated, the judges who helped us pick the winners, and Intel for supporting the contest. See details here.

For more Info, please contact contest@mobilefutureforward.com

New Paper: Mobile Cloud Computing May 25, 2011

Posted by chetan in : 4G, AORTA, BRIC, Connected Devices, Enterprise Mobility, European Wireless Market, Infrastructure, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Future Forward, Mobile Search, Mobile Traffic, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

Mobile Cloud Computing

mobilecloud_s

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

Sponsored by Real Networks

These are exciting times in the wireless industry. The innovation in technology, services, and business models is driving the global industry to new heights. While the global markets were feeling the pain of a brutal recession, the wireless industry for the most part sidestepped the crisis, especially in the North American and Asian markets. Mobile data revenues around the world have been growing at a steady pace. Given the lucrative nature of the market, there are more developers focused on the mobile ecosystem than ever before.

The mobile industry is going through significant transition from being voice-centric to data-centric, from consumers spending 90% of their time talking to being engaged on mobile data services 80% of the time. In Japan, Softbank became the first major operator to have more revenues come from data than voice. Others will follow. In the US, over 35% of the revenues are coming from data services and the data revenues will account for over 50% of the revenues by early 2013.

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 electronic devices such as the tablets, eReaders, automobiles, picture frames, and cameras.

Anything that can be connected will be connected making access omnipresent.

In such a multi-device world, the role of cloud computing becomes central to the content access and sharing. Consumers won’t like to store and upload by device type but would want the same level of functionality available across all their devices necessitating the need for mobile cloud computing. In a mobile environment, one has to contend with the limitations of screen size, the variability of devices, and the network latency. Therefore, the cloud requirements will vary by context.

With the emergence of the smartphones, the mobile operators are being gradually cut out of the value added services space with most of the revenues shifting to rest of the ecosystem. Mobile cloud computing provides an opportunity to leverage their network infrastructure assets and their consumer relationships to open up new revenue streams.

This paper will explore the mobile cloud computing market, its drivers, the opportuniies and the key elements of success in this space. Further, the paper discusses why operators should take a more active role in this space. Mobile cloud computing is here to stay. The winners and losers will be decided based on how players will adapt to empower consumers.

Download Paper

New Research: Competition and the Evolution of Mobile Markets April 28, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Devices, Enterprise Mobility, European Wireless Market, Gaming, General, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Networks, Patents, Privacy, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Competition and the Evolution of Mobile Markets

A Study of Competition in Global Mobile Markets

clip_image002

http://chetansharma.com/mobilecompetition.htm

Over the course of the last decade, mobile communications has become an essential part of the global fabric of evolution. With almost 70% global subscription penetration as of 2010, mobility is being embedded into almost every facet of our lives. Mobility is also spreading across verticals whether it is m-pesa in Kenya or SMS based counterfeit medicine detection in Ghana or paying for your coffee using your NFC enabled mobile phone in a Tokyo café or watching the cricket world cup broadcast while hiking the Yangtze river near Tibet. Consumers expect access to information everywhere they are and the ecosystem is responding with continued innovation, which has become extremely critical in managing the competitiveness of nations.

It is also apparent that some of the innovation and market dynamics has been evidenced by the competitiveness of these markets at different levels – network, devices, and services. While the market entry conditions into the devices and software services markets have gone through significant overhaul this last decade, the competitiveness framework of the mobile networks has been more structured and controlled in many instances.

Given the importance of the mobile network infrastructure to every nation’s competitiveness, security, and productivity, it is useful to understand how the “competitive mobile markets” are formed. In theory, the perfectly competitive markets are in the best interest of the consumers as they provide the best value given the competitive dynamics and the equilibrium provides good checks and balances for the ecosystem.

The global mobile networks have shown a remarkable adherence to the “Rule of Three” which states that in any mature industry, 3 top players dominate the market. Sometimes it has been dictated by the regulators and in other instances by the markets. Some markets like in Europe have settled into a state of equilibrium while other hyper growth markets like India are shuffling to find the right balance.

The elements of globalization are also shaping how mobile network operators grow. The regulators and the political class are increasingly looking at mobile networks as national assets and any foreign ownership generally goes through tremendous scrutiny.

Having worked in major mobile markets around the world, we have been intrigued by the framework  for a competitive market and this is the theme we explore in this working paper. Having the front row seat in an industry that is growing stupendously has given us some unique perspective on the competitive forces at work in the mobile space. We studied the competitive landscape in 40 top mobile markets around the globe.

This paper presents the analysis and an in-depth analytical framework to study the competitive landscape in the global mobile markets.

Download Paper (45 pages, 2MB)

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

Mobile Breakfast Series – The Universe of Connected Devices

Posted by chetan in : Carriers, Connected Devices, Devices, European Wireless Market, Mobile Applications, Mobile Breakfast Series, Mobile Content, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Worldwide Wireless Market , add a comment

Earlier this month, we hosted our 6th Mobile Breakfast Series Event in Seattle at the picturesque Columbia Tower Club. The topic is something that has been occupying everyone’s attention lately with some terrific growth numbers.

image

We were doing some math earlier this year and the chart above illustrates how fast the mobile ecosystem is subsuming the computing ecosystem as they become one and the same.

As you might have noted in our 2010 US market update, connected devices is the highest growing category in the market at 55%. It is creating new revenue streams and enabling new verticals to get mobilized. It is also disrupting the traditional ecosystems. This made it a perfect time to discuss the topic in-depth.

Our panelists were:

Tyler Davidson, VP, Amdocs

Martin Fichter, VP - Product Management Americas, HTC

Mike Mulica, President and Head of Strategy, Synchronoss Technologies

Ilja Laurs, Founder and CEO, Getjar

Erik Kling, Director - M2M, Vodafone Global Enterprise Group

Wilson Rothman, Deputy Technology and Science Editor, MSNBC.com (moderator)

image

image

image

As always, we try to bring players across the ecosystem to have a good discussion from multiple angles. Our panel didn’t disappoint.

First a bit about the panelists to give you some background on their viewpoints. Erik Kling is deep into M2M and Vodafone is pursuing a very aggressive M2M strategy worldwide with some smart value proposition to the enterprises. That can put some of the domestic operators at a disadvantage. Tyler Davidson focuses his energy on managing customers but also thinks deeply about the management of media in the connected world. The rage of apps is carrying from smartphones to tablets and other connected devices as well and Ilja Laurs knows a thing or two about apps – running the largest independent app store and being quite successful at it.

HTC just crossed Nokia in revenues which was just unthinkable even last year. HTC has run a very effective strategy in devices and Martin Fichter is one of the guys who is making things happen in the US market. If you have an iPhone, you have been touched by Synchronoss Technologies. They activate the iOS and other devices. A billion $ company you might have never heard of. Mike Mulica has deep experience in the mobile space and is driving the strategy of connected devices and related software forward. Last but not the least, our moderator Wilson Rothman has been covering gadgets most of his adult life and is a darn good moderator.

The highlights of the discussion was as follows:

We also announced that our annual thought-leadership summit on mobile - “Mobile Future Forward” will take place on Sept 12th in Seattle. We have some terrific speakers lined up which lead to some fabulous discussion. Stay tuned for more information early May.

My utmost thanks to David Smith, SVP at Enterprise Ireland for his notes from the event. It helped refresh my memory and pointed out things that I had missed amidst running around.

Thanks all for coming and making it a successful outing. Our next Mobile Breakfast Series is going to be on Mobile Commerce and Payments in late June. Stay Tuned for details.