2013 – The year in mobile December 23, 2013Posted by chetan in : 4G, 4th Wave, Applications, Chetan Sharma Consulting, Connected Devices, Devices, Disruption, Enterprise Mobility, European Wireless Market, Fourth Wave, IP Strategy, Intellectual Property, Mergers and Acquisitions, Mobile 2013, Mobile Applications, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 15 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.
Mobile Breakfast Series Recap – Mobile 2013 December 13, 2012Posted by chetan in : Chetan Sharma Consulting, Mobile 2013, Mobile Breakfast Series, Mobile Predictions , add a comment
The Mobile Breakfast Series Event returned back to its home ground in Seattle after a detour to Atlanta and London earlier this year. As is the tradition, we go into the pontification mode for the last event and assemble experts to help us gauge what’s going to be exciting in the coming year, the shakeups that are coming and what should we keep an eye on.
The panelists were:
Zaw Thet, Advisor, Signia Venture Partners
Zaw is a veteran entrepreneur who has been at the forefront of search, social networking, mobile, and adtech since the age of 19. Most recently Zaw was the founder and CEO of 4INFO, one of the largest mobile advertising platforms in the world. Business Week recognized him as one the “Mobile Barons” helping to shape the mobile ad industry since 2004.
Omar Javaid, Managing Director, BBO Global
Omar is the managing director of BBO Global, a boutique advisory and early stage venture firm in the wireless and media space. Prior to BBO, Omar Javaid is Vice President, Product Management of Emerging Technologies Group at Motorola Mobility, a Google company. He was part of the executive team that lead the successful turn-around of Motorola, culminating in the $12.5B acquisition by Google. In this role, he was responsible for next generation smart phone and convergence products Motorola Mobility.
Tracy Isacke, Director of Investments and Business Development, Telefonica Digital
Tracy started her career at Xerox, rising to be the first female member of the UK Board, leading a team of over 450 people. Tracy joined Telefónica in 2006 as the head of the Enterprise Sales Team for O2 UK, then she led on Telefónica’s $207m acquisition of Jajah, the Valley-based VOIP/IP Telephony company. Tracy is currently spearheading the growth of Telefónica Digital as Director of Investments and Business Development, focusing primarily on Silicon Valley, Israel and Europe, with a growing team of half a dozen employees, based in Mountain View, Madrid, London and Tel Aviv.
Todd Achilles, VP, Mobility, Hewlett-Packard Company
Todd Achilles is Vice President, Mobility for HP’s Printing and Personal Systems business unit, where he leads strategy and execution for delivering a connected experience to HP customers. Todd has spent his career in product, marketing, sales and engineering roles within telecommunications sector, including leadership positions with HTC and T-Mobile USA.
What is in store for Mobile 2013?
2012 has been an incredible year for mobile. We crossed several key industry milestones – 6.5B subscriptions, 1B subscriptions in China, 1B broadband subscriptions, 500M android activations, Apple’s monstrous march towards $1T market cap. We also saw Amazon’s aggressive moves in the mobile space, Facebook eclipsing 1B active users, and Nokia/Microsoft/RIM trying to stem the tide. Some big M&A maneuvers throughout the year. All this is setting up a very exciting Mobile 2013. There was a lot to discuss – from the tussles of Apple and Android to opportunities in commerce and big data, from Microsoft’s comeback to challenges in managing the network growth and consumer expectations. We assembled a stellar panel of mobile veterans to help us brainstorm what the big trends, big movers and shakers, and the big opportunities of 2013.
Below is the summary of the discussion:
- Events that captured our imagination in 2012:
- Omar – Google-Motorola, growth in smartphones around the globe
- Zaw – The rise of mobile gaming and the move towards mobile first
- Todd – FCC and the slew of actions they took to frame the wireless industry in the US market
- Tracy – London Olympics, which was truly a “mobile” event helping citizens of the world “connect”
- Depends on which business are you in – HP/Microsoft see it is a PC+ world with multiple screens interacting with the consumer, Apple sees it is a clear delineation.
- However, the data-centric devices like tablets are starting to challenge the notion of computing.
- Also, Smart TVs might start to make an entry that help with inter-device communication and expand developers view of the world
- Clearly an iOS and Andorid world. Microsoft will grind it out and become relevant but it is a tough slog ahead. No mention of RIM or any other platform player
- Panel cautioned developers to over-rely on Twitter, Facebook and other platforms as a foundation of their business. If they like the business, they will just build that into the platform as a feature. VCs are becoming wary of such startups.
- Siri and voice will be much tightly integrated into the OS in 2013. As speech recognition gets better, consumers get more comfortable, we are getting closer to the “star trek” world
- Augmented reality could have a big year as consumers become more familiar and comfortable with AR apps.
- Telefonica’s work with Mozilla on a web-based OS is going well and offers an alternative to the walled-garden approach of the appstores. It will first start in Latin America and might see deployment in the western markets later in the year.
- Telefonica is one of the most advanced operators when it comes to attacking the opportunities in digital. It is the most formal with the formation of Telefonica Digital. It has embraced the OTT world with a launch of new initiatives across various verticals – communication, advertising, health, retail, security, cloud, etc. Tracy operator based OTT services can become the core of enterprise and consumer services
- OTT players will continue to eat away at the operator voice and messaging revenues. Operators didn’t innovate on these services for over 20 years and we are seeing the impact of that.
- There are also significant opportunities in M2M
- Cross-operator services for further monetization
- The day of data only subscriptions is not far away
- More embedded data pricing w/ devices like notebooks
- Android is enabling new hardware segments
- Hardware is hard, supply-chain to build and deliver billions of device is harder and it is going to get tougher in 2013
- It will be hard for OEMs to be in the hardware game w/o any services with a possible exception of Samsung which is making its way into the services space
- Amazon will be the one to watch in 2013 as it works to introduce tablets and a possible Smartphone
- Google glasses is quite interesting and can open up new possibilities for developers and consumers
- Intel got surpassed by Qualcomm due to a number of missteps and the street is valuing the future growth of QCOM higher than INTC and it will be difficult for INTC to catch-up
- MediaTek is becoming a strong player
- Lytro like imaging innovation in smartphones
- Mobile commerce is growing by leaps and bounds as evident by thanksgiving numbers. Mobile and social commerce will continue to make waves in 2013
- Apps model has become an alternate to the web and while not efficient it does provide a distribution vehicle to the developers
- App interop will be a big thing in 2013
- Advertising works better on apps than mobile web
- Wallet wars to continue into 2013
- T-Mobile’s non-subsidy approach might not work out too well as other operators will pound on the opportunity to peel away more subs from TMO. Telefonica Spain tried it along with some other operators around the globe and the experiment didn’t go too well
- Big data and analytics will continue to drive all sorts of new services – health to gaming. Panel cautioned startups relying on Amazon for cloud services to have appropriate backups, some startups have lost all their data due to errors and have had no recourse
- Big opps in cloud and big data in the enterprise segment, these services will get bundled in with devices and data plans
- OTTs are unlikely to wade into the Telco space, too capital intensive and regulatory lens is a negative
- Interesting to see what Softbank does with Sprint. He changed the market in Japan and has the capacity to disrupt the US market
- Latin America is full of opportunities for 2013
- IP battles to continue but most will get settled
- 2013 will be another great year for mobile. Stay tuned and get ready for the ride
It was a lively discussion and I could have easily gone on for another 2-3 hours. Our audience is always top-notch and is highly educated about the nuances of the industry as was evident from the questions. 2012 was the year when Mobile Breakfast Series spread its wings and went to Atlanta and London. We had a great time putting together each of the events in 2012 and we have many more planned for 2013, so stay tuned.
Our annual thought-leadership summit – Mobile Future Forward returns in Sept 2013. More details to come.
From all of us at Chetan Sharma Consulting, we wish you and yours a great holiday season and a terrific 2013.
Finally, as we do it every year, we launched our Annual Mobile Predictions Survey for 2013. There will be prizes for the 25 lucky winners. Be sure to share your thoughts. The survey ends Dec 28th. We will release the results in January.
have a good time.