2010 Mobile Industry Predictions Survey January 3, 2010Posted by chetan in : 3G,4G,AORTA,ARPU,BRIC,Carnival of Mobilists,Carriers,CTIA,Devices,Enterprise Mobility,European Wireless Market,Federal,Gaming,General,India,Indian Wireless Market,Infrastructure,Intellectual Property,International Trade,IP,IP Strategy,Japan Wireless Market,Location Based Services,M&A,Mergers and Acquisitions,Messaging,Microsoft Mobile,Middleware,Mobile Advertising,Mobile Applications,Mobile Content,Mobile Ecosystem,Mobile Entertainment,Mobile Gaming,Mobile Search,Mobile Traffic,Mobile TV,Mobile Usability,Mobile Users,Mobile Wallet,Music Player,MVNO,Networks,Partnership,Patent Strategies,Patent Strategy,Patents,Privacy,Smart Phones,Speaking Engagements,Speech Recognition,Storage,Strategy,Uncategorized,Unified Messaging,US Wireless Market,Usability,Wi-Fi,WiMax,Wireless Value Chain,Worldwide Wireless Market , 6 comments
2010 Mobile Industry Predictions Survey
First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2010. Thanks to all who participated in our 2010 Mobile Predictions Annual Survey. We have found it is the best way to think about the trends coming our way.
Before we dive into the survey results, letâ€™s do a quick wrap-up of the year that was. Well, since we just completed one heck of a mobile decade, letâ€™s do a quick jog down the memory lane.
The Last Decade: 2000-2009
Each new decade brings its own consumer and technology trends. During the 2000s mobile cemented its place in the global society fabric, the use of mobility became addictive and pervasive, to be without mobile seemed a curse and innovation blossomed and took user expectations to new heights.
From a pure statistical point of view, the global mobile subscription penetration grew from 12% in 2000 to approximately 68% in 2009 – phenomenal by any measure. The overall revenues grew over 400%, the data revenue grew 32,600% and the total subscriptions grew 563%. NTT DoCoMo paved the way with the i-mode launch in 1999 and they were the operator to emulate throughout the last decade, leading every single year in data revenues, in new application and service revenue sources, and in innovation and risk taking. They tried to export the success to other regions with little reward but DoCoMo clearly led the industry in taking mobile devices where they have never gone before.
China and India were late to the party but during the second half of the decade caught up with the western world and eventually surpassed all nations becoming number one and two nations by subscriptions respectively. In 2006, China Mobile became the most valuable operator passing Vodafone.
Mobile devices went significant transformation as well. From the early Bluetooth, camera, and music phones to the iPhones, the Storms, and the Androids, the industry was transformed by the introduction of Appleâ€™s iPhone in 2007. While Bluetooth, sleek designs, camera phone defined the first half of the decade, the second half was all about the applications and the mobile web. While Nokia dominated the entire decade in terms of the sales and profits, having missed the touch revolution, it leaves the decade a bit battered and a bit behind playing catch-up to the newcomers who profoundly disturbed the status quo.
Razr carried Motorola through 2006 when its global share peaked but was left to reinvent itself during the second half. It seems to have redeemed itself with the successful launch of Droid and upcoming Android devices. While many in the industry predicted RIMâ€™s demise, the company has only gotten stronger and is looking good for the 2010s. The emergence of Samsung and LG as strong players in the mobile ecosystem was also a big story of the decade with Samsung increasing its share by 380% and LG by 575% becoming the number 2 and 3 players respectively.
While Microsoftâ€™s Windows Mobile had an early start and the enterprise market share, it lost its way through several missteps and is on dialysis as we enter the new decade. One shouldnâ€™t count WM out though but there is a lot of work to be done before it can capture the imagination of the ecosystem which has been sequestered away by iPhone and Android.
While many new application areas were introduced during 2000s, none was able to displace SMS as the leading app category by usage and revenues. However, itâ€™s relative share has started to come down especially in North America and Western Europe.
As data usage grew, so did the data traffic bringing many data networks to their knees. We expect the data traffic consumption to only accelerate. Many people are underestimating the growth rates (as they did previously) and the strain the increase in consumption will put on the unprepared networks. Projector phones will take media consumption to a new level. Data management is going to be big business in the 2010s.
Overall, the mobile industry became a trillion dollar industry in 2008 and the data revenues are increasing in almost all regions. Voice is being commoditized at fast pace and that has put the traditional economics and ecosystem wealth distribution in topsy-turvy.
The US market also experienced tremendous growth with mobile data service revenues climbing 21,327% and becoming a mainstay in the mobile economy. In 2008 it crossed Japan as the most valuable mobile data market. US was late in adopting SMS but caught fire once American Idol started using it and even played a good role in the 2008 Presidential election in showcasing the power of mobile. Verizon started the decade being the number one operator and after trading places with Cingular and ATT grabbed the title back in 2009 (after the Alltel acquisition) to become the most dominant carrier in North America. Many smaller players competed by being innovative with Cincinnati Bell launching the fist UMA device, Sprint the first mobile eReader, and TMO launched the hotspot business which has now become an essential component of an operator strategy going forward.
Mobile is also replacing landline at a much faster pace than expected and within the first half of the new decade, we will have majority of the users using mobile vs. landline. Just like the last decade, this one starts with a new standard deployment of LTE that will keep operators and vendors busy throughout the decade. However, a lot of the developing markets will still be deploying 3G during the first half of the decade.
Infrastructure providers suffered the most in the decade bookended by the two recessions. Consolidation of giants (Alcatel Lucent, Nokia Siemens), bankruptcies of the famous (Nortel), and uprising of the upstarts (Huawei) pretty much defined the decade for the segment. Ericsson and Huawei enter the new decade from a strong position and looking to dominate the global markets.
The last decade was also marked by some prominent IP battles such as RIM vs. NTP, Qualcomm vs. Broadcom, Sony Ericsson vs. Samsung, Upaid vs. Satyam etc. (disclaimer: we worked on some of these cases and testified as an expert)
Here is our â€œsubjectiveâ€ list of movers and shakers of the last decade
Operator of the Decade
DCM led the way in almost all new category of apps and services. Its data service revenue was highest in each of the last 10 years
DCM will continue to lead along with KDDI and SKT. However, it might be the carriers with tremendous scale who will have the calling cards in the new decade. Watch for China Mobile, Vodafone/Verizon, Telefonica, Orange, Bharti, Unicom, Singtel
OEM of the Decade
Nokia dominated in sales and revenues in each of the 10 years and while the last couple of years took some shine off its glorious past, the company nevertheless came out ahead
RIM, Apple, Nokia, Samsung
Smartphone OEM of the Decade
Smartphones as we know them were introduced by RIM but Apple defined the category and the subsequent ecosystem
This space will be very competitive with Apple still the gold standard to beat
Infrastructure Provider of the Decade
Its prime rivals struggled to stay afloat while Ericsson grabbed most of the revenues from infrastructure contracts and is very well positioned for the next decade
Ericsson is joined by Huawei as the two top infrastructure provider with Huawei giving tough competition for LTE contracts. ZTE and other Chinese infrastructure providers will also replace some of the incumbents
Nation that led in mobile data
This is a no brainer. Japan led with Korea a close second. Finland, UK also impressed
US, China, and India are well positioned to make an impression but most likely during the second half. Japan will still be a major player
Device of the decade
iPhone followed by Razr
iPhone impressed with form and function while Razr with its global sales making it a top selling device of all times
The field might get more crowded as all OEMs focusing on the smartphone category. However, OEMs who also focus on the 90% of the market w/o smartphones might win the top prize
The year 2009
Apple continued to dominate the headlines for the third straight year – whether it was the launch of 3GS or the upcoming introduction of the fabled tablet. Google too kept the ecosystem active. It has executed on its mobile strategy with brilliant acumen though causing significant consternation amongst its partners who it needs to be successful. It has been often misunderstood by competitors, regulators, and partners. Often, they have focused on Googleâ€™s tactics vs. its strategy. Look for these two players to be very aggressive as they try to fight for the mantle and the mindshare.
While Nokia leads the OEM space by a good distance, its momentum in the smartphone space left a lot of question marks. Motorola made a credible comeback with Cliq and Droid. Samsung and LG continued to innovate and expanded on their share of shipments and revenues.
India outpaced China in net-adds and crossed 500M though it is still quite behind Chinaâ€™s 750M. The M&A and the consolidation process became active in Asia with several of the big regional operators looking to flex muscles in the international markets. After several delays, China started deploying 3G while India again fumbled and postponed its 3G auction.
US mobile data market continued its pace in 2009 with each of the four quarters exceeding $10B in data service revenues. The gap between the top two operators and the rest grew to be the biggest in the decade and the industry weathered the recession with ease. There was a clear shift towards prepaid especially for Sprint, T-Mobile, and the tier 2/3 operators.
2009 was also defined by significant activity on the application front. With Facebook eclipsing 100M subscribers and Appstore exceeding 2.5B downloads, sky is the limit.
The year also saw an unprecedented growth in mobile data consumption. As we had predicted, for some of the networks, the growth proved to be a double-edged sword. Many in the industry are banking on LTE to help relieve the pain but will be surprised that depending solely on the upgrade strategy will not be enough. Declaring spectrum as a looming crisis, FCC also started tinkering with the mobile industry and the broadband plan.
Japan exceeded 90% in 3G penetration while US subscriptions ventured into the 90% territory. Most of western Europe is way past 130%.
All in all, a terrific year considering that we went through one of the worst recessions in a generation. As we bid goodbye to the last decade, Nexus One and iTablet only serve to whet our appetite of whatâ€™s to come.
On a personal note, we started our consulting practice this last decade as we were coming out of the bubble recession and have been fortunate to work with some of the brightest brains and companies in the global ecosystem. We also had a chance to work on some key initiatives that impacted the ecosystem in profound ways. Many thanks to our clients, colleagues, friends, and readers. We will be involved with many new initiatives over the next decade and are looking forward to the conversations through the research notes, books, speeches, panels, whitepapers, blog posts, facebook and twitter feeds, and more.
Thanks and Happy New Year. May the upcoming decade leave you happier, healthier, and more successful than the previous one.
As we eluded to earlier, 2010 will be a pretty eventful year from several perspectives: business models, user experience and expectations, ecosystem posturing, disruption, and friction. How are things going to shape up? What will be hot and what will fade into oblivion? How will competition shape up the new sub-segments?
We put some of the questions to our colleagues in the industry. We were able to glean some valuable insights from their choices and comments. This survey is different from some of the others in the sense that it includes industry movers and shakers participation. Executives and insiders (n=150) from leading mobile companies across the value chain and around the world opined to help us see what 2010 might bring.
11 names were randomly drawn for 3 special prizes. The winners are:
Claire Boonstra, Cofounder, Layar- INQMobile 3G Chat device
Michael Libes, CTO, GroundTruth – Open Mobile Book
Henri Moissinac, Head of Mobile, Facebook – Open Mobile Book
Subba Rao, CEO, TataDoCoMo – Open Mobile Book
Saumil Gandhi, Product Manager, Microsoft – Open Mobile Book
Sarah Reedy, Senior Editor, Connected Planet – Open Mobile Book
Mike Vanderwoude, VP & GM, Cincinnati Bell Wireless – 2010 Mobile Almanac
Pinney Colton, VP, GfK – 2010 Mobile Almanac
Tim Chang, Principal, Norwest Ventures – 2010 Mobile Almanac
Laura Marriott, President – 2010 Mobile Almanac
Asha Vellaikal, Director, Orange – 2010 Mobile Almanac
Thanks to INQMobile and my friend Ajit Jaokar for contributing the prize gifts.
Despite conventional wisdom, what will not happen in 2010?
There were many. Sampling – Verizon iPhone, Microsoft Phone, Sprint will not be bought, Femtocells wonâ€™t gain traction, RCS will not happen, Google will not enter handset market directly, iPhone wonâ€™t lose steam, Android wonâ€™t bring coherence, NFC wonâ€™t take off, WiMAX wonâ€™t disappear, Nokia wonâ€™t bounce back, Palm wonâ€™t die, â€œYear of Mobileâ€ noise wonâ€™t subside, carriers wonâ€™t be delegated as dumb-pipes.
It is hard to cover the mobile industry in 20 questions. As pointed out by our panelists, there are a number of other issues and opportunities that will help shape our ecosystem – monetization of social networks, augmented reality, the fight for mobile advertising dollars, continued impact of globalization, security and privacy, NFC, IMS, VoIP, enterprise apps beyond email, battery improvements, new interaction modalities, health risks of RF radiation, Mobile 3.0, LTE, single purpose devices, 3G in India, Bada, app vs web, developer turmoil, featurephones, smart grids, M2M, Chrome, etc.
However, be rest assured, we will be tracking these and much more throughout the year and sharing them through various channels.
Thanks again to everyone who contributed. We will be calling on you again next year. We are clearly living in "interesting times" with never a dull moment in our dynamic industry. It has been a terrific year for us here at Chetan Sharma Consulting and we are looking forward to the next decade and seeing many of you along the way.
We hope you enjoyed gaining from the collective wisdom. Your feedback is always welcome.
Be well, Do Cool Work, Stay in touch.
With warm wishes,
Disclaimer: Some of the companies mentioned in this note are our clients.
Now onto the 2010 Mobile Industry Predictions Survey Results
The panel comprised of movers and shakers from around the world
What will be the biggest stories of 2010?
Jan seems to be the Google Phone vs. Apple Tablet matchup. Our panel though voted for the continued growth in mobile data as the top story.
Have we recovered from the recession? (Please select one)
Majority thought we are out of it though some might still feel the pinch
Who will be the most open player in the mobile ecosystem in 2010? (Please select one)
Google has done a great job at maintaining its image as THE open leader
Will Android handset sales exceed iPhoneâ€™s in 2010? (Please select one)
Despite Androids coming in droves, iPhone will still be the king of the hill
When will we see tiered pricing plans for smartphones in the US from tier 1 operators? (Please select one)
There are indications that this might happen sooner rather than later
What will happen to the mobile prepaid subscriber base in the US? (Please select one)
Prepaid made a strong comeback in 2009 and a good majority thought that the trend is likely to continue
By how much will the mobile advertising ad-spend increase in 2010? (Please select one)
Mobile Advertising was the only advertising segment with positive growth last year so it is no surprise that folks expect it to more than double this year
What will be the impact of the FCCâ€™s national broadband plan on the mobile industry in 2010? (Please select one)
Not much is expected from the various rulings that might come this year with most expecting the courts to have the final word.
Who will be the mobile comeback story of 2010?
Having bet its future on Android, Motorola was voted as the comeback kid of 2010
What will be the impact of Google Phone?
Itâ€™s pretty clear, Google and Apple are duking it out for the developer mindshare. Google wins in either case.
Which areas will feel the most impact from FCC?
Net neutrality is the area where they will have the most impact
Which solutions will gain the most traction for managing mobile data broadband consumption?
While only a holistic approach can provide complete relief, tiered mobile data pricing might have the most impact
When will the carrier-branded appstores lose steam? (Please select one)
Most expect carrier-branded appstores to be a thing of the past in 2010
What will help mobile cloud computing gain traction in 2010?
Mobile cloud computing is gaining steam and the reason is storage and media
What will be the most successful non-mobile-phone category in 2010? (Please select one)
Netbooks seem to be the strongest category followed by eReaders, Tablet, and M2M
What will be the breakthrough category in mobile in 2010? (Please select one)
Mobile Advertising and Mobile Payments share the top honors
By the end of 2010, which will have more subscribers? (Please select one)
LTE might have the momentum but WiMAX has the subscribers
How will Netbooks do through the operator channel? (Please select one)
No major impact from the operator channel
Which standards will gain traction?
No major impact from the standards
What mode of mobile payments will get any traction in North America and Western Europe in 2010?
The category will expand in different ways with more items being charged on the operator bill
Power of Good Patents – Apple pays $100M to Creative August 23, 2006Posted by Chetan in : Uncategorized , add a comment
Inventors should take note, specially in small companies. Patents provide protection for your ideas and businesses.
Apple Computer Inc. said Wednesday that it is paying $100 million to settle a dispute with rival Creative Technology Ltd. over the design of its trendy and iconic iPod digital media player.
Creative, developer of the Zen digital media player, had sued the Cupertino technology company this year, charging that the iPod took its patent-protected technology to sort and organize thousands of songs. It sought, among other remedies, to halt iPod shipments to the United States from China, where they are manufactured.
Apple countersued, arguing that Creative, based in Singapore with U.S. operations in Milpitas, infringed on three of its patents.
The two companies said Wednesday that they had amicably settled their differences. Apple will pay $100 million to license Creative’s technology and use it in its iPods, with the opportunity to get back a portion of the fees if Creative is able to license that technology to other companies.
Try Farecast August 21, 2006Posted by Chetan in : Uncategorized , add a comment
I have already saved 100s of $$ using this fare predictor engineCarriers,Devices,Uncategorized,Wi-Fi,WiMax , add a comment
$1B down the drain for Connexion (Boeing). Fundamental problem was in the basics. The demand was there but it was too darn expensive to deploy and took too long. At $500K/installation, it took a while for investment to pay off. Idea is still great. We need both Internet and Power supply on long haul flights. An extra $50 is nothing for the time utilized. Hopefully, someone will pick-up from where Connexion leaves us.3G,AORTA,Carriers,Devices,Uncategorized,Worldwide Wireless Market , add a comment
Chinese are coming (ZTE) August 19, 2006Posted by Chetan in : Uncategorized , add a comment
As noted in a note couple of CTIAs ago, Chinese infrastructure providers are starting to operate on the world stage. In a first, ZTE will be shipping 3G terminals to Telus in Canada.
The first batch of CDMA EVDO data cards has been shipped and will be available in major Canadian cities this month. This marks another important breakthrough for ZTE in the European and American high-end markets, the most advanced 3G markets in the world, following its cooperation with top European operators such as France Telecom and Hutchison Whampoa. North America is regarded as the most difficult market to break into and the move is a significant milestone in ZTE’s overseas expansion.Uncategorized , add a comment
Last week, China Mobile with its massive subscriber base blew past Vodafone as the highest valued company. As of 8/17, China Mobile’s market cap was $136B vs. Vodafone which was around $133B
US Wireless Data Market Stats Coverage August 15, 2006Posted by Chetan in : Uncategorized , add a comment Uncategorized , add a comment
India wireless market growth continues August 11, 2006Posted by Chetan in : 3G,AORTA,ARPU,Indian Wireless Market,Uncategorized,Worldwide Wireless Market , add a comment
As predicted in our last two reports on the Indian wireless market, the market continues to grow. July numbers exceeded 5.28M subs rivaling the growth in China. More details here http://www.trai.gov.in/trai/upload/PressReleases/357/PRNo75of10Aug2006.pdf. More info on reports here http://www.chetansharma.com/report2.htm
Verizon becomes the first US carrier to cross $1B in wireless data revenues (per quarter) August 1, 2006Posted by Chetan in : 3G,AORTA,ARPU,Carriers,Uncategorized,US Wireless Market , add a comment
Verizon Wireless beat all analyst expectations by reporting second-quarter wireless data revenues of more than $1 billion, the first time the carrier has passed that milestone. The data figure represents almost 13 percent of the company’s service revenues, a 7 percent jump from the same period last year. Verizon also netted 1.8 million customers during the quarter, bringing its total to 54.8 million, second only to Cingular Wireless.
These are some very positive figures for Verizon, which has been quietly revamping much of its data strategy in the last few months. Its BREW-based walled garden approach has been criticized for being too restrictive on commerce, particularly by entertainment industry executives. But services like the VCast Music service (which just dropped its monthly fee) don’t rely on the content delivery system, and the new tack seems to be bearing fruit.
In comparison, DoCoMo reported $2.64 in data revenues this quarter. Quite a room for growth if one pursues the right strategies.
Google Maps Mobile July 25, 2006Posted by Chetan in : AORTA,Devices,Location Based Services,Mobile Applications,Uncategorized , 1 comment so far
Google Inc. has enhanced its Google Maps mobile application by adding traffic information and the ability to save routes. Download at http://www.google.com/gmm
eBay TV July 24, 2006Posted by Chetan in : Mobile TV,Uncategorized , add a comment
Skype founders have found a good business model. Build a startup and sell it to eBay for 10 times the price. It will be interesting to see what they come up with. Unlike P2P telephony, TV actually requires content whether it is user generated (and there are hordes of players now) or licensed. In anycase, like Om pointed out, eBay loses.ARPU,Carriers,European Wireless Market,Uncategorized , add a comment
Data ARPU has been steadily climbing with the Group Total at 17.4%. Germany and UK are doing good with 21.2% and 20.9% respectively. Also, non-messaging data ARPU is climbing and now accounts for almost 5% of the total revenues. Spain seems to be leading the way with 6.8% revenues from non-messaging data. Overall, it has been a slow growth from 16.2% (data ARPU % of the overall ARPU) in Jun 05 to 17.4% in Jun 06.Uncategorized , add a comment
I was just talking with a client about M&A in semiconductor industry and this news popped in .. Intel, your turnAORTA,Devices,Messaging,Uncategorized,Unified Messaging , add a comment
Skype and mBlox are enabling SMS from Skype. Rates are here http://www.skype.com/products/skypesms/rates/index.html?currency=USD#listing-U
Can Zune take on iPOD July 22, 2006Posted by Chetan in : Devices,Mobile Content,Mobile Entertainment,Music Player,Uncategorized , add a comment
Microsoft has been trying very hard to challenge iPOD’s dominance. After trying out several hardware vendors, its product plans went no where. Zune might arrive to the markets by Christmas but it needs to be a generation ahead of iPOD if it can even make a dent otherwise it will be a “mee-tooo” product few years late
ESPN MVNO July 21, 2006Posted by Chetan in : 3G,AORTA,General,MVNO,Uncategorized,US Wireless Market , add a comment
Analysts have started calling for the demise of ESPN MVNO. Granted the going has been tough due to some missteps and fierce competition, it is too early to expect hundreds of thousands of subscribers. With so much “instant gratification” content, ESPN should give it more time, clean up its strategy and focus on execution.3G,AORTA,Devices,Uncategorized , add a comment
We will believe it when we see it. It will be interesting to see if Apple can work in the confines of the mobile ecosystem. I would imagine that they will launch with an European or Asian operator first.
Seattle Mobile Gaming Conference/WSA July 13, 2006Posted by Chetan in : Middleware,Mobile Content,Mobile Entertainment,Mobile Gaming,Uncategorized , add a comment
Seattle Mobile Conference going on today and tomorrow. Also, moderated a panel on Mobile gaming earlier today –