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Opportunities at the intersection of 5G and IoT June 12, 2016

Posted by chetan in : 4th Wave,5G,Fourth Wave,IoT,Mobile Future Forward,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

There are two important discussion points in the mobile industry today are 5G and IoT. So, we decided to cover both of them under the same umbrella at last week’s Mobile Breakfast Series. The audience was glued, the speakers were brilliant, the weather was vintage Seattle, and I had a great time moderating the session. My thanks to our sponsor Netcracker for supporting the event.

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We had some excellent speakers who not only have the command over the subject but have a vision for the future. The audience was treated to a fantastic intellectual discussion on the topic.

Mark McDiarmid, VP – Radio Network Engineering, T-Mobile

Mark McDiarmid has 24 years of experience in the wireless industry in both domestic and international operations. Currently, Mark serves as VP, Radio Network Engineering and Development for T-Mobile US, where he leads several teams of industry-leading engineers focused on creating robust, operationally-efficient, and economic radio network designs. Recently, Mark was responsible for defining the evolution and system design of T-Mobile US’s HSPA+ and LTE mobile broadband network including the design and operationalization of new radio network transport solutions based on IP and Ethernet.

Hank Skorny, SVP – IoT, Neustar

Hank Skorny is Senior Vice President of Internet of Things at NeuStar, Inc. Mr. Skorny has extensive experience in the mobile software and services industry as well as in PC software for 25 years. Prior to joining Neustar, Mr. Skorny served as the Vice President of Software & Services Group and General Manager of the Intel Services Division at Intel Corporation, where he was responsible for the strategy and delivery of unified software services across device and operating systems including enterprise, cloud, IoT and developers.  Prior to that he was Chief Strategy Officer and SVP of RealNetworks, Inc., and President and Chief Executive Officer of mobile messaging startup, Thumbspeed, Inc. until its successful acquisition. Earlier in his career, Mr. Skorny directed product management, marketing and development teams at AOL, Adobe Systems, Microsoft and Apple Computer.

Paul Brody, Strategy Leader, Technology Sectory, EY

Paul Brody is Americas Strategy Leader, Technology Sector at EY. He is proficient in mobile finance strategy planning, technology of mobility and internet of things, with 20 years of consulting and strategy experience in mobile and electronics. Prior to joining EY, he served as Vice President and Global Industry Leader of Electronics at IBM. At IBM, he is responsible for building IBM’s services business in the mobile space, including the partnership with Apple, and developing solutions for connected devices.  Prior to IBM, Paul worked at McKinsey & Co. Paul has a degree in Economics and a Certificate in African Studies from Princeton University.

Dr. Rasmus Hellberg, Senior Director, Qualcomm

Rasmus Hellberg joined Qualcomm in 2006 and leads Qualcomm’s corporate technical marketing team that drives Qualcomm’s visions for future technologies, such as the wireless evolution, the path to 5G and the evolution of mobile computing. Rasmus has spent 20 years in the wireless industry and started his career in product management, working on the Japanese PDC system, the first commercial WCDMA products, and later on CDMA2000 1X and EV-DO focusing on radio access network products. Rasmus holds a Ph.D. in electromagnetic wave propagation and a master’s degree in electrical engineering from the Royal Institute of Technology in Stockholm, Sweden. He also holds a bachelor’s degree in business administration and finance from the University of Stockholm, Sweden.

Some of the highlights of our discussion:

It was a great discussion on some key 5G and IoT issues in the industry. We look forward to carrying on the conversation at Mobile Future Forward. Hope you can join us on Sept 27th. Until next time, have a great summer.

US Mobile Market Update Q1 2016 May 30, 2016

Posted by chetan in : 4G,4th Wave,5G,Chetan Sharma Consulting,Connected Intelligence Era,European Wireless Market,Internet of Things,Mobile Future Forward,Technology Cycles,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

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http://chetansharma.com/usmarketupdateq12016.htm

Highlights of the US Mobile Market Q1 2016

· Mobile data revenues increased by 17% YoY and now contribute 73% of the overall service revenues.

· QoQ, the service revenues declined again for the third straight quarter.

· The overall ARPU dropped below $40 for the first time.

· The Capex is likely to contract for a third year in a row given that most of the LTE networks are built out and there is pressure to preserve the margins.

· Device revenues declined sharply as consumers are upgrading at a slower pace than before and new device launches haven’t really motivated consumers to upgrade.

· EBITDA and Net Income saw double digit gains indicating operators are running a much tighter ship than before.

· Churn is at historic lows. Despite all the commotion in the market, fewer customers are churning each quarter.

· US will cross 400M in subscriptions in 2016.

· The data prices remained pretty stable throughout Q1.

· Mobile data traffic grew again with per sub smartphone consumption going past 4.0 GB/user/mo however, overall data traffic is expected to slow down in 2016.

· In the first 4-5 months of Binge-on, T-Mobile users chomped away over enough PBs of data for free to account for almost entire data traffic for the operator in 2013. T-Mobile experienced a net traffic reduction of 10-15% but given that consumers are consuming 3x than before, overall traffic is likely to rise again.

· AT&T continues to add more connected cars than rest of the operators combined. The operator is optimizing its business around profits. One side-effect of this has been a decline in postpaid phone net-adds for the sixth straight quarter.

· Verizon’s IoT/Telematics accounted for $195M in Q1 and is likely to cross the $1B mark in 2016 making US the hotbed for Connected Intelligence activities, growth, and continued experimentation.

· Apple again dominated the device market with over 39% revenue share, 74% profits share however it saw its quarterly YoY growth saw a decline for the first time in 13 years. The law of large numbers is starting to catch-up. Apple needs a new market narrative and/or another blockbuster. Given the pickup in R&D spend, speculators are hoping for the iCar to surface but it could be something as pedestrian as a new iPhone.

· Apple’s services business was greater than Facebook’s Q1 revenue but in context of its $50B quarter, Wall Street doesn’t appreciate the 20% increase in services revenue. Street’s eyes are squarely positioned on the iPhone numbers.

· Intel abandoned its existing wireless efforts leaving its future strategy and its role in the ecosystem a big question mark.

· Android ecosystem revenues and profits improved slightly primarily on the back of Samsung’s quarterly results. Sony, HTC, LG and some other Android players suffered deep losses in Q1.

· Operator tablet net-adds growth declined sharply.

· AT&T and Verizon on average made $17 per sub/mo, T-Mobile stayed into positive territory with $2 profit/sub/mo while Sprint eked out a 20c profit.

We will be doing an in-depth analysis of the future of the mobile industry at our 7th annual mobile executive summit Mobile Future Forward in Sept 2016. Hope you can join us.

Service Revenue Decline, what does 2016 hold in store?

The overall service revenue, postpaid revenue, overall and postpaid ARPU all declined again. After seeing the net-revenue decline for the first time in the history last year, there is a big question if 2016 will repeat itself or not. Q1 pointed downwards albeit only marginally. In general, the net-service revenue decline is not a good sign if it is market induced. In Europe, we saw net-revenue declines but the impact of the economic crisis was a big factor in determining the trajectory. After the economy has improved, we have seen the net revenue in effected countries rise again. In the US, the net-revenue decline is more market induced. The calculation of service revenue is a bit more complicated because device revenues are no longer part of the mix and as customers are weaning off the contracts, we have to adjust the service revenue for this accounting change. Regardless of the accounting distortions, there is continuous pressure on the postpaid revenues which is what is impacting the overall numbers.

Given the competitive state of the market, we might see further service revenue declines in 2016. The reversal might come down to consolidation in the industry in 2017 and beyond. The pressure on the revenues has had a positive impact though – operators are running far tighter ships than before. The net income surged in Q1 2016. Churn is at historical lows.

Spectrum Auction

FCC’s incentive auction will begin at the end of the month. It will be fascinating to see who beyond the usual suspects have aspirations in the mobile auction game.

Microsoft’s Tryst with Mobile

When Microsoft bought Nokia for a tidy sum, a reporter called me and asked, “What do you think?” I responded, “They will have to sell it once they are done realizing it was a mistake.” I have written extensively about the missteps in strategy and tactics that were so apparent from the start. Microsoft backed itself into a corner and had no choice but to buy Nokia and eventually destroy it. One of the highest market cap company disappeared right before our eyes. With market share falling below 1%, Microsoft has pretty much gotten rid of the last remnants of the business. This doesn’t mean Microsoft is out of mobile devices. If you carefully read between the words, Microsoft hasn’t given up and will be back. Its Surface strategy is finally taking shape and yielding better results and the pivot to services was the right call to get Microsoft enmeshed in the complex Connected Intelligence ecosystem. Old habits die hard. Microsoft might be making the same mistake with IoT.

Mobile Data Traffic Growth

In the last quarterly update, we mentioned that the Cisco’s data traffic numbers looked unreasonable for the US market. CTIA’s annual survey results proved the point earlier this week. Cisco will probably adjust its model and correct the numbers in its next update. We expect the US mobile data traffic to grow by 65% in 2016.

Messaging – the Next Big Platform Shift?

The last big platform shift in the computing space was the migration of attention, talent, and dollars from Windows to Android and iOS. The rise of the smartphones mirrored the rapid decline in Microsoft’s hold on the computing platforms. While Android and iOS have served us well, they haven’t evolved much. Despite having sensors and signals, some of the basic things like inter-linking of apps, contextual surfacing of app features and functions, and search remain complex and/or non-existent. The vacuum is being filled by the emergence of messaging as a platform. Messaging is primal. Consumers knew messaging before they knew smartphones. Given the availability of the processing power as well as the smarter software, some of the tasks can be moved to the messaging window is only natural. Asia has been the guiding light in this regard. How messaging emerges and how various players react to this phenomenon will be fascinating to watch in the coming days and months.

What’s next for Apple?

I have been saying for some time that Google has the best AI engine. Try driving in a remote part of the world and use Google Maps and you will see what I mean. The primary reason for this is that Google has been at it the longest with primary dataset on the most number of individuals. Facebook is starting to get there but the AI needs much more work. It will eventually get there. Another player that is sitting on a gold mine is Amazon and that’s why I say that they are most interesting tech company in the industry today.

Every company has at least one Achilles heel. Apple’s is software and services. Apple’s DNA is hardware and services come second. As I have said before, Apple’s problem with the market is more around controlling the narrative. Media and critics have been pretty hot and heavy about the future prospects of Apple. No doubt Apple has a weakness in software as has been apparent for many years but it has a very strong hold on brand loyalty of customers and a rock solid ecosystem of a billion+ consumers around the globe. Guess what, they also have an excellent stream of data on how consumers use devices, what apps they buy, what they surf and where do they go to but the way use it is quite different. I won’t count Apple out by any stretch. In fact, if one studies the acquisitions they have made over the last couple of years and connect the dots, some cool innovations could be released with the iPhone once the company figures out how to do it at scale.

However, as we have said in our Connected Intelligence thesis as well as Fourth Wave series of papers, services is where the action is going to be over the next decade or two. Apple, Facebook, Google, and Amazon are all well positioned to take advantage. How they execute against their strategy will determine who comes out ahead on the other side.

AI is as good as the datasets it has to train on. Neural networks of yesterday have become the AI algorithms of today just like M2M transformed into IoT. New buzzwords are like a necessary evil to keep the tech industry going. Apple has plenty of data, it just hasn’t started using it in a tangible way. You know who else has enormous amount of useful data? Mobile Operators – well, that’s a story for another day.

IoT Revenue Streams and what it means for the ecosystem

Service provider IoT revenue passed the important $1B mark back in 2013. So far it is tracking the growth of the early days of mobile data. However, they are different curves influenced by different factors. Mobile data was relatively an easier curve to climb as the revenues went up as more data handsets came online. The sales, business case, and ROI was straight forward. IoT is a bit more complicated as it across multiple vertical areas and it is not just about the data network, it is about the complete solution. The sales cycle and execution strategy is different and requires patience and resilience.

We will be doing an in-depth analysis of opportunities at the intersection of 5G and IoT at our upcoming Mobile Breakfast Series on June 7th.

Android vs. iOS: The fight for profit continues

Amongst the prominent Android OEMs, HTC, Sony, and LG, all lost money in their device business in Q1 2016. This again highlights the difficulty in differentiating on an open platform. Some of these players might give up on their handset business in 2016. Apple again dominated with 74% of the profit share and 39% of the revenue share with only 15% of the market share. Samsung’s revenues and profitability improved but it continues to face challenges both on the top and bottom end of the spectrum.

4th Wave Revenues

5 years ago, we put forth the theory of 4th wave to explain the upcoming changes in the mobile ecosystem. For the most part, the industry changes and tribulations have tracked the 4th wave curves. Last year, voice revenues fell down by 23%, messaging revenues declined by 18%, while data revenues grew by 23%. 4th wave revenues which now dominate the ecosystem now grew by a 60% YoY. We will have more analysis of the state of the 4th wave ecosystem later in the year.

Regulations for the new age

Some of the regulations in the communications space are over a 100-year-old. Communications itself has drastically changed though the principle of transferring the bits from point A to B remains the same. T-Mobile reported that 54%+ of its voice calls are on VoLTE. IP messaging is many times the SMS global volume. Gradually, almost all voice and messaging will be on the IP layer – voice and messaging will just become apps on the data layer. So pretending and regulating these services as if it were 2000 doesn’t help. An ideal strategy for consideration should be that the IP layer gets regulated for fair pricing, competition, and consumer good while everything on the top of the IP layer gets regulated on a “same service, same rules” principle. The interconnection between apps to deliver services like connection to PSTN, E911, etc. can be addressed by fair market pricing principles. VR is going to become the next communication platform; IP messaging the next application development and commerce platform. To keep the regulatory regime simple and in with the times, by focusing on the access layer, one can guarantee that whatever takes place on the top has the opportunity to grow as the market desires. Similarly, data rules across all apps and services on top of the IP layer should be the same irrespective of the provider. This market shift is required to make the market more competitive and fair.

Quad Moves

AT&T is integrating its DirectTV acquisition. Verizon acquired AOL, launched Go90 and is looking to acquire Yahoo (who isn’t?). Similar moves are afoot in Europe and other regions. Regular readers won’t be surprised. Video is a key offering for many service providers and by bundling quad plays, operators can further lower the churn. Content will continue to play a big role in how various offerings get bundled. The traditional cable bundle is being pulled apart in favor of more al carte OTT offerings. Media companies will have to figure out how they play in the new converged world. The ones that have been sitting on the sidelines will have to make some moves in the wireless ecosystem to stay relevant in the long-term.

The licensed vs. unlicensed: frenemies

Comcast is expected to launch its WiFi first MVNO with Verizon later this year. Google Fi hasn’t been a roaring success, perhaps it was never designed to be. Given that WiFi is carrying 75-80% of the traffic, it is easy to make the business case for a national WiFi operator. Companies like Republic Wireless have shown that this can be done.

Seeing the success of WiFi, FCC has rightly made more unlicensed spectrum available and it will be interesting to see how the ecosystem around 3.5GHz and other bands develop. This in light of what’s happening in the higher bands of cm and mmwave for 5G deployments. Technologies and business models that take into account benefits and drawbacks of both types of spectrum bands across a different uses cases will win out in the end. Despite advances, WiFi calling still has quality issues so the need for traditional networks is not going away anytime soon.

5G Economics

5G is gaining steam. All the major players have outline their preliminary plans to do trials on 5G (code word for we don’t want to be perceived as being behind). However, there is some real progress being made in short-range ecosystem of 5G. I have been working with many companies and talking to many researchers on this subject. I think what’s lacking from the discussion is the role of economics in 5G – what will be the cost structures, ROI, and the TCOs that will make it worthwhile for the operators to deploy 5G profitably. US is likely to be the key driving force in setting the standards and pushing the trials to deployments even though there is no Olympics as a motivator. But competition sure is.

We expect to explore this issue in more detail in the coming months. Our Mobile Future Forward Summit in Sept will tackle the questions in-depth with some seasoned experts.

Our paper on 5G covers the past, present, and future of the network evolution.

What to expect in the coming months?

2016 has started with a bang. The ecosystem is getting very complex and we need better tools to understand the relative strength of players and strategies. 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 Q1 2016 and 2016 US wireless market is:

Service Revenues

· The US mobile data services revenues in Q4 2015 increased 2% QoQ and 17% YoY.

· Verizon and AT&T dominated the quarter accounting for 69% of the mobile data services revenue and had 67% of the subscription base.

· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q1 2016. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 1.9%.  

· Data contribution to the overall revenues is now at 73%.

· All operators saw their ARPU decline by with Sprint and Verizon experiencing the sharpest declines.

Subscribers

· The US market increased its net-adds to 5.6M. T-Mobile gained the most and Sprint added the least.

· Tablet netadds declined sharply leading to a decline in big decline in postpaid netadds.

· There were more Car net-adds than there were phone net-adds

· AT&T has approximately 8M connected cars on their network – probably the highest of any mobile operator in the world.

4th Wave Progress

· The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 80% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $195 million revenue from IoT and Telematics. At the current run-rate, this will likely be a billion-dollar business by 2016.

· Overall, the IoT business is tracking the early days of the mobile data growth.

Connected Devices

· Connected devices (non-phones) accounted for almost 69% of the net-adds in Q1 2016. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.

Handsets 

· Smartphones continued to be sold at a brisk pace accounting almost 97% of the devices sold in Q1 2016. The feature phone category is practically becoming extinct in the US market.

· The smartphone penetration in the US is now at 84%.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 87M making it the #2 LTE operator behind China Mobile which has more than three times the LTE subs. Other three operators are also deep into their LTE deployments. Verizon reported that 92% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.

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 at our annual thought-leadership summit – Mobile Future Forward in Sept 2016. The next US Wireless Data Market update will be released in Aug 2016.

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

Announcing Mobile Future Forward 2016 May 20, 2016

Posted by chetan in : 4th Wave,5G,Connected Intelligence Era,Mobile Future Forward,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

In 2015 something dramatic happened in the mobile industry. In the US, the revenue on the 4th wave exceeded revenue from all the first three waves combined, just like the 4th wave theory had predicted in the 2012 paper. Globally, 62 companies made $1 billion or more on the 4th wave, a 1140% jump from 2010. The world of Connected Intelligence is unraveling in front of us at a fierce pace across multiple dimensions. At Mobile Future Forward (now in its 7th year), we will delve into exponential growth impacting linear industries, new innovations changing the trajectory of competition, sensors and software enabling a programmable world of immense potential, and new experiences changing consumer’s perception of technology, data, and privacy. The day long executive summit brings together global experts and visionaries to help probe the deeper mysteries of the evolving landscape. Am thrilled to announce that Mobile Future Forward 2016 will be held on 27th September in Seattle

We are excited to partner with industry leaders and thank them for their ongoing support: Neustar, Oracle, and VoiceBox.

The distinguished guests of the forum will discuss wide-ranging topics of 5G, network economics, messaging platform, VR, autonomous intelligence, blockchain, vertical industries, IoT, commerce, security, intelligent data, new business models, policy and economies, and much more. We welcome you to join us in the journey and contribute to the discussions that will help shape the industries and economies worldwide.

Registration is open now.

Some of the confirmed industry leaders are:

· Glenn Lurie, CEO, AT&T Mobility

· Veresh Sita, CIO, Alaska Airlines

· Jorge Espinal, SVP, Spotify

· Peter Lewis, Father of IoT

· Michael Bayle, SVP – Mobile, Amadeus

· Sunil Dulovoy, Head, Uber Everything

· Donna Fedor, MD, Mavericks Capital

· Bubba Murarka, Partner, DFJ

· Todd Hooper, CEO, VREAL

· Sridhar Solur, SVP – Xfinity Home and IoT

We will be announcing the addition of new speakers and partners throughout summer and look forward to seeing you in September. If you are interested in partnering, please feel free to reach out at info@mobilefutureforward.com.

Thanks and have a wonderful spring.

Chetan Sharma

CEO, Chetan Sharma Consulting

http://www.chetansharma.com

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IoT–Exploring the next big thing in mobile May 1, 2016

Posted by chetan in : 4th Wave,5G,Chetan Sharma Consulting,Mobile Breakfast Series,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

Internet of Things (IoT) has been hailed as the next big thing in the mobile industry. As connections from objects and things interconnect with existing and new end points, the networked effect can provide tremendous opportunities, reshape existing processes, user experiences, and expectations. But, really, how real is IoT and what will it take to reach the billions of dollars promised. Will it fundamentally alter how we do things? We are starting to see signs of tremendous progress. GE is investing $4B+ into its version of IoT – the industrial Internet and it is making the difference in operations and machine learning. Connected consumer gadgets are enabling us to lead healthier lives, work more efficiently, and manage our time more effectively.

Chetan Sharma Consulting hosted the first Mobile Breakfast Series event of the year in Vancouver and we delved deeply into the subject of IoT and what it means. We talked about the opportunities it represents, the challenges it faces, and the timeline for success. The panel took a look at the fundamental elements of IoT that will be a key layer for the Connected Intelligence Era.

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Shahid Ahmed is a Partner at PwC where he leads the Emerging Technology and IoT Practice. Previously, Shahid was the Managing Director with Accenture, where he had P&L responsibility for North America’s Communications business.  In this role, Shahid helped telecommunications clients build new capabilities, operate more efficiently and drive new growth.  He was also responsible for the Network practice in North America.  During his twenty-year tenure at Accenture, Shahid was involved in creating many practices including the formation of the Wireless Practice and helping to start the Accenture Cisco Business Group. Prior to joining Accenture, Shahid held several management positions at Sprint where he rolled out and expanded Sprint’s cellular services in North America.   Shahid was also responsible for rolling out the first cellular digital packet data (CDPD) capability in the US. Shahid is an active member of several wireless industry groups. He currently serves on multiple Advisory Boards such as the Smart Network Council, Cellular Telecommunication and Internet Association (CTIA), Northwestern University Masters in Engineering Management (MEM) Program and The Coral Group. In February 2011, Shahid was appointed as an Advisor to the Federal Communications Commission (FCC) Technical Advisory Council advising on technology issues facing the United States.  Shahid was chair of the M2M/IoT working group and currently chairs the cyber-security working group.

Rob Tiffany is the Global Technology Lead for the Internet of Things at Microsoft where he’s shipped smartphones and architected + developed many of the world’s largest enterprise mobile, IoT and wireless solutions. Prior to Microsoft, he spent his career as an entrepreneur, executive, strategist and writer of bestselling books on mobile and wireless technologies. A pioneer of the mobile revolution, he drove the development of the mobile app ecosystem and co-founded the world’s first cloud-based, mobile device management company. He started his career in the M2M business in the early days of wireless, bringing unintelligent vending machines to life.

Gonzalo Tudela is CEO and Co-founder of Vandrico Solutions, an enterprise wearables software company based in Vancouver Canada. With a background in Finance and Mining Operations, Gonzalo is an early champion of the positive impact wearable technology will have on large commercial operations. His insights have been featured in publications such as The Globe and Mail, Entrepreneur Magazine and TechCrunch. Gonzalo is a TEDx speaker who regularly presents to business leaders across the world. His expertise has been televised internationally to millions of viewers on the Globo TV network and on CBC. Gonzalo currently leads Vandrico in helping large global organizations use wearable technology as a way to overcome safety and operational challenges.

Rob Chandhok currently serves as President and COO of Helium, which provides a complete Internet of Things platform that makes sense of your things. Prior to Helium, Chandhok served as president of Qualcomm Interactive Platforms and senior vice president of Qualcomm Technologies Inc., where he was responsible for Qualcomm products and strategies that enabled people to benefit from the Internet of Everything, including wearable computing, vision-based computing via the Vuforia augmented reality platform, and the AllJoyn software development framework, an open source project of the AllSeen Alliance. Chandhok has years of practical and product-oriented experience in wireless communications and the Internet. He takes a systems-level approach to innovative communication oriented products, from chips up to applications and user interface. Chandhok holds 36 patents and has 23 published articles.

The highlights of the discussion were:

· Shahid was just back from the big Hannover fair in Germany. He gave a good overview of the emerging movement towards of what is being called Industrial 4.0 essentially a derivative of Connected Intelligence. Industrial nations like Germany and Japan are very worried about staying relevant in the new economy. It’s worth reading the official summary here. US was the showcase country this year so there were plenty of representation from US tech giants like GE, Intel, Microsoft, AT&T, and many others. Even President Obama took time to represent the US interests at the show. The bottom line of the show was that everything is getting connected, really fast, and the change is coming faster than we can think. There were several case studies that highlight this as we will discuss below.

· Rob Chandhok has cut his teeth in the mobile ecosystem with years of experience building technology and ecosystems at Qualcomm and is now shepherding Helium to become a contender in the IoT space. Fresh from raising a $20M round with GV and the likes, Helium is making good progress in that dimension. As he stated on the panel, Helium wants to become Android of the IoT world.

· Rob Tiffany started his career in the M2M space building vending machines that could communicate and help with the operations but as he leaned all too painfully, it is not about the technology but also about the human element that we need to be always cognizant of it.

· Gonzalo’s background is in mining and he is connecting the mining world to IoT and vice-versa and is in the process building out a platform that can be applied to many other use cases but the focus is on how to make things better, safer, workers more productive, operators cheaper and effective, and the ROI a no-brainer.

· While the news headlines are captured by the likes of consumer gadgets and gizmos, almost all of the revenue and profits is in Industrial or Enterprise IoT and that’s where we focused all of our attention.

· At the highest level, the main goals of IoT are one or more of the following: to reduce cost and expense, reduce risk, increase productivity, enhance consumer engagement which results into higher revenue and better profitability, and obviously at the end of the day – increase revenues with new revenue streams or new business models applied to the old businesses or just doing a better job with the existing streams.

· Product companies are turning into services companies. IoT is also enabling new business models. The prominent examples are: Rolls Royce and GE are leasing their jet-engines by the hour rather than selling them so that they can very accurately predict the maintenance windows and maximize usage by reducing downtime costs. It has led to increase in revenue and best margins for the business.

· Many folks in the industry view IoT as dumb endpoints to collect data but clearly there much more to it. Even sending control commands to manipulate the outcomes are a big step forward. However, the clear benefits come when the end-points are smart and are capable of making decisions. In the case of Helium sensors, software can be updated over time. In fact, if the sensor is not software upgradable, you shouldn’t even consider buying the sensor. As such, some of the new low-power networks like Sigfox and Lora are a non-starter in the long-run because they just don’t have the bandwidth to send updates to the end-points efficiently. I think the role of these two networks is similar to that of WiMax. It helped accelerate the LTE evolution. Similarly, SIgfox and Lora spurred the growth of NB-IoT and the ecosystem around it is being built quickly.

· Another great example is from RioTinto – they have dozens of mining operations around the world and operate heavy equipment. With the help of sensors, they are able to operate autonomous vehicles. In fact, RioTinto is the world’s largest owner and operator of autonomous haulage system trucks. By operating autonomously, more material can be moved safely and better yield is delivered.

· In the underground mining operations, Vandrico equips miners with off-the-shelf wearables and the data from the sensors is used to provide specific instructions based on the type of work, location within the mine, and other contextual factors that need to be considered in real-time operators.

· This leads to how the business model should be designed. More and more folks are thinking about value-based pricing. The communication piece in IoT is practically a commodity and so the value is in the outcomes. Gonzalo brainstormed some interesting value propositions that he is thinking about for e.g. pricing based on lives saved or extra production of the mineral (in case gold, copper and other valuable minerals, one can hit the jackpot).

· Microsoft has a number of good framework elements that can be used for IoT like Azure cloud, Analytics, BI, real-time event processing of high volume, etc. With Amazon, Microsoft are the two giants in the IoT cloud space.

· The IoT stack is very fragmented and it will continue to be such for a time before some consolidation takes place.

· Opex of IoT devices/network is generally bigger than the capex.

· Security is of course a big deal in IoT. Some think about it all the time but in general there is a big gap in the industry. Regulators are slow to move as well. Perhaps a big public fiasco will force the industry and the regulators to come up with guidelines and rules that can be enforced. Just because you can encrypt data doesn’t mean you are securing the data from the sensor. The fact that it is emitting data (garage opener) can be captured by nefarious elements. Encrypted data is of no use in such scenarios. So, as an industry, we need to take a much deeper look into how we deal with security and privacy of IoT data and end-points.

· BP provided fitbits to their employees and saw a 44% reduction in sick-days. That’s enormous amount of hours that can change how the business is run. It will also have a ripple effect on the fabric of society – insurance, health care facilities, education, social security, etc. will all be impacted.

· Gaming might provide some interesting business model lessons for IoT.

· In the end, Industrial IoT is about managing business outcomes to impact the basic operating metrics of the company and the ecosystem.

· The threat of cybersecurity looms large and we just don’t have the integration, collective framework to even start tackling the problem. Lots of challenges and opportunities to tackle this.

· There are big differences in expectations of IoT solutions in the developed vs. emerging worlds. Pricing is the biggest variable. As such companies operating in the space had to adjust their pricing models to suit the market and make it more palatable to the markets such as India and China.

· It was kind of reflective of the state of the industry that we didn’t talk much about the mobile operators who dominated the industry until 2010-11 and are slowly becoming less relevant in the 4th wave era (more to come on this). Of course, there are a few operators like AT&T, Verizon, Vodafone, Telefonica, and DT who are quite active in the space not only at the connectivity layer but actually on all layers of the stack. However, their best opportunity might be managing the OSS stack for the Industrial world.

Overall, it was an excellent panel with diverse viewpoints covering a technology evolution that is just getting started. It is exciting to be part of this shift and help shape the conversation which is bound to have a fundamental impact on the global economy. My thanks to our sponsor Optimus Information for their support, all the speakers who traveled great distances to be with us, and to the attendees who took out their morning to be with us. Everyone was glued to the discussion and the time flew by very fast. And we barely were able to scratch the surface. We will continue the dialog in the coming days, months, and years.

Our next opportunity is our Mobile Breakfast Series in Seattle on June 7th where we will add 5G to the mix and explore where are the opportunities at the intersection of 5G and IoT. We will look into what the new world of 5G will look like and how it will impact IoT.

As always, we welcome your input which helps in planning future forums and brainstorm sessions.

Thanks

Chetan Sharma

Mobile Patents Landscape 2016 April 13, 2016

Posted by chetan in : 4th Wave,5G,Connected Devices,Connected Intelligence Era,Intellectual Property,Patent Strategy,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile Patents Landscape 2016

http://www.chetansharma.com/MobilePatentsLandscape_2016.htm

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In 2016, Mobile industry will approach 2.7 trillion dollars in revenue. It has become the most broadly available and used technology on the planet. Its impact is being felt beyond the traditional boundaries of communications. Mobile app Uber has completed upended the logistics equation; Amazon and Alibaba are generating billions of dollars in mobile commerce; FlipKart and Snapdeal are changing how Indians buy, sell, and trade; and so on and so forth. By the end of 2015, there were at least 62 companies generating over a billion dollars from digital mobile services.

We are seeing a fundamental shift in the mobile industry as discussed in detail in our 4th wave series papers and an emergence of the Connected Intelligence Era as outlined in our recent series of papers. These two broad trends are changing the landscape and impacting how and where value gets created and where it gets captured. In the transition years, the value of IP becomes quite important as companies jumping from one stack layer to another one require the IP portfolio to protect its investment in the space. The cross domain activity will only intensify in the coming years and we are already seeing this in the patent data to date.

According to World Intellectual Property Organization (WIPO), the top fields of technology for published patent applications were: Computer technology (8.2%), Digital Communications (8%), Electrical machinery (7.3%), Medical Technology (6.3%), and Transport (4.3%). While US remains the leader in terms of overall quality and quantity. China and its companies are starting to flex some muscles on the big stage. In terms of regions, Asia continues to outpace North America and Europe. US and Japan were followed by China, Germany, Korea, France, and UK. The top 10 PCT applications were Huawei Technologies, Qualcomm, ZTE, Samsung, Mitsubishi, Ericsson, LG, Sony, Philips, and HP.

According to the US Patent Office (USPTO), in 2015, the number of patents granted grew over 8% YoY. The numbers of foreign filings are now in the majority for both the applications filed as well as the patents granted.

As we look into the mobile related patents, the growth is much more striking. 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 447% increase while the European market saw a 75% increase in mobile related patent grants.

By the end of 2015, approximately 27% of patent granted in the US were mobile related. This grew from around 2% in 1991 and 5% in 2001. In Europe, roughly 8% of the patents granted are now related to mobile. Europe saw a decline of 4% in mobile patents in contrast of 16% growth in the US market.

It is also interesting to note that a number of new Asian companies like Mediatek, Alibaba, and Xiaomi have stepped up their IP efforts and substantially increased the filings in the US. We are also observing strong activity in the new areas such as 5G, VR, mobile security, and IoT.

Chetan Sharma Consulting analyzed over 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 patents landscape. This study is fifth in the series that does an in-depth quantitative analysis of the mobile patents landscape.

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 April 2016.

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

Correcting the IoT History March 14, 2016

Posted by chetan in : 4th Wave,Internet of Things,IoE,IoT,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

In the last 5 years, IoT has entered the industry consciousness. There are varying forecasts calling for tremendous growth and revenue generation opportunities. We have argued IoT as part of the Connected Intelligence Evolution and have published a couple of papers on this topic of ongoing research. Last year, we delved into the history of IoT. Before it was fashionable to say IoT, it was M2M, and before that Telemetry and Telemetric systems.

During our research last year, we came across something that our industry and the media got wrong – the origination of the term “Internet of Things” or “IoT.” The current thinking is that the term first originated at the Auto-ID center at MIT around 1999.

IoT didn’t really enter the conversation until ITU’s IoT report in 2005. It took another 5-6 year before the 50B forecasts started appearing for connected devices and of course the lion-share of the growth was attributed to IoT. Regardless of the forecasts, IoT is a thriving ecosystem and the future of opportunities and its relevance in transforming industries has never been more important.

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Peter Lewis with Harry Brock, President, Metrocall in 1982 (Black Enterprise, June 1983) (top). Peter Lewis in 2015 (bottom)

That’s why it is important to get the historical context right. To the extent we could find, the term “Internet of Things” was first conceptualized, coined, and published in Sept 1985 by Peter T. Lewis in a speech to the Congressional Black Caucus Foundation 15th Annual Legislative Weekend in Washington, D.C. There was no widespread availability of Internet in those days so the Internet didn’t archive it some place and Peter Lewis was busy with his new startup endeavors and we lost track of an important speech that brought together the vision of IoT together. Only a few close friends and colleagues knew about the speech.

The full speech is published with permission in this note and as you will see, his vision was spot on – 30 years ago. Peter was uniquely positioned to understand the confluence of machines, wireless, Internet, applications because he had been exposed to them from different angles by then.

By connecting devices such as traffic signal control boxes, underground gas station tanks and home refrigerators to supervisory control systems, modems, auto-dialers and cellular phones, we can transmit status of these devices to cell sites, then pipe that data through the Internet and address it to people near and far that need that information. I predict that not only humans, but machines and other things will interactively communicate via the Internet. The Internet of Things, or IoT, is the integration of people, processes and technology with connectable devices and sensors to enable remote monitoring, status, manipulation and evaluation of trends of such devices. When all these technologies and voluminous amounts of Things are interfaced together — namely, devices/machines, supervisory controllers, cellular and the Internet, there is nothing we cannot connect to and communicate with. What I am calling the Internet of Things will be far reaching.

Peter started his career as a young commander and nuclear officer-in-charge in the US Army and served in the US and abroad in charge of critical communications and as a nuclear officer, in charge of running NATO’s first strike force during the cold war. In fact, here is a fascinating trivia for the history buffs – Peter was called by the Secret Service to retrofit President Reagan’s Limo (it was a 1972 Lincoln Presidential parade car) with phone service in the Motorola shop in Prince Georges County in 1984.

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Dawn Magazine, The Afro American, Nov 9, 1985 covering the CBC Foundation panel in Sept 1985

From the very early days of his career, Peter understood the importance of cellular communications before many of his peers at the time and was determined and focused to play a role in the birth and subsequent growth of the industry. At the start of 1980, he cofounded Metropolitan Radio Telephone System, Inc. or MRTS which merged with other partners to make the first cellular company in the US – Cellular One. The grand opening of Cellular One took place at the Vista International Hotel (now the Westin Washington) in Washington DC on 16 Dec, 1983. Later on, the company was folded into Cingular and then into the current AT&T Wireless.

He also played an influential role in the cellular settlements amongst mutually exclusive applications in over half of the top-90 US markets and in his interactions with the FCC. It was during this time in 1985, he was invited by Ms. Zora Kramer at the FCC to present his thoughts on the burgeoning Cellular industry and participate with other executives on the panel moderated by Ms. Doris McMillon who was the news anchor for WJLA TV-9 in DC. She now runs her own Media and Communications firm.

I had a chance to talk to Ms. McMillon to see what she remembered about that session from 30 years ago. “Peter wowed the audience, some of the stuff he was saying seemed science fiction at the time,” she said.

Peter was very familiar with the work on ARPAnet at DARPA and from the beginning saw the cellular system not just for voice but also for data services; not just for connecting phones but all sorts of machines. Remember, in those early days, cellular phones were installed in the car and amounted to thousands of dollars in equipment and monthly costs.

In all of our filings with the FCC, we made mention of our intent to offer not just voice, but also data services over the cellular networks. Particularly, was is easy to see that tons of machines and devices, many of which are situated in remote or hard-to-access areas, are in dire need of monitoring and manipulation so that managers of such machines and devices can check status, turn these devices on and off and modify settings and thresholds. The narrow bandwidth of cellular ideally lends itself to carrying small amounts of data to and from machines and devices. Some of you in the audience are familiar with the simultaneous and rapid development of the Internet — whose progenitor was called the “ARPAnet” — overseen by the U.S. Department of Defense Advanced Research Programs Agency better known as “DARPA.” When the Russians launched the Sputnik communications satellite in 1958, this gave the U.S. government the urgent motivation to create DARPA so we would never again fall behind in critical technology behind a rival superpower.

You can read the full speech to judge for yourself.

In the meantime, an entrepreneur like Peter can hardly sit idle. He has played an important role in the connected cars that are so prevalent today (see patent USPTO 5587715). He regularly advises the various government agencies like US Army, Pentagon, FAA, etc. and other corporations on future growth of technology and its impact on our world. He is currently engaged in Unmanned Aerial Systems (a.k.a drones) industry, which is an emerging segment of the IoT industry.

So, the next time someone asks you about the origination of IoT at a cocktail party, you will have the data and the historical context of how Peter’s speech in Sept of 1985 came about.

Chetan

US Mobile Market Update – 2015 March 9, 2016

Posted by chetan in : 4G,4th Wave,5G,AORTA,Applications,ARPU,Chetan Sharma Consulting,Connected Intelligence Era,IoE,IoT,Mobile 2016,Mobile Breakfast Series,Mobile Ecosystem,Mobile Future Forward,Smart Cities,Smart Phones,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

US Mobile Market Update – 2015

http://www.chetansharma.com/usmarketupdate2015.htm

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Highlights of the US Mobile Market 2015

· The overall mobile market expanded by 18% increase in revenues.

· Mobile data revenues increased by 17% YoY and now contribute 72% of the overall service revenues. In terms of data contribution, US is catching up with Japan which has been a leader in data % since the iMode days.

· For the first time in its history of the US market, the service revenues declined.

· For 2015, the voice revenues declined by 24%, messaging revenues declined by 18%, tablets saw the dip by 18%, handsets saw an increase of 5%, access revenues by 23% and 4th wave services dominated with an increase of 60%.

· The Capex contracted for a second year in a row.

· Device revenues are now 21% of the overall.

· EBITDA and Net Income saw double digit gains indicating operators are running a much tighter ship than before.

· Churn is at historic lows. Despite all the commotion in the market, 7% fewer customers churned in 2015.

· After falling sharply in 2014, the data prices remained pretty stable throughout the year.

· Mobile data traffic grew again with per sub smartphone consumption at 3.9 GB/user/mo (see note below on data traffic)

· In the first 10 weeks of Binge-on, T-Mobile users chomped away 34 PB of data for free or what was the entire year’s worth of data traffic on T-Mobile’s network in 2010. T-Mobile experienced a net traffic reduction of 10-15% but given that consumers are consuming 3x than before, overall traffic will rise again.

· AT&T added 4 million cars to their network. While postpaid business has its challenges, the connected devices business showed significant strength in 2015.

· Verizon’s IoT/Telematics accounted for $690M in 2015 and is likely to cross the $1B mark in 2016 making US the hotbed for Connected Intelligence activities, growth, and continued experimentation.

· Apple again dominated the device market with over 45% revenue share, 81% profits share with only 16%-unit share.

· Android ecosystem revenues grew by 5% but the profits declined by 2%

· There were more tablets added to the network than phones in 2015. Cars outperformed M2M by a good margin.

· T-Mobile edged past Verizon in postpaid netadds, AT&T was ahead in Prepaid, Verizon in Connected devices, Sprint in wholesale, and Verizon overall had the most netadds in 2015.

· AT&T and Verizon on average made $16 per sub/mo, T-Mobile turned into positive territory with $1 profit/sub/mo while Sprint stayed in negative territory with a loss of $0.55 per sub/mo.

· The valuation of Uber surpassed the combined market cap of T-Mobile and Sprint.

What to expect in 2016? Questions for 2016.

· We expect the overall US mobile market to pass the half a trillion-dollar mark in 2016.

· US will cross 400M in subscriptions in 2016.

· After the pause of dropping data prices in 2015, we could see intense price wars in 2016.

· The upcoming auction could be the big story of the year.

· What new 5G test results will be announced and will industry converge on some 5G standards ahead of the 2019 deadline?

· Will Comcast MVNO follow Google-Fi as a niche endeavor or does it have elements to fundamentally impact the market. 2016 will hopefully answer the question about the future of WiFi-first network strategy.

· Will the upcoming eSim integration in devices go far enough to disrupt the market?

· Will IoT gain sufficient steam to justify the forecasts?

· Can Android OEMs turn around the decline in profits in 2016?

· Can iPhone7 boost Apple’s growth numbers in 2016?

· Will the service revenue decline in the US reverse itself or are we seeing the start of the decline in revenues in the industry?

· Autonomous driving was a big story last year; what progress are we going to make in 2016? How will Uber shape the autonomous driving business models?

· AT&T and Verizon have bet big on video. How will the respective strategies pan out in 2016?

· The Apple-FBI is going to be one of the most watched cases in the world. Whichever way the final ruling lands has huge implications for the tech industry and consumers.

We will be doing an in-depth analysis of the future of the mobile industry at our 7th annual mobile executive summit Mobile Future Forward in Sept 2016. Hope you can join us.

Service Revenue Decline, what does 2016 hold in store?

The overall service revenue, postpaid revenue, overall and postpaid ARPU all declined. In general, the net-service revenue decline is not a good sign if it is market induced. In Europe, we saw net-revenue declines but the impact of the economic crisis was a big factor in determining the trajectory. After the economy has improved, we have seen the net revenue in effected countries rise again. In the US, the net-revenue decline is more market induced. The calculation of service revenue is a bit more complicated because device revenues are no longer part of the mix and as customers are weaning off the contracts, we have to adjust the service revenue for this accounting change. If we take the accounting distortion into account, service revenue is still in the positive growth territory but in terms of how operators report service revenues, this was the first year the category saw a decline. Regardless of the accounting distortions, there is continuous pressure on the postpaid revenues which is what is impacting the overall numbers.

Given the competitive state of the market, we might see further service revenue declines in 2016. The reversal might come down to consolidation in the industry in 2017 and beyond. The pressure on the revenues has had a positive impact though – operators are running far tighter ships than before. The net income surged in 2016.

The licensed vs. unlicensed: frenemies

Comcast is expected to launch its WiFi first MVNO with Verizon fairly this year. Google Fi hasn’t been a roaring success, perhaps it was never designed to be. Given that WiFi is carrying 75-80% of the traffic, it is easy to make the business case for a national WiFi operator. Companies like Republic Wireless have shown that this can be done. Keeping aside some of the technical challenges with WiFi, there are two major business challenges with the WiFi strategy. First, even with the rise of WiFi usage, the cellular usage hasn’t slowed down. Cellular data usage is still growing 60-70% YoY. As such, consumers will have to rely on cellular when they are out and about which means the economics comes down to the wholesale rate the MVNO has for cellular. The second big problem is the lack of handset choices. For consumers, handset choice is paramount. They want both iOS and Android devices to go with their data plans. WiFi operators generally have limited handsets. Over time this will change but to have a WiFi network of scale, economics, choice, and pricing are critical. By contract, cellular operators will always have a leg-up on the MVNOs unless access regulations are in place which of course are nowhere in sight.

Seeing the success of WiFi, FCC has rightly made more unlicensed spectrum available and it will be interesting to see how the ecosystem around 3.5GHz and other bands develop. This in light of what’s happening in the higher bands of cm and mmwave for 5G deployments. Technologies and business models that take into account benefits and drawbacks of both types of spectrum bands across a different uses cases will win out in the end. Despite advances, WiFi calling still has quality issues so the need for traditional networks is not going away anytime soon.

M&A 2016

As we mentioned last year, the service provider M&A window for 2016 pretty much closed late 2015 given the upcoming auctions and the presidential cycle.  There might still be some cross border opportunities but for any major transactions, it is better to wait it out to have a reasonable chance of success.

IoT Revenue Streams and what it means for the ecosystem

Service provider IoT revenue passed the important $1B mark back in 2013. So far it is tracking the growth of the early days of mobile data. However, they are different curves influenced by different factors. Mobile data was relatively an easier curve to climb as the revenues went up as more data handsets came online. The sales, business case, and ROI was straight forward. IoT is a bit more complicated as it across multiple vertical areas and it is not just about the data network, it is about the complete solution. The sales cycle and execution strategy is different and requires patience and resilience.

AT&T already had an active IoT developer program. Verizon introduced its ThingSpace platform to the developers last year. It is already selling complete IoT solutions in energy, transportation, security, and several other industry segments. As we mentioned before, Verizon is on track to crack the billion-dollar mark in IoT this year. For trivia buffs, Verizon passed the billion-dollar mark in mobile data revenues back in 2004 which at the time made only 5%of the overall wireless revenues for the operator.

We will be doing an in-depth analysis of the IoT Opportunity at our upcoming Mobile Breakfast Series in April and May.

Mobile data growth – Correcting the Cisco Numbers

Mobile data consumption (cellular) continues to grow as devices and networks continue to improve. There are 13 countries now with at least 1GB/mo/sub consumption. US is amongst the top three. At the end of 2015, the average consumption per sub in the US was at 3.9 GB/mo/sub.

Earlier this quarter, Cisco released its annual VNI report that forecasts data consumption and growth around the world. However, they did something very unusual this time, they pulled back their “factual numbers” by 36% for the US market. Based on our research which is corroborated by the data from the sources, Cisco’s numbers are low. Given that a lot of policy papers use these numbers as an input, we thought it will be worthwhile providing the reasonable estimates for data growth in the US market. These estimates match well with the data growth numbers in the Ericsson report.

Our estimates are that the US data consumption last year was close to 10.9 Exabytes. Ericsson reported approximately 10.5 Exabytes. Cisco adjusted its numbers from 9.2 Exabytes to 6 Exabytes.

Android vs. iOS: The fight for profit continues

Amongst the prominent Android OEMs, HTC, Sony, LG, and Lenovo all lost money in their device business in 2015. This again highlights the difficulty in differentiating on an open platform. Some of these players might give up on their handset business in 2016. Apple again dominated with 81% of the profit share, 45% of the revenue share, with only 16% of the unit share. Samsung’s profitability improved a bit but it continues to face challenges both on the top and bottom end of the spectrum.

4th Wave Revenues

5 years ago, we put forth the theory of 4th wave to explain the upcoming changes in the mobile ecosystem. For the most part, the industry changes and tribulations have tracked the 4th wave curves. Last year, voice revenues fell down by 23%, messaging revenues declined by 18%, while data revenues grew by 23%. 4th wave revenues which now dominate the ecosystem now grew by a 60% YoY. We will have more analysis of the state of the 4th wave ecosystem later in the year.

In its Q4 15 earnings call, Verizon laid out its 3-Tier strategy which is similar to the 4th wave digital strategy we have been working on with many operators around the globe since 2011 (see paper and slides for details). Without moving up the stack, eventually, operators will run out of the data steam that is powering their revenues today.

Regulations for the new age

Some of the regulations in the communications space are over a 100-year-old. Communications itself has drastically changed though the principle of transferring the bits from point A to B remains the same. T-Mobile reported that 50% of its voice calls are are on VoLTE. IP messaging is many times the SMS global volume. Gradually, almost all voice and messaging will be on the IP layer – voice and messaging will just become apps on the data layer. So pretending and regulating these services as if it were 2000 doesn’t help. An ideal strategy for consideration should be that the IP layer gets regulated for fair pricing, competition, and consumer good while everything on the top of the IP layer gets regulated on a “same service, same rules” principle. The interconnection between apps to deliver services like connection to PSTN, E911, etc. can be addressed by fair market pricing principles. VR is going to become the next communication platform; IP messaging the next application development and commerce platform. To keep the regulatory regime simple and in with the times, by focusing on the access layer, one can guarantee that whatever takes place on the top has the opportunity to grow as the market desires. Similarly, data rules across all apps and services on top of the IP layer should be the same irrespective of the provider. This market shift is required to make the market more competitive and fair.

Connected Devices – Resetting the target

The 50B number by 2020 has gotten into the industry lexicon since 2010 when Ericsson first suggested that we are likely to reach this target by the end of the decade. Others picked up the number and either copied it or even went further by suggesting even 75B+ numbers. By the middle of this decade, it looks unlikely, we will hit 50B. Our research shows that we were at approximately 16B last year. It is tall order to make up 34B in 5 years. Given the new evidence and assumptions, Ericsson also revised its estimates down to 28B by 2021 (the 2020 number is just over 25B). 25B+ is still an excellent target and something the industry can be proud of. The 50B number still gets thrown around a lot by vendors and media. We will be better off as an industry if we adjust the forecasts based on ground realities and not unnecessarily hype things.

Apple – what’s next? Mastering the narrative

Apple’s profit in Q4 were the highest recorded in the history of mankind. Let that sink in for a minute. Its $18B in profit on $76B revenue was truly astonishing. Yet, the markets were disappointed. What gives? First, the markets care about growth more than they care about the size of the profits or revenue. If the growth number matches or exceeds the expectations, the stock price responds positively otherwise it moves in the other direction. Second, for the first time since 2003, Apple issued a negative guidance on sales.

The unwritten narrative for Apple’s success has been around the iPhone juggernaut. Now that the high-end market for smartphones is starting to saturate, Apple needs a new narrative that can tie to growth. Apple took a shot at it by releasing some new details around services revenue. In any other company, this would have been received very well. With Apple, expectations of the market are supersized so it is not clear if the pivot towards services will help reshape the basic narrative around Apple’s growth.

Connected Consumer

· On average, each US household spent approximately $3800 on access and devices in 2015.

· Roughly 80% or $3000 of the US household spend went to access of services such as cellular voice, mobile data, cable, landline voice, and broadband internet.

· Roughly 20% or $800 of the US household spend went to devices such as computers, smartphones, feature phones, wearables, tablets, e-readers, connected cars, drones, robots, connected home, and other connected devices.

· 41% of the household access spend went to cellular phones (for voice and data services).

· As a standalone category, mobile data is the biggest category approaching $1000 in yearly household spend.

· In the last 5 years, mobile data spend has risen the most and landline voice has declined the most. Cellular voice spend has also gone down while cable and broadband spend have seen relatively modest uptick.

· In devices, smartphone is by far the biggest spend category. Consumers spend almost 3x on smartphones than they spend on personal computers. Smartphones accounted for more than 50% of the US household connected spend in 2015.

· New categories such as wearables, connected cars, drones/robotics, and connected homes have started to make a tangible impact on consumer spend.

· US consumers spent more on wearables than feature phones in 2015.

· Chetan Sharma Consulting conducted its annual Connected Consumer survey of 1000 US households. The results confirmed the ongoing increase in the number of connected devices/household.

Quad Moves

AT&T is integrating its DirectTV acquisition. Verizon acquired AOL and launched Go90. Similar moves are afoot in Europe and other regions. Regular readers won’t be surprised. Video is a key offering for many service providers and by bundling quad plays, operators can further lower the churn. Content will continue to play a big role in how various offerings get bundled. The traditional cable bundle is being pulled apart in favor of more al carte OTT offerings. Media companies will have to figure out how they play in the new converged world. The ones that have been sitting on the sidelines will have to make some moves in the wireless ecosystem to stay relevant in the long-term.

The Upcoming 5G wars?

5G is gaining steam. All the major players have outline their preliminary plans to do trials on 5G (code word for we don’t want to be perceived as being behind). However, there is some real progress being made in short-range ecosystem of 5G. As I noted, in my MWC note, some of the demos coming out of the labs are exciting. In the US, Verizon’s announcement last year took folks by surprise. By Q1 16, both AT&T and T-Mobile announcement their version of 5G trials. Verizon was out with the first batch of results from its experiments indicating 10Gbps throughput at short-distances. Given the momentum behind cm/mm wave, it is possible that some consensus is built around the spectrum bands by country (and not wait till WRC 19) to get the device ecosystem going.

A lot is still unknown about 5G, specifically, what will be the economics of 5G and the business case for new capex and ROI. We hope to explore this topic in more detail in the coming months.

Our paper on 5G covers the past, present, and future of the network evolution.

What to expect in the coming months?

2015 was a tremendous year for mobile industry thus far as it becomes omnipresence in every industry. We saw some massive moves, astounding acquisitions, and interesting strategic endeavors. The final quarter which is typically the biggest in terms of revenue will lay the foundation for an exciting 2016.

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 Q4 2015 and 2015 US wireless market is:

Service Revenues

· The US mobile data services revenues in Q4 2015 increased 3% QoQ and 16% YoY.

· After crossing the $100B in data revenues for two straight years, the US market is set for another excellent mobile data services year though some slowdown has started to occur as predicted by our 4th wave thesis.

· Verizon and AT&T dominated the quarter accounting for 69% of the mobile data services revenue and had 67% of the subscription base.

· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q4 2015. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 2.2%. 

· Data contribution to the overall revenues is now at 72%.

· After a minor blip of positive growth in postpaid ARPU by T-Mobile and AT&T earlier this year, all operators saw declines in postpaid ARPU in Q4 with Sprint showing the sharpest decline with 18% change YoY.

Subscribers

· The US market increased its net-adds to 6.7M. AT&T, Verizon, and T-Mobile all added approx. 2M or more subs. Sprint also showed positive net-adds though at a fraction of the top 3.

· Verizon again led in postpaid net-adds though a bulk of the net-adds are coming from tablets.

· AT&T has approximately 7M connected cars on their network – probably the highest of any mobile operator in the world.

4th Wave Progress

· The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 80% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $200 million revenue from M2M and Telematics. At the current run-rate, this will be a billion dollar business by 2016. The current annualized run rate is $800M.

Connected Devices

· Connected devices (non-phones) accounted for almost 66% of the net-adds in Q4 2015. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.

Handsets 

· Smartphones continued to be sold at a brisk pace accounting almost 97% of the devices sold in Q4 2015. The feature phone category is practically becoming extinct in the US market.

· The smartphone penetration in the US is now at 83%.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 84M making it the #2 LTE operator behind China Mobile which has more than three times the LTE subs. Other three operators are also deep into their LTE deployments. Verizon reported that 90% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.

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 April 2016.

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

Mobile World Congress 2016 Observations February 29, 2016

Posted by chetan in : 4th Wave,5G,ARPU,Chetan Sharma Consulting,Connected Devices,Connected Intelligence Era,Disruption,Enterprise Mobility,LTE,Mobile 2016,Mobile Breakfast Series,Mobile Future Forward,Mobile World Congress,MWC,NFV,SDN,Technology Cycles,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile World Congress 2016 Observations

The second of grand slams of mobile events – Mobile World Congress has become the marquee events that helps get the pulse of the industry as to where things are headed for the year. With the attendance topping 100K for the first time, it is a massive undertaking and brings all major players in the ecosystem from all corners of the world. Vegas could learn a thing or two from Barcelona on how to host big events. Some of the major themes were predictable like 5G, IoT, and VR. Others were important but not widely talked about in public settings. This note presents the summary of our observations from the show.

5G – 5G entered industry’s consciousness last year and the activity around the globe has just caught fire since then. Each week there is a new trial announced. Last year, there were more questions about 5G than answers. Some of the questions are starting to get answered now and we are getting clarity on others. However, the specification timeline still stays around 2019 with full standard deployments not before 2020. Given the trial activity and the progress in the labs, there is a good possibility, that there might be some consensus on higher frequency use specifications especially around indoor and dense outdoor networks.

I had a chance to visit with a number of CTOs of major players and these guys are not the ones who give into hyperbole. As an engineer, I left the show quite optimistic about the solutions and technologies that will become part of the 5G portfolio.

Verizon was the first one to announce results from some early tests in the field – 10 Gbps for potential fixed wireless deployments. Nokia and DT both showed sub millisecond radio delay which is quite an achievement. Ericsson showed the power of beamforming to gain really high capacity at short distances. 25-30 Gbps was common in most of the lab setups. SDN/NFV will provide the key underpinning to the 5G architecture but it didn’t surface much in the discussions.

Fundamentally, 5G will be driven by economics not just technology. Europe’s quixotic approach to spectrum auction in 2000s led to a decade long stagnation that left Europe behind. To attain leadership in 5G and on the next wave of technology evolution of Connected Intelligence, policy, technology, and strategy have to work hand-in-hand in a country to gain an upper hand. Some of my thoughts mentioned in the Economist and WSJ.

We will be covering 5G and its implications in future papers and at Mobile Future Forward in Sept.

Gigabit Society – While 5G is still a ways off, work goes on the LTE front. Industry hit a major milestone of a 1B LTE subs. Lot of the 5G enhancements will also be available in 4G being termed as 4.5G, Xtreme LTE, pre5G, 5G ready, and really-really advanced LTE. Infact, many of the features talked about in 5G are going to be available in the 4G evolution path. Qualcomm showcased their X16 chipset capable of reaching 1Gbps by combining 10 100Mbps streams.

4th Wave – In 2011, we put forth the 4th wave theory and 5 years later, we are seeing the 4th wave in full effect. As I mentioned to the Economist and the WSJ, the value is moving to the applications and services layer. Operators who will invest to become “solutions providers” will be better positioned for the future vs. the ones who are purely “access providers.” We are seeing the theory play out in front of our eyes. In 2014, US became the first country where the 4th wave revenues were greater than the access revenues. We expect this to occur in every major market over the course of next few years. Operators such as AT&T, Verizon, Telefonica, DoCoMo, KDDI, and Orange are benefiting from becoming solution providers. The new found revenue speaks for itself (more on this next week in our US Market Update for 2015).

Ericsson – Amazon Cloud Deal – Ericsson and Amazon struck a clever cloud deal that helps mobile operators use the AWS framework while creating a framework to be in compliance with the safe harbor provisions of sovereign nations. Win-Win-Win for sure.

The Ad wars – Instead of innovating, the ad industry as a whole took shortcuts and the end result was the bombardment of useless ads with no frequency control. Consumers are responding by embracing ad-blockers. Operators view this trend as an opportunity to stall the OTTs. Some of it is genuine concern for the consumers who get slapped with ads which consume good portion of their data bucket and deteriorate the experience sometimes to a point of making the browsing completely unusable especially when network conditions are less than favorable. Operator 3 in Europe working with startup Shine is taking the stance to block out the ads inviting the scorn of the ad industry and a peek of curiosity from the regulators. It is unlikely to be an effective strategy. However, it clearly is an opportunity for the ad industry to step up and design new frameworks that are consumer friendly. When we wrote the first mobile advertising book at the dawn of the birth of the modern mobile advertising industry, we had proposed several ideas that use the data to enhance the consumer experience and ecosystem strength but we clearly have a lot of work to do.

Verizon XO investment – Verizon’s XO deal of $1.8B didn’t get much attention but it was a brilliant deal appreciated by the folks who really understand what is going on. Verizon gets a fiber network and more important wireless spectrum (28 and 39 GHz) suited for 5G.

Resurrection of RCS – RCS has been a poster child of inability of operators to work together on a global scale w.r.t applications. The growth of IP messaging is well documented. Not only did operators miss out but Google did as well. Now that messaging is emerging as a new potential commerce and engagement platform, this is an attempt by Google to take a shot at the messaging opportunity. A number of things have to go right for this program to work so the probability is stacked against it.

Facebook TIP – Having shaped the IT infrastructure, Facebook is focusing on influencing the telecom infrastructure stack. The focus is going to commoditize the stack and open source it. Some big names are joining the effort like Nokia, Intel, and DT.

Connecting the next billion takes a back seat – Last year, one of the big theme emerging out of MWC was the focus on connecting the next billion. The talk of 5G drowned out any discussion of connecting the unconnected. The show did discuss using balloons, drones, satellites unlicensed spectrum to lower the cost of access. The unintended consequence of FreeBasics ruling might be a dampening effect on experimenting with alternative business models to support low cost access in emerging markets in the short-term.

Net Neutrality – NN has become an emotionally charged debate. Regulators around the world are grappling with how to understand and regulate through the complex prism of the future. Regulators are rushing to issue their rulings based on the world they saw in the past not the society and how it is going to react to applications and services in the future. Participants are getting bolder in their approach and interpretation of Net Neutrality. T-Mobile’s Binge-On is being watched by operators worldwide and the regulators are trying to understand what it means in their local market.

Regulations for the new age – Some of the regulations in the communications space are over a 100-year-old. Communications itself has drastically changed though the principle of transferring the bits from point A to B remains the same. T-Mobile reported that 50% of its voice calls are are on VoLTE. IP messaging is many times the SMS global volume. Gradually, almost all voice and messaging will be on the IP layer – voice and messaging will just become apps on the data layer. So pretending and regulating these services as if it were 2000 doesn’t help. An ideal strategy for consideration should be that the IP layer gets regulated for fair pricing, competition, and consumer good while everything on the top of the IP layer gets regulated on a “same service, same rules” principle. The interconnection between apps to deliver services like connection to PSTN, E911, etc. can be addressed by fair market pricing principles. VR is going to become the next communication platform; IP messaging the next application development and commerce platform. To keep the regulatory regime simple and in with the times, by focusing on the access layer, one can guarantee that whatever takes place on the top has the opportunity to grow as the market desires. Similarly, data rules across all apps and services on top of the IP layer should be the same irrespective of the provider. This market shift is required to make the market more competitive and fair.

IoT – IoT use cases are becoming more crisp and clear. There is steady growth in how IoT is getting integrated into both industrial and consumer worlds. As expected there are efforts underway to streamline and unfragment the stack. Intel and Qualcomm got together for the larger good of the industry under the Open Connectivity Foundation. We will be taking a deep dive into the IoT world at our upcoming Mobile Breakfast Series event in Vancouver.

eSIM – eSIM is potentially one of the biggest disruptive force our industry has seen in some time. If you connect the dots into the future, it is becoming clear that there is significant tension along the fault lines. Regulators better get ahead of this wave in time.

VRthe next communication platform – The emerging world of VR/AR is quite exciting. The technology is getting there. One of the key 5G use cases is going to be VR as it will require high capacity delivery of bits to the headset. However, VR sales are not going to go through the roof anytime soon. Some of the same things that plagued Google glasses – price, performance, and dorkiness are going to impact the early days of VR (Google’s VR approach is actually more market friendly at this time) but it is exciting to see tech companies tackle a complex computing problem. I am looking forward to new experiences across different domains.

Security, Privacy, and the clash of the titans – Apple vs. FBI case was on the top of the mind of executives. It wasn’t being discussed openly for obvious reasons but it came up in discussions almost every day. It is a complex issue that has to be looked from the perspective of enforcement in international jurisdictions. Operators have been forced to comply with similar requests for years. It will be an interesting battle, something that every tech company, every govt. around the world is paying close attention to.

Handset launches – Samsung launched S7, LG showed G5, Xiaomi announced Mi5, Huawei had its MateBook which probably was the sleekest device at MWC this year. Overall, only incremental improvements while the industry awaits new ideas to surface.

Disruption from 3.5 GHz – When I talked to the White House last year about 5G, I focused on stressing that Bits/s/Hz/Km2/joule/$ will be a key 5G performance consideration. FCC has done well by making the 3.5 Ghz available to the industry. Given that 70-80% of data consumption is indoors, unlicensed WiFi+LTE can be used to provide a much better economics esp. for enterprise customers. Players of various stripes are taking a serious look at it – Ericsson, Lemko, Google, Nokia, and others. Expect more news to come during the first half of the year.

Sigfox/Lora vs. NB-LTE – Sigfox/Lora remind me of WiMax. WiMax is remembered for its role in accelerating LTE deployments. While Sigfox/Lora started the process of creating a network and business model suited for IoT, it forced the 3GPP members to come up with NB-LTE (in a hurry) and with the growing support of the ecosystem behind it, it is hard to see how in the long-run a non-standard approach can win out.

Wearables – It seemed like the hype around consumer wearables has died down at MWC this year. No new concepts. Industry has to get the basics right first. However, there is good progress on the enterprise front where the use cases and requirements are clear. There are a number of companies who are working to make wearables/VR/AR a reality in the enterprise space.

Misc – Selfie security (Mastercard), Gesture user interfaces, Stripe’s Atlas platform, Mobile Connect (2B enabled consumers), AT&T $10B investment to expand globally, Paypal loves NFC after all, Smart Cities, Mobile Commerce initiatives, Media and Telco convergence, Operator data monetization, Alternate connectivity solutions (drones, balloons, lasers, etc.), Digital divide, 1B LTE subs.

Booth of the year: Ericsson by a distance

Party of the year: Siris Capital, Qualcomm

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 2016.

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

CES 2016 roundup January 11, 2016

Posted by chetan in : 4th Wave,5G,CES,Chetan Sharma Consulting,Connected Intelligence Era,Internet of Things,IoE,IoT,Mobile 2016,The Golden Age of Mobile,Worldwide Wireless Market , add a comment

CES 2016 roundup

As has been the tradition for the last few years, Cool Toys Association kicked started the year with its annual gadget fest. Ever since the iPhone launch, the industry keeps waiting for a company riding on a unicorn coming from the heavens to surprise us with a technology that we haven’t considered before. However, the romantic notion of someone taking our breath away invariably leaves many disappointed as we get relegated to the incremental improvements of the future. However, CES remains the premier show to lay the foundations of the discussions and debates for the year. Most of the products launched and showcased at the event don’t make it past the show floor but an incredible diversity of devices, applications, services, players, and ideas is on display. Additionally, the deals that are struck away from the limelight makes it one of the most important shows in the tech space.

As usual, I kick-started my CES with the AT&T Dev Summit which provides a good barometer of the initiatives for the year in the operator ecosystem. I also had an opportunity to participate on the WSJ’s panel on innovation to talk about broad industry trends that last beyond 2016. This note provides a summary of our observations from the show.

The Numbers: CTA forecasts the US spending on gadgets to increase 1.6% to $224 Billion in 2016 with smartphones accounting for quarter of that spending. Wearables, drones, robots, and some of the non-traditional devices are starting to appear on the spreadsheet now. As we mentioned in our Connected Consumer Research last year, the spending habits of US consumers are changing. Bulk of spending is still on services like data, internet, and cable with mobile data capturing the most share of the household IT budget.

The march towards Autonomous Intelligence: Each year, we are making incremental progress towards to what seems today a utopian autonomous intelligence state where computers observe anomalies and problems and just fix and address them without human intervention. We have written about this at length in our Connected Intelligence series of papers and will continue to explore the subject in more papers this year. The inevitable emergence of trusted data brokers that help us tie disparate data sources, products, services will be a key development in the coming years.

The current incumbents have a big leg up. In my mind, Google has by far the best machine learning engine. You get a sense of the power of Google’s AI when you travel in remote parts of the world and get a highly accurate representation of human movement – in real-time. It is stunning. Google has better understanding of what’s happening on the ground than any other entity or government in the world.

Facebook has the best repository of emotion movement though the AI engine needs work. Similarly, Amazon knows more about commerce movement than any other player. A number of their products are launched because of this key insight. Apple obviously has good understanding of what their iOS base is doing and while it is smaller than any of the three players mentioned above in their respective areas, in aggregate, it has a potent repository of human behavior and movement. Some mobile operators have technology that can give them insights into some of these trends but their subscriber base is limited and unless they expand beyond their traditional base, they will always be at a disadvantage vis-à-vis the Internet giants.

Intel again gave an excellent keynote of the computing capabilities that are going to enable new interfaces, experiences, devices, and applications. When will computing sense what I am thinking?

Self-driving cars – The biggest headlines at CES this year was for self-driving cars. CES looked like an auto-show. Tesla and Google have forced auto OEMs to dust off their self-driving plans and accelerate their public unveiling because that’s what the cool kids are doing. The notion of self-driving cars has gone from a geek fantasy just a few years ago to the reality on the ground at breathtaking speed. Competition does wonders to the innovation process. The tech to safely deliver a self-driving car is already here. Social-acceptance and regulatory issues will likely to delay the full-blown introduction for sometime.

However, a more interesting development is the marrying of a self-driving fleet with the Uber service model. That’s where a lot of disruption is going to take place. GM’s monstrous $500M investment in Lyft is a defensive bet in that future. Don’t be surprised by some interesting M&A activity in the sector. As, hardware gives way to software domination, new models and players will shift the industry marketecture.

Lot of media companies are busy figuring out how to entertain the consumer with all the new time that will become available in the self-driving cars.

IoT – IoT was a big headline last year, 2016 was just the continuation of what we saw in 2015. Pretty much anything imaginable was connected. Chipset guys are going to stay employed for sometime. The challenge for many new players is still going to be the distribution. Most of the money today is flowing to the system integrators and they can play the role of the segment godfathers of IoT if they play their cards right. Platforms are yet to consolidate around a few accepted technologies and players so we will continue to see the fragmentation and jostling for advantage this year.

Robots – Softbank’s Pepper again stole the show by displaying its humane side. Robots for elderly, kids, and the lonely will become mainstream.

Drones – The drone ecosystem seems to be growing as fast as the self-driving cars (obviously massively different price points). Regulators are more active in understanding what’s going on and how to provide a shape passage to innovation in the space. There are some really interesting use cases both in the consumer and the enterprise space.

Netflix moves – You know what is better than US media domination? Global media domination. Netflix launched its services to pretty much the entire world minus China which remains a closed market for most western services.

3D printing – 3D Printing. Yup, Check!

Connected Home – Connected home has disappointed so far. The pricing is still too high for mainstream adoption and products lack imagination. However, some startups are coming up with both new products that are built from the ground up as well as service models that will get traction. 2016 will continue to be the year of experimentation in the space.

Connected Devices. Unconnected Data – Current set of connected devices are primarily focused on sucking up the data but there hasn’t been much work on connecting the data across devices. If you own an Apple Watch and an iPhone and were having a stroke, Apple watch will duly note that your vitals are deteriorating fast but it will just sit on that data and pray that someone finds you to help out. It has access to a communication tool that could be used to seek immediate help via a call or text but it doesn’t. Data stays unconnected and as such useless in real-life situations. We need more work on the intelligence layer that connects the data and makes it useful. This can be applied to connected devices at home, car, office, city, and pretty much any set of devices and sensors around us.

Smart City – Smart City initiatives are starting to take hold. From governments to industrial players to mobile operator ecosystem, everyone wants a piece of it. Probably, the biggest announcement in the space was from AT&T which is putting together a coalition of the willing to explore the scalable framework for a smart city. Atlanta, Chicago, and Dallas get the first nod. The biggest problem with Smart City is not the tech which is available for most part but the funding and execution. With a majority of the cities in the US in the bankruptcy zone, money is hard to come by. Even if did, cities are notorious for lousy execution and waste of resources. Hopefully, being led by some of the industry players will provide the necessary guidance and new business models to bring many of the big cities into the 21st century. Dubai, Helsinki, Seoul, and Oslo might provide a better inspiration of how to go about making your cities smart. Who wants to live in a dumb city anyway?

Virtual Reality – VR is going mainstream. Will it become the OS for new experiences? By when? What will be the applications and services? Vertical segments? Lot of open questions but we are slowly starting to answer them. Facebook launched its much awaited Oculus, HTC had its Vive and a score of new players emerged on the VR landscape.

IP dilemmas – The federal agents swooped into the CES show floor and took evidence from the booth of Hangzhou First International Trade (maker of the wheeled skateboard) – something that doesn’t happen that often. The pace of introduction of digital products is accelerating at such a pace that it is extremely difficult to protect your IP specially for smaller innovative players. The copycat ecosystem comes so fast that before you know it, you are history. IP tussles used to be the domain of the industry giants but smaller innovators are now getting impacted. The sheer volume of products that use your IP will overwhelm you. But, CES gives a good window into the haves and the have-nots. The federal agencies have their work cut for now.

Samsung – Samsung has studied the history of the mobile industry well. That’s why it is nervous. The fact that they are struggling to maintain their top spot is not surprising, it was expected. in fact, the entire trajectory was very easy to predict. What’s astonishing is that, even after being at the center of the digital explosion with hands into virtually every segment, it hasn’t been able to launch an integrated product strategy. It should have been a leader in IoT but is not. It should have used TV as the home hub to connect everything digital in the house but it hasn’t. it should have led the industry in standards and best practices but it seems confused of its role in the larger ecosystem. In the meantime, Google, Apple, and others are doing circles around them. With a new management team in place, a renewed focus on software, will 2016 be different?

Security & Privacy – Almost every major discussion thread had an underlying question around security and privacy and what can and is being done about it.

Auction – FCC is pretty jazzed about the upcoming spectrum auction. It will be fascinating indeed.

The foldable screen – we have waited for a computing screen that can fold like a newspaper for over 15 years. I first wrote about it in my Wireless Internet book in 2000. We might be still a few years away from full commercialization. Sometimes, these things just take time. A flexible screen could lead to breaking of the rectangular screen mold that is starting to get boring. Full marks to LG for bringing the screen to the market.

Vaporware – There was plenty of hand waving. Some managed to fool the press into feeding into the frenzy like Faraday Future (apparent competitor to Tesla), Ehang flying cars.

Uber in Vegas – Every year, CES attendees to the torture of the Vegas taxis and the highly inefficient system of transportation. For the first time, Uber and Lyft were in action and it definitely help at times. The taxi cabal hates the entry of the new brethren in the market but will learn to live with it.

Next stop, DLD Munich.

Have a great 2016.

Best wishes

Mobile Future Forward Update July 20, 2015

Posted by chetan in : 4th Wave,Connected Intelligence Era,European Wireless Market,Internet of Things,IoE,IoT,Mobile Future Forward,Wireless Value Chain,Worldwide Wireless Market , add a comment

Dear friends,

Over the past couple of years, I have talked a lot about the “Connected Intelligence” Era which is a superset of the Industrial Internet and IoT. We already have plenty of data points to indicate the rise of the next technology era enabled by sensors and software. While consumer gizmos get the headlines, the real money is in the enterprise segment though in some verticals, the two start to merge e.g. health, retail, energy, etc. To give you a sense of the disparity in terms of dollars, consider the following:

This year the US wearables segment will do over $4B in sales. A leading industrial giant founded more than 90 years ago is looking to capture 2-4x revenue of the entire wearables industry in one year with the help of IoT as it empowers them to create new service and revenue models.

Leading facilities management companies are looking to automate the entire building management process and reduce the maintenance costs by over 50% in a matter of months. The “industrial” side of IoT is likely to capture 90% of the new multi-trillion-dollar revenue that will be injected into the global economy. Obviously, benefits will flow into the consumer economy as well.

The Connected Intelligence stack is very complicated right now but that’s true with any new technology wave. 10-20 years ago, most markets had dozens of mobile operators. Today they are generally limited to 3-4. We will see the layers collapse and new players emerge.

“The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did.” – North American Leader – IoT and Mobile, IBM

At Mobile Future Forward, we will explore where is the money in IoT, discuss several use cases that are being implemented around the world, the required building blocks, the areas of collaboration and competition, and how our community can help the industry reach its full potential quicker. Mobile Future Forward is a summit that makes you think. We will have folks from startups who challenge our thinking and industrial giants who are moving at a fast pace to deliver outcomes.

We welcome you to join us in the discussions and contribute to the collective knowledge of our industry. Give us your one day, and we will give you the next 5 years in mobile.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson, Neustar, Oracle Communications, and Tata Communications.

Registration (Summer Saver expires next week)

Some of the confirmed leaders are:

•  Glenn Lurie, President & CEO, AT&T Mobility

•  Dr. Eric Topol, Chief Academic Officer, Scripps Health

•  Faisal Masud, Chief Digital Officer, Staples

•  Rima Qureshi, Chief Strategy Officer, Ericsson

•  Hank Skorny, SVP – IoT, Neustar

•  Raja Rajamannar, CMO, Mastercard

•  Sanjiv Ahuja, Former CEO, Orange

•  Hossein Moiin, CTO, Nokia Networks

•  Craig Moffett, Partner, MoffettNathanson

•  Josh Will, SVP – Mobile, Best Buy

•  Tim Chang, Managing Partner, Mayfield

•  Prof. Shyam Gollakota, University of Washington

•  Mark Fernandes, Managing Director, Sierra Ventures

•  Erez Yarkoni, CIO and EVP, Telstra

•  Mark Showers, CIO and EVP, Reinsurance Group of America

•  Doug Suriano, SVP and GM, Oracle Communications

•  Vishal Gupta, CTO – IoT, Silent Circle

•  Marty Cooper, Chairman, Dyna

•  Vijay Shekhar, Founder and CEO, Paytm

•   Julie Woods-Moss, CMO, CEO – Nextgen Business, Tata Communications

•   Andrew Hopkins, Managing Director – IoT, Accenture

•   Lo Toney, Partner – Catalyst Fund, Comcast Ventures

.. more to come

We will be announcing new speakers and partners through the course of the summer and look forward to seeing you in September. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks.

Chetan Sharma

CEO, Chetan Sharma Consulting

http://www.chetansharma.com

New Paper: Empowering the Digital Telco Transformation with Convergent Charging and Policy June 23, 2015

Posted by chetan in : 4G,4th Wave,Connected Devices,Connected Intelligence Era,Convergent Charging,Mobile Cloud Computing,Oracle,Policy,The Golden Age of Mobile,Worldwide Wireless Market , add a comment

Empowering the Digital Telco Transformation with Convergent Charging and Policy

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

Commissioned by  Oracle Communications

convergentcharging_s

Download paper

Introduction

In 2014, the mobile industry passed an amazing milestone – the number of mobile subscriptions (SIM cards) surpassed the human population. While these connected devices represent a smaller subset of the global consumer base, mobile has had a significant positive impact on literally every aspect of our lives, the supply-chain of trillion-dollar industries and national GDPs. At the heart of this transformation is the digitization of information, processes and democratization of opportunity. The three dynamic forces of network evolution, smartphones and applications brought the fundamental change in the industry. Faster networks meant quick access to content and applications. Smaller yet powerful computers in smartphones translated into billions are coming into the digital fold. The new applications and services have empowered consumers to discover ways to enrich their lives and entrepreneurs to reimagine the world.

The changes have also meant that the traditional ways of doing business and thinking about revenue streams is largely over in most parts of the world. Many mobile operators who dominated the industry for the first 30 years recognize this and are transitioning to become a digital telco, but a vast majority are caught in the cycle of inaction.

For mobile operators to stay relevant and participate in the digital economy, they have to drastically change their processes and how they manage their services, launch new products, enable the ecosystem and think about digital services. At the heart of this transformation is the ability to launch and nurture new services whether it is one of their own or that from the larger ecosystem. The flexibility needed to launch at the speed of thought is essential to competing in the digital world.

Additionally, as the network becomes complex with millions of network nodes and billions of end points, we need a good framework for policy management to help manage the flow of data and thus manage the network.

Changing market dynamics due to economy and competition is also forcing service providers to consider a multi-play strategy, which helps protect the subscriber base whilst increasing revenue. As various services are integrated across different access means, one still has to maintain a single view of the customer to both lower the operational cost as well as better understand consumer’s interests and preferences. Without a tight integration on the back-end, this won’t be possible.

Finally, the communications and the IT industries are merging. Digital is changing the expectations of both the consumers as well as the enterprises. The digital economy is providing an opportunity to service providers to transform the business processes and become a digital platform where new applications and services can blossom. The massive growth in connected devices and applications means we need a more robust framework for policy and charging. One of the core strengths that service providers have is their billing relationship with the customer. The architecture required to support evolving use cases needs a rethink.

In this paper, we will explore the emerging trends that necessitate the urgency for a more agile infrastructure. We will discuss how new revenue opportunities in communication, commerce, health and retail need a more robust framework to manage growth and keep service providers relevant in the value chain.

Download paper

Your feedback is always welcome.

Chetan Sharma

US Mobile Market Update – Q1 2015 May 18, 2015

Posted by chetan in : 4G,4th Wave,5G,AORTA,ARPU,Chetan Sharma Consulting,Connected Devices,Connected Intelligence Era,IoE,IoT,LTE,Mobile 2015,Mobile Future Forward,Tablets,The Golden Age of Mobile,US Wireless Market,Wearables,Wireless Value Chain,Worldwide Wireless Market , add a comment

US Mobile Market Update – Q1 2015

http://www.chetansharma.com/usmarketupdateq12015.htm

image

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Summary

The US mobile data services revenue grew 4% Q/Q and 15% Y/Y. The overall services revenue declined 1%. The device revenue for the operators grew by 41% allowed the overall service revenues to grow 5% Y/Y.

We are forecasting that the mobile data service revenues will increase by 22% to $132 Billion in 2015. Verizon will become the first operator to generate more than $50B from data services in 2015.

After acquiring lusacell and Nextel Mexico AT&T became the biggest North American operator with over 136 million subs.

The average mobile data consumption (cellular) is approximately 2.5GB/mo. In the US, it took roughly 20 years to reach the 1GB/user/mo mark. However, the second GB mark has been reached in less than 4 quarters. An entire year’s worth of mobile data traffic in 2007 is now reached in less than 75 hours.

From 2010 to 2013, the data pricing declined by only single digits YoY. However, in 2014, the data pricing has plummeted by 77%. In Q1 2015, the data pricing stayed pretty steady.

The intense competition amongst the operators meant a 6% rise in OPEX QoQ and a 12% decline in CAPEX YoY. The income declined 4% while EBITDA grew modestly at 2%.

Smartphone penetration increased to 76% and roughly 95% of the devices sold now are smartphones.

4th wave services continue to grow at a very past face around the globe. At least 37 companies generated a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.

The difference between Sprint and T-Mobile number of subs is just 300K subs now – the narrowest it has ever been. Like we suggested mid-last year, T-Mobile is likely to become the number three operator. This is more or less just a symbolic event with the transfer of bragging rights. Overall, churn was low for all operators in Q1 2015.

T-Mobile accounted for over 40% of the overall net-adds for the year with AT&T and Sprint coming in second at 26%. Verizon slipped to a distant fourth with only 8%.

Operator’s non-phone net-adds were 4 times that of the phone net-adds, highest it has ever been in the history of the industry.

M2M+Connected car is a billion dollar revenue stream for AT&T. M2M+Telematics will become a billion dollar stream for Verizon by 2016.

In our 4th wave series of papers, we had postulated for years that the 4th wave revenues will become bigger than any of the previous curves. This finally happened in 2014 in the US market with the revenues from the 4th wave applications and services built on top of the IP access layer surpassed both voice and data revenues.

Apple Watch – New Interaction Models

Apple is never the first one to introduce a new consumer gadget but it is generally the first to make it work for the market so allies and enemies are all eager for Apple to come in and create awareness. For me, the exciting part wasn’t the watch itself though it clearly the best smartwatch available in the market but the new interaction models it introduced. The reincarnation of Morse code in the language of vibrations and heartbeats. The splitting of screen on two different computers on the body is quite fascinating and has design implications for the developers. It will take time for us (as consumers and developers) to understand and absorb the advantages of such a model. The transmission of signals from the body is enormously powerful in creating the preventive care culture around the globe. The story on wearables is just starting out.

Q1 2015 – 4th wave in action

For a casual observer of the industry, Verizon’s acquisition might have come as a surprise but for the students of the 4th wave, it was normal course of action.  In my talks, I often say that for service providers to compete with the OTTs, they have to become OTTs themselves. One could argue if AOL was the right company for this strategy but large operators are opening up their checkbooks to do cross-domain acquisitions. AOL brings a new billion dollar revenue stream however it doesn’t solve the basic fragmentation problem that operators have. They can’t effectively compete with Google and/or Facebook without covering the entire market. Without domination (in market share) or collaboration, the opportunity will remain small and might even vanish in due time.

As we mentioned earlier this year, globally, 37 companies generated (not valuation) a billion dollar or more in revenue from 4th wave services in 2014 – a 311% jump from 2012.

Unicorns at incumbents

Tech press and the startup world is infatuated with unicorns. The billion dollar is a magical marker that inspires the ecosystem to be in the elite club but what about when a new unicorn stream is created at an incumbent? It rarely makes waves. At a 100+ year old incumbent, even less so. AT&T has been lighting up connected cars faster than any other mobile operator in the world right now. While 3.5M connected cars might not instill excitement, one must consider the replacement cycles of automobiles which is several times that of a smartphone.

Our estimates suggest that the connected car segment will become a billion dollar business for AT&T by 2016. The M2M+Connected Car revenue stream is already a billion dollar business for AT&T. Verizon is also slowly getting there. Their M2M+Telematics revenue stream should reach an annualized revenue stream of over a billion dollars by 2016. Some operators in Europe are also making inroads into the new connected devices revenue streams. Similarly, the likes of Microsoft and Google have created new billion dollar revenue streams in mobile. As a separate entity, these will be decacorns but don’t get appreciated when residing with the parent company.

Google Fi – Google Fiber for Wireless

When Google-Fi was announced, there was plenty of media frenzy around Google going after the operators. Folks who wrote such articles don’t understand the business of either Google or the operators. Google is a brilliant strategist which does some projects to push its strategy in the ecosystem. The goal is generally not a new revenue stream but twisting the value-chain enough to serve its purpose long-term.

However, there are couple of direct and subtle signals that Google did send to the markets. First, there are some technical tricks that Google was able to pull off to make WiFi/Cellular handoffs to work. Second, and perhaps more important is that the control point moved from the network to the device which at scale can be the biggest disruption the mobile industry has ever seen. It is not easy to pull off given the interdependency of OEMs to the operators. But sometime in the future, it is not hard to envision that for every session, the device (and associated cloud infrastructure) initiates the auction amongst the available networks and picks one based on performance, pricing, revenue share, and other parameters. That day is not here yet but service providers should start planning for this scenario.

WiFi-first network has good potential and we will see many of them pop up around the globe but getting scale is the biggest question mark in such endeavors (beyond some technical issues of seamless interop).

One should also remember that while WiFi usage in the US is 3x that of cellular usage, the use of WiFi hasn’t really slowed down the cellular data growth one bit. They both are growing at approximately 100% Y/Y.

Post-PC – Apple has no peer

There are has been a lot of debate around the PC and Post-PC worlds. Apple has benefited from the transition to the Post-PC universe like no other company. Its Post-PC revenue in Q1 was four times the Post-PC revenue of Google, Microsoft, Facebook, and Amazon combined. Largely due to the iPhone, Apple has been able to carve out a dominant space on the current wave of computing.

Service provider M&A

When Comcast initially announced the merger with Time Warner, it looked like a slam dunk but it was swiftly rebuffed by the regulators. This sets up an interesting 18 months for the US market. Unless there is a change in power (democrats to republicans), the big mergers in the same domain are off the table. So, how do existing behemoths grow? They start to look overseas (e.g. AT&T acquiring Mexican operators), look sideways (e.g. AT&T acquiring DirectTV) or look upwards (e.g. Verizon acquiring AOL). There are still a number of questions posed to the likes Comcast, Time Warner, Dish, T-Mobile and Sprint. Will this finally force Comcast to be a more active mobile player by acquiring one of the two smaller operators? Will the regulators allow such a move? Is Sprint back in the equation? How anxious is Deutsche Telecom to offload its US assets? How will Dish use its spectrum assets? We might see all these questions answered in the next 18 months or not.

Net-Neutrality and Zero-Rating Debates

In the tech world few things ignite the discussion with religious fervor as the net-neutrality debates. From Washington DC to New Delhi, from Brussels to Santiago, net-neutrality and zero-rating have inflamed passions. Most of the times those fighting on either sides have no clue about the issues at hand and what are they fighting for. Ask a protester on the street about the intricacies of net-neutrality and you will get blank looks or confused answers. Both issues boil down to “transparency” and “control” – who gets to decide what and what are they going to disclose. The answer to many of these debates is fairly simple – ensure there is enough competition and put the (granular) “control” and the “responsibility” in the hands of the customer for e.g. they should decide which apps should make it into the “Zero Rating” club for them. The problem goes away at least in principle.

The Upcoming 5G wars?

I started my career when 1G was all the rage. My first 4G project was back in 2002. By some measures, we are already behind on the 5G discussions. In general, it takes 7-10 years before the standards are finalized and then the network technology lasts for approximately 20 years before a market moves onto the next generation of technology. US led in the growth of 1G (AMPS, TACS) followed by Europe on 2G (GSM, CDMA). Japan took the leadership role with 3G (WCDMA, EVDO) and US wrestled it back on 4G (LTE). Japan and EU are determined to lead on 5G and have been making very public statements and R&D investments about their ambitions on 5G. Japan of course has a very clear goal of having 5G by Tokyo Olympics in 2020. Am sure some operator(s) somewhere will jump the gun and start calling LTE-A+ as 5G around 2017-18 or sooner. You can expect a lot of activities both in public and private on 5G as companies and governments try to figure out a way to claim the 5G leadership mantle.

We have summarized our thoughts on 5G in this paper – 5G: The past, present, and future of the mobile industry evolution. I have been giving a number of talks on 5G in North America and Europe and many of these will be made public in due course.

What to expect in the coming months?

2014 was a tremendous year for the mobile as it becomes omnipresence in every industry. We saw some massive moves, astounding acquisitions, and interesting strategic endeavors. 2015 promises to be an exciting year for the industry as well.

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.

The next 10 years will generate almost 1000 Trillion dollars in global GDP, which is 60% more than the last 10 years. What will be significant is how the “Connected Intelligence” built using networks, sensors, and software is going to transform every industry, every nation. We will covering the future of the mobile industry in-depth at our Mobile Future Forward summit this fall on Sept 29th.

Against this backdrop, the analysis of the Q1 2015 US wireless data market is:

Service Revenues

· The US mobile data services revenues in Q1 2015 increased 3% and reached $30B.

· After crossing the $100B in data revenues last year, the US market is set for explosive growth and is likely to cross $130B in data revenues in 2015.

· Verizon and AT&T dominated the quarter accounting for 70% of the mobile data services revenue and had 68% of the subscription base.

· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q1 2015. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 2.71%. 

· Data contribution to the overall revenues is now at 62%.

· The postpaid ARPU continues to decline for all operators with all but Verizon suffering double digit YoY losses.

Subscribers

· The US market had 4.6M net-adds. Probably for the first time, Verizon finished last in terms of net-adds for the quarter. T-Mobile led with 1.8M net-adds mostly postpaid.

· T-Mobile added almost as many postpaid subs as rest of the three operators combined.

· Connected devices (excluding tablets) had the best net-add performance followed by tablets.

· T-Mobile led in the phone category while remaining three operators added more than 1M non-phone customers.

Shared Data Plans

· Shared data plans launched by Verizon and AT&T have been quite successful. The attachment rates have increased tremendously over the course of 2013-14 with more consumers opting for cellular tablets and connected devices. 70% of postpaid accounts at AT&T are now on shared plans.

· Some more granular data plans for tablets have also spurred interest as the cellular broadband is becoming available on demand vs. expensive on premise Wi-Fi solutions.

· 50% of AT&T’s postpaid accounts are on 10GB+ plans.

4th Wave Progress

· The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 70% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 89% in mobile (of the total advertising revenue) up from 60% in 2013. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $150 million revenue from M2M and Telematics. At the current run-rate, this will be a billion dollar business by 2016.

· AT&T reported 684K net-adds on the connected car platform. We estimate that connected car will become a billion dollar revenue stream for AT&T in 2015. Connected cars accounted for 62% of the connected devices for AT&T.

Connected Devices

· Connected devices (non-phones) accounted for almost 52% of the net-adds in Q4 2014. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.

· For AT&T, Connected cars started to form a significant base of the connected devices segment with 68% of the new connections in the segment coming from cars.

Handsets 

· Smartphones continued to be sold at a brisk pace accounting almost 95% of the devices sold in Q1 2015. The feature phone category is practically becoming extinct in the US market.

· The smartphone penetration in the US is now at 76%.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 71M making it the #2 LTE operator behind China Mobile which has more than twice LTE subs. Other three operators are also deep into their LTE deployments. Verizon reported that 86% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.

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 Aug 2015.

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

Announcing Mobile Future Forward 2015 May 13, 2015

Posted by chetan in : 4th Wave,5G,Connected Intelligence Era,Mobile Future Forward,The Golden Age of Mobile,US Wireless Market,Worldwide Wireless Market , add a comment

Dear friends,

The next 10 years will generate almost 1000 Trillion dollars in global GDP, which is 60% more than the last 10 years. What will be significant is how the “Connected Intelligence” built using networks, sensors, and software is going to transform every industry, every nation. At Mobile Future Forward (now in its 6th year), we delve into the nuances of innovation that trigger seismic activity which shapes the future generation of experiences, applications and services. The unique executive summit is a true meeting of the great minds who go beyond the headlines and hype to examine the growth trajectory of the future. It is a daylong data-driven brainstorm designed to make you think. The experts and visionaries from around the globe will gather in Seattle on Sept 29th to explore the world of possibilities, envision the opportunities, and inspire the entrepreneurship spirit within us to achieve more, faster.

We welcome you to join us in the discussions and contribute to the collective knowledge of our industry.

Registration is open now.

We are excited to partner with the industry leaders and thank them for their ongoing support: Ericsson and Neustar.

 

Mobile Future Forward is causing everyone to think about what’s the next big thing. – CEO, Global Mobile Operator

Mobile Future Forward is the most intellectual conference  – CEO and founder, Connected Watch Company

The caliber of participants is extraordinary. Mobile Future Forward is a data driven event, the team has put together so much hard to find factual data that is unrivaled anywhere in the industry in terms of building the foundation of facts for analysis. I normally don’t learn new things at events but at Mobile Future Forward, I did. – North American Leader – IoT and Mobile, IBM

Some of the confirmed industry leaders are:

· Glenn Lurie, President & CEO, AT&T Mobility

· Dr. Eric Topol, Chief Academic Officer, Scripps Health

· Faisal Masud, Chief Digital Officer, Staples

· Rima Qureshi, Chief Strategy Officer, Ericsson

· Hank Skorny, SVP – IoT, Neustar

· Raja Rajamannar, CMO, Mastercard

· Sanjiv Ahuja, Former CEO, Orange

· Hossein Moiin, CTO, Nokia Networks

.. more to come

We will be announcing new speakers and partners through the course of the summer and look forward to seeing you in September. If you are interested in partnering, please reach out at info@mobilefutureforward.com.

Thanks and have a great spring.

Chetan Sharma

Vancouver Mobile Breakfast Series Recap: Mobile Commerce and Payments April 16, 2015

Posted by chetan in : 4th Wave,Chetan Sharma Consulting,Mobile 2015,Mobile Breakfast Series,Mobile Commerce,Mobile Future Forward,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

We hosted our second event of the year in Vancouver (our first in Canada) earlier this week and had a great time. I have been going to Vancouver for 20+ years and have been thinking about doing something north of the border. It is also one of my favorite cities in the world. By strange coincidence, all 3 of our MBS cities outside Seattle have been Olympic cities – Atlanta, London, and now Vancouver. I guess we will have to go to Beijing or Seoul next.

With the help of my good friend Pankaj Agarwal and his team at Optimus Information and Wavefront, we were able to plan out a sold-out event. We continued the theme of Mobile Commerce and Payments given that it is such a hot topic right now and brought together three startup CEOs who are right in the middle of the action.

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The mobile ecosystem is evolving exactly we envisioned it in our 4th wave paper in 2012. The 4th wave is becoming the most dominant portion of the revenue stream as was witnessed from the revenue results in 2014 in the US.

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As I have said before in various public forums, one of the metrics I use to track progress in any segment is the number of $1B businesses being created each year. In 2012, there were only 9 companies mostly large enterprises like AT&T, Apple, Google, and Amazon that had > $1B digital businesses. However, in 2014, this number jumped to 37 with several new entrants – from known brands like Twitter, Walmart, and Xiaomi but several companies unknown to the western world like WeChat, FlipKart, Otto Group, GungHo, Suning Appliance, and others. While most of the concentration of digital wealth in the US, China is emerging very strongly as a player to reckon with. In fact, how China and US companies interact and play will perhaps define the next 10 years. While other economies like India, EU will play a role, I find China and US to be the most fascinating.

The speakers were:

Sam Gadodia, CEO & Co-Founder, Lotusflare

Sam co-founded LotusFlare with couple of his colleagues from Facebook with the objective to make mobile internet more accessible across the globe. Prior to LotusFlare, Sam worked at facebook and worked with Mobile Operators’ on SMS, Zero rating and other initiatives to drive growth on FB mobile app. Before this, Sam built and scaled TeleSign, one of the leaders in mobile authentication and verification space. Sam also co-founded and successfully built Global eProcure, a leading SaaS based SCM analytics Company with operation spanning from North America to Asia. While at Global eProcure, he received the Stevie award and was named by American Business Awards as Best Operation Executive.

Michael Gokturk, CEO & Founder, Payfirma

Michael Gokturk is the kind of entrepreneur who takes a company public in 3 years then launches a new business 3 days later. In 2011, Michael founded Payfirma with the goal of disrupting the highly competitive payments market by creating a solution to merge online, in-store and mobile payments. He has since grown Payfirma from the first company to introduce mobile payments in Canada into one of the top multichannel payment platforms. Before Payfirma, Michael founded and was the CEO of Versapay. A payments company specializing in point of sale systems and electronic bill presentment and payment (EBPP).

Ajay Hans, CEO and Co-Founder, Mobetize

Ajay Hans, Founder of Alligato Inc. and Co-Founder of Mobetize Corp brings over 15 years of diverse experience in the development, marketing and implementation of complex billing and payment related software technologies dedicated for MNO’s and MVNO’s. Ajay has overseen Mobetizes’ strategic vision and tactical execution since inception. He has held senior executive positions with leading telecom software technology companies where he successfully implemented solutions for brands including SaskTel, Sprint and AT&T.

Chetan Sharma, CEO and Founder, Chetan Sharma Consulting (moderator)

The three panelists are involved in advertising, payments, and commerce working with all parts of the value chain – banks, operators, startups, credit card companies, retailers, etc. We had a very interesting discussion that covered a breadth of topics.

The salient points of the session were:

In summary, mobile commerce remains a hot area and we are approaching a tipping point wherein mobile commerce dominates ecommerce in all parts of the world. I really enjoyed the moderation and questions from the audience. My thanks to Optimus Information and Wavefront for being our partners for the event. and thanks to the Vancouver mobile community for embracing us with open arms.

Our next event is going to be in our annual mobile summit – Mobile Future Forward on Sept 29th in Seattle. Stay tuned for announcements and details.

Mobile Patents Landscape – An In-Depth Quantitative Analysis – 4th Ed – 2015 April 1, 2015

Posted by chetan in : 4G,5G,Intellectual Property,Mobile Patents,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile Patents Landscape 2015

– Fourth Edition

http://www.chetansharma.com/MobilePatentsLandscape_2015.htm

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Highlights

· The study looked at over 7 million patents granted in the US and Europe. The analysis focused on the patents granted to 65 technology companies in the mobile space.

· The gap between the number of mobile patents granted in the US vs. Europe widened again. US now accounts for roughly 79% of the mobile patents granted in the two jurisdictions.

· US companies comprise of 48% of the top 50 list followed by Japan, China, and South Korea.

· By the end of 2014, over 26% of all granted patents in the US were mobile related. In 2001, the percentage was 5%. In Europe, roughly 10% of the patents granted were mobile related.

· IBM recaptured its top spot from Samsung to become the leader in mobile patents granted in 2014 in the US while Samsung dominated Europe. Samsung still dominates the overall rankings. Samsung was followed by IBM, Microsoft, Sony, Ericsson, Qualcomm, Nokia, Google, Alcatel-Lucent, and Blackbery for the top 10 companies by mobile patent grants in 2014.

· Google was number 5 in mobile patent grants in 2014. Apple was behind at number 8.

· Despite dwindling market fortunes, Blackberry continues a healthy patents grant rate and appears in several top 10 categories.

· US Mobile Operators dominate the top 10 operator rankings: Patent top 10 Rankings: AT&T, NTT DoCoMo, Verizon, Sprint, British Telecom, Telecom Italia, T-Mobile, Swisscom, Orange, and SK Telecom.

· Mobile Infrastructure Patent top 10 Rankings: Samsung, Ericsson, Qualcomm, Alcatel-Lucent, LG, Intel, NEC, Siemens, Broadcom, and HP.

· Mobile OEM Patent top 10 Rankings: Samsung, Microsoft, Sony, Google, Blackberry, LG, Fujitsu, Panasonic, NEC, and Siemens.

· The top 5 categories for patents grants in the US for 2014 were Digital Multiplexing, Telecommunications, Digital Processing – Data Transfer, Digital Processing – Financial, and Computer Graphics.

· The top 10 filers of mobile patents in the US were Samsung, IBM, Qualcomm, Microsoft, Intel, Google, Apple, LG, Sony, and Ericsson. It was the second time that Samsung, Microsoft, Google and Apple showed up in the top 10 patent filers list together.

· Some of the Chinese companies started to increase their filings substantially. Notable amongst them are: Alibaba, Xiaomi, Mediatek, and Huawei.

· Huawei appeared in the top 10 rankings in Europe for the first time.

· Information security category saw the highest jump in patent filings in 2014.

Introduction

The idea of Intellectual Property (IP) is as old as the debates Aristotle used to have about philosophy and society. All mature civilizations and societies come to appreciate the value in preserving the IP created by its citizen and give the rights to the benefits that such IP creates. IP is enshrined in laws and principles of doing trade and business. It is also how nations outmuscle each other over long periods of time to become dominant economies.

In a knowledge economy, the very competitiveness and durability of the nation’s prosperity depends on how well the framework of IP and patents works in the country and the steps it takes to avoid theft and misuse of the laws while enforcing the rules and regulations on the books. IP 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.

Mobile is first computing based technology that will encompass the entire human race and then some. In 2014, the number of cellular connections went past the human population. Additionally, the rise of IoT and Wi-Fi-led usage has meant that the use-cases for mobile and the impact it can have across verticals have exploded. Mobile has outgrown its own universe and now expanded to segments such as health, industrial, retail, education, agriculture, and more. As such, the intellectual property being generated has become very mobile centric. In 2014, the US crossed a major milestone, more than a quarter of the overall patents that were granted had something to do with mobile.

Mobile expertise and by extension the IP is being developed by more companies around the globe beyond the traditional ecosystem players such as Samsung, IBM, Microsoft, Qualcomm, and Ericsson. Billion dollar mobile companies are emerging from India, China, and Europe. Africa and Latin America are not far behind. As expected, mobile has removed the artificial boundaries of time and distance and empowered developers across regions. Mobile is also leveling the playing field, increasing the opportunities for entrepreneurs far and wide. A dreamer in Nairobi has as good a shot at success as anyone else in the west.

All the innovation and economic activity has also increased the patent activity around the world. While US remains the leader in terms of overall quality and quantity. China and its companies are starting to flex some muscles on the big stage. In 2014, China went past the European leaders Germany, France to become the 3rdplayer behind US and Japan to file the number of patent applications. While US, Europe, and Japan remain the overall leaders in patents both in quantity and quality; China’s is at the top in terms of growth rate. Amongst the top 3 filers, Huawei and ZTE are from China (Qualcomm was the third player on the list).

According to the US Patent Office (USPTO), in 2014, the number of patents granted grew over 8% by the end of 2014 for the same time period. The numbers of foreign filings are now in the majority for both the applications filed as well as the patents granted.

As we look into the mobile related patents, the growth is much more striking. 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 440% increase while the European market saw a 71% increase in mobile related patent grants.

Another interesting fact is that in 2014, for the first time, over a quarter of all patents granted in the US were mobile related. This grew from around 2% in 1991 and 5% in 2001. In Europe, roughly 9% of the patents granted are now related to mobile. Europe saw a decline of 4% in mobile patents in contrast of 16% growth in the US market.

It is also interesting to note that a number of new Asian companies like Mediatek, Alibaba, and Xiaomi have stepped up their IP efforts and substantially increased the filings in the US.

Chetan Sharma Consulting analyzed over 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 patents landscape. This study is fourth in the series that does an in-depth quantitative analysis of the mobile patents landscape.

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 May 2015.

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

New Paper: 5G – The past, present, and future of the mobile industry evolution March 16, 2015

Posted by chetan in : 4G,4th Wave,5G,Chetan Sharma Consulting,Connected Intelligence Era,European Wireless Market,Mobile 2015,Mobile Ecosystem,Mobile Future Forward,Mobile Payments,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

5G – The past, present, and future of the mobile industry evolution

A Mobile Future Forward Research Paper

http://www.chetansharma.com/5G.htm

NA_Wireless_Market

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Introduction

The deployment of LTE otherwise known as 4G is in full swing. Operators in US, Japan, Korea, Finland, Australia, and others started deploying the new technology some years ago and are nearing completion of their network build out. Others in Europe and Asia are on an aggressive schedule to catch-up. We can expect that a majority of the operators will have LTE up and running in the next couple of years. Operators have sunsetted 2G. In some instances they even stopped investing in 3G and are putting all of their investments in the 4G bucket. As mobile networks transition to all IP, operators will be able to re-farm their spectrum assets for 4G deployments. Beyond LTE, operators are looking at LTE-A to provide more efficiency and network bandwidth to consumers.

In mature LTE markets like the US, Korea, and Japan, the talk has shifted to the next generation technology evolution – 5G. Even Europe, which still has a long way to go before their 4G is built out have set their sights on 5G to recapture the mantle and the pride of the GSM days. Korea and Japan led the world in 3G but lost the lead of 4G to the US. They both are eager to be considered leaders in 5G. Japanese government has set the ambitious goal of having 5G by the Tokyo Olympics in 2020. US regulators have started to talk about 5G and the future spectrum needs as well.

Since the launch of 1G networks in late seventies and the eighties, we are now onto the 5th iteration of the network technology evolution. We have gone through a lot of technology skirmishes but with 4G and likely with 5G, we are narrowing the differences between technology options giving significant technology scale advantages to the ecosystem.

As network technologies have evolved, the application landscape has changed as well. 1G or AMPS was all about basic voice services. GSM and CDMA (2G) digitized mobile and we saw basic messaging and data services introduced into the market. 3G (WCDMA, EVDO) introduced the potential of data services to the ecosystem and the consumers. The launch of iMode in Japan became the poster child of data services for much of the 3G evolution around the globe. Midway in the 3G growth, new players like Apple and Google entered the ecosystem and laid the foundation of unprecedented data and application growth. Business models and control points in the ecosystem changed overnight. The insatiable data demand led to the acceleration of the 4G services in many leading markets. For the first time, the network technology was data-led. We are clearly moving towards an IP infrastructure where voice is just another app running on the data network.

In fact, data is the primary revenue engine for the services providers and rest of the ecosystem. In Japan, almost 80% of the revenue now comes from data services. In the US, we are approaching 60%. Other nations are not far behind. Even the emerging markets have caught up very fast and in some instances leap-frogging their western counterparts in certain application and services segments.

All through last four generations, the fundamental business model of “metering” remained the same. Barring some exceptions, there has been a direct correlation of usage and revenues. Will 5G be any different?

Another significant standard that has evolved is Wi-Fi. The impact of Wi-Fi on the mobile ecosystem can’t be overstated. It has become so pervasive that we have ask the question how long before nationwide Wi-Fi first networks start to make a run for the wallet share in major markets. How will Wi-Fi fit in with 5G, will the two standards merge?

Will 5G offer new business models or explore a different relationship between usage and cost? Will consumers warm up to the idea of value-based pricing? Or Will access just become a commodity layer like water and electricity and most of the value will reside in the platform and application layers? Though we have started to see the shifts (as discussed in detail in our 4th wave series of papers), how fast will future accelerate? Will the ecosystem landscape be markedly different than what we have in place today?

We won’t know the answer to some of these questions for a while but it is worth exploring the lessons from the past and potential disruptions that 5G could bring to the ecosystem that benefits the end customers. In the end, it might not be about the technology at all but about the business models that shape the technology landscape. This paper explores 5G through the lens of the past and explores the wireless world beyond 2020.

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 May 2015. We will be discussing 5G and its impact on the ecosystem in more detail at Mobile Future Forward.

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

Mobile World Congress 2015 Recap March 9, 2015

Posted by chetan in : 4th Wave,5G,Connected Intelligence Era,Emerging Markets,Enterprise Mobility,European Wireless Market,Mobile World Congress,The Golden Age of Mobile,US Wireless Market,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile World Congress 2015 Recap

Barcelona hosted its 10th edition of MWC last week. The beautiful weather in a lovely city provided the perfect setup to pontificate about the future direction of the mobile industry. This note presents the summary of the discussions and the observations from the show.

For a second year in a row, Mark Zuckerberg was the highlight of the show. The crowd and the buzz for his panel was probably more than for rest of the keynotes combined. Last year, Mark introduced the project, this year it was about the progress report. The operators look at Internet players with deep suspicion. The goal of getting more folks online is a shared objective in the industry but there is tension around the business model and the mechanics. Executives from Telenor, Bharti Airtel, and Millicom shared their experience (mostly positive) and the impact it has had on their data growth and revenues. All were cautiously optimistic.

One thing that will help the operators is to look at Internet players a bit differently and it requires a mental shift. Just like operators work with and compete against other service providers, they can find common grounds for collaboration in some areas and in other segments they will of course compete but having a one-track mind will detrimental to their progress. On the flip side, Internet players should appreciate the competitive dynamics in the market, the financial metrics that drives the business and the work to deliver a more customized partnership – something the Internet players are not that accustomed to. The Internet segment does a better job of managing coopetition than the telecom sector.

Probably the second most watched keynote was from Sundar Pichai. Rumors of a Google MVNO have been around for many months. The plans to launch the “nexus of networks” were discussed. Additionally, Sundar discussed how project Loon and project Titan could be used to provide the Internet backbone. The connectivity projects are nice science experiments at this stage but the MVNO project could have some implications depending on how far Google wants to take it. Will it be the Rokr project for Google or something more? Only time will tell.

Just like it has been for many years, Apple was at the center of many discussions at the show. In carefully orchestrated leaks, there was a steady flow of the news on Apple Watch. It will set the competitive bar for the segment and help everyone figure out their place in the market. Folks were deeply divided on the likelihood of success. Battery life might end up being the key-determining factor. There was also a lot of discussion around the news reports on Apple Pay fraud issues.

For the first 3 generations, technical guys were in charge of the wireless technology Gs. With 4G, the marketing department took over and it looks like they are not ready to relinquish their position anytime soon. The hype around 5G was at its highest at the show. In the last 3 months, every major entity has had something to say about what 5G should be and what will it enable. There is also a tussle for who gets to lead the industry on 5G.

Europe is anxious to regain the mantle it lost after GSM. But there is a big problem. The 4G penetration in Europe won’t even get past 50% until 2020, the investment wouldn’t have been recovered by then. Someone bring out the econ 101 book, please! It seems like 5G is going to revolve around mmWave spectrum and technologies (very few see a new interface coming) but this has massive capex and opex implications in addition to the practical implications of millions of nodes to deliver the desired throughput. That doesn’t mean they shouldn’t continue to work on pushing the boundaries and take leadership position in developing the standards and use cases. However, from a deployment point of view, we need a filter of reality.

Also, the industry is getting ahead of itself. Keep the marketing guys in the barn, settle on the definition, the how, the use cases, and then figure out the technical and marketing roadmap. (there was plenty of talk about pre-5G as well). Of course, one can achieve 10 Gbps today but mostly under impractical configurations. What’s also troubling is that the Internet players are not part of the standards process. Matt Grob, CTO of Qualcomm responding to a question about the timeline for getting 5M 5G subs suggested we might get there by 2022. As a reference, 4G reached the 5M mark in 2010. KT CEO gave a delightful presentation of 5G optimism. A number of position papers were released – fun reading for geeks if you are into these long reads. We will be releasing our own thoughts on 5G later this month expanding on piece we explored earlier this year.

All eyes were on FCC Chairman Wheeler after the landmark ruling last month. There was no new news per say but the topic was hotly discussed and debated in public and private forums. While the journey is just starting, the world is looking to see how things will end-up. As I mentioned to the WSJ, no country wants to be viewed backwards and whatever happens in the US market will have implications worldwide over the next decade and beyond. I also get the sense that we don’t quite understand the impact of unintended consequences. For e.g. there are several use cases like transportation, medical, financial, etc. where prioritization is required. Voice has been prioritized for ages and will be in the future. 5G will have different prioritization schemes depending on the radio, the applications, and the requirements. Ideally, you want the application to request a prioritization level. It is hard to justify that a moisture sensor in a sprinkler should get the same prioritization as the x-ray going over the wires. Prioritization exists in all forms of access and embedded in the way of life for good reasons. It is not quite clear what will be allowed and what will be dealt on a case-by-case basis. Maybe all this is taken care of in the ruling. Hopefully, the 300+ page tome will answer some of these questions.

The best phone launch belonged to Samsung. Learning from past mistakes, it was a no-nonsense presentation. The S6 edge looks sleek and beautiful, the camera is remarkable. However, for the purists the lack of the SD card and the removable battery is troubling. The price point for the highest end might go past $1K. It is unlikely that S6 will steal share away from i6 but it will probably take it away from other Android OEMs and will see a nice revenue bump in the 2nd half of the year. It might help stabilize the severe decline in profits from 2014. Samsung Pay puts Android on the mobile payments map as well. There were device launches from Nokia, HTC, and others but nothing captured the attention of the show. Orange/Mozilla came out with a unique offering of a 35 Euro package that includes a decent smartphone, 6 month of 500MB/mo, unlimited voice and messaging. It will be launched in the African markets to get more people transition over to smartphones and data services.

The current money in IoT is clearly in the industrial projects. IoT is a great enabler to re-architect business processes, revenue streams, business models, companies, and industries. While industrial IoT didn’t make a splash, in conversations with folks, there are all sorts of projects being done around the globe and there is serious money being spent. One project can sometimes account for the entire consumer IoT revenue stream. Accenture/Intel had some cool demonstrations to tell the story. Lot of work is going into IoT driven factories, buildings, and the supply-chain.

Consumer IoT didn’t make a big splash like it did at CES in January. There were no drones, robots, or humanoids running around. A number of OEMs came out with watches and sensor bands – nothing that will take the industry by storm. Huawei probably gets the vote for the best watch launch at MWC. In general, for the current stream of connected watches, the technical specs have triumphed the fashion specs. Can Apple change the equation this year?

In case, it wasn’t clear to some – AT&T is undergoing a significant transformation into becoming an international solutions provider – it was apparent from the show. In the European show, AT&T had the best presence amongst its peers. European operator landscape is dominated by the quad-play moves and consolidation. As usual, the Koreans and the Japanese impress with their quirky art of storytelling. Using a robot to emphasize low 5G latency by SK Telecom was my favorite. AT&T has been signing up the most number of connected car contracts and the numbers are starting to impact the financials in a material way. A select group of the operators are showing meaningful revenues from the 4th wave.

VR helps tell a good story. Several companies used VR headsets (mostly Oculus and Samsung) to have attendees experience their product, services or vision. Ericsson had a cool setup to remotely controlled excavator thousands of miles away. Will VR enter the boardrooms? Quite likely.

After a slow start, LTE-U is gaining quite a bit of traction. Qualcomm’s efforts are bearing fruit and we should be seeing some deployments in 2016. The Wi-Fi ecosystem has expressed concerns but nothing that can’t be overcome. Most of tier-1 operators in the western markets have some form of SDN/NFV initiatives in place. AT&T’s Donovan announced that they have already 5% coverage and are on track to reach 75% by 2020.

Security and privacy continue to be hot topic in the post-snowden era especially in Europe. Regulations are also tightening up. EU wants much stronger privacy regulations. European operators want harmonization of privacy regulation between operators and the Internet players. IoT multiplies the attack nodes and it has serious implications for both enterprise and consumer domains.

Few M&A transactions during the week got the attention of the industry. The biggest one was from Freescale and NXP who announced a mammoth $40B merger. Then Mavenir got acquired by Mitel for $560M. HP acquired Aruba to boost the Wi-Fi business and paid a premium at $3B.

Other items of interest were 3D biometric fingerprints (Qualcomm), autonomous cars in 2016 (Nissan), zero rating (Wikipedia), B2B $1B revenues (Ooredoo), sub-$50 devices (Android, Mozilla), Windows 10 (Microsoft), 100M mobile money users (GSMA), 5G Holograms (KT), Smart Home Air Service (Conway), Lighting as a Service (Philips), Resiliency and Fault-Tolerant SDN/NFV layer (Stratus), 6G (DoCoMo), Runcible (Monohm), Selfie’d Journalists (they were everywhere), Wireless charging furniture (Ikea), MoDe Electric Bike (Ford), Connected carry-on (Bluesmart), and more

Best launch – Samsung S6. Well executed. Generated lot of interest from media and partners.

Best booth – Ericsson. They have really mastered the art of storytelling through physical and digital assets.

Best parties – Siris Capital and Qualcomm

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.

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

US Mobile Market Update Q4 2014 and 2014 February 23, 2015

Posted by chetan in : 4G,4th Wave,5G,AORTA,ARPU,Chetan Sharma Consulting,Connected Devices,Connected Intelligence Era,Devices,European Wireless Market,Fourth Wave,Internet of Things,IoE,IoT,LTE,Mobile Applications,Mobile Cloud Computing,Mobile Devices,Mobile Future Forward,Technology Cycles,The Golden Age of Mobile,US Wireless Market,Wi-Fi,Wireless Value Chain,Worldwide Wireless Market , add a comment

US Mobile Market Update Q4 2014 and 2014

 

Summary

The US mobile market continues to be the biggest market by revenue and 2014 was a key transition year for the industry. The overall market grew 21% to almost $400B. Voice revenues declined by 15%, messaging by 16%, and tablets by 4%. The biggest winners were the 4th wave/OTT services which grew by 92%. Access revenues increased by 32%, handsets by 11%, and wearables by 150%. Verizon, AT&T, and Apple were the top 3 players by revenue (from the US market).

Last Jan, we had estimated $108 Billion in mobile data revenues for the market and the revenues ended spot on at $108B making US the first market to surpass the $100B mark. We are forecasting that the mobile data service revenues will increase by 22% to $132 Billion in 2015. Verizon will become the first operator to generate more than $50B from data services in 2015.

Verizon became the second operator after China Mobile to cross the milestone of 100 Million postpaid subs. After acquiring lusacell and Nextel Mexico (still pending), AT&T became the biggest North American operator with over 131 million subs. In 2014, US also crossed the 350 million subscription mark.

The average mobile data consumption (cellular) crossed 2GB/mo in 2014. In the US, it took roughly 20 years to reach the 1GB/user/mo mark. However, the second GB mark has been reached in less than 4 quarters. An entire year’s worth of mobile data traffic in 2007 is now reached in less than 100 hours.

From 2010 to 2013, the data pricing declined by only single digits YoY. However, in 2014, the data pricing has plummeted by 77%. It is having an impact on the industry financials which might help clear the way to further M&A in the US market.

The intense competition amongst the operators meant a whopping 20% rise in OPEX QoQ and a 1% decline in CAPEX YoY. The income stayed flat while EBITDA grew modestly at 3%.

In our 4th series of papers, we had postulated for years that the 4th wave revenues will become bigger than any of the previous curves. This finally happened in 2014 in the US market with the revenues from the 4th wave applications and services built on top of the IP access layer surpassed both voice and data revenues. The operator share of the US mobile industry revenues fell below 50% for the first time since the birth of the industry.

Smartphone penetration increased to 75% and roughly 95% of the devices sold now are smartphones.

The Android OEM ecosystem suffered its first major profit decline in 2014 – the profits dropped precipitously by 44%. iOS revenues increased by 31%. The difference in profits between the two major ecosystems is now $33 Billion – the highest it has ever been.

Apple broke more records in a single quarter than most athletes break in their lifetime. The amount of revenues and profits generated by a rectangular screen sent everyone in a tizzy. To get a sense of the scale, consider this – Apple’s iPhone generated more revenue than revenues generated by entire portfolio of products from Microsoft, Google, Facebook, and Twitter combined. Add in Macs and Tablets and you can mix a dozen more companies in the mix. The laser focus on quality and the benefit of the brand loyalty and aspiration catapulted into the business stratosphere that few can even dream of reaching.

Apple also introduced two new products late last year – Watch and Apple Pay. While it is too early to figure out the overall impact of Apple Watch (it clearly will put some Swiss Watchmakers out of business), Apple Pay appears to be more disruptive. Apple’s classic approach of embracing the ecosystem and thinking end-to-end might finally disrupt the otherwise staid financial sector. Apple Pay is already seeing significant traction and the financial industry is nervously promoting the service. Rumors of Apple Car will keep media on its toes for the next few years.

4th wave services continue to grow at a very past face around the globe. At least 37 companies generated a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.

The difference between Sprint and T-Mobile number of subs is less than a million now – the narrowest it has ever been. Like we suggested mid-last year, T-Mobile is likely to become the number three operator in a matter of weeks now. This is more or less just a symbolic event with the transfer of bragging rights.

T-Mobile accounted for over 40% of the overall net-adds for the year with Verizon coming in second at 30%. After having a lack-luster year in 2013, the operators doubled the net-adds in 2014 with connected devices driving most of the growth.

Race To The Bottom?

The mobile data traffic has been doubling YoY in the US. The consumption is clearly growing with the introduction of new devices, network upgrades, and application enhancements. Operators are seeing tremendous pressure on data pricing due to the competitive environment. EBITDA declined for the second straight quarter.

From 2010 to 2013, the data pricing declined by only single digits YoY. However, in the first 9 months of 2014, the data pricing has plummeted by 77%. It is having an impact on the industry financials which might help clear the way to further M&A in the US market.

Is Android in trouble?

Samsung suffered one of the biggest mobile revenue and profit declines in its history. As the dominant leader of the Android ecosystem, it is caught in the middle of two major trends that ironically enough Samsung had influenced. The bigger screen phone segment that Samsung seeded has become the fastest growing segment in smartphones. Apple following Samsung into the segment meant that it took away the single biggest differentiating factor and as such a serious impact on its high-end line. The lower end which yields higher volumes but much smaller ASP has attracted hordes of local developers in China, India, and Russia who have better logistics and operational advantage. Many of these players are becoming successful. To damage Samsung, they all don’t need to be successful, just enough to be in the market to sway the market. As such, Samsung has seen its share dwindle in the two biggest emerging markets.

Much of the current situation has been predictable for some time. While Samsung has ridden the smartphone wave masterfully, it hasn’t been able to build a platform moat, something that helps fundamentally differentiate its products in the sea of Android devices around the planet. They are not in a Blackberry or Nokia panic situation yet as some in the media have surmised. But, they need to figure a way out of the middle band. Unlike Nokia or Blackberry who were blinded by their success and ignorance, Samsung has shown it is a more nimble competitor. Samsung’s R&D and marketing is also second to none. Its diversified portfolio also helps in cushioning the drop in the phone segment. Historically, OEMs with such sharp revenue declines haven’t been able to arrest the decline. Can Samsung do it? Samsung is launching Galaxy 6 at MWC this weekend.

Given that Samsung controls most of Android ecosystem profits, the Android ecosystem suffered a 44% decline in profits. The woes of OEMs such as Sony, Motorola, and others also contributed to the decline. We can expect some of the Android OEMs leaving the device business altogether.

Operator M&A

In his classic book, “Competition in Telecommunications,” Nobel Laureate Jean Tirole wrote, “With digital technology, telecommunications, cable TV, broadcasting, and computers have become a single industry, which will be a critical element of our economies’ backbone. With the impending opening of competition, industrial restructuring is progressing at a fast pace.” The book was written almost 15 years ago. As I have written before, the computing and communications industries are merging into one and that collision is generating ripple effects some of which we are starting to understand (more on the Connected Intelligence Era trends here)

One of the implications of the 4th wave evolution is that there will be fewer mobile operators in the world. As we have argued in the papers, many of the smaller players just won’t be able to keep up and compete. AT&T acquired Mexican operator Iusacell (it also made the bid for Nextel Mexico) which made AT&T a clear leader in North America with almost 131 Million subscriptions. As we mentioned in our 4th wave series of papers, the number of operators will continue to shrink with fewer global operators who will seek to combine wireless and wireline assets to strengthen their moat. It is quite likely that US Cellular will be acquired in 2015.

Net-Neutrality Debates

After a blockbuster spectrum auction, FCC is looking to put its stamp on the future of the Internet by proposing net-neutrality rules later this week. President Obama decisively tilted FCC’s position on the subject. However, this is not a done deal yet. The legal and political apparatus is likely to react quite strongly to the ruling and we are in for a tough fight on this one. Other governments and regulators are also keenly watching the debate and the final ruling. Dish ended up acquiring a bulk of the spectrum wares. Is this a precursor of their wireless moves or was this just old-fashioned asset hoarding?

4th Wave Revenues

For the first time, US operators revealed some of their 4th wave (digital) services metrics publicly. Verizon reported $585 million in 2014 up 45% from a year ago. At the current run-rate, this will be a billion dollar business by 2016. AT&T reported 2.8M connected car connections and 140K home security connections. The connected car segment is clearly on its way to becoming a billion+ dollar business for AT&T. Connected cars accounted for 62% of the connected devices for AT&T.

Globally, 37 companies generated a billion dollar or more from 4th wave services in 2014 – a 311% jump from 2012.

The Upcoming 5G wars?

I started my career when 1G was all the rage. My first 4G project was back in 2002. By some measures, we are already behind on the 5G discussions. In general, it takes 7-10 years before the standards are finalized and then the network technology lasts for approximately 20 years before a market moves onto the next generation of technology. US led in the growth of 1G (AMPS, TACS) followed by Europe on 2G (GSM, CDMA). Japan took the leadership role with 3G (WCDMA, EVDO) and US wrestled it back on 4G (LTE). Japan and EU are determined to lead on 5G and have been making very public statements and R&D investments about their ambitions on 5G. Japan of course has a very clear goal of having 5G by Tokyo Olympics in 2020. Am sure some operator(s) somewhere will jump the gun and start calling LTE-A+ as 5G around 2017-18 or sooner. You can expect a lot of activities both in public and private on 5G as companies and governments try to figure out a way to claim the 5G leadership mantle.

We have a 5G paper coming out in March. You can read the summary here – 5G: The history of the future.

Apple Pay

Mobile Payments has long infatuated mankind. Many players with deep pockets have invested in the segment but in truth, the market was waiting for Apple to show up and show up it did with the launch of Apple Pay. In an ambitious orchestration of the financial supply chain, Apple introduced a simple payment proposition. The basic strategy is for commerce to flow through iOS. The institutions are even paying a share of the transaction to Apple which previous payment explorers are watching in utter disbelief. Ladies and Gentlemen, get ready for iTunes 2.0.

What to expect in the coming months?

2014 was a tremendous year for the mobile as it becomes omnipresence in every industry. We saw some massive moves, astounding acquisitions, and interesting strategic endeavors. 2015 promises to be an exciting year for the industry as well.

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 Q4 2014 and 2014 US wireless data market is:

Overall Industry Revenues

· The overall market grew 21% to almost $400B.

· Voice revenues declined by 15%, messaging by 16%, and tablets by 4%.

· The biggest winners were the 4th wave/OTT services which grew by 92%.

· Access revenues increased by 32%, handsets by 11%, and wearables by 150%.

Service Revenues

· The US mobile data services revenues in Q4 2014 increased 3% and crossed the $25B market for the first time.

· The mobile data services revenue crossed the $100B mark in mobile data services revenue to become the first country to generate $100B from mobile data services.

· Verizon and AT&T dominated the quarter accounting for 70% of the mobile data services revenue and had 68% of the subscription base.

· Verizon and AT&T are at #2 & #3 global mobile data revenue ranking respectively in Q4 2014. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile data operators.

ARPU

· The Overall ARPU fell by 2.57%. 

· Data contribution to the overall revenues is now at 60%.

· The postpaid ARPU continues to decline for all operators with AT&T and T-Mobile experiencing double digit losses for the year.

Subscribers

· The US market had the best net-add year in the last 7 years.

· The US operators added 20M new subscriptions with T-Mobile leading the pack at 40%.

· Verizon’s tablet net-adds accounted for almost 50% of the overall tablets that were added in Q4. Verizon has caught up with AT&T on the tablet front.

· T-Mobile’s postpaid continued to see the positive growth for the seventh straight quarter. It has recovered all its losses that began in Q3 2009 and is now growing in the positive territory.

Shared Data Plans

· Shared data plans launched by Verizon and AT&T have been quite successful. The attachment rates have increased tremendously over the course of 2013-14 with more consumers opting for cellular tablets and connected devices. 61% of postpaid accounts at Verizon are now on shared plans. For AT&T, the number is even higher at 70%.

· Some more granular data plans for tablets have also spurred interest as the cellular broadband is becoming available on demand vs. expensive on premise Wi-Fi solutions.

· 52% of AT&T’s postpaid accounts are on 10GB+ plans.

4th Wave Progress

· The number of players making $250M/quarter on mobile continues to increase rapidly and these aren’t your traditional wireless players. For example, Mobile is now contributing 69% (up from 30% in Q1 2013) to Facebook’s quarterly revenues. Latest addition to the club is Twitter which is now doing 88% in mobile (of the total advertising revenue) up from 60% in 2013. Even traditional players like Hertz, Sears, and Starbucks are generating meaningful revenues from mobile. There are now dozens of such players and the list is just growing. (for more discussion on the topic please see: “Mobile 4th Wave: Evolution of the Next Trillion Dollars”)

· In 2014, we are also seeing continued investments from the operators especially AT&T, Verizon, and Sprint in non-traditional segments like home security, healthcare, insurance, automotive, enterprise mobility, advertising, and security, and others. Collectively, this is already a multi-billion dollar business in the US.

· The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.

· Verizon reported $585 million in 2014 up 45% from a year ago. At the current run-rate, this will be a billion dollar business by 2016.

· AT&T reported 2.8M connected car connections and 140K home security connections. The connected car segment is clearly on its way to becoming a billion+ dollar business for AT&T. Connected cars accounted for 62% of the connected devices for AT&T.

Connected Devices

· Connected devices (non-phones) accounted for almost 52% of the net-adds in Q4 2014. This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net-adds for the phone business is tapering off and we can expect that new net-adds will continue to be dominated by the connected devices segment.

· For AT&T, Connected cars started to form a significant base of the connected devices segment with 62% of the new connections in the segment coming from cars.

Handsets 

· Smartphones continued to be sold at a brisk pace accounting almost 95% of the devices sold in Q4 2014. Within the next two years, the feature phone category will practically be extinct in the US market.

· The smartphone penetration in the US is now at 75%.

· After ceding the lead to Android for the last three straight quarters, iOS roared back to reclaim the lead with 54% share of the smartphones sold. For the year though, Android edged out iOS.

· Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 67M making it the leading LTE operator in the world (this year China Mobile will overtake Verizon to become the number 1 LTE operator by subscriptions). Other three operators are also deep into their LTE deployments. Verizon reported that 84% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen in the US wireless industry.

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 May 2015.

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

5G: The history of the future February 18, 2015

Posted by chetan in : 4th Wave,5G,Connected Intelligence Era,Fourth Wave,Internet of Things,IoE,IoT,Mobile Applications,Mobile Future Forward,Technology Cycles,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

5G: The history of the future

– Chetan Sharma

Note: This piece is based on an upcoming research paper on 5G

Over 50% of the world’s LTE subscribers are in the US right now. With aggressive 4G deployments aided by the thriving application ecosystem, US wrestled back the leadership mantle of the mobile world. While consumers are enjoying their mobile broadband devices and services, chatter around 5G has begun. Some new to the industry might be perplexed by all the talk of a technology cycle that is years away. However, if we study the 35 year old history of the mobile industry, things are going according to the plan.

All the major mobile markets have started to focus on defining 5G and the subsequent launch dates. Even Europe, which still has a long way to go before their 4G networks are built out have set their sights on 5G to recapture the mantle and the pride of the GSM days. Korea and Japan led the world in 3G but lost the lead of 4G to the US. They both are eager to be considered leaders in 5G. Japanese government has set the ambitious goal of having 5G by the Tokyo Olympics in 2020 (Russia wants to do it by 2018 for the FIFA World cup). US regulators have also started to talk about 5G and the future spectrum needs as well.

Students of the industry will observe that these network technologies evolve over a 20 year cycle. In general, the time to peak (the point where the net revenues for the technology peak and start dropping) is generally slower than the time from peak to sunset. This is primarily because as the last generation is peaking, investments and roll-outs of the new generation of technology starts thus taking away the share at a faster pace. On an average, the time-to-peak has been 12 years while the time from peak-to-sunset has been 7 years. Obviously, there are shifts in different countries depending on spectrum auctions; competitive dynamics, investment availability but they largely follow the 20 year cycle. For each of these 20 year cycles, the R&D and standardization time period of 7-8 years typically precedes the first major deployments of the network technology. So overall, these are big cycles of 25-30 years from initial concepts to the last subscription getting off the network technology. The research work for 5G got started in 2012 and we might have our first networks by 2018-2020.

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While there is no consensus yet on what 5G will feel and look like, there is some agreement on the types of performance criterion that are worth considering. Some of the performance goals for 5G under discussion are:

· Average – 300-500 Mbps and > 10 Gbps

· < 1 ms latency

· (Almost) 100% network coverage

· 1000 times reduction in power consumption

· Very high reliability in all circumstances especially indoors (99.999%)

· Deep indoor coverage (+20dB)

· 30x higher device density

· 10-100x connected devices

· Significantly higher security requirements

The first four generations have largely followed the same business model that of “metering.” The operator typically invested in assets such as spectrum, network build out, operational capacity, etc. and then built the business based on the usage. In the early days, it was more of a linear model with tight correlation between the usage and the cost of the usage but as the markets matured, the past revenue curves melded into the new ones. That’s the reason voice and messaging are offered as unlimited packages designed around the data services.

Will 5G offer new business models or explore a different relationship between usage and cost? Will consumers warm up to the idea of value-based pricing? Or Will access just become a commodity layer like water and electricity and most of the value will reside in the platform and application layers? Though we have started to see the shifts, how fast will future accelerate? Will the ecosystem landscape be markedly different than what we have in place today? We will answer these questions in due course.

Another important question for the industry will be around the control points. From 1G to 3G, the industry clearly revolved around the operators. Almost all of the revenue in the industry flowed through the operators and they controlled in excess of 75% of the industry revenue. However, primarily because of the broadband capability of the networks, the emergence of the powerful computing platforms in iOS and Android, and very powerful computing devices, the picture in the 4G era is changing. We estimate that the overall control of the industry revenues by the operators will shrink to 50% or lower within the next 5 years. This doesn’t mean that the operator revenues will decline in aggregate, they will continue to increase 1-3% globally but the ecosystem is growing much faster and as such the operator share will decline.

With 5G, it is very likely, that a highly distributed application and services ecosystem will become the dominant industry source of revenue around which rest of the mobile solar system will evolve. The tectonic shifts are likely to result in fewer mobile operators in the 5G technology era. Most of the countries will have 2 or 3 major operators. Given that so much mobile traffic is indoor, we will see the wireline and wireless operate merge at a frantic pace in the next 5 years. Many will also become content owners, banks, and might even operate car companies. On the flip side, we might see the rise of non-traditional MVNOs wherein vertical industry players will bundle in IP access with their services.

The noise around 5G will only grow louder in 2015 but it is normal. All mobile network technology evolutions have gone through the same cycle in the last 35 years and 5G will be no different. However, the ecosystem and the control points in 2025 are likely to look markedly different from the first three cycles. Tighten your seat belts and enjoy the ride.

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.

Chetan Sharma is the President and CEO of Chetan Sharma Consulting – a global management consulting firm focused on the mobile space. Chetan has been in the industry since the 1G days and is often found working with clients around the globe on strategies applicable to 4G, 5G and beyond. He is an author of over a dozen books and over 150 papers/articles on wireless. @chetansharma

Mobile Breakfast Series Recap: Mobile Commerce and Payments

Posted by chetan in : Mobile Breakfast Series,Mobile Commerce,Mobile Payments,The Golden Age of Mobile,Wireless Value Chain,Worldwide Wireless Market , add a comment

We hosted our first event of the year yesterday and were blessed with some terrific weather and views of the picturesque Puget Sound. This year we want to tackle the topic of mobile commerce and payments. In our annual predictions survey for 2015, Mobile Payments emerged as the breakthrough category for the year. Additionally, mobile commerce is just booming in all parts of the world with some very interesting implications for the ecosystem.

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One of the metrics I use to track progress in any segment is the number of $1B businesses being created each year. In 2012, there were only 9 companies mostly large enterprises like AT&T, Apple, Google, and Amazon that had > $1B digital businesses. However, in 2014, this number jumped to 37 with several new entrants – from known brands like Twitter, Walmart, and Xiaomi but several companies unknown to the western world like WeChat, FlipKart, Otto Group, GungHo, Suning Appliance, and others. While most of the concentration of digital wealth in the US, China is emerging very strongly as a player to reckon with. In fact, how China and US companies interact and play will perhaps define the next 10 years. While other economies like India, EU will play a role, I find China and US to be the most fascinating.

We had a terrific group to discuss the mobile commerce and payments trends, folks who are in the trenches making things happen on a daily basis and come to the problem from different angles.

Sebastien Taveau, VP and Chief Developer Evangelist, MasterCard

Sebastien serves as Chief Developer Evangelist for the Open API team at MasterCard where he leads the outreach to the global developer community. Puzzle solver, strategic thinker, beyond-the-horizon watcher and hands-on doer, Sebastien has technical and professional experience spans more than 20 years in various industries. He was previously with Validity as CTO and Paypal leading the technology integration efforts.

Prat Vemana, VP – Mobile and Commerce, Staples

Prat leads Staples’ eCommerce product teams responsible for the online customer experience (CX) on desktop, mobile and retail-store digital interactions. He also manages global shared services teams for onsite search, user experience research, architecture, A/B testing and analytics. Prior to his current role, Prat lead Staples’ Velocity Lab in Cambridge and drove the company’s global mobile strategy. Prat’s product and CX teams operate out of the company’s corporate headquarters in Framingham, Massachusetts and Staples Labs across the country, including Cambridge, Seattle and San Mateo.

Sam Liang, CEO and Co-Founder, Alohar Mobile

Sam Liang is CEO and Co-Founder of Alohar Mobile. Previously, Sam was the platform architect and lead of Google Location Server and API, which powers thousands of mobile applications on Android and iOS. Sam held a number of patents in wireless and mobile technologies. Sam has a Ph.D. in EE from Stanford University. Alohar was acquired by Alibaba, now the 4th largest tech firm on the planet.

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(Source: Alohar Mobile)

The salient points of discussions were:

We covered a range of topics. Mobile Commerce is driving the 4th wave for sure with so many interesting ideas and companies popping up every month. As usual, I had a lot of fun moderating the panel and engaging the audience. Thanks to all who joined and we will be in touch regarding future events. For now, we are expanding the breakfast series to Vancouver where we will host an event on April 14th and our Mobile Future Forward annual summit will take place on Sept 29th. Stay tuned for more announcements.

Thanks and see you around.