Mobile Predictions 2016

Mobile Predictions 2016

Mobile Predictions 2016

http://www.chetansharma.com/MobilePredictions2016.htm

 

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A very happy, healthy, and prosperous 2016 to you and your family. Hope you had a good holiday and area ready to take on the new year with vigor and purpose. My thanks to all who participated in our 9thannual Mobile Predictions Survey. It is a unique polling of the insiders to get a glimpse into what the ecosystem is thinking about the future.

As I have mentioned before, we are entering the Connected Intelligence Era and the mobile industry is growing beyond its traditional borders to transform every vertical industry and by extension – the global GDP. Proof is in the numbers. 7 Zettabytes of digital information created. 1.3 billion smartphones sold. 31 Exabytes of mobile data traffic (which btw will grow 15x+ in the next 5 years). 72 million wearables sold. 16 billion connected devices. Almost half trillion dollars in data revenues. Quarter billion dollars in OTT revenues. At least 62 companies generating a billion or more from 4th wave. At least 8 companies generating a billion or more from IoT.

The improving economy empowered consumers to spend more. Europe is starting to come out of the 2008 recession. Asia is on fire. Any slow-down in China has been picked up by startups in India who are transforming the commerce landscape. Even remote islands like Tonga are LTE-enabled and citizens everywhere have access to high-speed broadband networks. Affordability remains a key issue to address to bring in the next billions into the fold.

IoT emerged as a big category last year and we are just starting. While the potential is unlimited, industry needs to come together on a number of issues around fragmentation, security, policy, and privacy. The fact that we are selling more non-phone devices than phone devices on cellular networks in the US should be a hint of things to come. 2015 saw a wave of consolidation and we will continue to see stronger player get more aggressive this year across domains which is very exciting. We passed the mid-point of this decade and most certainly, the next five years are going to be full of action, surprises, and transformation. Stay with us and we will keep you posted.

We do our annual survey to engage our knowledgeable community on trends and events to keep an eye on. The composite view gives a glimpse into the future scenarios. Executives, developers, and insiders from leading mobile companies and startups from across the value chain and from the around the globe participated to educate us on what to expect of 2016. The survey draws upon the unique collective wisdom of the folks who are making it happen. Thanks for being part of the annual ritual.

25 names were randomly drawn for the limited edition of the Mobile Future Forward 2015 book and they have been notified. Congrats.

Welcome 2016!

Kind regards,

Chetan

What was most newsworthy in Mobile 2015?

2015 was a year of change in the mobile industry. The rise of Uber and its ilk are transforming traditional decades old industries in front of our eyes. T-Mobile’s impact on the mobile industry was felt far and wide and these two ended up being our top two stories of the year. Closely followed the continued rise of connected devices, IoT, and the mobile revenues around the globe. The emergence of Chinese players on the global platform is shifting things around. Apple’s tussle with Samsung subsided in the back pages of 2015.

What will be the biggest mobile stories of 2016?

2015 saw the launch of Google-Fi, 2016 might see the expansion of the concept by other players. Connected devices of all shapes and sizes will continue to transform the ecosystem and consumer mindset. We might see new experiences in VR and flexible displays introduced this year. Spectrum auctions and regulatory tussles will be a key story in 2016. Apple car rumors will continue. Mobile commerce growth in India was a big story in 2015 and will continue to only become more dominant this year.

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

Apple and Google continue to be the top 2 most important players in the mobile ecosystem. The biggest shift was that Facebook replaced Samsung at number 3 and Operators consolidated their position at number 4. There are 5-10 global operators who are influential in the direction of the industry. Will Samsung make a comeback in 2016 under the new leadership remains to be seen and will be the story to watch this year. While Microsoft ranked low, 2015 saw a shift from its failed strategy something we have advocated for many years. Can it recapture the love of the developers? It will be key to its future role in the ecosystem.

What will be the breakthrough categories in mobile in 2016?

For the second year in a row, Mobile Payments was voted as the key category for 2016 followed by Big data and analytics, Enterprise IoT, Connected Devices, and Mobile Security.

What will be the most popular consumer mobile applications in 2016?

Mobile applications are transforming many industries and 2016 will only accelerate this trend. Amongst the most popular app categories: Mobile Health and Wellness, Location Based Services, Mobile Payments and Commerce, Messaging which could emerge as the next major mobile OS this year, social and IoT.

Who will dominate the mobile payment/commerce space?

The introduction of Apple Pay last year shifted the long held view that Financial guys will dominate the space. However, the enthusiasm seems have subsided and the Visa and Mastercards of the world are back in the driver seat. Apple will continue to play an industry defining role. Operators have largely been marginalized mostly due to self-inflicted strategy blunders. Google could have played a more significant role but is operating on the edges. Amazon and Facebook can be disruptors in the space but so far haven’t shown must gusto to shape the industry.

Who will make the biggest mobile acquisition in 2016?

Google continues to be the player that startups and investors hope will help make their payday. Significant service provider M&As are also on the cards as they were in 2015. Facebook is perhaps the gustiest acquirer. Microsoft looking to stay relevant in the ecosystem is likely to be bolder and more strategic in its acquisitions in 2016.

Who is doing the most interesting work in the IoT space?

We are in the early phases of the connected intelligence era and startups seem to be doing the most interesting work in creating new solutions, hardware, and services. However, the big boys are investing heavily as well. Google, AT&T, GE, and Intel all are putting in a lot of resources and for some of them, IoT is already a multi-billion-dollar business. We expect several acquisitions in the space throughout the year.

What protocol will dominate IoT communications?

There is a race to dominate the IoT communications protocol layer. The emergence of Sigfox and Lora is similar to the introduction of WiMax which failed but played the role of rallying the GSM players to work on LTE. Similarly, NB-LTE has been rushed and positioned to address the IoT opportunity. In the absence of any widely adopted protocol, WiFi continues to dominate the remainder of the IoT industry and is likely to play a very important role in the coming years.

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

WiFi continues to play a very important role in handling mobile data demand. 70-80% of the consumption these days in most developed markets is taking place over WiFi (and hence fixed broadband). This hasn’t dampened the demand for cellular data though and it continues to increase albeit at a lower rate. Alternate business models like sponsored data and 5G have started to enter the conversation and we expect more discussion on the subject this year.

Which category will generate the most mobile data revenue in 2016?

The revenue trends are following the expected trajectory. Mature mobile markets have revenues divided between apps, access, OTT, and advertising. In the emerging markets, messaging (including SMS) still plays an important role though access is starting to generate some serious revenues for almost all mobile operators around the globe.

Which region will end up leading the world in 5G by 2020?

4G has been dominated by North American operators. There is a real race underway to take the honors for 5G. The collective wisdom right now is that Korea will end up kick-starting the 5G deployments though Verizon the US has stated its intention to be the leader. Europe and China also have several initiatives to make their mark in the race to 5G.

When will mobile commerce be greater than ecommerce?

We are at the tipping point in North America and Europe with Asia close behind.

The company bringing the most successful mobile gadget of the year – 2015 and 2016?

Since the introduction of the iPhone in 2007, Apple continues to dominate the race. Though 6s didn’t have as great of a reception as 6, it was enough for Apple to once again take the honors for the year. It is expected that while others will make some minor gains, Apple is again going to dominate in 2016.

Mobile company of the year – 2015 and 2016?

Besides Apple, Uber and Facebook really excited the industry – Uber with its breathtaking valuation curve and Facebook with its impressive revenue curves. T-Mobile with its many un-carrier moves shaped the US market decisively and unseated Sprint at #3 for the first time. The big two also had to respond to the pricing changes that TMO introduced. Operators beyond the US borders were also impacted as the tier-2 operators tried to copy TMO moves in their respective markets. AT&T with its heavy investments in the connected intelligence space is likely to make news in 2016. Google will continue to be an important player. The new corporate structure might help the company to be more aggressive. Amazon continues to be a juggernaut in the mobile commerce space – bigger than anyone else and with its complete hold over the consumer psyche, it will make further gains in the space.

Automation and Digitization of industries will lead to?

This is still an early area of discussion. We are still trying to understand how societies will be shaped by automation. Will past provide any guidance or are we unchartered territory. Arguments can be made on both sides. We continue to study the data points to inform our view on the subject. Opinions haven’t changed much since last year though there is a slight uptick in the number of people expecting automation to impact them negatively.

Which of the following are likely to happen in 2016?

Apple didn’t reach the trillion-dollar market cap but remains on course though 2016 could be a challenging year for the company. Wall Street has lofty expectations from the company that continues to defy expectations with its monstrous revenue and profits each quarter. It is a company unlike any other on the planet and remains a subject of intense curiosity amongst industry participants. Last year, the survey predicted Amazon opening a retail store which the company readily obliged. Data-only smartphone plans will start to become common. Some benevolent acquirer will end Yahoo’s misery run. Sprint and T-Mobile will continue to be the subject of M&A speculation. 5G marketing drama will intensify. Microsoft might make a comeback in devices. 2016 will keep us on our toes with its many unexpected turns and tribulations.

What category will be impacted the most by mobile in the next 5 years?

IoT, Home Automation, Health and Wellness, and Autonomous Cars are the most exciting categories for the year.

Which segments are likely to get disintermediated the most by algorithms in the next 5 years?

Algorithms can disintermediate a lot of industry job segments. At the highest risk are advertising agencies, transportation, real estate agents, retail, and car drivers. Fascinating trends to follow.

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

In the past executives from device companies have dominated the top honors. However, the mobile person of the year for 2015 was John Legere (first time someone at the mobile operator took the honor). With his colorful persona, he has reshaped the industry in many ways. Tim at Apple, Mark at Facebook, Sundar at Google, and Jeff at Amazon rounded out the top 5. The stars for 2016 are predicted to be Sundar Pichai, Tim Cook, Jeff Bezos, Mark Zuckerberg, Satya Nadella, and Jack Ma. Honorable mentions went to Lei Jun, Travis Kalanick, Masayoshi Son, Ralph de la Vega, Glenn Lurie, Marcelo Claure, Tom Wheeler, Steve Mollenkopf, Jony Ive, Nikesh Arora, Brian Krzanich, and many others.

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 Feb 2016.

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