Just as there is no “year of electric cars” or “year of razor blades” or “year of the Greek yoghurt,” there is no “year of mobile”, writes Chetan Sharma, CEO of Chetan Sharma Consulting.
However, as we have seen over the 30+ years of mobile evolution, the next year is always better than the previous one and so on and so forth. So, 2013 ends in the long tradition and continuum of human endeavour to make significant progress in multiple mobile dimensions and make an impact on individuals and societies alike. 2013 proved that connectivity has become the core of our fabric and we are entering the “connected intelligence era” that will enable the ‘Golden Age of Mobile’.
So in no particular order, here were some of the highlights of mobile 2013 as we saw them…
Number of mobile subscriptions to trump number of humans
The total number of mobile subscriptions got tantalizing close to the number of humans on the planet. Next year, we will go past the milestone,but it shows the pervasiveness and strength of the mobile technology that it has become the basic part of our Maslow’s hierarchy.
More data please
As smartphones approach the 2bn mark, the data appetite of consumers showed no signs of abating. In Sweden, mobile broadband subscribers are consuming over 7GB/month. In the US, some Android devices are consuming over 4 GB/month on average. Operators will need to continue to refine their pricing and margin models as the demand for more spectrum continues.
Mobile’s impact on commerce
Mobile is changing every industry, but its impact on commerce is particularly notable. In the 2013 holiday season (according to IBM), mobile made up 17 per cent of the online sales, increasing over 55 per cent from 2012. Tablet users spent $126/order.
The meteoric rise of mobile apps
In 2010, we evaluated the impact mobile apps will have on the industry. Much of the growth has been expected, however the players who lead in revenue and downloads have fluctuated across the various platforms. In 2013, Google started to match Apple in downloads, though Apple easily wins in the revenues category and thus still remains more attractive to developers, though the gap is closing.
The dominance of Samsung and Apple
The tussles in the device segment have all the intrigue and juxtaposition of a Shakespearean drama. Through sheer muscle tenacity and the execution speed of Usain Bolt, Samsung was able to firmly dominate 2013, despite Apple’s grip on the high-end smartphone market. These two account for almost 50 per cent of the smartphone shipments and almost all of the profits in the space.
Apple continued to set the tone for the market with the launches of new iPhones and iPads. Though iOS trails Android in raw deployment, it trounces it in consumer usage. It is also remarkable how quickly consumers upgrade to the latest iOS in stark contrast with the Android fragmentation. And 2013 was the year in which Apple finally got access to the big Chinese market.
The disappearance of the legacy device brands
Nokia, Motorola, and RIM were dominant players a few years ago, but Apple ensured the smartphone script was rewritten. They all made serious strategic errors one after another and while Nokia and Motorola have found new families to host their aspirations, their stories should be a reminder of the turbulent cycles of the device business, and that the complacency virus spares no one. The rise of the local OEMs should keep everyone on their toes in 2014.
In 2013, Android continued to create distance with Apple in terms of downloads, easily going past the mind boggling 1bn milestone. Android has changed the industry for the better. While there is trouble in the house, Android will continue to play a major role in the device and app ecosystem in 2014.
The growth of OTT services
As we discussed in our 4th wave paper earlier this year, OTT Services will be the biggest growth segment for the next decade. In 2013, the segment grew 50 per cent ahead of any other telecom segment. Young IP messaging stalwarts fundamentally altered the messaging landscape, with Whatsapp performing exceptionally. SMS usage and revenue numbers were impacted worldwide.
The digital revenue streams are widely distributed among diverse players such as Facebook, Twitter, Starbucks, Expedia, Uber, Pandora, Amazon, AT&T, Telefonica, Verizon, DoCoMo, Netflix, China Mobile, Rovio, Square, Softbank, Ebay, Hertz, Apple, Google, and Microsoft. In our work with players around the world this year, it is clear that there is significant energy and application in mining the opportunities on the 4th wave. With nascent efforts in Bhutan, Vietnam and Malaysia to moonshots in the US and Europe, mobile is rewriting the rules in virtually every industry. Fasten your seat belts for another fast-paced year in 2014.
Post-PC beat PC+
Apple expertly wrote the post-PC narrative, and while the PC+ crowd has a legitimate argument, perception is often reality and there in no doubt that from here on out, the industry will be talking about the post-PC world in one voice. Even Microsoft will grudgingly admit to the transition and likely shift its strategy accordingly. As we wrote a long time ago, tablets have fundamentally altered the computing paradigm.
In our SMB research released earlier this year, it was clear that smartphones and tablets are the tools of choice for the enterprise and that this not only altering the device business, but also the software landscape. Mobile broadband, the cloud, and the applications are altering the enterprise – big and small. Microsoft should take solace from a tough year of progress. Blackberry is practically done and Microsoft has established itself as the distant but a viable third mobile ecosystem. Had it not been for a series of strategic mistakes, Microsoft might have made better inroads in 2013.
LTE is the fastest growing generation of cellular technology in the history. With over 250 networks launched, the desire to launch IP networks quickly is top of the agenda. The US leads, with all major operators having substantial LTE deployments, but other nations are fast catching up. While there has been quite a bit of focus on LTE, wi-fi has been emerging as the white knight, and its importance only grew in 2013 with 60 – 70 per cent of mobile data traffic being carried by wi-fi networks in most countries. It might lead to some interesting business models in the coming years. 5G entered the industry lexicon in 2013.
It is natural for fast growing and competitive industries to consolidate. 2013 wasn’t any different. There were some blockbuster and expected M&As: Microsoft acquired Nokia, Softbank surprised with the Sprint/Clearwire acquisition, Verizon finally got hold of its destiny from Vodafone. As we have eluded to several times in our past research notes, we expect the global M&A to continue, with several blockbuster deals slated for 2014. Stay tuned.
Regulators are generally always behind in understanding a fast-growing industry. It was clear in 2013, that the convergence of the computing and communications world has left the regulatory world woefully short of expertise and imagination. Governments around the world will do better by hiring professionals from the industry to get a grip of the fast-paced, ever-changing dynamics of the mobile world as the very competitiveness of a nation depends on it. From spectrum to privacy, from competition to commerce, regulators need to get up to speed on unexpected trajectories of the new world.
Security and privacy
From Snowden revelations to industrial espionage, from credit card data loss to enterprise security, the security and privacy of mobile data, applications, networks, and devices became front and centre of the security and privacy debate.
The promise of M2M and connected devices has been there for some time. Internet of Things has morphed into the gimmicky Internet of Everything. While the hockey stick curve hasn’t arrived yet, there was plenty to celebrate, with the introductions of Google Glasses, wearables, smart watches, connected autos, glamorous thermostats, winking light bulbs, home security and energy management solutions and much more. GE is spending billions for its ‘Industrial Internet’ initiative. A nice platform has been set for continued feverish growth and product introductions in 2014.
There was much more
Twitter IPO, Surface, Moto X, spectrum scandals, Facebook’s love for mobile, Google mobile advertising dominance, the rise of the Chinese OEMs, the decline of HTC, and several other events captivated our attention.
I am positive that 2014 is going to be another terrific year for mobile. The progress and surprises will come from all quarters. New players will emerge, new business models will take hold, and we will take a significant step forward in the new year. I am also sure that you all will do your part in shaping the mobile cosmos.
Chetan Sharma is CEO of Chetan Sharma Consulting