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First things first. From all of us at Chetan Sharma Consulting, wish you
and yours a very happy and prosperous 2009.
Before we get into
what's to come, let's do a quick wrap-up of the year that was.
While 2007 was remembered as "the
year of the iPhone," in 2008, though iPhone and Appstore
again dominated the headlines as "Touch" became the new black, iPhone
shared the spotlight with Android and the resurgent RIM. The deafening
roar of "Openness" that started to bubble up during Q407 permeated the
ecosystem in 2008. Responding to the iPhone, OEMs raced to introduce
Touch phones - Instinct, Armani, Storm, N2, Glimmer, Vu, G1, Diamond,
Dare, N97, 5800, and others.
Apple reached its
10M goal a full quarter early and Gphone's 1M number was impressive. The
Clearwire deal was consummated though it meanders through the clouds of
uncertainty. Blyk continued to defy expectations.
made significant headway in energizing the mobile advertising sub
segment but the tough problems of privacy, education, control,
fragmentation, and user experience remain. LBS picked up steam and
mobility started to get into the alternate consumer device universe
which with the help of Amazon kindle and PNDs have started a new chain
of AORTA devices.
of actual numbers, the mobile industry exceeded 1 Trillion USD in
revenues for the first time with services revenue making up 80% of the mix
and 20% being contributed by infrastructure, handsets, and misc.
Several operators are now exceeding $2B/quarter in data revenues.
Several subscription milestones throughout the year: 50% penetration,
almost 4B worldwide, 600M China, 300M India. India and China both added
more than 100M subs in 2008. As expected, 3G crossed the inflection
point in the western markets (30%+ penetration) while in Korea and
Japan, it was getting hard to find people without 3G (85%+ penetration).
Mobile web penetration is above 25% and is becoming quite significant.
Thanks to the iPhone, we seem to have settled on sub-$200 smartphones
with race to $150 and $100 on the cards. Flat-rate data subscriptions
went above 10% in the western markets. Over 20% of the global service
revenues are not dependent on data while non-SMS revenues surged past
40%. With the advent of Femto and UMA, we might see a new front in the
battle for the digital home, esp. as bundling and quad-play offers
become common place and convergence starts to take different shapes,
forms, and business models. Carriers are starting to worry about mobile
data usage and looking for alternate strategies and business models.
Chinese OEMs started to become more dominant and started to win some
major accounts. Don't be surprised by a major acquisition by them in 09.
Among other events of significance: Mobile TV
continued to suffer from highpricendititis, Helio shut down, China and
India delayed 3G, WM got updated as MS got behind, Yahoo cemented some
impressive operator deals as GYM got more active in mobile, Microsoft
entangled Yahoo in a mating dance, Mobile Open got into the industry physce, 700 MHz auction drama ensued,
Beijing Olympics rocked, SMS handed the presidency to Obama, Whitespaces and FCC tangled, LTE
dominated, UMB died, Admob exponentiated, M&A slowed, IP scuffles
continued, over 1.2B new devices shipped, Nokia sold more than 100M
devices in each quarter, Samsung surged, Motorola pondered, AT&T iJoyed,
Vodafone said Namaste India, US edged past Japan in mobile data
revenues, DoCoMo continued to dominate the mobile data revenues
rankings, India edged past US in total mobile subscribers, Mobile
Facebook spread, Twitter tweeped, Symbian went open source, Sequoia
panicked, INQ launched, Economy tanked, WalMart started selling iPhone,
Palm got a lifeline, Change was in the air.
We covered these is much detail in our
regular industry research notes,
blog posts, speeches,
panels, and more. Look forward to continuing the conversation this year.
also be a pretty eventful year from several perspectives: business
models, user experience and expectations, ecosystem posturing,
disruption, and friction. How are things going to shape up? What will be
hot and what will fade into oblivion? How will competition shape up the
some of the questions to our colleagues in the industry. We
were able to glean some valuable insights from their choices and
comments. This survey is different from some of the others in the
sense that industry movers and shakers participate. Executives and
insiders (n=200) from leading mobile companies across the value chain
and around the world opined to help us see what 2009 might bring.
names were randomly drawn for one of our three books released in 2008
(Mobile Advertising, Enterprise Mobility and Wireless Broadband)
The winners are:
Akio Orii, CFO and VP, Toyota
Declan Carew, New Product Strategy
Helen Keegan, Consultant, Beep Marketing
Rich Begert, CEO, Singlepoint, and
Russ McGuire, VP, Sprint Nextel
Jonathan Ebinger, General Partner, Blue
Congrats and Thank You.
Now onto the survey results. The makeup
of the respondents below:
Will we see a pull-back in mobile data spending globally/in the US?
The wireless data industry has been somewhat unharmed so far (though
OEMs and Infrastructure providers are bearing the brunt of the economic
storm). Flat rate pricing, smartphones, 3G networks, better UX are all
helping in the continued surge of mobile data consumption and hence
revenues. Most expect that though we might see some scaling back in
mobile data spending, overall, the growth will continue. The global
markets will be slightly better off than the US.
Will Android handset sales exceed iPhone’s in 2009?
The overwhelming majority thought that iPhone will continue to dominate
Android in 2009 though 2010 could be a different story. Android has had
a good start and if the number of handsets keep on increasing with more
carriers carrying it in more countries, Android might not exceed but can
come awfully close.
Mirror, Mirror on the wall, who will be the most open of them all?
"OPEN" was the biggest buzzword of 2008 though it means
different things to different people. Almost everyone thinks, Google is
likely to set the agenda on "open" for others to follow.
Will Apple launch new iPhone models in 2009?
The answer is yes but will they be just minor upgrades or
shake-the-market new models. With Android, Nokia, and RIM breathing down
its neck, Apple will need more than just upgrades to maintain the limelight.
Will Mobile Advertising see a rise in ad-spend in 2009?
There might be some slow down but mobile advertising ad-spend will keep
Targeting capability is increasing and CPMs are coming
down making for a more efficient mobile channel for advertising.
In our own work, we have seen brands fall into two camps: one who
are scaling down on inefficient channels like print and radio and moving
money into digital including mobile and the others who don't have quite
the appetite for mobile and want to keep investing in channels that they
are most familiar with.
Will India and China launch nationwide 3G in 2009?
After many years of delay, the two powerhouses set to launch 3G in 2009.
China with TD-SCDMA/WCDMA and India with WCDMA are set to doll out some
of the largest contracts seen in the industry.
Will Mobile Payments get any traction in North America and Western
The plans for mobile payments launch will get pulled back a bit due to
the economic crisis. Limited rollouts and trials to continue. Some
progress will be made in international mobile remittances.
Will Microsoft launch its own mobile phone?
Will they, Won't they? How can they not? The probability increased from
last year for an Mphone coming to a store near you. But, with the
boeingification of Microsoft, it is hard to get any decisions to the
Will Clearwire meet the 1.3 million subscriber target in 2009?
The economic climate might force slow-down of expansion and thus the
optimistic subscriber forecasts could be impacted.
Will Mobile Open Source mitigate fragmentation?
Not a clear cut answer. Depends on how other versions of Android phones
do in the market and if the application development remains a challenge
across the Android and Symbian family of devices.
Will cable companies make a major play in wireless in 2009?
Quad-Play is the name of the game. Cable companies have invested
half-heartedly thus far. 2009 might be the year they move in
Will Microsoft buy RIM?
RIM has become too big and powerful to be consumed by
Microsoft easily but desperate times call for desperate measures.
Will Obama’s administration have a major impact on network neutrality
and open networks debate?
Not a priority for now. No high expectations, just regular bureaucratic
Will carriers start launching Apple/Android style appstores?
Opinions remain divided. I think most are tempted to build but will
outsource the development.
Will Microsoft make windows mobile free to OEMs?
Android (and to some extent Symbian) has pushed Microsoft in a corner. Will it preempt
the demise of its pricing strategy? Reduction in price might be the
safest bet at this time.
Will the smartphone penetration hit the inflection point in the western
We are getting to that inflection point. 2009 seems to be the year with
major implications for the ecosystem.
Will UMA/Femtocells cement their place in the mobile ecosystem?
As 3G networks get burdened by data usage, carriers will look to making
UMA and Femtocells as a critical piece of their network strategy
Will consumer privacy and data security rise to be one of the important
issues of 2009?
Privacy? What Privacy? Another celebrity mishap might
pull this issue to the front burner.
Despite conventional wisdom, what will not happen in 2009?
There were many. Sampling - Microsoft will not buy Yahoo. US Cellular
will not be sold. Global economy will not recover in 2009. LTE won't be
commercially deployed. India and China will struggle to get substantial
progress with 3G. Motorola will not breakup. Nortel will not disappear.
2009 won't be the year of mobile advertising.
It is hard to cover the mobile industry in 20
questions. As pointed out by our panelists, there are a number of other
issues and opportunities that will help shape our ecosystem -
monetization of social networks, the fight for mobile advertising
dollars, continued impact of globalization, security and privacy, NFC,
IMS, VoIP, enterprise apps beyond email, battery improvements, new
interaction modalities, health risks of RF radiation, OpenSocial, GF/FB
Connect, Comes with Music, Mobile Widgets, Mobile 3.0, LTE, MIDs,
Off-portal, Embedded Mobile, M2M, and others.
However, be rest assured, we will be tracking
these and much more throughout the year and sharing them through various
Thanks again to everyone who contributed. We
will be calling on you again next year. We are clearly living in
"interesting times" with never a dull moment in our dynamic industry. It
has been a terrific year for us here at Chetan Sharma Consulting and we
are looking forward to 2009 and seeing many of you along the way.
Your feedback is always welcome.
Disclaimer: Some of the companies mentioned in this note are our clients.