Mobile Breakfast Series is
a quarterly event that brings together thought leaders and
visionaries from the global mobile industry to interact and share
ideas, insights, and best practices with the entrepreneurs,
enthusiasts, and others who are passionate about mobile. The next
event is on March 10th, 2010 with keynote from
Rob Glaser,
CEO and Chairman, RealNetworks
Registration.
Sponsors: Motricity,
Openwave,
WDSGlobal, and
Clearwire
2010 Mobile Industry
Predictions Survey
http://www.chetansharma.com/MobilePredictions2010.htm
Mobile Predictions Survey (pdf)
Mobile Predictions Survey (ppt)
First things
first. From all of us at Chetan Sharma Consulting, we wish you and
yours a very happy, healthy, and prosperous 2010. Thanks to all who
participated in our 2010 Mobile Predictions Annual Survey. We have
found it is the best way to think about the trends coming our way.
Before we dive
into the survey results, let’s do a quick wrap-up of the year that
was. Well, since we just completed one heck of a mobile decade,
let’s do a quick jog down the memory lane.
The Last
Decade: 2000-2009
Each new decade
brings its own consumer and technology trends. During the 2000s
mobile cemented its place in the global society fabric, the use of
mobility became addictive and pervasive, to be without mobile seemed
a curse and innovation blossomed and took user expectations to new
heights.
From a pure
statistical point of view, the global mobile subscription
penetration grew from 12% in 2000 to approximately 68% in 2009 -
phenomenal by any measure. The overall revenues grew over 400%, the
data revenue grew 32,600% and the total subscriptions grew 563%. NTT
DoCoMo paved the way with the i-mode launch in 1999 and they were
the operator to emulate throughout the last decade, leading every
single year in data revenues, in new application and service revenue
sources, and in innovation and risk taking. They tried to export the
success to other regions with little reward but DoCoMo clearly led
the industry in taking mobile devices where they have never gone
before.
China and India
were late to the party but during the second half of the decade
caught up with the western world and eventually surpassed all
nations becoming number one and two nations by subscriptions
respectively. In 2006, China Mobile became the most valuable
operator passing Vodafone.
Mobile devices
went significant transformation as well. From the early Bluetooth,
camera, and music phones to the iPhones, the Storms, and the
Androids, the industry was transformed by the introduction of
Apple’s iPhone in 2007. While Bluetooth, sleek designs, camera phone
defined the first half of the decade, the second half was all about
the applications and the mobile web. While Nokia dominated the
entire decade in terms of the sales and profits, having missed the
touch revolution, it leaves the decade a bit battered and a bit
behind playing catch-up to the newcomers who profoundly disturbed
the status quo.
Razr carried
Motorola through 2006 when its global share peaked but was left to
reinvent itself during the second half. It seems to have redeemed
itself with the successful launch of Droid and upcoming Android
devices. While many in the industry predicted RIM’s demise, the
company has only gotten stronger and is looking good for the 2010s.
The emergence of Samsung and LG as strong players in the mobile
ecosystem was also a big story of the decade with Samsung increasing
its share by 380% and LG by 575% becoming the number 2 and 3 players
respectively.
While Microsoft’s
Windows Mobile had an early start and the enterprise market share,
it lost its way through several missteps and is on dialysis as we
enter the new decade. One shouldn’t count WM out though but there is
a lot of work to be done before it can capture the imagination of
the ecosystem which has been sequestered away by iPhone and Android.
While many new
application areas were introduced during 2000s, none was able to
displace SMS as the leading app category by usage and revenues.
However, it’s relative share has started to come down especially in
North America and Western Europe.
As data usage
grew, so did the data traffic bringing many data networks to their
knees. We expect the data traffic consumption to only accelerate.
Many people are underestimating the growth rates (as they did
previously) and the strain the increase in consumption will put on
the unprepared networks. Projector phones will take media
consumption to a new level. Data management is going to be big
business in the 2010s.
Overall, the
mobile industry became a trillion dollar industry in 2008 and the
data revenues are increasing in almost all regions. Voice is being
commoditized at fast pace and that has put the traditional economics
and ecosystem wealth distribution in topsy-turvy.
The US market
also experienced tremendous growth with mobile data service revenues
climbing 21,327% and becoming a mainstay in the mobile economy. In
2008 it crossed Japan as the most valuable mobile data market. US
was late in adopting SMS but caught fire once American Idol started
using it and even played a good role in the 2008 Presidential
election in showcasing the power of mobile. Verizon started the
decade being the number one operator and after trading places with
Cingular and ATT grabbed the title back in 2009 (after the Alltel
acquisition) to become the most dominant carrier in North America.
Many smaller players competed by being innovative with Cincinnati
Bell launching the fist UMA device, Sprint the first mobile eReader,
and TMO launched the hotspot business which has now become an
essential component of an operator strategy going forward.
Mobile is also
replacing landline at a much faster pace than expected and within
the first half of the new decade, we will have majority of the users
using mobile vs. landline. Just like the last decade, this one
starts with a new standard deployment of LTE that will keep
operators and vendors busy throughout the decade. However, a lot of
the developing markets will still be deploying 3G during the first
half of the decade.
Infrastructure
providers suffered the most in the decade bookended by the two
recessions. Consolidation of giants (Alcatel Lucent, Nokia Siemens),
bankruptcies of the famous (Nortel), and uprising of the upstarts (Huawei)
pretty much defined the decade for the segment. Ericsson and Huawei
enter the new decade from a strong position and looking to dominate
the global markets.
The last decade
was also marked by some prominent IP battles such as RIM vs. NTP,
Qualcomm vs. Broadcom, Sony Ericsson vs. Samsung, Upaid vs. Satyam
etc. (disclaimer: we worked on some of these cases and testified as
an expert)
Here is our
“subjective” list of movers and shakers of the last decade
|
|
2000-2009 |
2010-2019 |
|
Operator of the Decade |
NTT DoCoMo
DCM led the way in almost all
new category of apps and services. Its data service revenue
was highest in each of the last 10 years |
DCM will continue to lead
along with KDDI and SKT. However, it might be the carriers
with tremendous scale who will have the calling cards in the
new decade. Watch for China Mobile, Vodafone/Verizon,
Telefonica, Orange, Bharti, Unicom, Singtel |
|
OEM of the Decade |
Nokia
Nokia dominated in sales and revenues in
each of the 10 years and while the last couple of years took
some shine off its glorious past, the company nevertheless
came out ahead |
RIM, Apple, Nokia, Samsung |
|
Smartphone OEM of the
Decade |
Apple
Smartphones as we know them
were introduced by RIM but Apple defined the category and
the subsequent ecosystem |
This space will be very
competitive with Apple still the gold standard to beat |
|
Infrastructure Provider of
the Decade |
Ericsson
Its prime rivals struggled to stay
afloat while Ericsson grabbed most of the revenues from
infrastructure contracts and is very well positioned for the
next decade |
Ericsson is joined by Huawei as the two
top infrastructure provider with Huawei giving tough
competition for LTE contracts. ZTE and other Chinese
infrastructure providers will also replace some of the
incumbents |
|
Nation that led in mobile
data |
Japan
This is a no brainer. Japan
led with Korea a close second. Finland, UK also impressed |
US, China, and India are well
positioned to make an impression but most likely during the
second half. Japan will still be a major player |
|
Device of the decade |
iPhone followed by Razr
iPhone impressed with form and function
while Razr with its global sales making it a top selling
device of all times |
The field might get more crowded as all
OEMs focusing on the smartphone category. However, OEMs who
also focus on the 90% of the market w/o smartphones might
win the top prize |
The year 2009
Apple continued
to dominate the headlines for the third straight year - whether it
was the launch of 3GS or the upcoming introduction of the fabled
tablet. Google too kept the ecosystem active. It has executed on its
mobile strategy with brilliant acumen though causing significant
consternation amongst its partners who it needs to be successful. It
has been often misunderstood by competitors, regulators, and
partners. Often, they have focused on Google’s tactics vs. its
strategy. Look for these two players to be very aggressive as they
try to fight for the mantle and the mindshare.
While Nokia leads
the OEM space by a good distance, its momentum in the smartphone
space left a lot of question marks. Motorola made a credible
comeback with Cliq and Droid. Samsung and LG continued to innovate
and expanded on their share of shipments and revenues.
India outpaced
China in net-adds and crossed 500M though it is still quite behind
China’s 750M. The M&A and the consolidation process became active in
Asia with several of the big regional operators looking to flex
muscles in the international markets. After several delays, China
started deploying 3G while India again fumbled and postponed its 3G
auction.
US mobile data
market continued its pace in 2009 with each of the four quarters
exceeding $10B in data service revenues. The gap between the top two
operators and the rest grew to be the biggest in the decade and the
industry weathered the recession with ease. There was a clear shift
towards prepaid especially for Sprint, T-Mobile, and the tier 2/3
operators.
2009 was also
defined by significant activity on the application front. With
Facebook eclipsing 100M subscribers and Appstore exceeding 2.5B
downloads, sky is the limit.
The year also saw
an unprecedented growth in mobile data consumption. As we had
predicted, for some of the networks, the growth proved to be a
double-edged sword. Many in the industry are banking on LTE to help
relieve the pain but will be surprised that depending solely on the
upgrade strategy will not be enough. Declaring spectrum as a looming
crisis, FCC also started tinkering with the mobile industry and the
broadband plan.
Japan exceeded
90% in 3G penetration while US subscriptions ventured into the 90%
territory. Most of western Europe is way past 130%.
All in all, a
terrific year considering that we went through one of the worst
recessions in a generation. As we bid goodbye to the last decade,
Nexus One and iTablet only serve to whet our appetite of what’s to
come.
On a personal
note, we started our consulting practice this last decade as we were
coming out of the bubble recession and have been fortunate to work
with some of the brightest brains and companies in the global
ecosystem. We also had a chance to work on some key initiatives that
impacted the ecosystem in profound ways. Many thanks to our clients,
colleagues, friends, and readers. We will be involved with many new
initiatives over the next decade and are looking forward to the
conversations through the research notes, books, speeches, panels,
whitepapers, blog posts, facebook and twitter feeds, and more.
Thanks and Happy
New Year. May the upcoming decade leave you happier, healthier, and
more successful than the previous one.
As we eluded to
earlier, 2010 will be a pretty eventful year from several
perspectives: business models, user experience and expectations,
ecosystem posturing, disruption, and friction. How are things going
to shape up? What will be hot and what will fade into oblivion? How
will competition shape up the new sub-segments?
We put some of the questions to our
colleagues in the industry. We were able to glean some valuable
insights from their choices and comments. This survey is different
from some of the others in the sense that it includes industry
movers and shakers participation. Executives and insiders (n=150)
from leading mobile companies across the value chain and around the
world opined to help us see what 2010 might bring.
11 names were randomly drawn for 3
special prizes. The winners are:
-
Claire Boonstra, Cofounder, Layar-
INQMobile 3G Chat device
-
Michael Libes, CTO, GroundTruth -
Open Mobile Book
-
Henri Moissinac, Head of Mobile,
Facebook - Open Mobile Book
-
Subba Rao, CEO, TataDoCoMo - Open
Mobile Book
-
Saumil Gandhi, Product Manager,
Microsoft - Open Mobile Book
-
Sarah Reedy, Senior Editor,
Connected Planet - Open Mobile Book
-
Mike Vanderwoude, VP & GM,
Cincinnati Bell Wireless - 2010 Mobile Almanac
-
Pinney Colton, VP, GfK - 2010
Mobile Almanac
-
Tim Chang, Principal, Norwest
Ventures - 2010 Mobile Almanac
-
Laura Marriott, President - 2010
Mobile Almanac
-
Asha Vellaikal, Director, Orange -
2010 Mobile Almanac
Thanks to INQMobile and my friend Ajit
Jaokar for contributing the prize gifts.
Despite conventional wisdom, what will not happen in 2010?
There were many. Sampling - Verizon
iPhone, Microsoft Phone, Sprint will not be bought, Femtocells won’t
gain traction, RCS will not happen, Google will not enter handset
market directly, iPhone won’t lose steam, Android won’t bring
coherence, NFC won’t take off, WiMAX won’t disappear, Nokia won’t
bounce back, Palm won’t die, “Year of Mobile” noise won’t subside,
carriers won’t be delegated as dumb-pipes.
It is hard to cover the mobile industry in
20 questions. As pointed out by our panelists, there are a number of
other issues and opportunities that will help shape our ecosystem -
monetization of social networks, augmented reality, the fight for
mobile advertising dollars, continued impact of globalization,
security and privacy, NFC, IMS, VoIP, enterprise apps beyond email,
battery improvements, new interaction modalities, health risks of RF
radiation, Mobile 3.0, LTE, single purpose devices, 3G in India,
Bada, app vs web, developer turmoil, featurephones, smart grids,
M2M, Chrome, etc.
However, be rest assured, we will be
tracking these and much more throughout the year and sharing them
through various channels.
Thanks again to everyone who contributed.
We will be calling on you again next year. We are clearly living in
"interesting times" with never a dull moment in our dynamic
industry. It has been a terrific year for us here at Chetan Sharma
Consulting and we are looking forward to the next decade and seeing
many of you along the way.
We hope
you enjoyed gaining from the collective wisdom. Your feedback is
always welcome.
Be well, Do Cool
Work, Stay in touch.
Thanks.
With
warm wishes,
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
Now onto the
2010 Mobile Industry Predictions Survey Results
The panel comprised of movers and
shakers from around the world
You
can checkout 2009 Predictions here
What will be
the biggest stories of 2010?
Jan seems to be
the month for Google Phone vs. Apple Tablet matchup. Our panel
though voted for the continued growth in mobile data as the top
story.
Have we
recovered from the recession? (Please select one)
Majority thought
we are out of it though some might still feel the pinch
Who will be
the most open player in the mobile ecosystem in 2010? (Please select
one)
Google has done a
great job at maintaining its image as THE open leader
Will Android
handset sales exceed iPhone’s in 2010? (Please select one)
Despite Androids
coming in droves, iPhone will still be the king of the hill
When will we
see tiered pricing plans for smartphones in the US from tier 1
operators? (Please select one)
There are
indications that this might happen sooner rather than later
What will
happen to the mobile prepaid subscriber base in the US? (Please
select one)
Prepaid made a
strong comeback in 2009 and a good majority thought that the trend
is likely to continue
By how much
will the mobile advertising ad-spend increase in 2010? (Please
select one)
Mobile
Advertising was the only advertising segment with positive growth
last year so it is no surprise that folks expect it to more than
double this year
What will be
the impact of the FCC’s national broadband plan on the mobile
industry in 2010? (Please select one)
Not much is
expected from the various rulings that might come this year with
most expecting the courts to have the final word.
Who will be
the mobile comeback story of 2010?
Having bet its
future on Android, Motorola was voted as the comeback kid of 2010
What will be
the impact of Google Phone?
It’s pretty
clear, Google and Apple are duking it out for the developer
mindshare. Google wins in either case.
Which areas
will feel the most impact from FCC?
Net neutrality is
the area where they will have the most impact
Which
solutions will gain the most traction for managing mobile data
broadband consumption?
While only a
holistic approach can provide complete relief, tiered mobile data
pricing might have the most impact
When will the
carrier-branded appstores lose steam? (Please select one)
Most expect
carrier-branded appstores to be a thing of the past in 2010
What will help
mobile cloud computing gain traction in 2010?
Mobile cloud
computing is gaining steam and the reason is storage and media
What will be
the most successful non-mobile-phone category in 2010? (Please
select one)
Netbooks seem to
be the strongest category followed by eReaders, Tablet, and M2M
What will be
the breakthrough category in mobile in 2010? (Please select one)
Mobile
Advertising and Mobile Payments share the top honors
By the end of
2010, which will have more subscribers? (Please select one)
LTE might have
the momentum but WiMAX has the subscribers
How will
Netbooks do through the operator channel? (Please select one)
No major impact
from the operator channel
Which
standards will gain traction?
No major impact
from the standards
What mode of
mobile payments will get any traction in North America and Western
Europe in 2010?
The category will
expand in different ways with more items being charged on the
operator bill
