Thursday, 12 February 2009

Expectations for MWC

I, along with the rest of the mobile industry, am decamping to Barcelona on Monday for Mobile World Congress. Last year was the first for many years that I did not attend, so I'm rather looking forward to getting back into mobile's biggest bunfight. A lot of people have been asking my what I'm expecting of the show. So I thought I'd list them, in no order of importance:
  1. What time is LTE? – There remain big question marks about what we can expect from LTE. Will it be an overlay network or hotspots? What are the prospects for LTE handsets? What are the timescales, particularly in the light of the recession? Some of my colleagues have just put the finishing touches to a report on the subject. I’ll be interested to see what the vendors and the operators have to say on the subject in this public forum, and how much their views diverge.

  2. It’s not easy being green – there have been a lot of pre-briefs on environmentally friendly products from base stations to low-cost handsets. Are MNOs interested in being green in the face of economic gloom?

  3. Laptop frenzy – The likes of Dell, Compaq, Asus and Toshiba* now have much more of a vested interest in the mobile industry, so it’ll be interesting to see how prominent they are at the show. Doubtless we’ll see a lot of announcements about new embedded modules and partnership deals between operators and laptop vendors.

  4. Hanging on the (smart) telephone – With the deepening recession, there is a very real threat to the smartphone market. My esteemed counterparts at vendor-oriented analyst firms who track and forecast device shipments are predicting a dismal 2009. However, with the falling cost of components, we should also see the functionality associated with the smartphone permeate the mid-tier of devices. So the question is: what is the danger for those vendors highly exposed to the smartphone market such as RIM, SonyEricsson, HTC and to a lesser extent Nokia?

  5. Paranoid Android - I expect a lot of coverage of an increasing number of vendors adopting (semi) open source operating systems. After several years of convergence on Symbian, Windows and a couple of other niche OSes, we’re getting increasing fragmentation. This is not overly healthy for the industry. Developers face an uphill struggle dealing with a diverse range of application development environments.

  6. Welcome to the jungle – a range of new handset players are set to get going, not least Asus in conjunction with Garmin. Can we expect to see another company that hasn’t historically been present in the handset market make a play?

  7. As easy as AAA – MNO mobile data strategies, particularly with regard to the consumer segment, is converging on a consensus that the real opportunities for revenue are three-fold: Access, Applications and Advertising. Access includes both laptop connectivity and handset-based internet access. By applications I’m specifically thinking of the opening up of APNs to third parties in exchange for revenue share. Mobile advertising has been well examined before, but I think long term this offers some significant revenue opportunities, although advertisers are still slow to realise the opportunity. MNOs have recognised that they have certain capabilities that have real value and that they can monetise. One is the access network as a ‘smart pipe’, another is as a holder of information on end users, be it demographic or location or whatever. Where they are not strong is in the provision of the ultimate application. Nor do they want to play in that applications space. It’s too crowded. The opportunity for operators is to sell access to a wide range of third-party applications and add some value-add to those applications in the form of more targeting of advertising and the provision of user data. I was a judge for this year’s GSMA Awards and, without giving too much away, the most interesting advertising ventures were from operators and the best music and video applications were mostly from 3rd parties.

  8. Are you experienced? – Linked to the above point. MNOs’ position as controller of the mobile user experience is threatened, e.g. by Ovi or Windows 6.5. Therefore they will look to identify areas where they can bring additional value to the end users. We’ve seen a few examples recently of attempts by operators to provide easier access to social networking sites. Ultimately I think this will be fruitless, but the MNOs have to try.
  9. Find me – Not location-based services again, I hear you cry! As a mobile service enabler, location has flattered to deceive for more years than I care to remember. I’ve sat through so many presentations from location-based apps vendors that illustrate how you can pinpoint users to within x metres. Ultimately no real revenue opportunity has materialised for operators. It has taken the availability of GPS on the device and – dare I say it – the circumventing of the mobile network operator in the value chain, for location-based applications to really generate some potential. But hang on, I hear you cry. How can you square that with the view that MNOs will make money from APNs, of which location must be one of the most valuable. They’ll have to bring their prices down! The lion’s share of phones won’t have GPS, so to get any kind of location functionality for the vast majority of the population will have to rely on cell-ID or something a little more sophisticated.
  10. Money talks – M-Commerce is set to raise it’s head again. There are increasing numbers of impressive looking applications, particularly in the emerging markets. One look at the GSMA Awards nominees will show how innovative and clever some of the applications are, going even further than ever before to provide banking, payment and financial services to people who have never enjoyed those things before. In developed markets, contactless technology finally seems to be making some headway. We’ve been talking about it for long enough. The question for me is still about the value chain for m-payment. I’m not convinced anyone has yet resolved that.
  11. Money’s too tight to mention – The “R” word. I think I got away with only mentioning it twice in the piece. The recession (three times) will loom large over MWC. It influences a lot of the points I mentioned above, from the demand for green infrastructure to the market for smartphones. Personally I think the impact will be felt hardest in the handsets market as users extend their handset replacement market, infrastructure vendors will feel a bit of the pain as network operators decide whether the time is right to roll out new kit (although the demand for mobile broadband capacity should provide a substantial boost) and network operators will feel it least of all. Mobile is sufficiently well established and affordable – although maybe not great value-for-money – that the worst we’ll see will be a small dip in revenue amongst the operators.

  12. Sore feet, lack of sleep and some sort of travel headache - Two years ago I was stuck on the tarmac at Barcelona for 5 hours while BA tried to find a replacement part, although the time flew by thanks to Tom Holland's excellent Persian Fire and the knowledge that Arun Sarin was on the same plane. Misery loves company, particularly in the form of major movers and shakers in the mobile industry.

* Before anyone complains that Toshiba has always had an interest through their handset division, I am only too aware of that. They were a client of mine for many years.

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