Anyone who has ever attended the annual Mobile World Congress at the Fira Montjuic in Barcelona will agree it is an amazing experience. Its scale is bewildering and its significance for the mobile industry cannot be under-estimated.
But, with days packed full of product launches and partnership announcements, industry updates, CEO keynotes, often with subtle jabs at competitors, panel discussions and lots and lots of predictions about the future, the challenge is how to make sense of the deluge and bring home something that is meaningful for the SA digital industry.
I have made four key observations about stats, predictions and ‘one-liners’ from some of the keynotes and presentations that make for interesting reading and are sure to initiate much debate. Bear in mind, they are educated guesses and fluctuate wildly depending on who has made the predictions.
1: The App Debate
Just 2.5 years since Apple launched the AppStore, no-one can deny the impact that apps have had on the smartphone market’s growth, the well-being of the developer environment and the overall improvement in the user experience for mobile subscribers.
Sir Martin Sorrell of global communications company, WPP had some interesting figures and predictions about the future of the application market. These numbers were put together by the specialist digital agencies in the WPP Group.
- The average smartphone user has downloaded approximately 60 apps.
- Over 450k apps have been published by end 2010.
- 18bn app downloads are predicted for 2011.
- A total of 185bn will have been downloaded by 2015
- Revenue from apps in 2010 was US$5.2-billion and will grow to US$15-billion in 2011
- Free downloads account for 81% in 2011. These rely on upsell to premium versions, in-app advertising revenue and more prevalently, the sale of in-app digital merchandise.
- In 2014, 33% of app revenue will come from advertising
In the shadow of this prediction overload, there has been much debate about fragmentation of the app environment, with developers being stretched to develop for multiple OS’s that are constantly evolving. The Wholesale Applications Community has been established to attempt to reduce this fragmentation – and this week announced the commercial launch of WAC-powered storefonts.
This is in an attempt by the network operators to have a realistic chance of benefitting from app revenue opportunities – and not capitulating to app disintermediation by Apple’s AppStore, Android, Microsoft’s Marketplace, with Blackberry as the fourth.
2: Numbers, numbers, numbers
There has been a bewildering array of stats and predictions about what the future holds. Most of these are centred around the growth in mobile data and the ecosystem to support this growth.
- One smartphone uses the data of 10 feature phones and 1 data dongle uses the data of 10 smartphones.
- There are 5bn mobile connections worldwide, this will grow to 6bn by the end of 2011.
- In developing markets, a 10% growth in mobile penetration can lead to a 1.2% real GDP growth.
- The global installed base of smartphones grew by 44% year-on-year
- There are 18 LTE rollouts underway, with another 184 planned.
- There is a 10 fold increase in connectivity speeds with every generation of mobile technology – ie 4G is 10x faster than 3G, and in 5-6 years, 5G will be 10x faster than 4G.
- 90% of mobile data traffic will be generated by mobile video consumption
Enough to make you think?
3: The Chinese market
The scale of the Chinese market and its impact on the rest of the mobile world has also emerged as an interesting theme. There is much we can learn from the Chinese.
Firstly, the scale of China Mobile and how they are dealing with mobile data growth challenges is impressive. As a network with 600m subscribers, 640k base stations and 98% of the population covered, they certainly do know about scale. They have an aggressive rollout of Wifi hotspots to reduce the mobile data overhead and congestion that the traditional mobile network would have to deal with. This rollout will result in one million hotspots in three years.
This is a real learning that the SA operators should take from China – it can actually preserve their costly, difficult to manage data networks.
Wang Jianzhou, Chairman of China Mobile says that operators must do everything possible to avoid becoming ‘dumb-pipes’ with the rest of the mobile industry participants reaping the reward from the massive investments that the operators need to make in infrastructure rollout.
There is little doubt that the Chinese are going to become serious challengers in the handset and device markets. Just as South Korea has done with their automotive industry through Kia and Hyundai, it seems that China’s ZTE and Huawei (pronounced Wah-wey) will do with mobile, connected consumer electronics.
They began as network infrastructure companies and are rapidly rolling out lower-cost, high-volume handsets, tablets and dongles. Their smartphones will become the smartphones for the mass-market. If the year-on-year growth in the size of their exhibition stands is anything to go by, then it is clear that they will be serious contenders in the future.”
4: Connected everything
As consumer penetration rates slow, the new area of growth will come from the ‘Connected Life’, the ‘Internet of Things‘ where machine-to-machine (M2M), machine-to-man communication provide unlimited opportunities.
With predictions of 20bn to 50bn connected devices, sensors and machines coming online by 2020, this is where real innovation can occur. Everything from emission reduction, improving energy consumption, environmental monitoring, production and logistics improvement and even connected appliances will become mainstream.
As another MWC comes to an end, it has once again blown my mind and reinforced the opportunity that lies ahead. I am convinced that we are just at the beginning of the next explosive growth phase in the mobile and connected world!