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Friday, December 18, 2009

Predictions for 2010: Mobile Winners and Losers

It's mid-December, so it must be time for the annual prediction season. I've tried to keep them short and sharp and to the point - there's plenty of detailed argument behind each of these if people are interested.

I'm off away on holiday tomorrow, so may not get a chance to respond to comments.


  • HSPA+ Just like LTE, but it's got voice and it's straighforward to implement
  • Apple iPhone - looking unstoppable, playing the pricing and distribution curve flawlessly, and doubt Mr Jobs will have some extra Wow Factor in mid-2010 to maintain its cool. Apps will continue to help, although from Apple's point of view they're just a means to an end rather than an important revenue source. As usual, hardware is where the profit is.
  • Android - OK, I'm eating my words on this one, it looks like Google has got it right on the second attempt, rather than some platforms' 3rd or 4th time around. Momentum looks like it's building, unless OS fragmentation calls a halt. Might still struggle in parts of the world where low Gmail penetration deprives it of a headline use case.
  • Augmented reality - Layar and its peers seem to have tapped into something unique to mobile devices. The notion of a wireless "head-up display" is sci-fi turned real. I can see a whole ecosystem evolving here - and a set of headaches for network planners who have only just got their heads around a shift to indoor usage of mobile data - it might shift back.
  • Facebook - sets the standard for personal communications, but also the user-provider interaction model. It encourages rebellion among its own users. Meanwhile, it's turning from a service to an app-platform to a web OS. Makes mobile operators' claims of "loyalty" look like a joke in comparison.
  • Consumer femtocells - ignore the impatient critics expecting overnight adoption, the momentum is building slowly but steadily. The need for extra capacity, offload and the ability to use them as services platforms is inexorable. I'm expecting decent-size deployments in 2010 - although ignore anyone suggesting it's an alternative to WiFi.
  • Huawei - the scariest vendor in the telecom industry. Derided by some as a cheap copy-shop a few years ago, it's now aggressively pursuing every sector of the telecoms industry with skill and depth. Watch out for its handset division taking out back-markers like SonyEricsson, while the infrastucture side is still worrying everyone. The company's lack of dogmatic pursuit of specific standards is very positive.
  • "Comes with data" - 2010 starts to see the end of the "subscription mentality". Following on from the Amazon Kindle, we're going to see a range of devices with connectivity "built in" to the retail purchase price, with no need for onerous contracts. Behind the scene, new wholesale models will rule the roost.
  • Connection-sharing - I've written quite a bit about this recently, and it might take until 2011 to really pick up, but I think one of the most disruptive possibilities is that of users pooling their mobile broadband connections. "Share my mobile connection - only with my Facebook friends"
  • Operator-on-operator applications - I'm not convinced that many will be successful, but I'm expecting various MNOs to follow Vodafone's and Orange's lead and try to launch software apps and widgets to run over each other's networks, exploiting smartphones and open appstores.


  • Mobile IMS and RCS - the dead parrot is now looking undead, shambling about like a feathered zombie that won't stay buried. But there's plenty of garlic and wooden stakes around....
  • LTE - No clear advantages over HSPA, all manner of teething problems in optimisation and building scale. Looks like 2001-era UMTS. Come back in 2014 for it to move beyond niche.
  • Virtual conferences - virtually useless. Everybody hates them, irrespective of the supposed savings in travel. If I can't be there in person, just email me a PPT or PDF and give me a dial-in number.
  • NFC - the videoconferencing of the 21st century. Repeatedly hyped, repeatedly delayed and will be repeatedly ignored by customers. Pointless.
  • Twitter - either niche or irrelevant. Either way, it doesn't deserve more than 5% of its current hype.
  • Enterprise femtocells - no clear business model, and a world of pain in implementation. Question to ask your mobile operator: "How many customer-facing firewall experts do you have?"
  • Embedded 3G netbooks - The business model and user behaviour still don't stack up in most cases, a year after I highlighted the deficiencies in a major Disruptive Analysis report on Mobile Broadband. There's already evidence of fraud with subsidised laptops being "box broken" and resold. Dongles and MiFi's are cheaper and easier.
  • Smartphone profit margins - Touchscreen? Check. Fast processor? Check. Web Browser? Check. AppStore? Check. Widgets? Check. Differentiation? Nope. Margins? Ever-thinner.
  • Operator AppStores - Might turn out to be "table stakes" to play in the smartphone market, but I really can't see them being the main avenue for application sales for handsets, especially as the iPhone is excluded and every other device will have its own vendor-run store as well. Won't "move the needle" for MNO revenues or churn.
  • Aggregated social networks - As I mentioned a few weeks ago, the idea of combining various web services into a single handy screen & identity sounds great to operators and other wannabee "owners" of customers. But no user actually wants to be aggregated - we're all very good at multi-tasking now, thank you very much.
  • The terms "dumb pipe" and "over the top" - Hugely evocative and judgemental soundbites, which have caused countless executives to make hugely wrong kneejerk decisions. Try using the phrases "Happy Pipe", and "Independent Application Provider" instead for a few weeks. The world looks different now, doesn't it?

No surprises

  • WiMAX - Steady but unremarkable growth for fixed-wireless broadband in developing economies. A few high-profile mobile-centric deployments, but not many devices. Slow going for the promised new business models.
  • Open network APIs - Lots of noise around initiatives like GSMA OneAPI and numerous operator-specific programmes. Location lookups, network-based SMS, voice and CEBP, automated authentication and billing. Moderate market uptick in 2010, although with a continual battle as alternative work-arounds developed by Google et al continue to mature.
  • WiFi - Doesn't get replaced by femtocells, doesn't displace cellular mobile broadband, gets embedded in more devices. Hotspot business models largely still a train-wreck, apart from free venue-sponsored ones.
  • Nokia - finally gets going on touchscreens and decent UI. Bounces back a bit. Chugs along steadily and profitably for feature phones and the developing world. Confounds the more hysterical pessimists and doesn't disappear. Ovi might return from the dead, but I'm not banking on it.
  • BlackBerry - Continues quietly growing in Apple's PR and branding shadow. Makes considerable headway among consumers, especially teenagers who use it for messaging and Facebook. The PIN messaging system starts to encroach on MSN's territory.
  • Consolidation - margins are looking ever uglier. New business models aren't succeeding yet. Capital remains tight. Scale is king
  • Mobile TV: Was dead, is dead, will stay dead. No surprise.
  • Data roaming prices. Everyone knows it's a huge embarassment. But it's such a profitable embarassment that nobody will budge until regulators or competition authorities come after them with a big stick.


Kevin Mitchell said...

We'll continue to disagree on a few core issues, but the debate is lively and informative. Here are some of my 2010 predictions (considerably fewer than your list):


Paul said...

I like the list but feel I have to challenge 1 allegation:

""Embedded 3G netbooks - The business model and user behaviour still don't stack up....Dongles and MiFi's are cheaper and easier.""

Show my granny an embedded netbook (open, pause, connected; close, disconnected) and a Mifi (power on: hold 1,2,3,4,5; wait, connect: hold 1,2,3,4,5; WiFi on: hold 1,2,3,4,5. Now, is it on - where's my status indicator?) and let her decide the veracity of your statement.

Anonymous said...

AT&T going Qualcomm BREW MP is a huge setback for OneAPI.

Dean Bubley said...

Paul: Now show your granny the bill for an embedded netbook, vs. the cost of buying the PC standalone, plus an easy-to-use USB dongle. What did she use to say? "Look after the pennies and the pounds will look after themselves"?

The whole embedded-3G PC thing has gone exactly how I expected it to in my Mobile Broadband report from Dec 2008: very, very slowly. Looks great at first sight, elegant and integrated. But the channels to market and pricing models don't work well, and who really wants to buy a PC from a mobile phone company?