I’m glad to say that my predictions for the key themes at this year’s Mobile World Congress (2010) – smartphones, operating systems and applications – were spot on the money.
Truth to be told, you hardly had to be Nostradamus to predict the headlines for this year’s Congress. Device vendors are desperate to retain brand and consumer loyalty (especially in the face of operating systems becoming a bigger draw than handsets themselves), mobile operators want to ensure they get a slice of the application action and don’t get relegated to dumb pipe status while software vendors including Google & Microsoft see an opportunity for land grab in a global mobile market buoyed by an application obsession.
Underpinning this gold rush for customers and content is the need to move quickly and painlessly to LTE/4G networks. Data and download revenues are what will drive the next 10 years of the mobile market, and for that to happen quickly Joe Public needs to have a compelling user experience to convince him to keep buying applications, watch streamed video and download music. Of course, faster networks also give all parties license to develop new services and business models that rely on a lightning fast data connection.
To all of the above, GSMA head honcho Rob Conway has declared 2010 the ‘year of the developer’ while Vittorio Colao, chief executive of Vodafone has compared where the mobile industry is now to the start of the last decade when a lot of the heavy lifting on GSM was being carried out. Indeed, the headline coming out of this morning’s keynote session was “Dawn of a new era.”
I rarely get carried away with hyperbole but this time I think the industry luminaries have got it spot on. The mobile industry is witnessing an unbridled consumer desire for data services driven by devices that are turning on the non-techies as much as the real mobile geeks. And it’s here, where all parties co-operate and clash in a battle for awareness, loyalty and lucre, is where the real interest lies for me.
About two years ago I was working with a mobile phone OS vendor and a leading handset manufacturer. Both co-operated (i.e. devices ran the software) yet in briefings with separate senior execs it was clear that both companies were at odds in terms of what the overall purpose of the phones were, who they were aimed at and how they would be marketed.
I suspect this scenario has been replicated right across the mobile sector. Carriers and handset makers coming to blows over their own application stores, OS vendors and software developers quarrelling over what competing services are allowed ‘on deck’. The realisation that customers no longer buy phones based purely on brand/tariff and carrier has sent everyone scrambling for loyalty, mindshare and the “killer app”. I think the next 12 months are going to be fascinating.
For me, the power now lies in the platform. That’s not to say the device vendors or operators aren’t going to play an important part in how the market shapes up – they will, massively. However, I feel the impact of the iPhone has thrust platforms into the limelight and they will drive the market, certainly in the short term. The industry seems to agree judging by the amount of companies from all sides of the industry that have signed up to the GSMA’s Wholesale Applications Community (WAC), an alliance designed to allow developers to easily create and port applications to ALL mobile operating systems…apart from Apple of course.
I’m also expecting a “platform” that currently isn’t in the mobile space to make a play for market share. Facebook could easily smash a hole in the handset market by launching a proprietary phone (likely based around Android or a Linux shell) that appeals to the social media obsessed generation. In fact, if you consider that in the UK alone nearly half of all mobile data sessions are Facebook generated I’d be surprised if conversations with one of the smaller handset guys aren’t already underway. After all, Facebook doesn’t charge for its mobile applications and while its advertising revenues are handsome, they’re still modest in comparison to most larger media companies. When you consider that over 70% of its ad revenue comes from local advertising, the power of having a platform that is always ‘local’ (the mobile phone) starts to look very compelling indeed.
And we can’t discount Microsoft in all of this. In the mobile wilderness over the past few years, it staged a Lazarus-like comeback with the announcement of its new Windows Mobile 7 OS yesterday. While handsets won’t be available until around Q4 this year, you can’t rule it out making inroads back into the smartphone market. Consumers will certainly be keen to find out more about its Zune and Xbox Live integration.
So where does this leave the handset guys and carriers? In a word, innovation. It’s going to force them to look at all aspects of their business to see where they can innovate – from the seemingly mundane like pricing to sexy next-gen services like Mobile TV. My own client Orange [client] is certainly forging ahead with this approach, embracing the platform-focused consumer mindset. I’m sure its competitors are too.
And I’ve definitely seen the handset guys step their game up this year. 2009 was all about big bright screens – with not much thinking about the user experience if we’re honest – but 2010 seems to have been about the whole package. Samsung’s Wave finally seems to have gotten the right balance between stunning hardware and a UI and OS that consumers will want to use (again, based on its own Bada platform) while SonyEricsson has revisited the mini mobile concept with usability and software front of mind. Motorola [client], HTC and LG have also demoed some really nice kit, but kit where the platform gets almost as equal billing at the technical specifications.
And that’s a trend that will continue – marketing that focuses on the platform as much as it does the hardware. The example of miscommunication between software and hardware companies that I cited earlier could still occur but I believe there has been a realisation, albeit one that is acknowledged mostly in private, that consumers are being turned on by the software first and foremost.
I’m confident this platform-led approach will lead to a golden era of innovation in the mobile market. Do you agree?