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Part 1: 2011 Industry Review

Wed, 11/30/2011 - 4:44pm
William Dudley, Sybase 365

Here we go again, for the 5th consecutive year. 2011 was an extraordinary year to be sure for the mobile industry. Mobile commerce, messaging, Apple, Google, Samsung, RIM, Steve Jobs, the FCC, Network Neutrality, LTE, spectrum and mobile data were just some of the topics that got significant coverage this year. Suffice it to say, this is an amazingly robust, but difficult industry to follow and predict. As in past years, I thought I would review the 2011 prediction accuracy and then offer my predictions for 2012.

Just as a review, my predictions were 73 percent accurate in 2008, 80 percent accurate in 2009. In 2010, 77.5 percent of the predictions were correct. So, without further delay, let's review the 2011 prediction accuracy. (Just a quick note: Due to publication schedules, these are actually made in late November.) 

  1. William DudleyHandsets:  Android-based handsets will solidify their lead as the No. 2 mobile platform behind Nokia.  While Nokia Symbian will still be No. 1, worldwide, we should see Android eroding that.  Apple and Blackberry will also increase their worldwide market share vying for No. 3 and No. 4. Windows will do well, but remain in No. 5.
    Reality Check: Android handsets are now the No. 1 mobile smartphone platform. Nokia dropped precipitously in 2011, although, according to Gartner, they still have the No. 1 market share for all devices.  Samsung, LG Electronics, and Apple are No. 2, No. 3, and No. 4, while ZTE is No. 5 and RIM is now at No. 6. At the end of Q3 2011, Windows was No. 6, behind Bada at No. 5. (80 percent correct, as BlackBerry did not increase their worldwide market share and Windows being the No. 6 mobile operating system.)

  2. Mobile Payment solutions will be rolled out to reach hundreds of millions of subscribers worldwide, but there will continue to be fragmentation in the solutions – from NFC-based solutions (e.g. Isis), to SMS and app-based solutions to browser-based solutions, depending on where one is in the global marketplace.
    Reality Check: Mobile payments were in the news everywhere. Google launched its mobile payment application on Sprint's network, along with Citibank, using a pilot NFC program in 2011. But that is not all. Isis also announced that a number of handset makers will support NFC in the coming years. But NFC is still far from widely adopted. In November, Visa announced a new prepaid mobile service for emerging markets, starting with partner MTN Mobile Money, based on USSD. As of November, there are hundreds of different mobile payment services in developing nations (50 percent - hundreds of millions of subs were not covered, yet many rolled out in 2011.)

  3. Alternative Operators (e.g. NUVOs) will play an ever-increasing role in the North American P2P messaging and voice ecosystem with one or more moving into the U.S. top 10 in terms of "operator messaging traffic."  These operators will be viewed as leaders in extending messaging to multiple screens as well as leading convergence of other IP services. Finally, several well-known mobile operators will embrace and partner with these new messaging providers.
    Reality Check:  NUVOs grew their market share considerably in 2011.  In Q4, in the North American market, Pinger is a definite top-10 in terms of traffic.  NUVO traffic now accounts for 2-3 percent of mobile operators' traffic in these markets. In markets where NUVOs are not active, there are risks of cannibalization of mobile operators SMS revenues by other, non-SMS interoperable services. In 2011, Sprint and Google Voice partnered, enabling Sprint subscribers to port their number to Google Voice. (100 percent correct.)

  4. Facebook's integrated "Social-Inbox" concept will spawn other ideas that will spread outside of Facebook and integrate additional types of messaging communities. Some of the alternative operators will take this concept to new levels of usability for smartphones and other connected devices such as tablets.
    Reality Check: Let's call this a partial – while the "social-inbox" concept was a strong one for Facebook, it mostly stayed there, although combining email, texting and other types of P2P communications were launched by some NUVOs. (20 percent correct.)

  5. Enterprises and Brands will continue to turn to mobile and social networks as preferred ways to reach employees and consumers. As smartphones continue to grow market share, we'll see more usage of advanced technologies such as IP-based push notifications, apps, HTML5 and browser-based capabilities. SMS will still be a key mobile channel, co-existing with these newer channels, around the world. Mobile Customer Relationship Management (mCRM) will become commonplace with coupons, discounts and incentive programs at the forefront of Enterprise mobile services.
    Reality Check: Absolutely, enterprises and brands have turned to mobile. Push is strong for smartphones, but SMS has not diminished whatsoever. Mobile Couponing and customer engagement, whether via app or SMS or mobile web are all strong and the various mobile channels are all growing. Our Enterprise traffic and diversity continues to grow and that is reflected in the overall industry. Companies like Target, Best Buy, Walgreens, RiteAid, Coca Cola have used a variety of methods around mCRM and mobile engagement with their customers. (100 percent correct)

  6. P2P SMS and MMS will continue to show growth, although like in 2010, at an overall slower pace of growth. Emerging economies will be the biggest P2P messaging growth markets. Voice and SMS will continue to be key communications mediums.  RCS, having been "rethought" by the GSMA as enabling technology, may re-emerge around LTE voice… and messaging.
    Reality Check:  Mobile messaging growth continued in 2011, but at a much slower pace. Worldwide messaging traffic is still up around 10 percent over 2010.  SMS is still extremely popular and remains popular around the world. RCS, as a new medium for voice and messaging, is starting to see deployment in Asia, as well as Europe (around the RCSe standard).  North American operators are planning for 2012 deployments. (100 percent correct)

  7. Mobile IP networks – especially LTE networks will begin to reach hundreds of millions of subscribers in markets around the world – many with download speeds exceeding 20-30Mbps – rivaling that of fixed broadband providers.  While this will help ease some of the bandwidth issues, tiered pricing schedules will become the norm.  LTE-enabled mobile handsets will be launched on the Apple, Android and BlackBerry platforms in 2011.
    Reality Check: LTE momentum has been tremendous in 2011; subscribers covered by LTE networks do now exceed 100 million subscribers, although usage is less. Current forecasts run approximately 11 million to 15 million subscribers actually using LTE by 2011 year end.  LTE is well supported on Android handsets. Apple did not support it, nor has BlackBerry, although a BlackBerry LTE model is expected early in 2012.  (80 percent correct)

  8. Mobile security and privacy will become a major topic in 2011, as a greater number of smartphones are rushed to market, consumers become more security and privacy-savvy, and multiple non-verbal communications channels – IP notifications, SMS/MMS messaging, IM, social networks, browser based solutions and apps and even geo-location apps all become commonplace.
    Reality Check: Privacy and security – especially around mobile devices – were major topics in 2011; in April and May, there was significant coverage regarding Apple's collection of location information from subscribers as well as the usage of UDIDs in apps.  This lead to Apple restricting UDID usage in later iOS updates. Many other articles highlighted the loose privacy and data security issues of Android-based devices. (100 percent correct).

  9. Finally, some quick predictions:  Apple will launch multiple new iPhones. (Woops! – only one; 0 points), Facebook won't launch a handset. (They did not! – 10 points) Google won't launch anymore handsets. (Still haven't although their purchase of Motorola Mobility devices may challenge that in 2012 – 10 points)  Tablets will finally cannibalize netbook sales.  (It happened – 10 points) 4G users will use more bandwidth than 3G users ever dreamed of. (Yes – that's why they get more bandwidth than 3G users – 10 points)  MetroPCS and Cricket in the USA, again won't merge. (True – still two separate companies: 10 points) India will finally launch MNP. (Yes – at last; 10 points)  NFC POS terminals will be delayed until at least 2012, opening the door for easier mPayment technology. (In a few places, so give it 5 points)  Some reality TV show will launch an app to help viewers interact or participate (Dancing with the Stars?). (Fail! Did not happen – 0 points)  Sarah Palin will make the news in a big way (True – she didn't run! 10 points)
    Reality Check: For the quick predictions, I gave myself up to 10 points for each fully correct prediction. A review of the above shows 75 percent correct.

Adding it all up shows that my 2011 predictions were 78.3 percent accurate.

Stay tuned for 2012 predictions.

William Dudley is group director, Operator Services Product Management, at Sybase 365.

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