Mobile Megatrends 2009

[Following the uninspiring announcements at the annual MWC show, Research Director Andreas Constantinou looks at the Megatrends that are shaping the mobile industry in 2009]

After many months in the making, we ‘ve just released our annual Mobile Megatrends 2009. Last year’s Megatrends covered 15 trends for 2008 and got over 40,000 views at slideshare – we have no lesser expectations for this year’s edition.

In this 2009 edition we ‘ve focused on fewer trends with deeper analysis. These are trends which over-arch the many micro-announcements which took place during the MWC week in Barcelona. The bigger picture that emerges in 2009 is not this or that App Store, this or that open source effort, or a new developer portal; these were just meta-effects set in motion by some tectonic shifts which started in 2008.

[slideshare id=1071449&doc=mobilemegatrends2009visionmobilenew-090226011714-phpapp01]

So what are the overarching trends of mobile in 2009? We ‘ve covered 8 core themes:

– Eight Centres of Gravity, the New Rules of Mobile: how Google, LiMo, Nokia, Qualcomm, Apple, Microsoft, Adobe and Intel are consolidating power in mobile around complete vertical stacks (from hardware to services), essentially forming virtual centers of gravity and attracting mini-ecosystems around them.

– Market Gravity, The Rise and Fall of Market Value: we explore how all market sectors (from App Stores and widgets to ringtones and location services) move across the lifecycle of market value: from novelty to differention and finally to commodity. We also discuss the concept of gravity accelerators or decelerators, forces which determine how fast each market transitions through this lifecycle.

– The Software Industry is Consolidating: how Android and S60 are the remaining two choices for smartphone operating systems, what caused Linux to fade out, the landscape of today’s Linux market and Qt, WebKit, Flash Lite, Java ME, the four service delivery environments that are set to dominate.

– Mapping Revenue Model Innovation – Value Quadrants: an evolution of a strategy tool we introduced back in early 2008, which explains how revenue models are changing, where the handset software value is migrating and what are some of the untapped opportunities in value creation in mobile.

– Open is the New Closed: why ‘open’ is one of the most overstated terms of 2009, and how in practice open source is used to drive ‘closed’ commercial agendas in LiMo, Symbian Foundation and Android. The analysis also explains how open source licenses are almost orthogonal to governance models, and how source code control fundamentally differs from product control in this new era of openness.

– The Mobile Application Store Phenomenon: digging beneath the often superficial coverage, this analysis explains what is the 5-ingredient recipe for a succesful Mobile App Store (MAS), why Apple and Qualcomm have been the only two that got it right, and why handset OEMs stand to succeed in developing MAS solutions, contrary to operators/carriers.

– NaaS: Network as a Service: we discuss how operators/carriers are opening up their networks to third parties (Betavine, Orange Partner, Litmus, etc), and why the current offerings are currently too little too late.

– Mobile Service Analytics: the Most Underhyped Opportunity: Last but certainly not least, we explain why service analytics present the most underhyped opportunity today, how mobile phones and networks are beehives of information with unprecedented richness and how startups are exploiting the opportunity today.

We ‘ll be updating the Mobile Megatrends as new announcements are made during 2009, so new trends and information will be included over time.

Comments welcome as always.

– Andreas
twitter: @andreascon

Nokia: ST-Ericsson, Qualcomm, Broadcom…bye bye Texas Instrument, and hello to the new Nokia!

[Following on from three hardware related Nokia press releases, guest blogger Thomas Menguy discusses how these announcements fit within the new Nokia strategy]

MWC is in full PR mode at the moment.. and the following three announcements from Nokia  show how the game is changing in Finland.

Nokia selects Broadcom as a next generation 3G chipset supplier:

“Today’s announcement with Broadcom is a further example of Nokia’s commitment to our diversified, multi-supplier chipset strategy,” said Kai Oistamo, Executive Vice President, Devices, Nokia. “This agreement, which targets low cost, high volume markets, demonstrates that we view Broadcom as a reliable supplier to bring the benefits of 3G to Nokia customers around the world.”…

Then Nokia’s selection of the ST-Ericsson platform for Symbian/S60 phones:

…Nokia and ST-Ericsson announced they are co-operating to provide the Symbian Foundation with a reference platform based on ST-Ericsson’s U8500 single chip…

and finally how Nokia and Qualcomm plan to develop advanced mobile devices:

…Nokia and Qualcomm Incorporated (Nasdaq: QCOM) today announced that the two companies are planning to work together to develop advanced UMTS mobile devices, initially for North America. The companies intend for the devices to be based on S60 software on Symbian OS, the world’s most used software for smartphones, and leverage Qualcomm’s advanced Mobile Station Modem(TM) (MSM(TM)) MSM7xxx-series and MSM8xxx-series chipsets…

What does this all mean?

For years Nokia has been relying on Texas Instruments to produce its custom 2G/2.5G/3G chipsets. Nokia was designing the core chipset and letting Texas Instruments finish the integration and physically produce the chips: Nokia has been mastering the whole hardware IP of its phones, and has not been relying on generic chipsets for the vast majority of its production, with all the margins this implies :-).

Nokia is now feeling the wind of change: from one supplier, the OEM is transitioning to three. Nokia has licensed its 3G hardware IP to ST (and presumably to Broadcom, rumors mentioned Infineon also), and will also use some “generic” chipsets.

Texas Instruments has really missed the ball here, by stopping 3G investment (well they have made some, but failed to deliver), and being mostly ruled by business guys with no technical vision of where the market is going: How can a company with 70% of the billion units chipset market leave the market completely in such a short amount of time? Nokia diversification is part of the equation, for sure.

And Nokia really seems to be shifting their focus: relaxing their efforts on the chipset front, not simply to cut internal costs but to invest, and my guess (as everyone else 🙂 is of course on Ovi, services, etc.

PR after PR, announcements after announcement, product after product, Nokia is showing how serious it is about reinventing itself again. It won’t happen overnight, but it is coming, and it may be a game changer indeed.

– Thomas

Inventory Convergence: Mobile Ads, PC Ads or Both?

[PC and mobile ad networks are beginning to converge – guest blogger Raj Singh discusses how this evolution is a good thing for the industry.]

When Admob first launched in 2006 (not saying they were the first), the focus was on creating a new ad network specific to mobile devices. This meant, when you bought an ad for mobile, it wouldn’t appear on your PC but only on your mobile device.

Later that year, when Google launched their initial mobile advertising beta, PC advertisers were automatically opted-in for mobile – this created some commotion on the blogosphere andGoogle soon reversed their tracks and made it an opt-out.

What’s interesting, is that Google’s initial gut may not have been off – the network or better known as inventory is blurring between PC and mobile advertising. I used to joke that when I did search several years ago on the Yahoo Mobile WAP site for pizza, that I would get a ringtone ad but when I did the same search on the PC, I would get national pizza ad, as you would expect. The reason for this, is the two different networks were treated separately – I would not get a PC ad on my mobile device even though the PC ad unit could have easily been presented as a mobile text ad unit.

At the time, this made a lot of sense; why show an ad to a PC site if when the user clicks that ad, the site doesn’t render. The browsers were not up to par and so the destination pages would often crash the browser or not display at all. Today, browsers have significantly improved especially on the higher-end devices, those that get 80% of the browsing usage anyways. This means PC advertisers have less reason to be averse to displaying their ads on a mobile device since their pages will render.

As a result, we are beginning to see a new trend line that has been forming over the past year, the convergence of the PC and mobile ad network. This is best exemplified in mobile search where the size of the ad network is critical to driving relevant results, much more than display advertising which has been difficult to target with the limited text and in-links in the mobile web.

Try it now, go to m.yahoo.com and search.yahoo.com – I just searched for “pizza in san francisco”, notice how the PC ads are not yet displayed in mobile – it’s only a matter of time before they converge.

Comments and discussion always welcome.

Raj Singh

Looking for Bright Minds

It’s hard to believe that it’s been twelve months since we published the last Print Edition of our blog. A lot has happened since then; we introduced the 100 million club, launched the Mobile Industry Atlas , worked on a zillion projects (long year!) and were voted the best blog in the Mobile Comms category by Electronics Weekly Magazine!

To celebrate the past year of blogging we’ve published our Blog Print Edition 2009. Read on to find out how to download a copy.VisionMobile Blog - Print Edition 2009

Looking for Bright Minds!
The VisionMobile blog is a place where mobile strategists can voice, share and exchange ideas on market happenings and trends. It is a think tank for strategists who share a passion for uncovering the future of wireless telecoms.

Our blog revolves around one key message: Distilling market noise into market sense. It’s about discerning technologies, vendors and the mobile markets, filtering the market noise and helping readers see out of the box.

We are looking for bright minds with a passion for writing and flair for original, thought leading articles which cut through the hype and marketing noise into uncovering trends and new opportunities. Articles can be about market analysis and facts, observations on under-the-radar markets, analysis of technologies and their impact, etc. Company pitches are out, thought leadership is in.

 

So, if you think you have an original idea or two to air, and want to get in front of of 1,600+ subscribers and industry insiders, do get in touch. And of course, we ‘ll be selecting the best articles to go into the next Print Edition of our blog

Blog Brochure 2009

Print Edition 2009
This year’s Blog Print Edition contains excerpts from a number of seminal articles which appeared on the blog in the last 12 months:

The 7 centres of gravity in mobile. Nokia+Trolltech+Symbian, Android, BREW+Flash, Adobe Open Screen, LiMo devices.. As the dust settles, we look at how the mobile landscape is shaping around 7 centres of gravity.

The darker side of Android. Can an open Android result in a closed phone? We explain why this will not be the exception, but the rule.

Watchlist: The 100 million club. We discuss the latest update to VisionMobile’s 100 million club, and the bigger picture that emerges from our research, including de facto standards and software that’s truly mass-market.

Value Quadrants: understanding value creation in mobile. How are the revenue models changing in the mobile industry? We introduce Value Quadrants, a tool that deciphers the multitude of revenue models and maps how value creation is changing in mobile.

Making money on the last mile: Introducing Channel ARPU. Has the industry been expecting too much from data ARPU? We revisit Channel ARPU as a new way of capturing not just the user’s wallet, but also his attention and heart.

Mobile software is dead. Long live.. mobile software. Mobile software has always been a tough business and is getting tougher. We explore how the value is migrating from embedded to downloadable software.

The Mobile Application Store phenomenon. Apple’s App Store, Android Market, RIM Application Center.. application stores are the latest fad of the mobile industry. We analyse the recipe of the mobile application store phenomenon and the movers and shakers of this virgin market.

Application Environments: Order from Chaos. Flash, Web Runtime, OSX, widgets, Java engines, Python.. the array of software platforms is chaotic to say the least. We dig deeper into application environments, explaining who’s what and identify 5 clear market trends.

The SIM card evolution: finally, a breakthrough? Is there a future for the SIM card in operator service delivery? We review the state of the SIM card industry, the commercial developments in the last 12 months and discusses why the role of the SIM may be indeed coming to a positive inflection point.

Mapping open source into mobile: who, where and how. Android, Symbian Foundation, Maemo, Trolltech… there’s been so much talk about open source moves in the mobile industry, but so little analysis on the big picture.  We distill market noise into market sense by mapping out three dimensions of open source in mobile: the who, the where and the how.

Community dynamics in mobile open source. How do open source communities work? We discuss how community dynamics can be mapped and better understood.

Want to read more?
You can download the PDF version here. Alternatively, if you would like a printed copy, email us your postal address and we’ll send it out to you (offer valid for the first 50 copies).

– Vanessa

Cloud Computing anyone?

[Cloud Computing is the new buzzword, blogger Thomas Menguy tries to decipher its underlying concepts, the main actors, the business models and the implications for the industry ].

Cloud Computing is everywhere, and begins to look like the next big thing. But the term seems to regroup a plethora of new and old concepts with no clear consensus about it: everybody seems to understand what it is but when asked, having a clear definition is not so easy (I know, I’ve tried recently…and miserably failed 🙂 ). Here is my attempt to give it some sense.

 

I’ll begin with some quotes grabbed from this nice video from the web2.0 expo

Everything that we think of as a computer today is really just just a device that connect to the big computer we are all collectively building…Cloud computing : how computing services will be delivered in the future

Tim O’Reilly

Chance for developer to no worry about “things” …business concerns, scaling concerns

Matt Mullenweg (WordPress Co-founder)

A way to deliver services rather than applications completely independent of platform completely independent of physical hardware and I hope it works.

Vamshi Krishna Mokshagundam

Ok, so to sum up those gurus’ words, cloud computing seems to be about:

  • Software Services deployment
  • Transparent scaling of those services
  • Reliability (no down time worry)
  • Monetization handling
  • Decorrelate the software from the physical hardware it is running on

After this helicopter view, we can try to be a little be more educated, reading this excellent article from ExplainingComputers about the cloud may help:

It describes a very good metaphor for all this cloud stuff:

In his book The Big Switch, Nicholas Carr compares the growth of cloud computing to the development of the electricity network around a century ago. Before that time businesses had to generate their own power and therefore had to choose their location based on the available means of generation, such as moving water to drive a wheel or a supply of coal. However, with the availability of a reliable electricity grid to which they could connect, firms were increasingly freed from such constraints to focus on the other aspects of their business.

In exactly the same manner we are today just about entering an age in which both individuals and organizations will be able to dispense with a large home computer or corporate data centre, and instead connect far leaner computing devices to cloud computing resources that will fuel their information processing requirements. It is therefore hardly surprising that cloud computing is also being referred to as “grid computing” or “utility computing”

ExplainingComputers about the cloud:

What a paradigm shift! Computing power data storage and services will soon be outsourced to 3rd parties.

Now getting back to the industry, Cloud computing seems to be the sum of two concepts

Software as a Service, or SaaS, perhaps you know it under another name : web 2.0

It can be described as desktop like application accessed within the browser (or a  RDA technology like AIR) and where the storage/processing is on dedicated servers.

Those services can be free or not, here are some notable examples:

  • http://www.salesforce.com/ : CRM for marketing/sales, per user monthly fee (9$ to 65$ a month)
  • The excellent http://zoho.com free for personal use then few bucks per month/per user for business
  • http://www.clarizen.com/ : project management software, per user monthly fee (around 20$ to 40$)
  • Even IBM is going this route with https://www.lotuslive.com/ a kind of hosted Lotus service (I can’t get prices…)
  • Of course : http://docs.google.com/ to store/share/edit office documents, free but has a paid version for enterprise. Of course Gmail is there also as Google web album (price depend on storage)
  • Adobe plays the game with https://www.photoshop.com/ a kind of “online” Photoshop elements to store share and edit your personal photos, free for simple use, from 19$ to 129$ a year to grow the storage, different services are proposed if you already own Photoshop elements or premiere elements. Adobe also provides an office online collaborative suite: https://www.acrobat.com/ free to use, but acrobat desktop is heavily advertized across the tool.
  • Apple MobileMe for photos, mail, events contact calendar shared between desktop and mobile (iphone) 99$ a year.
  • Microsoft answer to Apple: SkyBox/SkyLine/SkyMarket (MobileMe+Appstore for WinMob). Microsoft has also some offers, around Microsoft live, http://home.live.com/, and some plan for hosted exchange services, I don’t have any price point to compare it to “standard” Exchange installations

Of course I forget a lot of others, like Flickr, yahoo! services, etc.

All those services have in common:

  • Ease of use, not only for the service itself, but also for billing, maintenance, installation, deployment, etc.
  • Affordable, price depending on storage/number of user/services accessed
  • Neat and modern UIs
  • Packaged and well defined services

This is this last point that led some of those providers to open their infrastructures, putting in place the Next Big Thing :

Hardware as a Service, HaaS

Those SaaS providers have grown their infrastructure  to support scaling and reliability for their services…the next step is to open it and monetize it.

So here is HaaS where the business model is simply to sell some RAM/CPU/Storage/Bandwidth/some services according to the needs of the customer.

  • The real first One: Amazon EC2, part of Amazon Web Service (AWS) platform. A way to deploy and scale a web application, paying only for the resources it actually uses (prices are around 0.10$ to 0.80$ of cpu/hour, 0.10$ per GB transferred, 0.15$ per GB stored per month, 0.01$ per 1000/10000 PUT/GET requests).(side note: Adobe proposes LiveCycle ES on Amazon Cloud).  Amazon describes its solution as:
    • Elastic: user can increase or decrease their hardware requirements within minutes
    • Flexible: user can choose specification of each individual instance of computer power purchased
    • Inexpensive: no dedicated capital investment required
    • Reliable: make use of Amazon proven datacenter and network infrastructure.
  • Google of course is there (do your self a favor and read this about the AMAZING Google infrastructure) with Google App Engine , free for now but fairly limited
  • Little actors like MossoGoGrid or 3tera are popping out on the same kind of technology
  • IBM is jumping also with Blue Cloud
  • HP, Intel, Yahoo join forces on cloud computing research
  • For me Facebook is part of the game: easy way to deploy and monetize (?) social applications. Ning is another example (for social networks)
  • And of course Microsoft with Azure:

Azure seems to be really complete with a new OS, great marketing materials etc…but as always with MS not really available yet. Business model is again identical: you pay what you use as resources.

 

See above a schema about those technologies. What is emerging is a new kind of OS capable to handle

  • faulty hardware,
  • load balancing,
  • heavy multiprocessing and parallelization,
  • virtualization technologies are key here (at least I understand the market cap of VMWare now!) ,
  • advanced storage technologies and databases.

Google has built its own stuff (the three core elements of Google’s software: GFS, the Google File System, BigTable, and the MapReduce algorithm), Microsoft too (and present Azure as it is : a new OS), Amazon, Yahoo and others are using some Open-Source initiatives like http://hadoop.apache.org/ .

A nice summary of what we can do with cloud computing, from the Yahoo white paper:

What does it take to get the Next Great Thing off the
ground?

Now:

  • Set up multiple replicas of a clustered data store
  • Set up a system for indexing
  • Set up a system for caching
  • Set up auxiliary DBMS instances for reporting, etc.
  • Set up the feeds and messaging between them
  • Write the application logic
  • Fairly complex system at first line of new code

Our vision:

  • Write the application logic
  • Use a hosted infrastructure to store and query your data

=> Or, as Joshua Shachter puts it: “The next cool thing shouldn’t take a team
of 30, it should be three guys, PHP and a long weekend”

Yahoo white paper

This is all well and good but where is the catch?

Many aspects are slowing this IT revolution

  • Concerns around privacy and collusion: giving all my (as a company) data AND processing of my critical business to Amazon and Google may lead to collusion, Google is no more the “don’t be evil” it may have been, nor Microsoft or Amazon…Or even worse if I am a service provider new entrant (hum say like Nokia with Ovi for example), I just can’t use Google Infrastructure for that! How can I trust Google about my competing usage of its own resources to deliver a service …that competes with Google own ones?
  • Concerns about stability. Most cloud vendors today do not provide availability assurances. This is particularly an issue with Mashups that need a set of web services hosted in various cloud computing environments, and many may stop working at any time. Seeing the MobileMe launch fiasco, Apple learnt how difficult it is!
  •  Concerns around security. The old dilemma: “should I put my money in a Bank or in my own building” …we all know the right answer now.
  • Regulation issues:  For Example in Europe, some countries require services and/or customer data be retained within a country’s borders.
  • This is new technology: even if simple, there is a learning
  • IT service may feel threatened: after all the tedious tasks of updating, backup, hardware handling are now externalized…

One key point seems to be that to be trusted cloud computing providers have to stop offering their own services and focus ONLY on providing a compelling and efficient cloud platform.

Where is the Mobile industry: client side?

As said by Tim O’Reilly in the first quote, ALL the devices are morphing to cloud access points, phones are on their way, MID and Netbooks are just showing it more clearly.

The iPhone is the first real device to access the cloud effectively, and what is really interesting about it is that the browser is not the preferred choice to access the cloud: the vast majority of non-game iPhone applications are simply optimized front-end to a dedicated  SaaS! I predict the same for Android Marketplace…and many software actors will pop out  around this cloud interaction.

Nokia is morphing into a cloud computing provider …but doing the whole stuff alone: Ovi being the infrastructure AND the service, and Nokia devices nice cloud front-end.

Time will tell if an actor alone can handle those three aspects, Google, Microsoft and Apple are also trying…

Where is the Mobile industry: server side?

Doing this overview I was really surprised to not see the “natural” actors of this new paradigm:

  • Who has a BIG infrastructure?
  • Who can link this infrastructure to the final devices/customer?
  • Who is deploying complex services to million of customers for decades?
  • Who handles directly the customer billing?

….hum you guessed it : our beloved CARRIERS!

Cloud computing would be a fantastic way for them to not fall in the dumb pipe category. Let’s face it, developing services has to be done by service providers, not operators (who wants to use its operator IM or mail? social network? photo sharing?) .

If carriers were able to leverage their fantastic cloud computing capabilities, they may stop developing sure-to-fail-services and monetize their pipe not only to the final customer but also smartly from the service provider ( NaaS seems to be a first attempt but I still don’t understand the business model). Perhaps a bold statement, I would be more than happy to have some carrier comments on this one!

Looking forward to your comments.

Thomas