February 22, 2016

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The Value of Mobility

Like most other great technologies, Mobility started with a small humble footprint – a mere 16M subscribers in 1995.  Today there are more than ~4,000M subscribers, 50% of world’s population is safely connected.  As can be seen in the picture below, deployments have been very speedy – a consistent growth rate of 35% CAGR over 20 years.

Technology is perhaps the most important force shaping our world today. The continuous innovations being developed are also altering the way we live, thrive, and do business.   Particularly for businesses, technology has become the competitive edge and also the barrier.  Because of this, the companies who once thought they had all they needed to win, are now losing to innovative technologies, processes, and business ideas the world is generating at super-quick speeds.

Phone Penetration Started, and Then Kept Growing

  1. The initial mobile phones were bulky and supported voice & SMS only.  Fast forward 2 decades, and even the cheaper phones support packetized Internet and video.  This trend caught the Telecom Service Providers (TSPs) napping and led to over-the-top (OTT) services including data (web access, and data oriented apps) but far more importantly, voice-over-IP (VoIP). 

    It was Skype that launched with usage of calls from laptop to laptop, and today carries over 75% of international voice minutes globally.  Then along came the social media portals & mobile messaging apps like WhatsApp and Viber.  The story was complete – a mobile phone is needed merely to subscribe to mobile Internet and maybe a few voice minutes. Calls can then be made to friends and business associates anywhere in the world at a fraction of the price that TSPs charge.  For strange some reason the TSPs continued to nap. 

    It was now possible to call anyone at the price of mobile Internet than pay hefty TSP voice bills, and the game was won (for App companies) & lost (for TSPs).  The TSPs are reduced to practically a core industry with generic bit pipes & lowered profitability.

  2. A key question is, Who is the Telecom Service Provider (TSP) today?

    There was a time when our mobile phones were defined by the TSP we were using – SingTel, Verizon, Vodafone, Airtel or one of the other many ones.  Everything changed, once again, with the advent of phone based social media portals and mobile messaging applications like WhatsApp & Viber. 

    The language of subscribers changed from “I was trying to call you from my SingTel phone, but couldn't connect.  What operator do you use?” to “I WhatsApp’d you”.  This move makes the TSPs even more generic and threatens their basic business premises.  The TSPs MUST enable their innovation engine, rather than only focus on process optimization. 

    Another view of mobile phone growth is prudent.  Armed with powerful processors, phones are now as much computing devices as much as they are phones.  Among these, at about the same price point, phones allow pretty much all that a laptop does, except probably size.  As mobile phones became more and more intelligent, the OS that runs on them also became smarter and more intelligent.  From Apple’s iOS to Google’s Android, they have all transformed user experiences over the last 5-7 years.  The phones also have come to be called “smartphones” instead of just mobile phones.

  3. Just about 50% of the world doesn’t yet have access to a phone or compute device.  The good part is that they also don’t have historical baggage of knowing what a desktop or laptop computer is. This will make it easier for them to adapt to the new form-factors.

  4. The last viewpoint - the world has progressed much from the days of “computer” being defined as laptops & desktops and in 2015, 2.5 times more mobile phones were sold than all forms of compute (desktops, laptops & ultra-mobiles).  The numbers are 1,940M phones to 814M computers (http://www.gartner.com/newsroom/id/3088221).  The trend is very clear – somewhat bigger phones suffice most needs. 

Apps Led the World’s Interest in Smartphones

Led by Apple, smartphone manufacturers launched online stores from where phone users could easily download apps to their phones.  Both Apple & Android stores boast of more than a million apps.  Interestingly, the apps are “buy once, use forever”.  The onus is on the developer community to offer new releases for free.

Every smartphone user is interested in these apps – in 2015, as many as 100B apps were downloaded from Apple App Store, delivering $20B consolidated revenue just from app sales.  This is a good indicator that while mobile phone sales maybe tapering off, user are wanting now to do more with the smartphones.

A look at even an ordinary smartphone includes GPS, camera, taking and watching videos, photos, videos & sharing them, localization, emails, reminders, mobile Internet.  On the software and apps side: web browsers, access to social media portals, a lot of readymade apps and content on the Internet.  Quite a list this is!

Energizing Smartphone Usage in the Under Utilized Market

The primary market left today for smartphones to fulfill is a low cost one, where I believe a sub-50 $ smartphone is more affordable and acceptable than the current prices of 100-300 $.

Perhaps localization ranks among the most important features on the smartphone of today.  The most prominent utilization of this feature is in education.  With many terabytes of learning and educational material available on the net, presentation through automatic translation into the local language is an attractive idea.  Much less of a wild idea today, a smartphone and Internet is quite sufficient than ever before in driving education and knowledge of healthcare, personalized entertainment, and gaming, etc.

There is a well-known, large, and persistent association between education and health. This has been observed in many countries and time periods, and for a wide variety of health measures. The differences between the more and the less educated are significant: in 1999, the age-adjusted mortality rate of high school dropouts ages 25 to 64 was more than twice as large as the mortality rate of those with some college education.

Similarly, there has been a super-linear relationship between primary education and economic status. Education of all types brings about prosperity to a society. The cost of education is paid off quickly, with long lasting economic benefits and healthy contribution to the self & society.

In the wildly turbulent social times we humans are experiencing today, the most important contribution to depression and PTSD is absence of entertainment. While smartphones cannot replace sports and physical games, they do contribute to relaxation.

The responsibility of developing relevant electronic games, translating movies and similar video content to the correct screen size must lie with the mature ICT countries, as every aware child develops into a mature contributor to society at large.

Finally, this dispersion of information and knowledge has a cascading effect. Every trained individual ensures that more and more within his circle of friends and family also joins in. I think this was meant when it was said that the “pen is mightier than the sword” – impart relevant knowledge to the critical mass of people, and then we have a self-growing crowd.

Enterprise Mobility Makes Life Simpler

Tablets and smartphones have excited this market, with BYOD leading the way. Enterprises happily want widespread mobility revolutions to simplify and enhance possibilities of higher productivity from their workforces. And hence the concerns around BYOD led security lapses in the enterprise will remain in the CIO’s and security experts’ domains to manage and secure. BYOD denial is certainly not a solution anymore.

  1. The emergence of a multimedia stack on the smartphone has enabled fully integrated live voice, video, email, chat, instant messaging.  On the heels has been the growth of video conferencing and live multimedia based meetings, thus simplifying collaboration.  Apps like Skype-For-Business are leading the way for the enterprise for collaboration (web meetings, VoIP, instant messaging, email, voice mail) to the phone.  Enterprise Mobility trend has made enterprises more virtual than ever, with employees increasingly empowered to work from anywhere, irrespective of the media type.
  2. Next, information dispersion of political and business news, stock markets are all instantly available through apps, thus keeping the business user instantly connected with the rest of the world.  The business user’s actionability is very high now.
  3. The multimedia enabled smartphones are personalized and rarely switched off today.  This makes them ideal for alerts, for instance IoT sensor events.  Alternatively, smartphone based UC applications & services may actuate IoT based devices to influence UC properties or environment.
  4. Business Process Management (BPM) has simplified the usage of smartphones and tablets in automating many a business for an enterprise.  “Action triggers” are sent to the individuals responsible for keeping the wheel moving along.  For instance, once an employee raises a business travel request, the next person in line whose approval is required is the requester’s manager, and then the travel desk books as per itinerary.  Each approving authority is automatically informed through proactive smartphone apps, IVRs or a live video session, thus reducing overall delays.

What lies ahead? 

Quite like all of ICT, the smartphone device market is maturing.  Device sales are tapering, yet usage is growing.  The new opportunities will be for apps – the more innovative, the better.  For instance, subscription based music has all of a sudden caught the attention of subscribers.  Rather than own music, listen to what you like whenever & wherever you want. 

I don’t see enterprise users queuing up to buy new versions of smartphones often enough now.  I believe the time to replacement probably extends to 3-4 years now.  Device manufacturers need to take heed and probably cut back production, else they will be stuck with unworthy inventory. The next round of growth will focus on usage of these powerful smartphones to get the job done.

As feature rich phones reach out to those not targeted yet, education, healthcare, information dispersion, gaming opportunities themselves will usher in a connected world and prosperity for all.

Coupled with the Internet fabric, TSPs, smartphone manufacturers, app & content builders, we are living in very interesting times.

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