Mobile Web and Apps World New Orleans Session 1 state of the wireless industry


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Opening Remarks and Presentation from the Chair- The State of The Wireless Industry

Chetan Sharma is President of Chetan Sharma Consulting and is one of the leading strategists in the mobile industry. Executives from wireless companies around the world seek his accurate predictions, independent insights, and actionable recommendations. He has served as an advisor to senior executive management of several Fortune 100 companies in the wireless space and is probably the only industry strategist who has advised each of the top 6 global mobile data operators. He is considered a leading authority on the mobile data technologies and consumer trends.

Chetan Sharma, President, Chetan Sharma Consulting

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Mobile Web and Apps World New Orleans Session 1 state of the wireless industry

  1. 1. State  of  the  Global  Mobile  Industry   CTIA  Research.  Technology.  Strategy.  Intellectual  Property.  Thought  Leadership  Summits.   h=p://                                  1     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  prohibited.    
  2. 2. Chetan  Sharma  Consulting  §  10  yr  old  Seattle  based  Strategy  firm  exclusively  focused  on  Mobile  §  Advisor  to  major  operators,  brands,  startups,  VCs,  and  Fortune  500  firms  around   the  world.    §  Strategy  for  each  of  the  top  6  global  mobile  data  operators  §  Have  a  unique  360o  view  of  the  ecosystem   •  Market  Research   •  Intellectual  Property   –  Research  and  ForecasJng   –  Strategy,  Audit,  &  Policy   –  Patents,  Infringement  analysis   –  CompeJJve  Analysis   –  Patent  Mining  and  ValuaJon   –  Market  Sizing   –  LiJgaJon   •  Strategy     –  Consumer  &  Enterprise   •  Mobile  Thought-­‐leadership  Summits   •  Roadmap   –  Mobile  Future  Forward   •  Product  and  Technology   –  Mobile  Breakfast  Series     Strategy   •  Technical  Due-­‐Diligence   •  R&D   •  Business  Plan  Development   •  Revenue  Models  
  3. 3.   h=p://  h=p://                                  3     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  4. 4. h=p://                                  4     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  6. 6. Discussions  to  inform  your  strategy   •  Is  4G  a  Game  Changer?   •  InnovaJon  at  the  Edges   •  Mobile  Payments  and  Commerce   •  DisrupJon  is  in  the  air   •  Mobile  Data  Services  from  the  Prism  of  the  CIOs     •  Solving  the  50  year  Spectrum  Crunch     •  Managing  the  Network  Growth     •  OpportuniJes  in  the  Emerging  Markets   •  The  Universe  of  Connected  Devices   •  AnalyJcs  -­‐  How  to  Collect,  Manage,  and  Use  Data?   •  MulJ-­‐modal  InteracJons  -­‐  How  Consumers  Adapt?   •  At  the  IntersecJon  of  Social,  Mobile,  Commerce,  Content   •  Ba=le  for  the  Home  –  playing  in  the  n-­‐screen  world   •  What  do  Developers  Want?   •  A  Smarter  Planet  -­‐  The  Role  of  Mobile  in  Enhancing  Lifestyles  and  in  Making  Everyday  Decisions   •  Drivers  for  New  Sources  of  Revenue   •  Role  of  RegulaJons  -­‐  Spectrum,  Privacy,  Net-­‐Neutrality   •  Mobile  Cloud  CompuJng   •  MoneJzing  the  network   •  From  3  Screens  to  MulJ-­‐screens   •  Mobile  Universe  in  2020   h=p://                                  6     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  7. 7. Mobile  Executive  Summit   Sept  10th,  2012   Seattle     Ever  wondered  what  the  future  of  mobile  looks  like?   Join  us  for  an  extraordinary  day  of  executive  mobile  brainstorming     Contact  for   sponsorship  and  speaking  opportunities    
  8. 8. Mobile  Breakfast  Series  June  7th  –  SeaFle  –  Mobile  Operators  and  OTT    Panel  Discussion  with  AT&T  June  22nd  –  Atlanta  –  Connected  Devices      Fireside  Chat  with  David  Christopher,  CMO,  AT&T  Mobility    Panel  Discussion  with  CNN  and  Synchronoss  June  29th  –  London  –  Mobile  Operators  and  OTT    Panel  Discussion  with  Telefonica,  Orange,  Rebtel,  Horizons  Venture     Excellent  Speakers.  Invaluable  Insights.  Peerless  Networking.     Contact  for   sponsorship  and  speaking  opportunities      
  9. 9. Table  of  Contents  •  Global  Mobile  State  of  the  Union  -­‐  2012  •  Mobile  Impacts  Everything  •  Mobile  Subscriber  and  Revenue  Growth  •  Global  Markets  –  Data  Growth  •  Devices  –  Changing  Landscape  •  Mobile  VAS  and  OTT  •  Mobile  Data  Traffic  Growth  and  SoluJons  •  2012  ExpectaJons  •  Mobile  Web  and  Apps  Program   h=p://                                  9     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  10. 10. Key  Industry  Micro-­‐Milestones     •  Apple  captures  70%  of  mobile  device  profits  –  defies  gravity,  obliterates  compePPon   •  Apple  mobile  appstore  downloads  exceed  25  Billion,  100  Million  on  Mac  –  redefines   distribuJon/ecosystem   •  Samsung  ends  Nokia’s  14  year  reign  as  the  device  king  –  brutal  execuJon   •  Android  300M  acJvaJons  –  Juggernaut   •  Paypal  does  $7B  in  mobile  transacJon  volume   •  Square  does  $5B  in  commerce  transacJon  volume   •  Google  >  $5B  in  mobile  revenues   •  Microsoh  revenues  from  Android  >  Windows  Mobile   •  Pandora’s  70%  usage  is  on  mobile,  Twi=er’s  60%  of  the  usage  is  on  mobile  –  heading   towards  a  mobile-­‐dominant  world   •  Facebook  Instagram  AcquisiJon  $1B  –  Mobile  only  acquisiJon  to  beef  up  mobile   strategy   •  Angry  Birds  approaches  a  billion  downloads   •  ESPN  does  3.1  billion  minutes  on  mobile  in  3/12  –  Mobile  is  where  the  acJon  is   •  Skype  traffic  over  150  billion  minutes  –  OTT  pressure   h=p://                                  11     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  11. 11. Key  Industry  Micro-­‐Milestones  cont’d   •  KPN  messaging  volumes  decline  15%  YOY  –  OTT  pressure   •  Mobile  Security  threats  grow  7x  in  last  two  years,  Android  threats  up  3000%  –  Mobile  IS  IT   •  Cisco  BYOD  raPo  –  70%  (up  52%  in  2011)  -­‐  BYOD  is  creaPng  new  opportuniPes  for  vendors   •  US  data  traffic  over  130  quadrillion  bytes/month  in  2011  –  Data  traffic  2X  YOY,  welcome  to   the  yo=abyte  era   •  Fandango  sells  quarter  of  its  Jcket  on  mobile  –  commerce  is  happening   •  Expedia  does  >  $1B  in  mobile  commerce  –  see  above   •  Microsoh  Nokia  MulJ-­‐Billion  partnership  –  It  takes  two  to  tango   •  Lightsquared  fails  –  Keep  your  friends  close,  enemies  closer   •  Google  Motorola  $12.5B  –  IP  becomes  key  to  strategy   •  Nortel  Patent  acquisiJon  $4.5B  –  IP  becomes  key  to  strategy   •  AT&T/T-­‐Mobile  Failure  –  DOJ/FCC  put  down  the  gavel   •  40%  of  Kenya’s  GDP  comes  from  mobile  money  –  impact  of  mobile  is  pervasive     •  Millennial  Media  IPO  at  $2B  –  first  public  market  validaPon  of  the  mobile  adverPsing  space   •  HP  gives  up  on  Palm  –  CompeJJon  forces  Corporate  Schizophrenia   h=p://                                  12     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  13. 13. Mobile  is  the  single  most  pervasive  technology  ever  invented   h=p://                                  14     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  14. 14. Mobile  is  now  50%  of  the  household  IT  budget  
  15. 15. Context  –  the  most  valuable  currency   in  mobile   Demographics/Explicit Profile Interests/Implicit Profile Browsing, Watching, Previewing, Flipping Sensor data Purchasing, Payments User Intent Communications Location Trusted  Concierge   Presence Search (Local, Online, Media)Physiological parameters Knowledge Transactions DRIVES (about User) (from User) Calendar User Experience Address Book Gifting Social Community Intellectual Community Trusted  Advisor   Advertising M2M Pricing Preferences Security/Authorization Devices in the vicinity Big  OpportuniJes  in  becoming  the  trusted   3 Party Sources Concierge/Advisor  to  the  individual  user   rd h=p://                                  16     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  17. 17. Global  Mobile  Market  Snapshot  2011   Global  Mobile  Market  Snapshot  2012 Global Subscriptions Global Smartphone Users Global Data Users ©  Chetan Sharma Consulting, 2012 Global SMS Users Global Mobile Broadband Users Each  dude  represents  approximately  113  million  humans  on  planet  Earth   h=p://                                  18     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  18. 18. Global  Mobile  Technology  EvoluPon   First  time,  data  is  leading  the  charge   h=p://                                  19     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  19. 19. Global  Mobile  Industry  conPnues  to   grow  at  a  healthy  pace  •  Non  Operator  OTT  Revenues  at  4%  •  Voice  will  fall  below  50%  in  2012  •  Messaging  revenues  sJll  growing              but  fla=ening  growth  •  Access  revenues  are  growing  quicker              than  any  other  operator  segment   h=p://                                  20     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  20. 20. Mobile  is  over  2%  of  Global  GDP   h=p://                                  21     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  21. 21. Operators  around  the  world  are  benefiPng  from  mobile  data   50  operators  with  >  $1B  in  data  revs   h=p://                                  22     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  22. 22. Global  Mobile  Industry  Growth   h=p://                                  23     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  23. 23. Global  Mobile  Leaders  -­‐  2012     Rank   By  Subs   By  Total  Revenue   By  Data  Revenue   1 China US US 2 India China Japan 3 US Japan China 4 Russia Brazil France 5 Brazil France UK 6 Indonesia Russia Korea 7 Japan UK Italy 8 Pakistan Germany Germany 9 Germany Italy Australia 10 Mexico India Brazil h=p://                                  24     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  24. 24. Global  Mobile  Leaders  -­‐  2012     Rank   By  Sub  PenetraPon   By  ARPU   By  Data  Usage   1 Hong Kong Japan Sweden 2 Finland Canada Finland 3 Portugal Switzerland Hong Kong 4 Austria US US 5 Singapore Norway Denmark 6 Sweden Australia Canada 7 Denmark France Australia 8 Greece Netherlands New Zealand 9 Germany Singapore Austria 10 Switzerland Israel Belgium h=p://                                  25     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  25. 25. Biggest  Telecom  Groups   Rank   By  Subs   By  Data  Revenue   By  NM  Data  Revenue   1 China Mobile Verizon Wireless AT&T Mobility 2 Vodafone NTT DoCoMo NTT DoCoMo 3 Telefonica AT&T Mobility Verizon Wireless 4 Bharti Airtel China Mobile China Mobile 5 America Movil Vodafone Vodafone 6 Orange Sprint Nextel Sprint Nextel 7 China Unicom KDDI KDDI 8 Vimplecom Telefonica Telefonica 9 TeliaSonera Softbank T-Mobile 10 Reliance T-Mobile Softbank h=p://                                  26     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  26. 26. US  –  Mobile  is  the  most  dominant  digital  channel   h=p://                                  27     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  27. 27. Race  to  a  Billion  –  China  won   CorrupJon  drags  down  growth   h=p://                                  28     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  29. 29. Mobile  Internet  3.0  –  Data  as  growth  engine   Mobile  Internet  -­‐ Leading  Global  Operators  (2011)  $40 3.0 Softbank  Japan NTT  DoCoMo  $30 KDDI Mobile  Data  ARPU  (USD) 2.0 Telstra Vodafone  Italy 3  Australia  $20 Rogers Verizon Sprint 3  Sweden AT&T O2  Germany Singtel 1.0 Orange  France ©  Chetan  Sharma  Consulting,  2012 T-­‐Mobile  US SFR T-­‐Mobile  Netherlands Bouygues SK  Telecom  $10 O2  UK KT T-­‐Mobile  Austria 3  UK Vodafone  UK Telefonica Vodafone  Spain TIM 3  Italy Vodafone  Germany T-­‐Mobile  UKT-­‐Mobile  Germany Orange  UK China  Mobile Turkcell China  Unicom Vodafone  India AIS SMART Bharti Reliance  $-­‐ 0% 15% 30% 45% 60% Mobile  Data  as  %  of  Total  ARPU Source:  h=p://   h=p://                                  30     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  30. 30. All  major  markets  experiencing  data  growth  –  Japan,  Australia,  US  leading   h=p://                                  31     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  32. 32. Mobile  Devices  are  dominaPng  the  CompuPng  Ecosystem   h=p://                                  33     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  33. 33. US  leading  in  smartphone  sales   US  accounts  for  roughly  40%  of  the  smartphone  sales  worldwide   h=p://                                  34     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  34. 34. Smartphones  driving  data  growth   h=p://                                  35     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  35. 35. Samsung  reaches  the  top  of  the  hill  in  market  share,  Nokia  struggling   h=p://                                  36     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  36. 36. Apple  and  Samsung  control  50%  of  the  unit  smartphone  sales.  Nokia’s  share  decimated.   h=p://                                  37     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  37. 37. Connected  devices  come  in  all  shapes  and  sizes   High Data  Cards/Embedded Superphones Tablets Video  Cameras Data  Consumption Automotive Smartphones Cameras eReaders Picture  Frames Low High Number  of  Units  in  Market Feature  Phones ©  Chetan  Sharma  Consulting,  2011 Digital  Signage/Kiosks Security  Sensors Health  Monitors Copiers,  Scanners,  Printers Wellness  Devices Home  Sensors Asset  Tracking Energy  Meters Vending Grid  Sensors Low h=p://                                  38     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  38. 38. US  Tablet  Market   h=p://                                  39     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  39. 39. Plahorm  players  –  5  Amigos  of  mobile   Strengths   Weaknesses  Apple   Step  ahead  of  the  compeJJon.   Pressure  on  the  operator  margins   VerJcal  IntegraJon,  Brand  loyalty,  Dev   revenues,  Commerce,  DistribuJon  Google   Broad  adopJon.  Broad  Support.  Open   FragmentaJon.  Dev  revenues.  Lack  of   dev  plaqorm.  AmbiJous   clear  device  strategy.  Regulatory   microscope  Amazon   Deep  understanding  of  the  user,   New  to  the  device  arms  race,  Lack  of   Content,  Commerce,  DistribuJon,   OS   Margin  master  Microsoh   Bank  balance,  Operators  want  a  3rd   Late  to  mobile  party,  Lack  of  mobile   ecosystem   execuJon  Facebook   ~  1  B  users,  500  M  mobile   Lack  of  coherent  mobile  strategy,  Lack   of  OS   h=p://                                  40     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  40. 40. Apple  dominates  the  plahorm  ecosystem   Apple The  overall  market  is  basically  iOS   and  Android.       Apple  marketcap  >  Microsoh   +  Google  +  Facebook  or  Amazon   Marketcap Microsoft ©  Chetan  Sharma  Consulting,  2012 Google Facebook Amazon Users h=p://                                  41     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  41. 41. VAS  AND  OTT  
  42. 42. Smartphones  are  enabling  Offdeck  to  dominate  app  revenue   h=p://                                  43     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  43. 43. Some  operators  are  starPng  to  see  the  decline  in  messaging  revenues   Some  operators  in  Europe  are  also  seeing  declines  in  messaging  revenue   Total  SMS  Volumes  sJll  increasing   but  revenue  in  decline   h=p://                                  44     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  44. 44. SMS  Growth  –  US  takes  over  Philippines   Philippines  SMS  volumes/sub  declining  precipitously  due  to  the  rise  in  IP  messaging   h=p://                                  45     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  45. 45. WHAT  TO  EXPECT  IN  2H  2012  
  46. 46. What  to  expect  in  2H  2012  •  More  Tiering,  faster  pace  of  change  of  plans.  More  opJons,  family  data  plans  •  Cost  reducJon  is  as  important  as  revenue  generaJon.  More  players  will  align  their  value-­‐chains  and  cost  structures  •  Facebook  IPO  is  probably  going  to  be  the  single  biggest  event  in  the  technology  industry  in  the  next  few  months.  •  Radios  will  start  connecJng  the  digital  world  with  the  physical  world  with  significant  disrupJon  opportunity  •  Mobile  Payment  Networks  will  remain  intact  for  the  near  future  as  the  ecosystem  largely  focuses  on  building  value   on  top  of  the  exisJng  exchange  plaqorms  •  The  intersecJon  of  Social,  LocaJon,  IdenJty,  and  Gaming  is  creaJng  new  opportuniJes  •  With  connecJvity  becoming  pervasive,  mobile  will  fundamentally  start  to  alter  the  legacy  infrastructure  –  retail,   health,  educaJon,  energy,  compuJng,  travel,  entertainment  •  Significant  tablet  adopJon  in  the  enterprise  directly  impacJng  the  tradiJonal  computer  manufacturers  •  Both  HTML5  and  Apps  will  conJnue  to  grow,  the  relevancy  to  any  given  applicaJon  will  depend  on  the  reach  and   economics  requirements.  HTML5  is  not  going  to  replace  Apps.  •  Mobile  data  growth  will  double  again  in  2012.  Significant  opportuniJes  in  managing  and  understanding  of  mobile   data  growth  •  Regulators  will  need  to  evolve  to  keep  up  with  the  trend  to  keep  their  naJon  globally  compeJJve  •  More  IP  scuffles  before  licensing  se=lements  •  ConsolidaJon  of  weaker  players,  more  global  M&A  •  Significant  progress  in  emerging  areas  like  mHealth,  mPayments  will  come  from  the  developing  world  while  the   western  countries  get  mired  in  regulatory  and  legacy  mess  •  Several  players  face  challenging  Jmes  ahead  and  2012  will  be  criJcal  in  their  turn  around  sojourn.     h=p://                                  47     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  47. 47. We  look  forward  to  hearing  from  you  Chetan  Sharma   Mobile  Future  Forward    TW:  @chetansharma   TW:  @mfutureforward  h=p://     h=p://         Research.  Technology.  Strategy.  Intellectual  Property.  Thought  Leadership  Summits.   h=p://                                  48     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  48. 48. Mobile  Web  and  Apps  Program  •  Apps  and  Web   –  Development   –  Engagement   –  MoneJzaJon   –  Connected  Devices   –  Commerce  OpportuniJes   –  APIs   –  Cloud   –  Media  and  Entertainment   –  Best  PracJces   –  Privacy   h=p://                                  49     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.  
  49. 49. Book  Drawing   h=p://                                  50     ©  Copyright  2012,  All  Rights  Reserved.  Copying  w/o  permission  is  strictly  prohibited.