Cambridge Consultants Innovation Day 2012: How the mobile industry is influencing the broader consumer market

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As mobile devices become the user interface to the world we live in, they have started to drive the evolution of a wide range of industries. While this may look like land grab, in fact it is the scale and competitiveness of the mobile industry that is driving innovation that, in turn, benefits other industries and accelerates their rate of evolution. In this seminar, we’ll look at how the competitive behaviour in the mobile industry is both threatening and creating opportunities for innovation in other consumer electronics markets.

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Cambridge Consultants Innovation Day 2012: How the mobile industry is influencing the broader consumer market

  1. 1. How the mobile industry is influencingthe broader consumer marketInnovation Day 2012Tim Fowler 7 November 2012 INNOV12-P-046 v1.0
  2. 2. How the mobile industry is influencing the broader consumer marketConsumer electronics covers a very broad spectrum of products 7 November 2012 INNOV12-P-046 v1.0
  3. 3. How the mobile industry is influencing the broader consumer marketMobile phones have for many years been the highest volume consumerelectronics products in the world [Source: Guardian Newspaper] 7 November 2012 INNOV12-P-046 v1.0
  4. 4. How the mobile industry is influencing the broader consumer marketFifteen years ago, the first instant picture was sent by a “camera phone” Shipments of digital still cameras by Japanese vendors 140 Million Units Built-in Lens Cameras Fcast 120 Interchangeable Lens Cameras 100 80 60 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 June 11th 1997 Interchangeable lens cam eras included in built-in lens cam eras until 2003 Philippe Kahn takes picture of Sophie [ so ur c e : C I P A ] 7 November 2012 INNOV12-P-046 v1.0
  5. 5. How the mobile industry is influencing the broader consumer marketSmartphones and tablets have accelerated the rate use case evolution 7 November 2012 INNOV12-P-046 v1.0
  6. 6. How the mobile industry is influencing the broader consumer marketSmartphones and tablets have accelerated the rate use case evolution 7 November 2012 INNOV12-P-046 v1.0
  7. 7. How the mobile industry is influencing the broader consumer marketConsumer product convergence 7 November 2012 INNOV12-P-046 v1.0
  8. 8. How the mobile industry is influencing the broader consumer marketConsumer product convergence – Video 7 November 2012 INNOV12-P-046 v1.0
  9. 9. How the mobile industry is influencing the broader consumer marketConsumer product convergence – Video, Audio 7 November 2012 INNOV12-P-046 v1.0
  10. 10. How the mobile industry is influencing the broader consumer marketConsumer product convergence – Video, Audio, Gaming 7 November 2012 INNOV12-P-046 v1.0
  11. 11. How the mobile industry is influencing the broader consumer marketConsumer product convergence – Video, Audio, Gaming and Navigation 7 November 2012 INNOV12-P-046 v1.0
  12. 12. How the mobile industry is influencing the broader consumer marketConsumer product convergence – Video, Audio, Gaming and Navigation Wireless connectivity is already pervasive Enabling products to just work together 7 November 2012 INNOV12-P-046 v1.0
  13. 13. How the mobile industry is influencing the broader consumer marketVideo is a good example where use case evolution drives convergence The BBC already offers multi-device viewing – Broadcast content on TV – Interactive content on mobile devices – Experiments with synchronisation underway (alternate languages, voiceover etc.). Only the start… 7 November 2012 INNOV12-P-046 v1.0
  14. 14. How the mobile industry is influencing the broader consumer marketNew mobile platforms have raised the bar in terms of users’expectations regarding experience These platforms are an attractive starting point for many new consumer product developments More cost sensitive products are “connecting” with smartphones and tablets to form “smarter systems” And in some cases both are happening (Smart TVs). 7 November 2012 INNOV12-P-046 v1.0
  15. 15. How the mobile industry is influencing the broader consumer marketIncreasing mobile product sophistication has driven evolution of new platformsAs happened in PC market 20 years ago Supply side for consumer electronics products has disaggregated – From: highly vertically integrated players (Matsushita, Sony, Philips) – To: platform, product and key component suppliers (Intel, Microsoft, Google, ARM, Qualcomm etc.) – Who rely on standards to make integration work This is not true of Apple who, through policy and scale, remain largely vertically structured 7 November 2012 INNOV12-P-046 v1.0
  16. 16. How the mobile industry is influencing the broader consumer marketIncreasing mobile product sophistication has driven evolution of new platformsAs happened in PC market 20 years ago Breadth of products based upon platforms is increasing Moving from mobile phones / laptops … To many consumer devices Platforms provide base technology that products can be built from – Platform evolution indicates trends in capability of future products Component Product Component Platform Product Component Product 7 November 2012 INNOV12-P-046 v1.0
  17. 17. How the mobile industry is influencing the broader consumer marketKey technology component players1. Processors2. OS3. Connectivity 7 November 2012 INNOV12-P-046 v1.0
  18. 18. How the mobile industry is influencing the broader consumer marketKey technology components and players1. Processors2. OS3. Connectivity 7 November 2012 INNOV12-P-046 v1.0
  19. 19. How the mobile industry is influencing the broader consumer marketKey technology components and players1. Processors2. OS3. ConnectivitySource: Asymco.com 7 November 2012 INNOV12-P-046 v1.0
  20. 20. How the mobile industry is influencing the broader consumer marketKey technology components and players1. Processors2. OS3. Connectivity Intel is releasing their Windows tablet variant of Medfield today code named [SemiAccurate, Sep 2012] Clover Trail… Intel refused to show the chip in their briefing, afterwards, and in a Twilight Zone turn of events, would not even hand out a press picture to print. Really? Is this what the company has sunk to? Are they that afraid the financial press will realize they can’t compete with ARM on anything much less die area? … Microsoft has yet to approve any Windows 8 tablet using the Intel Clover Trail microprocessor which is Intels x86 processor for Windows 8 tablets, while tablets using Windows for ARM microprocessors (Windows RT) are at a more advanced stage of development… [Electronic Times, Oct 2012]Source: Asymco.com 7 November 2012 INNOV12-P-046 v1.0
  21. 21. How the mobile industry is influencing the broader consumer marketKey technology components and players1. Processors2. OS3. Connectivity 7 November 2012 INNOV12-P-046 v1.0
  22. 22. How the mobile industry is influencing the broader consumer marketKey technology components and playersInternet data services view1. Processors2. OS3. ConnectivitySource: Quantcast 7 November 2012 INNOV12-P-046 v1.0
  23. 23. How the mobile industry is influencing the broader consumer marketKey technology components and playersInternet data services view1. Processors2. OS3. Connectivity iPhon e Lau n chSource: Quantcast 7 November 2012 INNOV12-P-046 v1.0
  24. 24. How the mobile industry is influencing the broader consumer marketKey technology components and playersInternet data services view1. Processors2. OS3. Connectivity nch Lau id dro iPhon An e Lau n chSource: Quantcast 7 November 2012 INNOV12-P-046 v1.0
  25. 25. How the mobile industry is influencing the broader consumer marketKey technology components and playersInternet services usage view1. Processors Mobile/Tablet Top Operating System Share Trend (by network traffic/web use)2. OS 70.00%3. Connectivity 60.00% 50.00% 40.00% Share 30.00% 20.00% 10.00% 0.00% Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 iOS Android Java ME BlackBerry Symbian OtherSource: Net Applications 7 November 2012 INNOV12-P-046 v1.0
  26. 26. How the mobile industry is influencing the broader consumer marketKey technology components and playersMobile phone share by unit shipments view1. Processors2. OS3. Connectivity 7 November 2012 INNOV12-P-046 v1.0
  27. 27. How the mobile industry is influencing the broader consumer marketKey technology components and playersMobile phone share by unit shipments view1. Processors2. OS3. Connectivity Samsung passed Nokia to top Market share earlier this year If all iPhones shipped by end 2011 were still in use at that time they would have represented just 3.5% of all phones in use 7 November 2012 INNOV12-P-046 v1.0
  28. 28. How the mobile industry is influencing the broader consumer marketKey technology components and players1. Processors2. OS3. Connectivity – Hardware – Stacks 7 November 2012 INNOV12-P-046 v1.0
  29. 29. How the mobile industry is influencing the broader consumer marketStandard wireless technologies are essential to enable inter-working Difficult to predict how innovation will affect market share for any one platform – Five years ago, few predicted Nokia’s market share collapse You can only use already adopted connectivity standards – WiFi – Bluetooth (Standard and LE, or Bluetooth, Bluetooth Smart and Bluetooth Smart Ready) 7 November 2012 INNOV12-P-046 v1.0
  30. 30. How the mobile industry is influencing the broader consumer marketStandard wireless technologies have very long cycles from concept to adoptionBLE 2001 – Nokia research identify need for lower power link 2006 – Nokia publicly announce WiBree 2007 – WiBree absorbed into Bluetooth to become BLE standard 2011 – Apple launch first BLE enabled Smartphone 7 November 2012 INNOV12-P-046 v1.0
  31. 31. How the mobile industry is influencing the broader consumer marketStandard wireless technologies have very long cycles from concept to adoptionNFC 200? – Philips and Sony create NFC specification from RFID 2003 – NFC Specification adopted by ISO 2004 – NFC Forum formed 2006 – Nokia 6131 first NFC mobile (trials) 2009 – First NFC Smartphone – simple use case 2011 – Blackberry launch first NFC Smartphone with MasterCard functionality 7 November 2012 INNOV12-P-046 v1.0
  32. 32. How the mobile industry is influencing the broader consumer marketStandard wireless technologies have very long cycles from concept to adoption(if adopted at all)UWB 1901 – Marconi’s first wireless transmissions are UWB transmissions 2001 – General industry interest in new applications for UWB short range systems 2002 – FCC approve UWB for commercial use (DS-UWB front runner) 2004 – WiMedia Alliance promotes OFDM based alternative 2005 – UWB comes under the wing of Bluetooth 2006 – Motorola and Freescale (DS-UWB) quit UWB activities 2012 – UWB only used in niche products (no phones have UWB today) 7 November 2012 INNOV12-P-046 v1.0
  33. 33. How the mobile industry is influencing the broader consumer market Sophistication of the solutions leads to platform development and supply. The motivation of the mobile platform vendors significantly affects the adoption cycles for technology that they offer 7 November 2012 INNOV12-P-046 v1.0
  34. 34. How the mobile industry is influencing the broader consumer marketOperating systems determine what users can do with their devicese.g. Google and Android Google are a services company Motivation driven by adoption of their services – Not adoption of other products around them – One example: their accessory approach: – Android product assumed it will connect to a PC – Therefore, Android accessories have to look like a PC Android is not one OS, but is a plethora of versions… – No automatic upgrade imposed 7 November 2012 INNOV12-P-046 v1.0
  35. 35. How the mobile industry is influencing the broader consumer marketOperating systems determine what users can do with their devicese.g. Google and Android Launched 30 months ago Launched 20 months ago Launched 12 months ago Launched 4 months ago Source: Google 7 November 2012 INNOV12-P-046 v1.0
  36. 36. How the mobile industry is influencing the broader consumer marketOperating systems determine what users can do with their devicese.g. Google and Android - Compare to Apple, 14 days after iOS 5.1 launch Source: macrumors.com 7 November 2012 INNOV12-P-046 v1.0
  37. 37. How the mobile industry is influencing the broader consumer marketOperating systems determine what users can do with their devicese.g. Google and Android By way of an example: Android adoption of BLE has been slow – Google chose not to implement it (yet) – Platform vendors didn’t add it – Some product vendors tried, failed and dropped it 7 November 2012 INNOV12-P-046 v1.0
  38. 38. How the mobile industry is influencing the broader consumer marketOperating systems determine what users can do with their devicese.g. Apple Apple have a vertically integrated approach – If they decide to implement something, they can – However, if they decide not to, then it is blocked BLE has been adopted by Apple NFC has not been adopted by Apple 7 November 2012 INNOV12-P-046 v1.0
  39. 39. How the mobile industry is influencing the broader consumer marketPlatform vendors differentiate through either higher performance / experience orlower development and product costs Western platform vendors target high-end performance – western user tastes Emerging platform vendors targeting low cost – Still use Android Gingerbread (see Hwawei Blaze) – Large Asian, African and Latin American markets make this segment large Many analysts predict strong growth of low-end smartphones in western markets – as “lowest common denominator” devices from other geographies improve – and as price differential between highest and lowest price tier smartphones widen beyond obvious benefits (as happened in PC market) – If true, this will lead to a growing proportion of smartphones having only “lowest common denominator” capabilities 7 November 2012 INNOV12-P-046 v1.0
  40. 40. How the mobile industry is influencing the broader consumer marketMany products are becoming wireless accessories, where smartphones becomean extended, even remote, user interface We have seen growth in the use of smartphones as the user interface and processor “host” for a whole range of new applications 7 November 2012 INNOV12-P-046 v1.0
  41. 41. How the mobile industry is influencing the broader consumer marketI started this talk at the emergence of the Camera Phone, but today we see… Sophisticated software adding new panorama capabilities to one camera phone 7 November 2012 INNOV12-P-046 v1.0
  42. 42. How the mobile industry is influencing the broader consumer marketI started this talk at the emergence of the Camera Phone, but today we see… And… cameras built from Android platforms – Include connectivity for sharing – And App’s specific to pictures 7 November 2012 INNOV12-P-046 v1.0
  43. 43. How the mobile industry is influencing the broader consumer marketHardware, Operating Systems and Connectivity of Mobile platforms will influencemany new use cases for consumer products It’s not that phones and tablets will replace other consumer goods… But they will influence: 1. Expectations of users 2. Use cases 3. Building blocks 4. Connectivity 7 November 2012 INNOV12-P-046 v1.0
  44. 44. Contact details:Cambridge Consultants Ltd Cambridge Consultants IncScience Park, Milton Road 101 Main StreetCambridge, CB4 0DW Cambridge MA 02142England USATel: +44(0)1223 420024 Tel: +1 617 532 4700Fax: +44(0)1223 423373 Fax: +1 617 532 4747Registered No. 1036298 Englandinfo@CambridgeConsultants.comwww.CambridgeConsultants.comCambridge Consultants is part of the Altran group, theEuropean leader in Innovation Consulting. www.Altran.comCommercially Confidential This Presentation contains ideas and information which are proprietary to CambridgeConsultants Limited and/or Cambridge Consultants Inc: it is given to you in confidence. You are authorised to openand view any electronic copy we send you of this document within your organisation and to print a single copy.Otherwise the material may not in whole or in part be copied, stored electronically or communicated to third partieswithout the prior written agreement of Cambridge Consultants Limited and/or Cambridge Consultants Inc.© 2012 Cambridge Consultants Ltd, Cambridge Consultants Inc. All rights reserved. 7 November 2012 INNOV12-P-046 v1.0

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