Evan Liu - Innovation on 50B Connections - speech at CMDC 2010


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As a speech on CMDC (China Mobile Developer Conference) 2010, Evan talked about Ericsson's vision of 50B connections in 2020, what chances could be found on such a industrial trend, how to innovate for Mobile Internet developers, and how Ericsson Labs supports mobile developers.

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  • Source: Ericsson Forecasts and Real measurements in 3GPP networks Globally across RNC, BSC and Packet Core
  • Key messages
    Mobile telephony was a first inflection point for growth in connections
    Now - early stages of the next major inflection point for our industry – the connection of a vast array of “things”.
    Everything that benefits from a connection will have one. 2020: ~ 50B connections.
    This exciting development is causing us think about our technology and our customers’ requirements differently.
    We need to drive the market in creative ways and not be reactive to it.
    One good example of a strategic step to drive the market is the formation of our ST Micro JV. Give some anecdotes on this.
    Proof points
    PLACES: ~0.5B fixed broadband connections 2010 -> 0.6B 2015 (but explosive growth in Mobile BB)
    PEOPLE: ~5B mobile 2010 -> 7.9 B 2015 (driven by emerging markets in part. APAC, multiple subs, and shifting towards WCDMA/HSPA)
    CONSUMER THINGS: iPad, smartphone, Kindle, tablet, mp3, cell phone / PDA, car electronics GPS / ABS, mobile video, games, home entertainment
    INDUSTRY THINGS: remote monitoring, asset tracking, fleet management, telematics, automation and control, automated meter reading, SmartGrid, point-of-sale/ATM and wireless routing
  • Key messages
    “Talk about being in the right place at the right time! I have a hard time conceiving of any other technology sector that will be the beneficiary of so many new application developments!”.
    Drivers are: mobile connections bridging the digital divide, surge for broadband connections, multiple devices per person, M2M, industry specific solutions.
    Ericsson cannot address many of the application opportunities without strong partners.
    Furthermore, many of these strong partners recognize Ericsson’s unique position in the industry and have already approached us to form relationships with them. Our initial assessment is that if we choose our partners carefully we will create a win/win/win opportunity for us, them and our customers, some of whom may be new to Ericsson
    Proof points
    10x more devices – not just phones: iPad, smartphone, Kindle, tablet, mp3, cell phone / PDA, car electronics GPS / ABS, mobile video, games, home entertainment etc
    M2M brings value to businesses by e.g. reducing labor and latency in its activities.
    M2M devices deliver capabilities to multiple industries and include such applications as remote monitoring, asset tracking, fleet management, telematics, automation and control, automated meter reading, SmartGrid initiatives, point-of-sale/ATM and wireless routing. Mobile computing devices, together with traditional consumer electronics and devices with broadband access, offer increased durability, hardware/software integration, simple setup and lower support costs for customers and partners.
    M2M represents a revenue growth opportunity for operators, beyond human connections. Increased operator activity: Sprint, Verizon Wireless, Vodafone, Orange, Telenor etc.
    M2M: connections is already impacting data growth rates. Verizon Q1 numbers: 7.3 million (7.3%) of 101.1 million wireless connections are now M2M. AT&T Inc. reported 5.8 million M2M devices, or 6.7 percent of its total. Verizon expects its LTE network launch to cause this number to grow even quicker too.
    Figures does not include (examples); RF-ID tags, Cellular watches, USB memories, Headsets, Femtocells
    Consumer Electronics (CE) include: Networked TVs, Digital Media boxes, BluRay players etc.
    Uncertain how many of the Connected CE devices that are actually networked - because of the technical complexities currently associated with connected home devices, manufacturers face a particular challenge in persuading owners of those devices to successfully install them and use them in the manner intended.
    Confidence level: Low, since this is early in the growth period and we have to base the forecast on external sources. Likely to change as data matures.
  • <number>
    >100B embedded processors => the remaining 16B+ devices: 16+3+1+30=50
  • Key messages: Operator M2M activities stepped-up during 2009
    Slide owner: 50 billion marketing program
    Latest update: December 2009
    Best before: December 2010
    A dedicated M2M unit is critical for an operator to succeed in the M2M space according to ABI Research. A few examples include:
    Telefonica international M2M unit – aim to have 100 employees
    Telenor Connexion - 60 employees
    Orange M2M - 150 employees
    AT&T has two units:
    Emerging Devices Organization, established October 2008, focusing on devices that are wirelessly enabled for consumers. The unit has its own product design lab, sales team, and freedom to set its own pricing strategies.
    In May 2010 AT&T created a new group - Advanced Enterprise Mobility Solutions - mobile applications and solutions for traditional and emerging devices to businesses, governments and organizations.
  • e.g. telephony 1G->2G->3G->4G->…
  • e.g. Apple app-store ecosystem
  • From Innovation 1.0 to Innovation 2.0.
    Innovation 1.0: from zero to small scale. Bigger and bigger. Until becomes a large enough scale to be as platform.
    Then we open the platform to become the open platform to establish Innovation 2.0.
    NOTICE that NOT ALL innovation 1.0 are suitable to take the open platform strategy to become 2.0.
  • - There is a lot of things that can be done with the capabilities of the network that can’t be reached if you do things over-the-top
    - Privacy and security are really key issues here
    - But think what kind of cool applications you could create if you hade access to all places your user have been to in the last year or could transfer money between your users without any credit card etc
  • Any developer meet many problems.
    Device platforms
    Operator reach
    Complex telecom world
    Technology details
    Access to advanced functionality
    TTM (Time-toDemo, Time-to-Prototype)
    This is of course impossible for a single developer to do.
    Instead we think that it’s better that you have one interface to all these things..
  • ===
    [Olof] The trick is to explain this slide in a very simple way to appeal to the target group of journalists.
    Two sentences: to innovate enablers to simply app dev by encapsulating cloud-side complexity; to open APIs to promote the convergence of networks.
  • Evan Liu - Innovation on 50B Connections - speech at CMDC 2010

    1. 1. Innovation on 50B connections 500 接上的 新亿连 创 Evan (Qingyan) Liu 青焱刘 evan.l.liu@ericsson.com
    2. 2. © Ericsson AB 2010 | Page 2 Outline › Ericsson’s vision of 50B connections in 2020 › Methodology of open and innovation › Ericsson Labs and Ericsson Application Award
    3. 3. Ericsson’s vision of 50B connections in 2020
    4. 4. © Ericsson AB 2010 | Page 4 Off the press Global Measured data Traffic Nearly Triples in 1 year › Global measured mobile data traffic stands at 225 000 TB/month – As off Q2 2010 › Mobile Data grew 10 times faster than voice – Grew 171% from Q209 to Q210 versus 16% for voice › Regional Variation in line with forecast and network deployments – EMEA leading global traffic – Voice higher than data in APAC PRESS RELEASE Aug 12, 2010
    5. 5. © Ericsson AB 2010 | Page 5 Measured voice and data traffic – global Total * Measured Data Updated Aug 2010 Source: Ericsson Measurements in Global Networks (DVB-H, Mobile WiMax, M2M and WiFi traffic not included) This slide contains forward looking statements › Q209 to Q210 – Mobile Data Traffic nearly Triples › Mobile Data traffic grew 10 times faster than voice
    6. 6. © Ericsson AB 2010 | Page 6 Measured voice and data regional breakdown EMEA APAC Measured Data Updated Q2 2010 Source: Ericsson Measurements in Global Networks (DVB-H, Mobile WiMax, M2M and WiFi traffic not included) › EMEA dominates the global traffic with more Mobile BB › APAC Voice still dominates, but data catching up
    7. 7. © Ericsson AB 2010 | Page 7 Key Messages: 50B connections New telecom cycle “Connecting 50B devices by 2020” 1 Opportunity 10X
    8. 8. © Ericsson AB 2010 | Page 8 inflection points 10X the Opportunity 1875 1900 1925 1950 1975 2000 2025 50 B 5.0 B ~0.5 BPLACES PEOPLE THINGS Inflection points Global Connectivity Personal Mobile Digital Society Sustainable World Source: Ericsson
    9. 9. © Ericsson AB 2010 | Page 9 New devices and new industries bring new business opportunities New telecom cycle: 10x devices, 10x industries Connected Devices Worldwide Traffic systems, Automotive Transport and logictics Utilities – smart grid Security – connected buildings Home appliances Medical automation, Remote healthcare ATM, Point of sale, Vending Critical infrastructures Monitoring and control 0 10b 20b 30b 40b 50b 2007 2010 2014 2020 Consumer Electronics Fixed phones / IP phones Mobile phones More devices per person Addressing Industries PCs M2M eBook readers, Music players, DVD players, Gaming devices, Cameras, Home appliances, In-vehicle entertainment etc. Source: Ericsson Note: Connected devices / connections (not including tags e.g. RFIDs, including 802.15.4) This slide contains forward looking statements
    10. 10. © Ericsson AB 2010 | Page 10 Connected devices Businesses Societies People Online homes Personal network Intelligent transport Smart utilities Industry & society
    11. 11. © Ericsson AB 2010 | Page 11 50 billion Connected devices 2020 2020 Businesses Societies People Online homes Personal network Intelligent transport Smart utilities 3B middle class consumers x 10 connected devices 30B connected consumer devices >1 billion vehicles >100B embedded processors shipped (cumulative) >3 billion utility meters Industry & society
    12. 12. © Ericsson AB 2010 | Page 12 Key Messages: Ericsson’s actions Ericsson enables “operators” to handle M2M for health, auto, connected devices & utilities 2 Products & Solutions Ready NOW Ericsson teaming with ecosystem in addition to the operators to realize the vision of 50B 3 Ecosystem for 50B expansion
    13. 13. © Ericsson AB 2010 | Page 13 0 5 10 15 20 25 30 Education Government Construction Logistics Security Retail Insurance Utilities Transport Finance Healthcare Automotive Number of operators active (of 22 total) Source: Ericsson, 2010 Operators are active
    14. 14. © Ericsson AB 2010 | Page 14 Ericsson Enabling Operator M2M 5 Steps to 50B HANDSET & DEVICESGOVERNMENT UTILITIES OPERATORS TV & MEDIA   HEALTH TRANSPORT 1. Connected Devices 2. Cloud Services 3. Horizontalization 4. Operator Service Platform 5. Smart Pipe Operator driven Ericsson Labs focus area
    15. 15. © Ericsson AB 2010 | Page 15 HANDSET & DEVICESGOVT UTILITIESOPERATORS TV & MEDIA   HEALTH TRANSPORT Smart Cities Security Safety Sustainability Ericsson Enabling M2M 5 Steps to 50B with Ecosystem Chips Laptops MIDS Home Phones & OS Service Layer Smart Meters Smart Grids Sustainability Collaboration Wireless Car Systems Solutions Hosting
    16. 16. © Ericsson AB 2010 | Page 16 Key Messages New telecom cycle “Connecting 50B devices by 2020” 1 Ericsson enables operators to handle M2M for health, auto, connected devices & utilities 2 Ericsson teaming with ecosystem in addition to the operators to realize the vision of 50B 3 Opportunity 10X Products & Solutions Ready NOW Ecosystem for 50B expansion
    17. 17. © Ericsson AB 2010 | Page 17 Open Questions: 1000X the traffic in 2020 › Will that generate 1000 times the ARPU? › Will that allow 1000 times the power consumption? › Will we find 10X the number of sites, to place new Node-B’s? › What new service demand will there be – Quality of service? – Service enablers? › What does this imply to the backbone – Content delivery – Smart pipe etc
    18. 18. Methodology of open and innovation
    19. 19. © Ericsson AB 2010 | Page 19 Mobile Internet: the most evolved till today Telegraph Telephony Internet Fixed Mobile Electromagentic information bearer IoT
    20. 20. © Ericsson AB 2010 | Page 20 Business Model Evolution: from innovation 1.0 to 2.0 $ $ $ $ $ $ $ Product Product Product Product Telecom Internet/Media Mobile Internet/Cloud FREE/FREEMIUM consumer cost per bit ECOSYSTEM
    21. 21. © Ericsson AB 2010 | Page 21 Innovation 1.0 disruptive sustaining Innovation 1.0: a series of innovations with bigger and bigger scales. Blue triangle means in-house innovation. Gray triangle means future innovation. The triangle denotes the RPV (Resource, Process, Value) criteria from Clayton M. Christensen, Innovators’ Solution
    22. 22. © Ericsson AB 2010 | Page 22 Innovation 2.0 disruptive Innovation 2.0: a mass of innovations with “long tail” scales. Innovation platform (ecosystem) Yellow triangle means 3rd-party innovation.
    23. 23. © Ericsson AB 2010 | Page 23 From 1.0 to 2.0: Open the Platform open the platform For example. Facebook itself at first was a SNS website. At around 2008, it opened itself to become an open platform to involve many 3rd party developers to innovate based on its open platform.
    24. 24. © Ericsson AB 2010 | Page 24 Keyword of Innovation 2.0: Open Community Innovators The company Scalable Resource Scalable Innovation outsourcing crowdsourcing Methodology: Cloud Computing Methodology: Open Platform Competence: - Huge computing resource - Huge consumer base Competence: - Low-cost to fail - Freely evolved - Close to market enablers enablers in different verticals
    25. 25. © Ericsson AB 2010 | Page 25 Keyword of Innovation 2.0: ecosystem In: Cash2User Out: User2Cash Cloud Ecosystem $ $ Platform (App Container) Community Innovators Apple store: near-free market with lots of consumers Apple store: pay per download Amazon affiliate program iPhone Mozilla Firefox Facebook Open Platform Amazon EC2 Google AppEngine ROI is KING! Ericsson Labs x-axis:business y-axis: technology in different verticals
    26. 26. © Ericsson AB 2010 | Page 26 Open Questions › Why App Store is strategically so important while it doesn’t generate much gross profit for Apple (only ~1%)? › What is the most important thing for your open strategy? › What kind of brand-new opportunities can we innovators found on 50B connections? Mobile Internet? M2M? etc?
    27. 27. An Innovation Mall http://labs.ericsson.com/cn 新浪微博 / 搜狐微博: @ericssonlabs Ericsson labs
    28. 28. © Ericsson AB 2010 | Page 28 Open innovation › Mobile Applications are today developed by anyone › Support developers creating new innovations › Feedback on new technology developed labs.ericsson.com/CN Target group
    29. 29. © Ericsson AB 2010 | Page 29 The Power of the Network › Knows – Who your users are – Where they are – Where they have been – Who they know Can – Push content to your users anytime – Handle payment and money transfer …and much more
    30. 30. © Ericsson AB 2010 | Page 30 Developer Dilemma Researcher iPhone Developer Hobby Developer Telecom Developer Student Android Developer Java Developer Web Developer Operator OperatorOperatorOperator
    31. 31. © Ericsson AB 2010 | Page 31 Enablers Internet Cloud Telecom Cloud Web app Client-side app (Open API) App-side simplicity (REST & SDK) Ericsson Labs: an initiative for open innovation by Ericsson Research › Innovate. Simplify. Open. Converge. Cloud-side complexity Ericsson Labs Operators Capability Providers Researcher iPhone Developer Hobby Developer Telecom Developer Student Android Developer Java Developer Web Developer
    32. 32. © Ericsson AB 2010 | Page 32 ericsson labs API’s SMS Send & Receive Communication Framework Communication Group Voice Mixer Mobile Push Web Location Web Maps Mobile Maps Mobile Location 3D Landscape Maps & positioning Cluster Constructor Machine Learning Streaming Media Media & graphics Converting Media Face Detector Security Mobile Web Security Bootstrap Tag Tool NFC & Sensors Sensor Networking Application Platform Network probe User & network Information Mobile Identification Mobile Network look-up Web Connectivity Web Technologies EventSource Web background Text To SPeech labs.ericsson.com/CN
    33. 33. © Ericsson AB 2010 | Page 33 Ericsson Application Awards 2011 › Theme: ”Connected Things” › Official Launch @ Droidcon London 2010 › More details ericssonapplicationawards.com Oct 2010 March 2011 Jun 2011 Prize CeremonySubmissionsLaunch Beta-test
    34. 34. © Ericsson AB 2010 | Page 34 ericsson application awards 2010 › Registered developers: ~800 › Registered Teams: 120 representing 28 countries › Applications: 43 (43 teams submitted their apps) › 3 teams from China reached the semi-finals. The teams were awarded with Sony Ericsson Xperia X10 › The finalists were awarded at Nordic Mobile Developer Summit 2010 – Interviews http://www.youtube.com/watch?v=V9scEKvesZQ › Finalists represented Ireland, Italy and China(KTH)