Mobile Data Revolution


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Mobile Data Revolution

  1. 1. The Mobile Data Revolution – Overview of trends and impact on mobile operators Ziv Baum
  2. 2. Executive Summary The data revolution is already here Better devices Appropriate data plans Better user experience iPhone was the break through Got people to really “eat all they can” Created new set of problem for operators Data is the new golden egg for all the players The open-mobile initiative is after the operators’ control Operators should consider new scheme for controlling the end-user Building an operator platform is the best solution Give 3rd parties access to network assets Participate in revenue stream and maintain some control 1
  3. 3. Agenda Overview of current trends The smartphone space iPhone saves the day Open mobile Wireless CE Opportunities and risks The problems operators are facing Opportunities and risks for mobile operators Recommendations Analyzing the strategic choices available for operators Recommendations 2
  5. 5. Smartphones – the Holy Grail of the Mobile Industry Smartphones enable… Global Smartphone Shipments and % of Total Mobile-Device Shipments OEMs to sell high priced product Dedicated, pure-play smartphone vendors have become super-profitable. RIM, HTC and Apple are all registering larger profit margins than Nokia. Operators to attract high ARPU subs iPhone data ARPU: 35$/Month – X4 the average data ARPU in the US And content providers to provide better content Larger, browser-friendly displays Global Operating Margin for Handset Messaging-friendly keyboards Division in 2007 Expandable software Global smartphone shipments will grow 3 times faster than the total industry average in 2008… and still 2 times faster by 2015 More brands Lower ASP * Data from Strategy Analytics / Sep 2008 4
  6. 6. The Power of the Smartphone wasn’t Unleashed Until the iPhone Appears The chicken or the egg? Implications of the iPhone revolution: Smartphone prices are going down iPhone 3G (8G) - $199, iPhone EDGE - $499 Unlimited data plans are more affordable iPhone 3G – 30$ unlimited data Intuitive UI and simplified user experience OEMs are finding “over-the-top” ways to end-users OVI, MobileMe, Google Maps Open Mobile, aka Mobile 2.0, is the new buzz word Not social networks but rather open access The next holly grail is around the corner – monetizing the mobile applications – mobile ads and LBS * Data from M:Mobile 5
  7. 7. The Next Big Leap – Open Mobile Ecosystem (1/2) Application and Platforms Networks User Devices content Aggregation platforms Devices with open where Networks allowing Unmanaged “Over the architecture upon which external applications developers and content Top” services from developers can write online and devices access to owners can directly tightly reach players core network functions integrated apps consumers Operator response to consumer and competitive pressures “All you can eat” data plans Consumer demand the same internet experience they get on their PC Operators are opening networks to external devices and application Open ecosystems facilitated by device development Better device capabilities OEMs want part of the pie 6
  8. 8. The Next Big Leap – Open Mobile Ecosystem (2/2) Architecture of Yahoo! ‘Mobile Developer Increasing availability of Platform’ unmanaged applications Application Developers Gmail, Google Mobile Maps, Skype…. Create a single application using Yahoo! Multiple device/network Mobile Developer Platform and SDK agnostic platforms Android, Yahoo! Mobile SDK Client side software to help access these Hardware manufacturers will applications on multiple handset types want a piece of this pie as well Applications are viewed as Mobile Widgets 7
  9. 9. Wireless CE – The New Segment How interested would you be in having one of these products connected to the internet? New opportunities for operators to utilize their pricey 3G networks New revenue stream, possibly advertising based Most obvious candidates are Laptops and Navigation Devices But other will follow – mobile TV, Kindle.. New class of products – Mobile Internet Devices will supply operators with even more opportunities * Data from 8
  11. 11. The Walled Garden is Open – Operators Need a New Plan Worldwide Mobile Voice and Data Revenue, ARPU from voice is declining 2002-2011 Verizon Wireless’ voice ARPU dropped by 11% from the end of 2004 to the end of 2006 Data is the new source of ARPU In order to promote more data consumption, some of the wireless industry paradigms should be examined The biased model the operator enjoyed is out-dated and will disappear Worldwide Mobile Advertising Spending, Customers demand it 2002-2011 Other players push for it Operators need it as well 700Mhz auction put the last seal on it Mobile advertising is at the doors This is the time to find new ways to control the user in order to better benefit from mobile ads * Data from Strategy Analytics / Wireless Media Strategies 10
  12. 12. Opportunities and Risks for Mobile Operators Risks Opportunities Being left as the dreaded “dumb- Set up MobileMe & Appstore pipe” equivalents to get control back in services Industry growth is 6% and saturating. Provide APIs for third parties to hook into wireless networks to Voice revenue growth is at 7% leverage customer relationships, Growth stagnation in costumers billing, services joining and voice revenue will Play greater role in helping users drive consolidation – be a big fish, find relevant third party services or be eaten and content (both mass market Loss of costumer confidence and long tail) Cannot support 3rd party Promote new business models to applications benefit from new class of VOIP and video services consume wirelessly connected CE huge chunks of bandwidth The investment in the network and in the upgrade needs to be covered * Data from Strategy Analytics, Limbo 11
  14. 14. Analyzing the Strategic Choices Available for Operators Application Platform Network User Devices and content Free access to all Open applications. No operator control – All external devices Open access to the Network 3rd party controls the Operator is not an are allowed on the network – ISP model active participant in platform network Access value chain Differentiated Subscribers to 3rd party aggregation Operator is involved premium plans get Network in delivering some platforms – operator Prioritized access subsidies on applications may be involved access handsets Operator offers a platform with Higher level of 3rd party applications open APIs, a Only authorized Owning the prioritized access – + operator content development toolkit handsets on the application/service Platform and applications and hosting and network type billing functions * Data from TME 13
  15. 15. Recommendations Owning the platform offers the most for operators Embrace and extend: Get 3rd parties to extend the application offering on the network Use data assets to participate in revenue sharing Use core network assets (voice, messaging) to participate in revenue sharing Applications are granted prioritized access to the network and at the same time are adherent to the fair use rules Operators can supply applications with billing and hosting services Operators should focus on owning the platform rather than owning the network, the content and the devices The result: revenue uplift in addition to retaining significant control over the end-user 14
  16. 16. Questions + Answers 15
  17. 17. Thank You 16