Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
What will the mobile world look like in 10 years? It’s certainly a question worth pondering. It’s also a question that is extremely difficult to answer because of the rapid, exponential growth of mobile technology and the industry itself.
A lot can happen in 10 years
If we look back to the year 2000, just 10 short years ago, we see the world in the midst of the Internet bubble. Stock portfolios were performing handsomely and wireless subscribers hit the 750 million mark – about equal to the combined populations of the U.S., Japan, Russia and Brazil.
Today, wireless subscribers have reached 4.6 billion.
What was the hot phone in 2000? One of the hottest was the Nokia 3310, which featured an 84 X 48 monochrome display, utilities such as a calculator and a stopwatch, and several customized ringtones. It was a huge hit, selling 126 million units.
A decade later, we have the iPhone, iPad and Android phone. These three mobile devices provide more computing power than the Apollo rockets that carried our astronauts to the moon in 1969. They also have more computing power than most desktops of the not-too-distant past.
The traditional big-name mobile phone manufacturers have continued to grow. At the same time, the new top mobile companies have set new parameters for measured success. The collective market cap of just two of these companies in 2000 was $28 billion. In February 2010, the collective market cap of the top three of these new leading mobile companies reached $385 billion –a 1,300 percent increase in just 10 years.
When reality exceeds expectations
Who predicted this kind of growth, this kind of explosion of innovation? No one did. Over the past 10 years, the mobile industry players have added about 4 billion mobile connections, reinvented what a device looks like, driven perhaps a trillion dollars of market cap in new companies and fundamentally redefined the entire communications and technology universe.
The ability of today’s technology to exceed even the wildest of expectations and predictions at times makes us question our ability to see what the future holds ten years from now.
However, there are a few things we do know.
Mobile broadband is going to be huge. This year global mobile broadband penetration stands at about 21 percent with roughly 1 billion 3G connections. By the end of this decade, we’re likely going to have 3G and 4G connections numbering 4 or 5 billion. And this growth will provide global, pervasive, ubiquitous connectivity for Internet speeds that will move beyond the usual Western nations into developing markets in Africa, the Middle East, Asia and Latin America.
On top of the mobile broadband platform will come an explosion of mobile applications — an explosion like we’ve never seen before. What exactly those applications will be and how they will change our lives is impossible to predict. But just look at what’s happening already. Facebook claims 400 million active users, and 100 million of them currently access Facebook through a mobile device. The average Facebook user spends almost an hour, every day, on the site. That’s a lot of eyeballs and a lot of activity.
Mobile video will also be a highly disruptive trend. The number of Americans, for example, watching videos on their phones rose 50 percent from 2008 to 2009. Expect those numbers globally to soar as handset manufacturers answer the call for phones with better video functionality.
Enterprise applications
The largest impact, however, to the way we live our lives will likely not occur in the singular consumer electronics environment. It is projected to occur at the enterprise level, with enterprise applications based on mobile capabilities. Industries such as automotive, utilities, healthcare and banking will be completely transformed by enterprise mobile technology. Embedded mobility is already transforming the kind of functionality drivers enjoy in their cars. Insurance companies are considering uses for this technology as well. Initiatives such as dynamic insurance premiums that rise or fall depending on a driver’s behaviors, tracked through that same kind of embedded mobility, is just one idea that will be emerging in the near future.
Companies are looking at mobile in a new way. They are asking how to incorporate mobility into consumer value propositions. This will be ground zero for where innovation is going to happen in the enterprise space.
Innovation has traditionally moved from the enterprise to the consumer. This concept is now being flipped on its head. Consumers now drive significant innovation and the enterprise space is reaping the rewards.
Another hugely disruptive trend is machine-to-machine (M2M). A series of joint 2010 surveys by Accenture and the GSMA targeting consumers, corporations and mobile network operators found that more than three-fourths of early-adopter consumers believe that most electronic devices they purchase in the future will connect to the Internet. Eighty-nine percent of corporate executives in this same survey reported that mastering the issues around networking technology is critical to their organization’s future growth.
The next generation of innovators
So where do all of these trends lead? There are 4.6 billion current users of mobile devices. It’s a conservative estimate that 4.6 billion people will be mobile Internet users by 2020. Then there is the global distribution platform for applications. The Internet is going to be married to four-plus billion people, millions of applications and billions – if not trillions – of smart sensors and devices.
Out of that potential, who will be the innovators and the market shakers? Which companies will become the next Apple or RIM by building a multi-billion dollar business on the back of this infrastructure? It’s an exciting question in these exciting times.
It’s also exciting to be asking this question when just a year ago most companies were concerned with cost cutting and, in some cases, sheer survival. There is a lot more optimism in the industry today. It’s very palpable. There is more focus on growth, and growth through innovation. And there is greater focus on the tremendous opportunities that new devices, applications and services built on mobile platforms that connect to billions of people will bring.
A final thought
We are living in an exciting era. It’s an era where the technology and communications industry is evolving beyond the expectations of our wildest dreams. But one thing is for sure. When we look back on the decade to come from the vantage point provided by the year 2020, we’re sure to be somewhat surprised by the direction that the industry has taken, and very surprised at how far we’ve come in such a relatively short time.
Gene Reznik is Global Managing Director, Communications Industry, at Accenture.
Reality Check: Mobile innovation: A vision for 2020
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