Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
This week marks the start of the second half of 2011 – a perfect time to consider key trends for the mobile sector in 2012.
Based on the view from three of the sharpest researchers in the industry next year will see mobile devices driving commerce; Apple Inc. and Google Inc. battling for ecosystem dominance; and mobile location services more deeply integrated into our daily lives.
Nitesh Patel, Senior Analyst Wireless Media Strategies, Strategy Analytics: Why mobile will drive commerce in 2012
“The mobile phone is evolving into a power commerce tool, enabling consumers to review products, run price comparisons, access inventory levels and make transactions both over the mobile network and the retail point of sale. However, while industry commentators have hailed the virtues of mobile commerce for some time consumers have not responded positively – beyond buying ringtones and wallpapers. So why will m-commerce blossom in 2012?
“First, some large Web retailers indicate that mobile is becoming a significant sales channel. In July 2010, Amazon.com Inc. announced that mobile devices generated $1 billion in sales, which was 3.5% of its net sales during the 12 month period. Last month EBay.com stated it expects to process $3 billion in payments via PayPal in 2011. To dispel the view that big ticket items aren’t ripe for mobile commerce, EBay.com indicated three to four Ferraris are sold via its mobile application each month!
“Second, we expect more retailers to create mobile sites enabled for mobile commerce. For a long time, Web traffic from mobile devices has been negligible. Once it accounts for over 10% of traffic, as it does for some retailers, merchants start to view it as a missed sales opportunity.
“Third, a slew of services will be launched in 2012 enabling consumers to make small value payments by tapping their NFC-enabled mobile phone against an NFC retail point of sale. 2012 will be a critical year for driving NFC handset sales and encouraging retailers to adopt the technology, although we expect end-user adoption to lag due to inertia.
“Finally, consumers increasingly recognize that product reviews and price comparisons conducted on mobile devices enable better purchasing decisions both in and outside the store. Importantly, mobile payment is convenient and enables consumers to buy products when and wherever they want.”
Michael Vakulenko, Research Partner, Vision Mobile: Battle of the product ecosystem mobile
“Apple Inc. and Google Inc. turned the mobile industry on its head by creating vibrant product ecosystems – encompassing devices, content and on-line services.
“The Apple ecosystem is optimized for a premium user experience, delivered via iconic devices sold at premium prices. In contrast, Google’s ecosystem is optimized to maximize the number of people accessing Google’s ad-supported services via a variety of devices.
“Both Apple and Google must expand their experience ecosystems across screens, shifting the battleground from smartphones to tablets and finally the living room. The outcome of this competitive struggle will be decided by how successfully they can offer a wide selection of content across all devices. This includes music, premium video, e-books, magazines, games and applications.
“Both companies need content licensing deals with cloud infrastructure to make the content available across all connected devices. Apple dominates content, while Google leads in cloud infrastructure.
“Apple will build on its content strengths while investing heavily in cloud services. The recently announced iCloud service is the first move in this direction. The service detaches iTunes content delivery from PC dependency – helping to consolidate the product experience of iPhone, iPad, Mac and Apple TV.
“Google owns the more robust cloud infrastructure, but does not match Apple in content. Google will invest in securing big content deals and strengthening content delivery services for smartphones, tablets and connected TVs. This includes partnerships with music video site Vevo, Google TV and the nascent Google Music and Google Movies.
“Console game platforms (Sony Corp., Microsoft Corp. and Nintendo) are still leaders in living-room entertainment, but on the defensive. This is due to fragmented product experiences that are particularly weak on smartphones and tablets. While Microsoft and Sony will continue to close these gaps, they won’t challenge the leadership of Apple and Google in mobile devices.”
Dr. Bruce Krulwich, Partner, Grizzly Analytics: A new level of location integration
“One trend worth noting is handsets using location to assist our daily routines. Right now, GPS is used mostly for applications like maps and navigation. Currently, we turn these apps on and off as needed. Soon, location will be deeply integrated into our regular activities.
“The tipping point will be Apple’s upcoming introduction of location-based reminders in their iOS. These location-based reminders can notify you to pick up a prescription at the neighborhood drugstore as you near the store. The iPhone might also remind you to buy flowers for your wife’s birthday on your way home from the office.
“Based on current research by handset manufacturers, this is just the tip of the iceberg for location integration. In the future, we will be reminded to fill a prescription when passing any drugstore. We will be reminded to buy the new John Grisham novel when passing a store that has it in stock. The phone will automatically switch to vibration mode upon entering the conference room or lecture hall. We will receive a wake-up ring five minutes before arriving at the appropriate train station. The phone will provide directions to an inexpensive gas station when the car needs re-filling. The device will even remind you to phone your next appointment if heavy traffic is likely to cause a delay. All of these benefits without draining the battery.
“Many of the tasks we currently do on our handsets, such as to-do items and calendar entries, relate to location. Why should consumers need a separate location app, when our phones can use location within the built-in to-do list and calendar? A new level of location integration is coming soon to devices near you.”
Levi Shapiro advises digital media companies from Hollywood to Herzilya Pituach, including NTT DoCoMo, Deutsche Telekom and the Australian government. From his base in Los Angeles, he is a Partner in TMT Strategic Advisors, covering the technology, media and telecom sectors. Shapiro has launched new business units (IBM), new services (Toyota) and entirely new companies (Two Minute Television, Snack Mobile, etc). He is an Adjunct Professor in the MBA program at Fordham University and frequent speaker at industry events. He welcomes your comments at levi@tmtstrat.com or via twitter: @levshapiro.
