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.
Mobile innovation has changed our lives – but this is only the beginning. Mobile computing will continue to drive dramatic changes in how we conduct business, communicate with each other, access and share content, pursue knowledge and educate our children. And, that’s just a sampling. Even with the tremendous breakthroughs to date, in the future, wireless devices and their supporting services will likely run applications faster, store more data, create better pictures and display information in brighter and more compelling images. This path of innovation, combined with the right business models, should ultimately lead to disruptive products that further transform the ecosystem and many industries in ways we never imagined.
To better gauge the mobile outlook, PricewaterhouseCoopers developed the PwC Mobile Technologies Index, a broad composite of seven components – infrastructure speed, device connectivity speed, processor speed, memory, storage, image sensor and display – that underlie the power of mobile devices to sense, analyze, store and connect information. Since the first brick-like mobile phones appeared in the limousines of executives in the 1970s, disruptive breakthroughs in mobile have been driven, in part, by the continuous progress of these components at predictable price points.
PwC has determined the relative performance of the components in the index has consistently followed a pattern of at least 30% compounded annual growth. Over the next five years, the components will likely continue to progress along a similar upward path, making them a natural starting point for a predictive index. PwC forecasts a combined compound annual growth rate of the index between 2011 and 2015 of 41%. As each of these components advances to higher levels, devices in turn will become more resourceful, ultimately leading to new usage models, impacting how we do business and live our lives.
New capabilities may arise from the growth of the index include technologies that change how users interact with the devices and how the devices interact with the environment. For example, the price-performance improvements of these enabling technologies are largely responsible for the current trend in which smartphones are gaining market share over feature phones at a rapid rate. Ultimately, mobile devices will likely become cheaper, faster and more capable, and will be able to deliver better and more diverse services and digital content.
Taking a closer look at three of the seven components – storage, display and infrastructure speed – yields a promising picture of transformation on the horizon.
Storage
We expect storage to experience 35% growth in gigabits per dollar through 2015. This growth could further accelerate the transition of the wireless phone into a rich, data driven device, opening up new usage models and business opportunities. Through enhanced storage, wireless devices have gradually transitioned into Internet access tools with voice capabilities. For many, the phone function is now secondary to data management, entertainment and workflow. Right now, laptop computers have significantly higher levels of storage than smartphones. In the future, however, storage capacity on smartphones should advance considerably and users should gain flexibility in docking these devices on larger screens, potentially disrupting personal computers.
One thing is certain, the combination of functions now offered through smartphones has driven major changes in how we conduct business and spend leisure time, often blurring the lines between the two as convenience and mobile access expand our working hours. Devices with greater access speed and intelligent features will only hasten the movement to asymmetrical work patterns.
Display
With regard to display, PwC expects performance per dollar per square inch, to improve 16% CAGR through 2015. Performance is a weighted aggregation of resolution, brightness, power efficiency and other factors. This will further drive the progression from static content to interactive video. The publishing, media and entertainment industries will likely continue to gradually adopt the mobile screen as technology improves and users migrate online. The four screen strategy that seamlessly links smartphones, tablets, personal computers and televisions is only just beginning. High-resolution screens could bring particularly dramatic change to online textbooks, creating opportunities for interactive learning on a level we have not witnessed before.
Infrastructure speed
Looking at infrastructure speed, PwC forecasts a global CAGR through 2015 of 54%, as measured in average megabits per second. This makes it the fastest improving component of the index and one that directly supports advances in both storage and display. By 2015, we expect to see “4G” innovation that will support new business models based on capacity improvements, and new use cases based on better video streaming and other technologies. New use cases, involving more and better streaming video, will include more satisfactory viewing of commercial film and TV content from the cloud and multi-player mobile gaming with minimal latency. Other use cases are likely to come in mobile video conferencing and voice-over-Internet services that rival or exceed the quality of traditional wire-line offerings; new device form factors better attuned to augmented reality; and other applications involving the movement of large amounts of information.
The wireless innovation life cycle is still in the early stages, but one thing seems clear: continued disruption is inevitable. However, the seven components of the PwC Mobile Technologies Index, including the three discussed in this article, individually or collectively, are not likely to cause the next great disruption without creative thinking about how to use them. Specifically, new capabilities, creative use cases and imaginative business models, or some combination, are more likely to produce game-changing mobile innovation. In the months ahead, PwC will identify these models and the potential change they will bring to how we live our lives, every day.
