Placing your bets in 2015: What’s hot in mobile? (Part 1)

Osborne Clarke brought together a high profile panel on 11 February 2015 to discuss their predictions for mobile in 2015. Here is the first in the series of blogs looking at the findings and delving into what was discussed.

The mobile landscape

Chris Burke (ex-CTO of Vodafone and ex-CEO of RIM) kicked off the evening by explaining that Moore’s law has always been a theme in technology, but a better law is “everything happens in slow motion forever and then it goes super-fast!”. Nothing happened in the world of mobile for nearly a decade and now mobile is ubiquitous. Everyone is panicking about mobile in their industry because they’re suddenly behind the curve. “As we move forward we see some trends that have barely even begun where people are using a small fraction of the technology available.” So when should we act? Chris advised the floor that “timing is everything. When you see the point of inflection, get serious about your strategy”. Chris then shared his tips on what’s hot and what’s not in 2015:

Brands:
Chris gave us a round trip on some of the current biggest names in mobile and concluded that the general themes of: expectations exceeding the ability to deliver; and falling from pervasiveness into obscurity, will continue. These themes persist because of: the struggle to innovate (do we need more sensors in our mobiles?); and innovators creating new markets for bigger brands to take over (large screens for everyone!). In addition, there is strong pressure from new suppliers (“Xiaomi are killing it”), so the rises and falls of brands will be at an “epic” rate. Chris described the basic reasons for this. There is always a low-cost market but the high-cost market relies on culture, which is impossible to read. As time moves on, low-cost suppliers then struggle as development varies and base costs, such as property, increase.

Consolidation of carriers:
The collapse of mobile carriers has already begun to take shape as BT prepares to acquire EE, Hutchinson Whampoa buys O2 to merge with Three and Vodafone acquires fixed line services. The distinction between fixed line and mobile is likely to disappear and it is possible, in a few years, that carriers in Europe may disappear. Chris predicts that big carriers will spend a long time figuring out what the consolidation means and sorting out its products. Undoubtedly, consolidation will complicate issues of cost and efficiency and EU legislation will further complicate this (such as roaming decoupling). Nonetheless, unified communications are continuously improving and one of Vodafone’s fast moving product sets. Chris believes that this is the time to let go of the fixed line.

Consumer brands moving into the corporate world:
Basic company communications are not sophisticated. “Some businesses don’t know what to do with mobile but the consumer proposition is moving into the corporate world and consumer brands are capitalising on that.” For example, Facebook is creating its own version of LinkedIn. This extension into the corporate world and understanding the mobile workforce is a hot patch for investment and a move from the old world and into the new.

Change in communications activities through connectivity and location-based services:
How we will connect in the future is unknown. Some believe that WiFi will be everywhere whereas others believe that 4G’s arrival signals WiFi’s departure. Nevertheless, connectivity, as it exists now, has changed communications activities. This is easily visible in the young with the use of social media and increasing amounts of media consumed. As connectivity improves, this will accelerate tracking and location, which are already fast growers. For example, Vodafone and TomTom teamed up to provide real-time traffic news to give the fastest route and then within a year, Waze had transformed this into an app.
Improved connection, tracking and location services will lead to growth in other areas. Firstly, beacons, which localise you and turn data into something useful for people trying to sell things to you. Beacons have scarcely taken off in Europe compared to North America, possibly due to differing perspectives on privacy, “Europe cares; USA gives up!”. Secondly, wearables, which have “barely begun”. Wearables have a profit margin of approximately 50% per unit, which means it “has legs” and are much more lucrative than smartphones. Brands will continue developing these products until the low-cost guys distil and steal the essence.

Internet of things:
Chris describes the internet of things as “overhyped,” because of its broad ecosystem and slim revenue streams but ultimately “inevitable”.

Part 2 – Read about M&A and financing trends in mobile here.

Part 3 – Read about three start-ups provide insight into the use of mobile in enterprise here.