Mobile Space At The Cusp Of Revolution

The mobile space is going through unprecedented activity and innovation. This momentum reminds me of the explosion in the Internet space in the late 90s. On one end of the spectrum, advanced devices and platforms are being rolled out and on the other end applications are unfolding at record speeds. Users in advanced markets such as the U.S, are experiencing the mobile Internet on Smartphones and advanced mobile devices such as the iPad, whereas users in markets like India and other emerging markets are getting their first taste of mobile data on their feature phones and that too at levels way beyond the expectations of operators. Technologies such as LTE and 4G are getting rolled out at the network infrastructure level in markets such as the U.S.

Device makers such as Apple, HTC, Motorola, Samsung and LG are on a path where Smartphones will become the de facto devices in the hands of users. Today, such devices have already captured 40 percent of all mobile devices sold in advanced markets such as the U.S. Users are finally beginning to get comfortable with touch screen devices. As prices drop with higher volumes and better technology, this number is expected to go up to over 75 percent of all devices sold being Smartphones. These mobile devices are typically powered by mobile operating systems like Android, iPhone, Maeemo, Symbian^3, RIM and now Bada. Of these, Android seems to be getting the highest quarter over quarter growth with a number of OEMs shipping phones or in advanced stages of design.

In markets such as India and China, affordable, yet feature-rich mobile devices have made a big dent in the market share of established players. These devices are typically based on the Mediatek chipset and have features like WAP browser, Bluetooth stereo, Qwerty keypads, Dual-SIM, 2 Mega pixel or higher cameras, video cameras, and even Wi-Fi, and are able to accept downloadable applications. We now see consumers trading up from their voice-only phones to these affordable feature-rich phones.

These are the same consumers that end up experiencing the Internet for the first time on the mobile phones and in turn, downloading applications that are primarily oriented towards entertainment or social networking. We see a very high number of users, from smaller towns and cities (B and C cities) that are discovering the rich world of applications and the mobile Internet on their feature phones. Users want the anytime, anywhere access in their hands, and once they taste this freedom, they are not willing to give it up. As opposed to the typical metro audience that wants the Facebook and Twitter experience, these users are looking for interaction and “near-live” entertainment with either their friends or like-minded people. Their hunger for information and entertainment seems apparent as you look at their usage patterns. Using mobile applications such as RockeTalk, the creation and consumption of UGC content is very high since the mobile phone, for the first time, allows these users to express themselves using a medium that is accessible and familiar.

With the explosion of Smartphones and even feature-rich phones that allow downloadable applications, app stores are opening up at the operator level, ecosystem level like those of Apple and Android, the device OEM level and independent app store players like Getjar. Of course, developers will have a harder time trying to get their applications provisioned with a wide variety of App Store SDKs but will also enjoy the resulting distribution. Discovery of applications will remain a challenge. Take the example of the iPhone App Store, where over 200,000 applications exist. On the Android App Store there are over 50,000 applications. A new application, however interesting and engaging, will have a difficult time attracting attention from the user base in this crowded space. The winner is obviously the consumer that will increasingly have much more choice when looking for applications. As a proof point, there have been over 4.5B applications downloaded from the Apple App Store alone.

The debate of Apps vs browser based applications has intensified as well. While native Apps exploit the underlying device capabilities, browser based apps thus far have not been able to optimize access to the device capabilities such as the camera and the address book. However, as the HTML5 standards evolve, these issues will get solved and browser based apps that rival native apps may actually become a reality. This will create a much easier ecosystem for app developers since this will mitigate the need for massive porting efforts currently needed to cater to the huge number of mobile devices.

In India, the launch of 3G networks will open up opportunities for rich content, collaboration and communication services. Applications that use rich video, audio and music will make use of this increased bandwidth and data speeds, and in turn provide a great user experience. Location based and augmented reality based applications will begin making their way into the hands of consumers. Social gaming applications that require low latencies will also begin making their presence felt. As the base platforms evolve, we won’t be too surprised if game players like Zynga make their web based multi-player games available on mobile phones as well.

Enterprise applications on the mobile are just at the beginning of the curve. As devices improve, the networks get better, the mobile worker will get connected to the back-end enterprise systems with a much more user friendly interface. Applications such as Wireless Health will see lots of innovation as the base platforms evolve.

At the device level, technologies like NFC (Near Field Communications) will enable secure payments and other secure transactions like entry and exit. Wi-Fi will make its way into the mid to high end devices since it allows the network data traffic to be offloaded to lower cost landline networks.

GPS on the mobile phone will increasingly be part of the feature set and this will allow the location-aware apps to offer more compelling information and services.

Longer battery life will be next frontier as devices continue to scale up in terms of functionality and minutes of use.

In summary, the mobile space is at the cusp of a revolution – be it in the area of the network, access speeds, the device itself and the application ecosystem. For the first time, the winner will be the consumer at levels higher than the operators!