#2 – Centre of gravity – Europe had it, and then the US, now it’s China’s turn

Summary: The Chinese mobile communication industry is now experiencing an almost perfect environment for new ideas to prosper. An already enormous market, China is now undergoing unparalleled growth in infrastructure and other enablers, which attract the big investors’ focus. Northstream predicts that it is here, in the new industry centre of gravity, that the next big wave of successful mobile communication startups (and giants) will emerge.

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Chinese internet startups have enjoyed tremendous growth and success during the last years and spurred growth in Chinese late-stage VC investments. Chinese online food delivery company Daojia closed a $50 million VC investment, car auction platform Youxinpai.com raised $260 million and Alibaba, the giant online market place, recently made the largest IPO in history.

We are currently witnessing a number of factors supporting the development and expansion of the Chinese telecom industry. One such example is the current LTE rollout, which is of unparalleled speed. The number of LTE sites rolled out in China during 2014 will be a factor 20 higher than the peak rate in the USA. Add to that the growing market share of Chinese smartphone vendors and the Chinese consumers’ love of smartphones. Chinese smartphone vendor Xiaomi was founded as late as 2010, but is now the fourth largest vendor globally. 420 million smartphones are expected to be in use in China at the end of 2014, making it the largest market for smartphones.

Silicon Valley has long been the breeding ground for the big and successful mobile communications startups, as the USA has been the industry’s and venture capital’s focus of investments. This will now begin to change and the telco industry centre of gravity is shifting towards China as a result of the growth taking place there. The development of the market will attract the industry giants and big capital, which will serve as additional catalysts for the Chinese startup and innovation culture. This, together with the greatly improving connectivity and infrastructure, will further develop the Chinese telecom industry and turn it into a hotbed of investments, innovation and growth.

Based on the above, Northstream believes that the next big wave of successful mobile communication startups will emerge on the home turf of the new industry leader, China.

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#3 – The ‘things’ that will make IoT grow are the things in our hands and on our bodies

Summary: IoT is a very promising market with significant growth potential. However, Northstream believes that the sizing forecasts in general are too aggressive and optimistic, but at the same time too conservative when it comes to the total number of devices in the licensed spectrum. This is due to the growing consumer market for wearables, [...]
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