#3 – Convergence

In 2011, iOS and Android platforms become the focal point of service convergence

For years, talk across the global mobile industry has been dominated by the acronyms FMS and FMC. Mobile operators frantically tried to drive fixed mobile substitution to grow their revenue streams. Fixed line providers became obsessed with fixed mobile convergence services that combined the convenience and practicality of mobility with the reliability and cost efficiencies of fixed line access.
Both IMS and RCS (rich communications suite) were introduced to further bridge both the fixed/mobile and telco/internet divides. The intention was to converge networks and services on to one joint, standardised platform that would liberate service development while safeguarding security and QoS. While these intentions were honourable, it ultimately left operators and vendors in a catch 22 situation. Device manufacturers became preoccupied with smartphone development, the operator community turned its attention to monetising and deploying mobile broadband and meanwhile the world’s largest internet players started to expand their services and target mobile users.
The reality is that with the arrival of IP and the presence of WiFi, the latest devices have become the source of convergence for fixed and mobile services. Apple and Google have changed the paradigm of mobile Value-Added Services (VAS) and content sales. The iOS and Android platforms offer an efficient storefront, payment mechanism and distribution channel for content developers and providers. The market access they deliver is unrivalled by any mobile operator. iPhones and Android smartphones represent the latest incarnation of the famous Swiss army knife, with touch screens overcoming the physical awkwardness of early smartphones while maintaining their primary function as communications devices.
Mark Zuckerberg, CEO of Facebook, recently claimed that the “iPad isn’t mobile, it’s a computer”. Northstream begs to differ, the iPad is both. These latest tablets offer an almost entirely software-based blank canvass that can support most use cases imaginable. In contrast, an iPhone is limited by its size and physical feature set – it is by definition just a phone. A laptop is just a portable computer that can drive productivity and efficiency gains. A tablet is so much more – it’s a mobile computer that can elegantly deliver communication while enabling media production and consumption.
The iOS and Android platforms have thus not only changed the name of the game for mobile VAS and content, they have also firmly separated the use case from its dependence on access. The disconnection from access offers developers total freedom in the choice between direct and indirect revenues. As a result, multiple services can now converge on one platform, not in a mobile operator’s core or service network, but in the hands of the end user. Thus, convergence is larger than “fixed-mobile” and involves the (digital) convergence of multiple industries, businesses and use cases.
The tablet phenomenon will further boost the “over-the-top” service revenues channelled through iOS and Android platforms. The iPad is the first mobile device with a cellular connection sold on a global scale, free from operator lock-in or subsidies. Some tablet manufacturers will decide to go to market through operator subsidies but Apple will lead the charge in disconnecting these devices from operator control.
The application market continues to move away from mobile operators. Although Apple is generating modest revenues from its App Store, the total number of mobile broadband enabled devices has increased to more than 50% of the subscriber base in developed markets. Over the top app-based VAS revenues are in pole position to overtake existing “on-deck” operator App revenues. Operators would do well to abandon plans to establish their own App Stores and concentrate on enabling more converged devices like tablets.

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#4 - Connected Devices

Strong growth in mobile connections in 2011 will demonstrate that 10 billion global connections will be reached by 2015 Northstream believes that increased Mobile Broadband availability will drive the global mobile market beyond 10 billion connections by 2015. In 2009, Northstream predicted that the M2M/connected device market will start demonstrating strong growth in 2010, and [...]
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