Gartner analysts highlight the most significant trends shaping the Wireless and Mobile industry at its annual Wireless and Mobile Summit in London
London, UK, 3 April, 2006 – Presenting Gartner’s scenario at the annual Gartner Wireless and Mobile Summit today, Nick Jones, Gartner vice president and distinguished analyst outlined Gartner’s view of the most significant trends in the wireless and mobile industry that will affect people during the next five years. As these trends unfold, Gartner predicted that key stakeholders in the mobile industry will face a challenging blend of opportunity and stress.
1. Mobile operators under threat
“Mobile operators are under increasing threat from the large Internet companies such as Google and Yahoo!, who are targeting a slice of the revenue from millions of subscribers and are prepared to disrupt established business models to get it,” said Mr. Jones. “The next generation of the Internet, Web 2.0, has opened up opportunities for these ‘new kids on the block’ to move into the mobile market, as illustrated by Google’s recent deal with Vodafone to develop search engines on mobile phones.”
Internet brands have few inhibitions and have no respect for, or legacy with, established mobile approaches. They are prepared to experiment and are well positioned to assimilate new ideas into their services collection as they have no existing mobile revenue or customer base to protect. When developing new ideas or products, traditional mobile operators think in terms of ‘how to provide new chargeable services based on technology’, whereas Internet players will innovate something new (e.g. Google map), and then see how it takes off. “This is a race for innovation and operators are not in pole position,” Mr. Jones added.
“There are opportunities for operators to partner with Internet based providers such as Google or other application sources to package multiple services and make them available on mobile phones. For example, partnering with an Internet Instant Messaging (IM) provider and enriching the service with improved mobile presence to create a really compelling application,” concluded Mr. Jones.
Mobile operators will continue to face threats from additional business areas. Pressure on international roaming and termination revenues for voice, email and IM will put at risk short message service (SMS), and saturated mature markets will encourage price competition, which will make customer acquisition difficult and more expensive.
Gartner warned that some mobile operators will see their profit margins decrease by 20-25 percent in the next three to five years. Opportunities for mobile operators moving forward include convergence and bundling, new managed services, new client devices and new partnerships with third parties.
2. Mobile email
Gartner predicts that wireless email users worldwide will reach 20 million in 2006 and 100 million in 2009. “Mobile email has primarily been a niche application for executives, largely based on BlackBerry.
However, it is on the cusp of becoming main stream also for middle management and it will eventually pervade the enterprise as email did a decade ago,” said Mr. Jones.
Today, high quality wireless email services are still expensive and this limits widespread deployment. However, Gartner predicts that by 2010, wireless email will be a commodity and organisations will no longer need to cost-justify investments.
Gartner also predicts that by 2008, Microsoft will achieve feature parity with Research in Motion (RIM) and become the dominant email provider.
3. Mobile collaboration
Mobile workforce and collaborative technologies both feature in the top four priorities for chief information officers (CIOs) in 2006, according to Gartner’s annual survey of 1400 CIOs globally.
“Mobile collaboration is emerging in response to a need for increased IT support for ‘soft’ collaborative tasks combined with greater staff mobility,” said Mr. Jones.
Until now, the IT organisation has primarily proven its value to the business by driving down cost through automation. Today, many companies have already completed the easy business process automation tasks such as customer relationship management (CRM) or enterprise resource planning (ERP) implementations, and they are at a point of diminishing returns. Moving forward, the opportunities to increase further returns lie in augmenting the effectiveness of individual knowledge workers.
Mr. Jones highlighted that people are no longer fixed in one place and this means they need more support for mobile collaborative work. Geographically distributed knowledge workers will be both highly valuable to the organisation, and sophisticated enough to be aware of a wide range of consumer mobile technologies.
“Mobile technology and market trends will facilitate collaborative applications. We will see increasingly powerful smartphones that can use Bluetooth, cellular and WiFi enter the market. In addition, consumers and employees are becoming more familiar with web based collaboration tools such as blogs and Wikis, which will speed up the acceptance of the mobile equivalents when they come to market”, concluded Mr. Jones.
4. Corporate Mobility
According to Mr. Jones, we are witnessing the ‘growing up’ of mobility, as it becomes increasingly controlled and managed as part of corporate architecture and strategy. Gartner’s 2005 survey of European mobile professionals showed that enterprise priorities are evolving from individual projects such as email or sales force automation, to mainstream strategy. As mobility becomes mainstream, enterprises are seeing the need to formalise this by developing mobile policies and strategies. They are making strategic decisions, such as which vendor will be their strategic mobile partner, for the first time.
Although large-scale mobility is still relatively rare, pilot projects will often lead to larger implementations and the familiarity with mobile technology created by these projects will reduce the barriers to future adoption.
5. Consumerisation
The growing integration of mobile and wireless technologies into every aspect of life; home, office, home office, family, car and recreation, present both risks and opportunities for the enterprise.
Technologies such as WiFi, ‘smart’ mobile phones, mobile wireless enabled personal digital assistants (PDAs), as well as consumer software like Google Desktop and Skype, have steadily infiltrated the enterprise, and are posing security risks to corporate data. If organisations do not provide these facilities to its workforce, employees will embrace them anyway, which also present a huge risk.
“Banning consumer technology from employee-owned devices is unrealistic, unverifiable and naive,” said Mr. Jones. “Banning consumer tools is also counter productive, because employee’s experiments will discover new ways to perform tasks in new and effective ways. Prevention will stifle innovation, so companies should educate their employees about the risks, define policies and be prepared to invest promptly in corporate solutions when users discover valuable applications.”
6. Growth of Smartphones
As smartphones become widely available, medium-cost devices capable of delivering simple thin and thick client corporate applications, they will increasingly be used as business tools and evaluated by IT managers. This will challenge vendors to offer viable devices that address corporate deployment requirements.
Smartphone prices will fall, driven by new single processor phones, making smartphones accessible to a much wider population of consumer and business users. In addition, it means that a much higher audience of consumers and enterprises will be able to afford a mobile device that can run sophisticated applications.
Gartner predicts that smartphone sales in Western Europe will grow at a 49 percent compound annual growth rate (CAGR) between 2005 and 2009. By 2009, one in three mobile handset phones will be a smartphone.
7. Mobile Business 2.0
“The final trend to emerge will be mobile business 2.0, the next generation of mobile business,” said Mr. Jones. “While the exact specifics and revenue predictions are not clear, we can clearly see the shape of mobile business 2.0 and, most importantly, what will guide it.”
Many web 2.0 principles will apply to mobile business 2.0, including business models, cultural behaviours, technologies and interaction. While web business often starts by searching, mobile consumers will not want to browse results on tiny screens. Gartner predicts a future of mobile ‘ambient business’, where consumers explore their environment to find relevant value propositions.
Mr. Jones added, “The web is like an encyclopaedia, where you always start with the index. Mobile business 2.0 will be more like a theme park where you explore what’s around you.”
Data will be selectively pushed to the user based on context, matching the users’ needs, interests, mood, location and even recent behaviour. The use of ‘snack’ business and fleeting experiences will arise to exploit dead time, for example, ‘buy from this shop in the next ten minutes and we’ll give you a discount’.
Mobile business 1.0 (or mobile commerce) failed because the industry tried to transplant all web principles into the phone (e.g. WAP). Truly valuable services have not been widely available and the location based services that we have seen have not been very sophisticated. There are opportunities for mobile operators to enable people to make better use of a few minutes of dead time than reading the news or playing a game. Location, combined with personal presence, creates transient communities, which offers an opportunity for better use of time or marketing.
Even though the conditions for mass market mobile business 2.0 in Western Europe will not arrive before the 2009-2011 timeframe, Mr Jones said businesses should start planning now and exploit the short term mobile business 1.5 opportunities that exist. Immediate opportunities include providing ‘what’s on’ information and offering bookings, simple machine-to-machine (M2M) applications, location based services, providing local information, and first generation mobile peer-to-peer (P2P) interaction.
The Summit is taking place at the Royal Lancaster hotel in London, 3-4 April and is attended by 380 delegates.
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