New Horizons for the Wireless Industry (Part 2)

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Among the lessons we can learn about where the wireless industry will head come from an understanding the past success.  At its roots, the wireless industry has grown due to technological progress in the design and manufacture of semiconductor-based equipment and mobile devices.  In many cases, particularly in the early stage of each new generation of wireless, the use cases beyond voice and simple text messaging have been a process of trial and error.  Of concern to mobile operators is whether they would become ‘fat pipe’ access providers detached from the revenue generating services, content, and applications that ran OTT, Over the Top.

Most of instances of ‘viral adoption’ emerged because:

  • They served a need among a significant ‘tribal population’ and then were extended to a broader audience.
    • Messaging started as a business app used by sales and service departments and executives.
    • Even basic voice started out that way, although the experience seems irrelevant given the time frame, the rationale behind why voice went ‘viral’ remain valid.
    • The fielded device platform was inherently enabling. 5G has developed after years of building up the use-case methodology that led to targeting of low latency and distributed network topologies than help provide an enhanced user experience for new user and ‘things’ devices and applications.  The platform should compel new applications once device saturation reaches a level of critical market mass, roughly 50%.
  • The mobile applications either worked as a compliment to fixed-location use or were dependent on device capabilities including taking of photo images and videos that can easily be sent in a message, email, chat or online blog space.
    • Among applications likely to emerge are immersive and 3D gaming, multi-party real-time chat with imaging, multi-location events.
  • Mobile device apps delivered a unique capability or existing one better.
    • Prominent among this type of viral use category are GPS assisted map applications.
      • Google hit a home run with their mapping program which came out ahead of Apple and with fewer early bugs. That helped the Android platform gain ground as the most popular device platform, now with well over 80% worldwide marketshare. Google’s dominance in mapping extends to Internet websites where it dominates the field outside of China.
      • Google Maps shows what is required of a special-purpose type application: A dedicated effort which keeps the data and application continuously updated. The map app has also been extended to include more types of data including traffic information, tourist locations, and reviews.
      • Google uses location information as part of its location-based advertising services.
      • Google offers the “Google Maps Platform” for developers of Internet and mobile applications. Mobile operators work with the Google Maps platform to extend their own applications.
      • Device suppliers, including Nokia, have made efforts prior to the introduction of the iPhone to provide mapping applications. However, they made the critical error of trying to contain the applications on their proprietary or pseudo open-environment platforms, thus short-circuiting viral adoption.  A lesson that might be learned from that is that it is better to first build a platform that has wide appeal and then open it up to be exploited by others than to try to mold it to the ‘own it all’ mobile operator business model.  Nokia’s failure in devices was not because they failed to incorporate the ‘right apps’ but because they tried to contain ownership to their de facto privately held environment, regardless of declaring it open-source once the tide shifted against them.  The challenge for mobile operators will be to find points at which they can leverage the best of breed among existing capabilities or can develop world-beating applications of their own.
    • Viral Applications developed among many who tried.
      • Most successful viral applications were preceded by others. Google Maps, Facebook/Messenger, Twitter, Snapchat, Instagram, Gmail, and many other of the top mobile apps followed earlier ones.
      • This informs us that the effort to provide applications that gain and keep in use requires a lot of effort. How that effort is organized should also be informed:
        • The open-market stimulated a climate of one-ups-man ship: not just providing applications that are “as good as” those already available but making apps that hit more of the sweet-spots of market demand and do so while being easier to use and share.
        • Among companies with a history of providing viral applications are those who establish multiple development teams who compete for the same or similar applications. This has been a standard practice among well capitalized semiconductor companies: Intel, for example, has multiple development teams working on each new generation of CPUs and GPUs.  They may use different processor or memory architectures to achieve goals for performance.  Management then decides which will move forward or whether to combine the best approaches from multiple development teams to produce the go-to-market products.
        • Mobile companies typically have open-market development platforms which promote competition among developers. However, these efforts often lack the degree of funding and a cohesive set of goals.  They may work similar to ‘Hackathons’ but few if any ‘killer apps’ have emerged.

The 5G environment expands the range of applications that can be considered for mobile operator involvement.  These include IoT, OTT video, and mobile money, and tie-ins between applications through authentication/security platforms, for example. We think that this will be among the biggest challenges for mobile operators in order to grow and maintain their positions within a broadening and more competitive overall market.  One challenge will probably be for operators not to dismiss this challenge as being easy or secondary to their primary goals as infrastructure based service providers.  Applications will take on the primary role for competitive differentiation going forward, far more so than in past decades.

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Robert Syputa, BSEE, MBA, is a Senior ICT industry analyst with 28 years experience in the field of electronics, computing and telecommunications. His understanding of these fields stems from the study of patents and baseline research. The technologies and applications methods has led to breakthrough understanding in the emerging fields of Next Generation Mobile Networks and convergence of IT and communications spheres of business. Robert’s experience includes applications engineering and marketing for leading companies in the fields including Philips, Fairchild, Honeywell, GE-Druck, Boeing. He has participated in IEEE and 3G-5G standards efforts and consulted with leading component, equipment and service providers. Robert authors reports on 4G-5G wireless and its impacts on IT/networking, mobile eCommerce, patents, and industry convergence.

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