Episode IX – My 2016 Mobile Industry Predictions
Ok, this is definitely a late 2016 predictions article – especially since it is the week after Mobile World Congress 2016. But, in my defense, not THAT much happens until after MWC, so maybe I’m not cheating so much. This is my ninth (yes 9th!) annual prediction blog posting.
As we do year after year, we check last year’s results, before I delve into what I think the coming year will bring. In past years, I’ve done okay – In 2014: 67.5% correct, 2013: 75.5% correct, 2012: 66% correct.
|Let’s look back at my 2015 predictions to see how we fared:|
 Messaging continues to evolve as the number 1 used service – whether that is through SMS, non-SMS messaging apps, or in contextually-specific circles. SMS as a medium will continue a slow decline, worldwide as a P2P channel. In the United States, overall SMS traffic will drop slightly (no more than 3% Year over Year) mostly due to larger iOS market share (iMessage effect).
The reality: According to Business Insider, messaging apps have eclipsed social media apps. Enough said, there. In terms of P2P channels, SMS traffic in the United States did drop almost 3% from 2014, based on our own traffic analysis. 100% correct.
 Messaging as a consumer engagement channel, including SMS will remain a bright spot with more growth as consumers realize the benefits of simple notification messages. Other channels (e.g. push notifications, mobile wallets [e.g. Passbook]) will be used more intelligently by marketers to reduce push-notification fatigue that many smartphone users experience.
The Reality: Mobile messaging (both SMS and non-SMS channels) continued to be at the forefront of consumer communications from businesses (e.g. B2C and C2B). Companies like WeChat have found wide acceptance in their core markets from everything from personal (P2P) communications to providing payments for goods and services. The ubiquity and availability of the SMS channel to everyone, regardless of region and economic status, continues to support SMS as a key channel for reaching consumers, but in 2015, other messaging channels continued to reach into this pie as well. 100% correct.
 Contactless payments will grow substantially in 2015, with dozens of retail chains launching NFC Point-of-Sale support to benefit users of Apple Pay, Google Wallet, Softcard and other similar payment initiation solutions – not only in the United States, but in many markets around the world. In top markets, usage among enabled smartphone users will top 15% by year-end. The alternative, CurrentC will launch; however, several retail chains will drop out of the Merchants Consumer Exchange (MCX) in favor of NFC supported solutions. Square will deliver Apple Pay compatible solutions in 2015.
The Reality: Lots of changes occurred with contactless payments, last year. Apple Pay rolled out in the UK, Canada, and Australia and is accepted at more than 2 million outlets. Google Wallet was generally replaced by the mid-year launch Android Pay and acquired and absorbed Softcard. As of year end, it is competing well with Apple Pay. In November 2015, Square announced an Apple Pay reader for its low-cost wireless payment products. In February of this year, it goes on sale at Apple Stores. CurrentC once again delayed and both Best Buy and Rite Aid announced that they would support Apple Pay, reversing previous decisions. Finally, worldwide, contactless payment usage is 26% with Australia leading the way. 100% correct.
 More messaging consolidation in store for 2015. One or more of the independent non-SMS messaging providers will be acquired by a non-messaging company. The benefits of social messaging will be too much to ignore for the rest of this decade. Starting in 2015, more contextually-specific online solutions will include various styles of P2P messaging – all with specific benefits for mobile users.
The Reality: Unlike 2014, when Facebook acquired WhatsApp, there were no major non-SMS messaging providers that were acquired in 2015, so predictions-wise, that was a miss. But, we did see a number of mobile centric app providers such as WeChat engage with contextually-specific online providers so that online chats can proceed. For example SAP C4C clients can engage their customers through chat channels such as WeChat and more (thanks to a Nexmo integration). Missed the mainline prediction, but got secondary, so 40% correct.
 As privacy and security concerns are belayed, more marketing and analytic solutions will be able to use anonymized mobile meta-data to provide unprecedented views on consumer engagement and behavior through mobile device usages. This will lead to more targeted and less intrusive consumer engagement through mobile by using new and innovation solutions such as beacons, messaging, and location-enhanced apps. All of this data (truly “big data”) willhelp retailers, marketers, and even MNOs have much better, more reliable visibility into what consumers are doing.
The Reality: For marketers and retailers, the data and solutions are available, but in reality, the art of passive information gathering as well as usage of anonymized mobile data is just beginning. For some, there is still a push and pull between the detail of the data and privacy concerns, but these are being mitigated to a point. Beacons, which have been available since 2014 are still being experimented with, but that is finally changing. Solutions are available, but slower than expected uptake, so we’ll call this 50% correct.
 Mobile device OS rankings will not change appreciably in 2015. Android, iOS, and Windows will remain in the top 3; however, Tizen and Firefox will eclipse Blackberry. As the iPhone 6/6+ continues to grow, global iOS market share will grow up to 5 percentage points and drop slightly by year-end.
The Reality: There are number of ways to determine global market share. Globally, the OS rankings did not change. Based on mobile shipments, IDC reports that at the end of Q2 2015, worldwide: Android had 82.8%, iOS: 13.9%, Windows Phone: 2.6%, Blackberry: 0.3% and all other 0.4%. US market shares showed that Windows continued to lead Blackberry. Overall, iOS shares fell worldwide, but growing in share in some specific markets. Not quite 100% right, so call this 80% correct.
 The current wearable glut will begin to filter out the winners from losers. Apple Watch will do very well – popular variations will sell out and the Apple Watch will become a new platform for a variety to innovative solutions. Headlines will be made. Other, less functional or very function-specific wearables will quietly disappear. One or two Apple Watch primary rivals will emerge. These “watches” and wristbands won’t just be for fitness anymore.
The Reality: According to IDC, the worldwide wearables market grew 126.9% in Q4 2015 alone, with a 171.6% increase for all of 2015. There are several rival analysts noting different numbers and Apple has not given up the true numbers. In a Verge article, it notes that Fitbit lead 2015 shipments with 21 million, followed by Xiaomi at 12 million and Apple at 11.6 million. From all of this data, certainly both Fitbit and Apple have emerged as leaders. I wouldn’t say that “headlines were made,” but there are some very innovative Apple Watch apps now in the market. I’m calling this 100% correct.
 LTE network deployments will top 450 operators by year end, with over 250 networks available for LTE Roaming. By year end, there will be more than 80 networks, worldwide that will have deployed LTE Advanced. Many European operators will abandon premium pricing for LTE networks – instead bundling all 3G/LTE into one data rate plan.
The Reality: The GSA notes that 480 LTE networks are commercially launched in 157 countries. Furthermore they indicate that there are 116 commercially launched LTE-Advanced systems in 57 countries. A quick look at a snapshot of leading European MNOs such as Vodafone, Telefonica (Movistar), SFR and a few others do show that mobile data plans do not differentiate any more. “4G or LTE” is cited as a feature for most. 100% correct.
Blackberry will show some growth in 2015. If they are not acquired (notwithstanding the Samsung / Blackberry rumors as I write this). Apple will introduce their annual upgrades to the iPhone 6 devices (the 6s / 6s Plus?), which will help people move from iPhone 4/5 to 6/6+. Samsung and other Android stalwarts won’t be left behind. Even Sony may come back strong.
The Reality: Blackberry ultimately was not acquired although they’ve had a rough 2015 in terms of revenue; however, in their quarter ending Nov 28, 2015, revenue was up 14% Quarter over Quarter to $557 million, but still down for the year. Still Blackberry is refocusing the company and may ultimately do okay. The new PRIV device may help further turn things around. Apple did launch the 6s and 6s Plus along with iPad Pro. But while Sony had a mandate to turn things around in 2015, it was not to be. A couple of misses, prediction-wise: Blackberry and Sony… so let’s call this 50% correct.
 Mobile networks will play an increasingly important role in the Internet of Things (IoT) solutions – from specific network access support to SIM-enabled devices. Apple HomeKit will shake up the fragmented connected home/home automation marketplace; however, other solutions will help bring some interoperability into the picture enabling HomeKit to support various home automation standards such as Z-Wave, Insteon, and others.
The Reality: Absolutely IoT made plenty of inroads in 2015 and virtually all mobile operators are supporting IoT devices. For example, US MNO AT&T brags that they are the top North American IoT provider with 26M+ devices connected. Similarly Vodafone offers a number of M2M (or IoT) solutions for Enterprises. Clearly, mobile networks are playing a major role in the roll-out of IoT solutions, worldwide. Apple HomeKit was made available in mid-2015 as a framework for home automation. Device manufacturers are making home automation accessories HomeKit certified (or compatible) at increasing rates. 100% Correct
Ciphering all of this, it looks like I was 82% correct for 2015 predictions. One of my better years (prediction wise)
Now that it’s 2016, the dynamics and changeability of this industry are certainly not diminishing. The theme at this year’s Mobile World Congress: Mobile is Everything certainly rings true. Mobile is in everything and virtually everywhere, but there is significant room for improvement as we in the industry work to tweak the kinks and untie the knots. 2016 has already seen its first major controversy in Apple vs. the FBI. This will have long standing consequences for privacy, security, and ethics beyond whether or not a single iPhone can be accessed. In fact, privacy and security will be big topics for the rest of this year. But that isn’t all. 5G was a significant topic at MWC 2016 and we will see major MNOs begin trials this year. Will this start to benefit end users in 2016? Oh, and how can we not forget that this is a U.S. Presidential election year! Mobile will most definitely play a role.
In no particular order, here are my general mobile industry predictions for 2016:
- Messaging (I’m dropping the “mobile” part), which includes SMS, non-SMS messaging apps will remain THE primary channel for consumers and enterprises to connect and converse, despite all of the fragmentation. Worldwide, P2P SMS will drop in volumes, but in some markets, it will stabilize. A2P SMS continues to grow as a channel to reach consumers for a wide variety of uses, including increasing usage as a side-channel for two-factor authentication.
- This will be the year of Two-Factor Authentication (or 2FA). In the past couple of months, there have been significant pushes from media (Gizmodo article on banking) and the government (even President Obama, in a Wall Street Journal editorial) for consumers to use 2FA and for businesses to offer it. Overall, the majority of the companies currently listed at twofactorauth.org that do not support 2FA at this time, will support it by the end of 2016.
- Wearables (smartwatches, fitness bands, etc.) will double the shipments from 2015. Apple will release the Apple Watch 2 which will have significantly more functionality than their inaugural product. Smartwatches in general will become smarter in 2016 with some rivaling the new (2016) Apple Watch in functionality. Fitbit will continue its dominance although the new Apple Watch (based on the new version expected in 2016) will gain.
- LTE commercial deployments will top 600 mobile operators with 300 available for LTE Roaming (GSA thinks 550, I think more). Additionally, we’ll see over 200 LTE-Advanced commercial deployments. Already we have crossed 1 billion LTE subscriptions. By year end, that should grow to 1.5 billion subscriptions. There will also be some limited 5G commercial service in the U.S. by year end (mainly for IoT and 5G modems).
- For Mobile Devices, Android will continue its fragmented world dominance with Apple coming in second and, once again, defying logic and growing again with the new iPhone 7 model(s). Apple will gain in market share. Blackberry will hang in there as will Windows Phone, but as niche players. No other mobile Operating Systems will play a major role in the marketplace.
- In terms of security of mobile devices, the latest drama between Apple and the U.S. FBI will be a catalyst for a number of new security and privacy initiatives in 2016. The U.S. Congress will not get into the act, given it is an election year, so this will all be settled in the courts. The FCC’s new privacy regulations will touch off another firestorm of controversy as did their Network Neutrality regulations. The courts will be busy for several years sorting all of this out.
- As a repeat from last year, we will see more marketing and analytic solutions able to use anonymized mobile meta-data to provide unprecedented views on consumer engagement and behavior through mobile device usages. This big data will help retailers, brands and marketers target connections to consumers on a more subtle, yet more responsive manner.
- Mobile Point-of-Sale / contactless payment solutions such as Apple Pay and Android Pay and the resulting “mobile wallet” loyalty capabilities will become much more mainstream in 2016. Contactless payments will finally grow to where more US national retailers than not will be supporting NFC payment terminals. CurrentC will launch to consumers (finally), but end up failing as additional retailers pull out of their consortium.
- Once again, mobile messaging – both P2P and A2P will play roles in the 2016 presidential campaigns, especially after the conventions toward the general election. The final candidates will have mobile apps, mobile websites, and opt-in messaging options. They will also utilize some of the newer non-SMS messaging channels.
- It’s also an Olympic summer with summer Olympics in Rio from August 5th – August 21st. As in past years, SMS as well as messaging channels will see traffic bursts from fans around the world reacting to various events during this Olympiad. Visitors from around the world will be well provided for via mobile as the Brazilian operators’ preparation will pay off with virtually no downtime or disruptions to both local and roaming mobile services; however, “free” WiFi services around the venues in Brazil will be overloaded, leading to service disruptions.
So there you have it – my somewhat offbeat and eclectic predictions about the mobile industry for 2016. Late, but not too late. I look forward to your comments and thoughts.
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