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Keynote Benchmark
he world’s largest gathering of the mobile ecosystem convened in Barcelona, Spain last month, attracting 49,000 attendees
from carriers, device manufacturers, developers, the media, and interested onlookers. According to GSMA, organizer and
host of the four-day Mobile World Congress, attendees hailed from 200 countries and included 2,800 CEOs.iT
Mobile Industry Update: Barcelona 2010
A Report on the Mobile World Congress and What to Watch This Year
2
Such robust attendance is a sign that the
mobile industry is ready to shrug off the
world’s economic woes, if it hasn’t done so
already. It’s also a sign that the myriad mobile
players are anxious to find out where the
frenetic changes in the industry are taking
them, what technologies they should hang
their hats on, and how they’re going to make
(lots of) money.
The industry appears to be on the
cusp of major changes on a variety of fronts,
from network technology to applications to
how devices are being used. A sea change
toward smartphones, and smartphone-like
functionality on feature phones, is clearly
underway. As keynote speaker Eric Schmidt
put it, “it’s now the joint project of all of us to
make mobile the answer to pretty much
everything.”
For some “old-timers” in attendance,
it felt a lot like the 1990s all over again, a
miniaturized replay of the scramble brought
on by the ascent of the World Wide Web.
Browsers were duking it out for the desktop,
broadband technology was getting sorted out,
dot-coms were attracting cash beyond all
reason — and in the midst of it all, enterprises
were trying to figure out how to leverage this
exciting new channel.
The analogy is apropos, but with
significant differences in velocity. The
technology is moving at a much more rapid
pace; the tech industry is that much more
mature today, and simply moves much more
quickly. At the same time, carriers with their
huge and expensive infrastructures are being
deliberate in their progress, making sure their
central role is not undermined even as they
begin the first phases of huge investments to
accommodate exploding data usage.
STEVE JOBS WINS TOP AWARD, IN ABSENTIAApple doesn’t even attend MacWorld, the show
that’s just for Apple, and they don’t attend the
Mobile World Congress, either. But that didn’t
stop the Global Mobile Awards from dubbing
Jobs the Mobile Personality of the Year. The
moment must have been a bit awkward, with
no one from Apple to accept the award, and
the most prominent runner-up, Google’s Eric
Schmidt, in attendance and delivering the
show’s keynote address.
In a way, the scenario was symbolic
of the relatively new and increasingly bitter
rivalry between Apple and Google, which is
being fought almost entirely on the mobile
front. For now, Jobs and Apple are still the
industry darlings. Indeed, it is not a stretch to
trace virtually all of the major trends and
technology in mobile operating systems,
software, interfaces, and app stores to the
iPhone. But Schmidt, Google, and Android are
fast at Apple’s heels, and clearly are serious
about the fight. With 60,000 Android-driven
phones shipping every day, according to
Google’s reports — an annual rate of 21.9
million units — they could pass the iPhone
installed based before the end of 2010.ii
“Definitely the iPhone is changing
the world — it affects every company out
there,” says Shlomi Gian, Keynote’s director of
mobile business development, who was in
Barcelona for the congress, “But Android is
catching up. Many people believe Android will
take the lead not too far from now.”
A BALANCE SHIFT TOWARD MOBILE?Is the online access point of choice shifting to
mobile? Benchmark has reported previously
on the predictions that say it will be so. Most
visibly, perhaps, the Morgan Stanley “Mobile
Internet Report,” authored by Mary Meeker,
that predicts that in five years, more people
will access the Internet on mobile devices than
on desktops. Already, the report says, “the
iPhone is growing faster than the Internet did
during the 90s.”iii
A recent report by Gartner concurs
that smartphones will be the most common
primary Internet access device by 2015. The
installed base of smartphones and browser-
equipped phones will actually exceed the PC
installed base as early as 2012, according to
Gartner, but they will not serve as the primary
access point until 2015.iv
In his keynote at the Mobile World
Congress, Schmidt sounded a theme of
“mobile first.” He cited the “three Cs,” three
drivers that will push mobile to the foreground
not just of daily online access, but of daily
computing. First is computing power itself —
the tremendously increased processing power
of mobile devices. Second, connectivity — the
installation of higher-speed, higher-capacity
wireless networks. And third, the cloud — the
tethering of mobile devices to remote servers
not just to store or access data and media, but
to tap into tremendous processing power.
According to Schmidt, Google
engineers now want to work on mobile first,
Keynote Benchmark
The Android home screen here looks strikingly similar to an iPhone home screen. But the Android OS can be implemented in different ways by device manufacturers, and the home screen can be customized by the user, for wide variations in interface look and feel.
and then have their products ported back to
the desktop. Several Google engineers joined
Schmidt onstage to demonstrate a few of the
mobile projects they’re working on. An
engineer from the translation group demoed
both real-time voice translation — he spoke
into the phone in one language and Google
computers in the cloud instantaneously
translated it into another — and also print
translation, where he took a photo of a menu
with his phone and Google translated it into
his native language.
A second engineer demoed Google
Goggles, an app that lets you search using the
phone’s camera. Take a picture of a book or
DVD, landmarks, a logo, artwork, business,
product, barcode, or text, and Google delivers
descriptions and data about the subject.
Google Goggles is currently available on
phones running Android 1.6 and above.
Another Google engineer showed a
game built in Flash running on an Android
phone, which highlighted Adobe’s important
announcement at the show of Flash 10 and
AIR for mobile devices (except for Apple,
which rejects Flash).
6,850,000 APPS EVERY DAY?There was a time when phones were used for
talking. But for the first time, in 2009 U.S.
data traffic exceeded voice traffic on mobile
phones, and that ratio is expected to widen in
2010, according to industry observer Chetan
Sharma.v And one of the biggest drivers of that
data, in the U.S. and around the world, is apps.
Apps have been around for mobile
phones for quite a few years. But once again,
it was the iPhone and the Apple App Store
that caused a veritable explosion in mobile
phone apps. In 18 months, users downloaded
3 billion applications from the App Store;
reports quote Garnter putting Apple’s 2009
share of mobile apps at 99.4 percent. No, that
is not a misprint, and yes, that number is
nearly impossible to believe; readers sent Ars Technica back to Gartner and to Apple to
confirm the number, which they did.vi
Whatever numbers you go by, the
Apple App Store is a multi-billion business
(even accounting for the many free apps), and
Apple takes a 30% cut of every app sold.
Gartner puts 2009 app volume at $4.2 billion,
contributing an estimated $1 billion to Apple
revenues.vii
So, let’s do the math: If Apple
accounts for 25.1 percent of mobile subscribers
as of January 2010,viii and Apple moved about
2.5 billion apps in 2009,ix then that would
indicate an unfulfilled potential of 7.5 billion
apps to be sold for non-Apple smartphones,
roughly speaking. In other words, the biggest
piece of the pie is waiting to be served. And
using Gartner’s numbers, that unserved pie
should be worth about $16.8 billion.
Enter App Planet, the newest
addition to the Mobile World Congress, a
show-within-the-show in its own exhibit hall
that attracted more than 20,000 visitors. App
Planet gave developers, manufacturers and
carriers the opportunity to check out each
other’s wares, and for the big players to hold
application developer conferences. The mere
existence of the App Planet, as well as the
announcement there of the Wholesale
Application Community, points out the almost
feverish land-grab mentality that has taken
hold of the industry around apps.
The Wholesale Application
Community was formed by two dozen carriers
literally from every corner of the globe, plus
Samsung, LG, and Sony Ericsson. Its stated
purpose is “to create a ‘wholesale applications
community’ that will establish a simple route
to market for developers, in turn, providing
access to the latest and widest range of
innovative applications and services to as
many customers as possible worldwide. This
alliance will deliver scale unparalleled by any
application distribution ecosystem in existence
today.”x
It’s a lofty ambition, and if it can be
pulled off, it could theoretically simplify life for
developers trying to tackle multiple operating
systems. But whether a globally diverse group,
primarily made up of carriers with very
different markets, different needs and different
business objectives, can pull together and play
nicely in the same sandbox together remains to
be seen. And in the end, how wise a strategy
would it be for carriers that are trying to
competitively differentiate themselves? If
3
Keynote Benchmark
Google Goggles lets Android users search using the camera’s built in phone. Snap a photo of a landmark, building, product, book, barcode — basically anything that’s not a person — and Goggles will deliver information and search results.
This was the first year for MWC’s App Planet, a separate exhibit hall devoted entirely to mobile applications. Some 20,000 attendees passed through App Planet.
customers can get the same apps and a decent
phone from any of their local carriers, where
does that leave the carriers? In the Q&A
following the keynote, an audience member
questioned whether Google was trying to turn
the carriers into “dumb pipes” that are merely
the conduits for data, a charge Schmidt
emphatically denied. But through WAC, could
they be doing just that to themselves, in return
for a cut of app sales?
Even network equipment
manufacturers are getting into the app act.
Alcatel-Lucent announced at MWC a cloud-
based “sandbox in the sky” development
laboratory to help coordinate and accelerate
broad-based app development. The new
initiative follows on the heels of their
Application Exposure Suite, announced in
December 2009.xi With these efforts, Alcatel-
Lucent appears to be positioning itself as a
broker and go-between among carriers,
developers, and content providers, and would
take a cut of whatever is created in the process.
BUT WHAT OPERATING SYSTEM?Despite efforts of various players to come
together on apps, the fact remains that the
mobile industry is seriously fragmented among
operating systems. This is a persistent
challenge for developers, and a situation that is
not likely to change soon.
The Mobile World Congress saw its
share of operating system announcements.
The biggest was the introduction of Windows
Phone Series 7 (more below). Others included
Symbian^3, an open source version of the
operating system most closely associated with
Nokia. Symbian^3 adds improvements in
touchscreen features, memory management,
graphics and UI to the widely distributed
Symbian OS, which claimed a 46.9 percent
share of smart mobile devices shipped
worldwide in 2009, making it the most widely
used smartphone OS.xii
Also announced was MeeGo, a mash-up of
Nokia’s Maemo and Intel’s Moblin, both
Linux-based operating systems. And Samsung
introduced a new operating system, Bada, for
its Wave phone,xiii which begs the question: if
Samsung chooses Microsoft for its search
engine, will it be called “Bada-Bing”?
WILL 7 BE A CHARM FOR MICROSOFT?The biggest OS news at MWC was that
Microsoft is restarting its mobile operating
system, jettisoning the flawed Windows
Mobile platform, and introducing the
Windows Phone 7 Series. It will include
Microsoft’s Zune music and video software,
and be able to run Xbox LIVE games. And
naturally, it will include Bing search and map
services, reportedly accessible via a dedicated
hardware button.
A fresh user interface feature on the
Phone 7 Series is the organization of
functionality around “hubs” — the
music+video hub, the people hub, etc. The
people hub reflects the platform’s potentially
impressive social media integration, enabling
users to pull from and post to a variety of
social media communities from one central
screen.
At this point, Microsoft Phone 7 is
something to watch on the horizon. Its release
is slated for “holiday 2010,” which ostensibly
means the end of this year. Microsoft will have
to overcome the serious stumble it made in the
mobile market with Windows Mobile; it has
demonstrated its ability to overcome its own
missteps in the past. But a year is practically
an eternity in today’s mobile market —
especially a year in which Google Android is
anticipated to gain serious traction.
“Microsoft is making a desperate
attempt to get back into the game,” Keynote’s
Gian says, “They made a big push. They
realized they’re late. So Windows Phone 7 is
coming in December. Between now and then,
though, all they can do is wave their hands,
and that’s what they did. Steve Ballmer was
there, and they put up a pretty good demo.”
“I think a lot of folks, myself
included, are probably thinking ‘hmm,’” adds
Keynote Senior Director of Mobile
4
Keynote Benchmark
“People” is one of the “hubs” in the future Windows Phone 7 Series interface. Hubs cluster related functionality into one screen. The People hub promises advanced social networking functionality, enabling users to push and pull status from various networks all in one place.
Keynote Benchmark
© 2010 Keynote Systems, Inc. All rights reserved. The trademarks of Keynote Systems, Inc. include Keynote®, DataPulse®, CustomerScope®, Keynote CE Rankings®, Keynote Customer Experience Rankings®, Perspective®, Keynote Red Alert®, Keynote Traffic Perspective®, Keynote WebEffective®, The Internet Performance Authority®, MyKeynote® , SIGOS®, SITE®, keynote™, The Mobile & Internet Performance Authority™ and all related trademarks, trade names, logos, characters, design and trade dress are trademarks or registered trademarks of Keynote Systems, Inc. in the United States and other countries and may not be used without written permission.
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FOOTNOTES
i. GSM World, “The Mobile Communications Industry Demonstrates Momentum,” 2/18/10
ii. Mashable.com, “60,000 Android Phones Shipped Every Day, Says Google,” by Stan Schroeder, 2/17/10
iii. “The Mobile Internet Report,” Morgan Stanley, December 15, 2009
iv. “Gartner Top End User Predictions for 2010: Coping with the New Balance of Power,” summary report, Gartner, Inc., 2010
v. ChetanSharma.com, “US Wireless Data Market Update — Q4 2009 and 2009,” by Chetan Sharma, 2/2/2010
vi. ArsTechnica.com, “Apple responsible for 99.4% of mobile app sales in 2009 (Updated),” by Chris Foresman, updated 1/18/10
vii. The New York times, “A Conference Keen on Finding Open Communication,” by Kevin J. O’Brien, 2/17/10
viii. comScore Press, “comScore Reports January 2010 U.S. Mobile Subscriber Market Share,” 3/10/2010
ix. op cit
x. www.wholesaleappcommunity.com/home
xi. Alcatel-Lucent press release, “Alcatel-Lucent opens developer sandbox in the sky,” 2/16/10
xii. Ubergizmo.com, “Symbian remains top, Android closing in,” 2/23/10
xiii. PCMag.com, “Mobile Platform Competition Benefits Consumers,” by Michael J. Miller, 2/17/10
xiv. Rethink Wireless, “TeliaSonera aims to boost LTE performance to 80Mbps,” by Caroline Gabriel, 3/14/10
xv. The New York Times, “Mobile Data, the Next Generation: High Speeds but at What Cost?” by Kevin J. O’Brien, 2/16/10
xvi. ibid
5
Technologies Manny Gonzalez. “There’s
nothing there that makes you want to run out
and get it as soon as it comes out. But they
have a track record of coming in and just
systematically getting there. Microsoft has
shown that they can take their time and still
come back.”
THE NEED FOR SPEEDThe undercurrent to all the new product
announcements and apps and slick new
phones was the question of the networks
themselves. How will they accommodate the
tremendous new data demands being placed
on them by all of the new smart devices? How
will they service a world that is increasingly
using mobile devices for primary Internet
access? How will they deliver the speed that is
a requisite for a quality user experience?
The leading topic in the network
conversation in Barcelona was LTE, or Long
Term Evolution, a next-generation technology
that offers theoretically possible peak
download speeds of 100 Mbps and beyond.
Already deployed in parts of Scandinavia, test
results show that LTE is delivering average
speeds of around 12 Mbps. Verizon Wireless
reports its testing has achieved download
peaks of 40–50 Mbps and upload peaks of
20–25 Mbps, but average speeds hover around
5–12 Mbps for upload and 2–5 Mbps for
download.xiv
Nonetheless, 51 of the world’s largest
operators have expressed their intention to
adopt LTE, with 19 expected to begin this year.
Several big players have indicated they may
begin introducing LTE service in 2010 or 2011,
including AT&T and Verizon Wireless in the
U.S., Australia’s Telstra, and Japan’s NTT
Docomo.xv
The costs to build out an LTE
network are monumental, which no doubt
accounts for carriers’ measured embrace of the
technology. The New York Times quotes a
London research firm, Aircom International,
as estimating a price tag of $1.8 billion for a
U.S. operator and $880 million for a European
operator in the first year.xvi
UNTIL NEXT YEAR…The Mobile World Congress highlighted a
number of things to watch in 2010, and a
number of questions looking to be answered.
Will it be the year Android achieves critical
mass and gives the iPhone a run for its money?
Most likely. Will the various players, mostly
the carriers, collaborate successfully and arrive
at some sort of standards or common
infrastructure and cooperation for apps? We’ll
see. And will Microsoft succeed in getting back
into the mobile game with Windows 7 Phone
Series? That’s likely a story for 2011 and next
year’s MWC.