Yankee Research: 2013 Mobile Predictions

Yankee I attended the Yankee Research annual 2013 Mobile Predictions webinar yesterday.   Four analysts presented a total of ten predictions during the webinar.  The overall message was that the mobile ecosystem, which includes devices, applications, networks, mobile transactions, etc., will continues to grow in 2013.  There is an ever-increasing global consumer and business demand for mobile capabilities and the providers in the mobile ecosystem are all trying to meet that demand.  The market is by no means mature so there is lots of disruption as providers try to deliver products and services that are valued in the marketplace. 

The following four mobile industry experts from Yankee Research provided their thoughts on the top ten predictions for 2013

1.  Operators will lose US$1 Billion per month in voice/messaging revenue in 2013.   Yankee says that changes in mobile offerings, customer behavior and the mobile industry in general will result in a significant drop in voice / messaging revenue.  However, Yankee says that fortunately the loss will be offset by a boost in data and that going forward, winners will be those providers that launch their own apps that focus on data streams.

2. By year end, all mobile operators will be either “digital lifestyle solution providers” or a “digital value bit ‘mover’ providers”.  Both strategies are valid but ruled by different dynamics and Yankee believes that providers must pick one or the other strategy.  For Digital Lifestyle, the market will start segmenting as providers offer mobile solutions for different types of people who have different needs.   Winners will be big global players and startups that develop creative approaches to generating incremental revenue.  Losers will be those providers that don’t realize that they need to act now to carve out new business units.  Also, operators that kill margins with high marketing and device subsidy costs will be on the loosing end.

3.Small cells will stumble.   2014 will be a better year than 2013 for small cell providers.  Tariffs influencing end-users to avoid mobile broadband for video will strip much of the economic rationale for extensive small cell deployment in the near term, calling into question expectations for rapid market uptake.   Suppliers need to expand their focus on standards.  Operators should continue to experiment with small cells.   Winners will be large scale firms that can handle both macro and micro offerings like Alcatel-Lucent, Ericsson, Huawai and Nokia Siemens Networks.  Losers will be smaller firms like Pure Wave and ip.access

4.  At least one operator will launch turbo-boosting service in 2013.  Data and analytics will drive new offerings.  As more operators look to real time analytics tied to network data to speed the creation, delivery and monetization of unique product and service bundles, they will begin to learn from customer expectations and be able to track monitor and respond to any change.  As a result they will embark on new services, such as turbo-boosting, enabled by insight drawn from the advanced analytics.   Winners will be vendor who can enable real-time data analytics like Nokia Siemens Networks, Openet, Medio Systems, Amdocs, AT&T, Verizon and Orange.   Losers will be firms like Teradata, Oracle and SAP who don’t have real-time analytics capability

5.  By year end Google will start subsidizing Mobile Payments Credit/Debit Transaction Fees.    Expect some shifts in the mobile payments industry in 2013 as Google enters the mix with it’s strong advertising capabilities.  In 2013, Google needs to find ways to entice merchants to accept its mobile wallet solution.  Paying merchant transaction fees (from it’s advertising revenue stream) could prove to be very persuasive.   If this does happen, it will disrupt the current payment ecosystem.  Winners will be Google.   Losers will be current providers PayPal, LevelUp, Square and Isis who can not scale up.

6.  A cloud based mobile payment system will see a significant data breach in 2013.   Criminals are waiting in the wings waiting for the right opportunity to exploit mobile.  So far attacks have been muted only due to the lack of scale.  Yankee sees a perfect storm in 2013 caused by ubiquitous Smartphone usage, 24×7 connected devices and consumer naiveté.  Yankee predicts at least one of the major mobile payment schemes will fall prey to a successful hack.  Yankee says the victim will most likely be a cloud player since it presents criminals with them most lucrative risk/reward ratio.   Winners will be the criminals (at least in the short term).  Losers will be the consumers, merchants, and the payments industry overall.  Consumer education will be key to overcome this threat.

7.  More than 50% of Companies look to the cloud for their mobile app developments.  Cloud continues to be an important trend.  Yankee says that demand side pressures and supply-side innovations are accelerating enterprise deployments of mobile applications in the cloud.  Next year, Yankee expects the majority of enterprises will be deploying their applications using software as a service (SaaS) as opposed to on-premise software.  Winners will be companies with mobile strategies in place, cloud app providers, and mobile cloud platform providers and developers.   Losers will be enterprises and vendors without a cloud strategy.

8.  Microsoft Windows store will abandon 70-30 split and registration fees in 2013.  In 2013, competition between the app storefronts will turn red hot and Yankee expects Microsoft will be a big player.  Yankee says Microsoft will entice developers to its store by breaking with the standard app store-to-developer business terms.   Winner will be MS, Losers could be Google and independent app stores. 

9.  2013 will mark the first year that Android Smartphone market share will decline in the U.S.   Stronger competition from Apple, MS, and even RIM will result in pressure on the Android market including devices and developers.  Yankee says growth in the Android marketplace will slow and even decline in 2013.  Winners will be Apple & MS.  Losers will be those in the Android ecosystem.

10.  In 2013 M2M Mobile Virtual Network Operators (MVNO)s will feel the squeeze as operators get serious about machine to machine (M2M) market.  As Tier 1 operators ratchet up their attention on M2M networks to help drive new revenue, specialist MVNOs will feel the heat as they evolve from friend into foe.  Expect some smaller MVNOs to be acquired.   Winners will be the larger scale firms like AT&T, Verizon, Deutsche Telkom, Sprint, Orange, Vodafone, China Mobile and Telefonica.  Losers will be the smaller upstarts like Aeris Communications, CrossBridge Solutions, M2M DataSmart, Numerex, Wyless and Kore Telematics

A more detailed report is  be available from Yankee Research.  Registration for the report is at http://web.yankeegroup.com/report2013predictionsregistration.html.  I’d also recommend checking out the Yankee Research blog at http://blogs.yankeegroup.com/ for mobile ecosystem insights and news.