Mobile World Congress 2011. Insights and Observations - Dan Hodges

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MediaBizBloggers Guest Contributor Dan Hodges shares his overview from the Mobile World Congress 2011, held in Barcelona February 14-17.

The mobile industry is entering the third wave of innovation, enabling connected life and businesses on a global scale. This wave of innovation is transforming the way people communicate with long-term impact on the world economy and civil society. The CEOs of the top operators, handset makers, network enablers, software and service companies, governments, NGOs and start-ups were all in attendance sharing their views on how to connect the world. Expect Rapid Disruptive Transformation: What stood out most to me, was the rapid and transformative rate of change and its implication on government, business, people, rich and poor. The revolution began when mobile passed the Internet at one billion subscribers and went largely unnoticed. Most revolutions are hard to detect, but the fruits of this revolution began with mobile health in Asia, banking in Africa, English learning in India as well as the most recent upheavals in Tunisia and Egypt.

"Each time a transition happens, you have to bet five to ten years before it is obvious or you miss your window." John Chamber, CEO Cisco.

I will provide some data points below that highlight where we have been and where we are projected to go.

1. Seven-eight billion mobile subscribers or 80% of the world's population by 2015; it took 100 years to wire 1 billion people and 15 years to reach 5 billion people, according to Hans Vestberg, CEO of Ericsson.

2. For every 1,000 new broadband lines installed, 80 new jobs are created (AT&T, 2011).

3. For every 10% of broadband penetration, GDP increases by 1% (source: AT&T, 2011).

4. The average Android phone has 20,000 times more computing power than the entire lunar mission, according to Eric Schmidt of Google.

5. There has been an increase of 60% in network speed over the last two years (AT&T).

6. Google is moving from syntax to semantics for mobile phones. The next generation of mobile phones will have language translation software, allowing you to speak to people around the world without any knowledge of the language they are speaking.

7. Thirty-five hours of video are downloaded to You Tube every minute (according to Eric Schmidt).

8. 4G build out in mature markets and 3G in developing countries

9. Facebook now has 200,000,000 mobile users and is growing rapidly.

10. Smartphone ownership grew 10% to reach 27% of subscribers in the US. 36% of users use mobile for web browsing. The number of mobile users accessing a social media site grew 56% to nearly 58 million users in 2010. In Japan, 75% of mobile users connect to mobile via their browser.

Mobile Product Innovations Highlighted: including Maps, Social Networks, Gaming, Augmented Reality, NFC (near field communications), Translation, (speak in English and hear in French); SMS and NFC vending machines mass deployment within the next few years. Ericsson had the first SMS payment vending machine in 1997 (in Finland).

New Tablet Launches:

RIM: Playbook
Motorola: Xoom
Samsung: Galaxy SII
Sony Ericsson: Xperia Play
LG: Optimus

Telecom Industry Highlights

WAC: Wholesale Applications Community established- the purpose of the group is to provide standards for apps so they can be used in smart phones and feature phones. The initiative promises in-app billing support and user identification. The specifications support HTML 5 with multi-media capabilities. Verizon, China Mobile, MTS, Smart, Orange, Telefonica, Telenor, Vodafone have all signed on. Cloud: building out the mobile broadband, using cloud computing services

LTE: Long Term Evolution, has been embraced by most major operators.

Telefonica: The industry will need to increase capacity 10X over the next few years to accommodate demand from new users, higher usage by smart phone users and mobile video.

AT&T: (CEO, Randall Stephenson) says smart phones will transform the market, the mobile tablets, gaming and mobile technology used in phones. The cloud will be essential to manage all these choices. 50% of consumers in the U.S. are using three or more devices to access the same content, The Wall Street Journal being a prime example. Expect explosive growth in mobile services and advertising similar to SMS growth, which went from $26 million in 2002 to $5 billion in 2008. 50% of tablets in the US are streaming video. 15 billion apps have been downloaded, and the projected revenue for apps in 2015 is $50 billion.

HTC: (CEO, Peter Chow)  they have developed a phone with a Facebook button, which is optimized for Facebook; Facebook has 200 million mobile users.

Isis:  Joint venture with AT&T, Verizon and Tmobile will transform the way people shop, pay and save. McDonald's is spending $2 million to install contactless (NFC) readers in 1200 stores in the UK.

Keynote Highlights:

Nokia: extending connectivity to the unconnected 80% of the world's population is within cell phone range, yet only 20% are connected to the Internet. Nokia will innovate with Nokia Money and Nokia Life Tools.

Google: Eric Schmidt says Android is signing up 300,000 new customers daily

Microsoft: Steve Ballmer promoted Windows 7 as the most operator friendly platform. The demo they gave showed deep integration with all the Microsoft products such as Xbox live, music, bing, IE9, gaming and office. "The opportunity for growth is huge as smart phones get into the hands of the masses."

Twitter: Dick Costolo said that 40% of tweets come from mobile devices and 50% of Twitter users access from more than one platform. A record 6,000 tweets per second were recorded during the Super Bowl.

Yahoo: targeting personalized mobile content delivery.

Advertising

Mobile advertising was represented on various panels and keynote speeches during the event. This is the first time that advertising has taken a prominent role at this event. CEOs from WPP and IPG gave keynote presentations and the panels featured leaders in the advertising space. In 2009 it is estimated that the global mobile advertising marketplace was $1.75 billion. In 2014, it will grow to $8.7 billion. In 2011, 5.3 billion subscribers generated 17.7 billion downloads, bringing in $15.1 billion in revenue. In 2015, 1 billion users will access the Internet on mobile, making it the primary source of Internet browsing.

Sir Martin Sorrell says the average user has downloaded 60 apps in 2010 vs. 10 apps in 2008. Consumers are spending 25% of their media time online and advertisers are spending 14% of their advertising budget on online advertising. He announced the formation a new agency group called "Possible World," which will help lead the agency's efforts in new media technologies impacting consumers. Fill rates for iAd are 10%. Advertisers are resisting and pushing back because of lack of information.

mPublishing Highlights

1. ebooks account for 9.5% of all book sales.

2. Enhanced books are emerging

3. Apps are a short term fix

4. Multi-platforms are the future

5. Education is going digital

6. New business models are emerging

mHealth Highlights:

A McKinsey study shows that 57% of people in US, Brazil and India respond favorably to a doctor phone service and would be willing to pay. People call in to a hotline for medical advice. An SMS Q&A service would have market appeal in emerging markets. The mobile phone uses for health:

1. Patient care on demand support for caregivers

2. SMS prescription reminder

3. SMS appointment reminders

4. Global access to medical care

5. Prevention and wellness

6. Click to diagnosis in Botswana

7. Remote access to doctors services drug authentication

8. Remote health monitoring

9. It takes 15-17 years from the moment of innovation to mass acceptance

Barriers:

1. Complex ecosystem
2. Standards and regulations
3. Cultural barriers

mCommerce Highlights:

--Loyalty programs on the mobile phones are driving mobile commerce, according to Western Union (2011).

--The delivery of payroll to Afghan police officers, where 10% of the police force in Afghanistan is paid via mobile phone.

--No companies dominate the mobile payment segment in the US. The players in this space are the credit card companies, the operators, the banks and the handset manufacturers.

Selected payments companies:
--Wipro Comet: targeting consumer offers
--Boku: global money payment solution
--PayPal: mobile ran $4 billion of revenue through its system in 2010
--Fundamo has an mbanking solution in emerging markets.

India has a major initiative to provide banking services to the population. Mobile Money for the unbanked: the goal is to make mobile money services available to 20 million unbanked customers living under $2 a day, by 2012. Nokia is teaming with the bank in India to help accelerate acceptance of the unbanked, as Nokia has 3X the points of distribution as the banking system. Here is an overview:

--85,000 banks
--65,000 ATM's
--60 million Internet users
--690 mobile phone users
--60% of the population does not have access to bank accounts
--Only 30,000 of the 600,000 villages in India have a bank.
--The goal for 2020 is for every household to have a least one member with a bank account.
--4.6 million consumers have biometric cards
--By 2014, there will be 1 billion mobile phone users in India

In the US market, the Bank of America has 32,000,000 customers using digital banking and 6,000,000 customers using mobile banking;

80% of the mobile banking customers are using it. The mobile customer is the most valued customer for Bank of America.

Other GSMA and industry initiatives featured include:
--Education
--Entrepreneurship
--mWomen

Dan Hodges is Managing Director of Consumers in Motion. Prior to founding Consumers in Motion, he led the world’s largest global sales force dedicated to mobile advertising and marketing at Nokia Interactive. In 2008, his Nokia team won the MMA Award for Innovation with mobile advertising for Unilever's Seda Teens. He has worked for over twenty years at several of America's premier media companies and advertising agencies, and has held leadership positions at Nokia, Discovery Communications, Inc. (DCI), WebMD/Medscape Inc., MediaVest, BBDO and Foote Cone & Belding. Dan has also served as a Board Member, advisor and/or consultant to companies and countries in the Internet, mobile and television industries. Dan can be reached at dan@consumersinmotion.com.

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