Mobile World Congress (MWC) 2011 was held for the sixth time in Barcelona, Spain, during February 14-17, 2011. There was not only a significant increase in the attendance (authorities mentioned a record of 60,000 people), but also significant increase in new exhibitors, and new product / service announcements. There were huge crowds at the exhibit floors, but the outdoor activities were somewhat restricted due to the uncharacteristically rainy weather. I participated in over 60 meetings and talked to countless many during the Congress!
How is the industry doing? Compared to the last 2 years, I observed a remarkably increased enthusiasm, optimism, and positive outlook in every discussion I had with the people in the industry. As far as numbers are concerned, the industry passed the 5 Billion mobile subscriber mark during 2010. So, maybe we now have the last billion left! China with 840 Million subs is number one, but now only at 15% growth rate, while India has 757 Million subs and 45% growth rate; so I would expect India to overtake China in terms of mobile subscribers during this year! In the developed world, it is the Smartphone penetration that is being watched: 27% of all US subs are now using Smartphones, while that ratio in Western Europe is 31%. According to Strategy Analytics, Smartphone shipments surged 67% in 2010. Also, there were strong showings at the MWC from the emerging market operators, such as Bharti Airtel from India, and Qtel from Qatar. Several emerging market countries have booths for the first time, such as one from Egypt!
Informa, a research group, stated during MWC that the worlds 900 strong mobile operators generated $965 billion revenue last year, and will pass the $1 trillion mark in revenues during 2011. That will be a major milestone for the mobile industry!
Major Themes? The major topics at this Congress were Nokia-Microsoft announcement, Google, Tablets, New Android Phones, LTE vs. HSPA+, Semiconductors, App stores / WAC, Cloud, Social Networking, LBS, Mobile Money, Messaging & RCS, m-Health, and network optimization. Lets look at each of these areas in detail.
Nokia-Microsoft Announcement: Nokia is the largest handset supplier as well as the largest Smartphone supplier in the world. Lately, it has been coming under increasing pressure from Apples iOS and Googles Android for the Smartphone business, and from a variety of Asian manufacturers for the lowend of the market. Nokia had invested heavily in Symbian in the past, but has been falling far behind. At the last MWC, Nokia had announced jointly with Intel, a new initiative around MeeGo, a new OS that is targeting high-end devices. There has been some positive anticipation to see some first MeeGo devices at this MWC.
Microsoft on the other hand, rolled out their new Smartphone OS, Windows Phone 7 (WP7) last year and received lots of positive response, with several handset manufacturers such as Samsung & LG introducing WP7 handsets. However, Microsofts WP7 Market Place has only 8,000 apps, way behind Apple (360,000) and Google(150,000).
A week before MWC, we have heard of a leaked memo sent by the recently appointed CEO of Nokia, Stephen Elop, to Nokia employees. This is referred to as the brutally honest burning platform memo, where Mr. Elop compares the situation at Nokia to a fire on an oil rig in North Sea, and contemplates to jump to freezing waters to save the company.
That jump into freezing waters came on Friday before the MWC 2011, when Microsoft and Nokia announced that Nokia will be adopting Microsoft Windows Phone 7 (WP7) Operating System for its Smartphones, effectively killing Symbian, and putting MeeGo on hold. Later it also became clear that Nokias Ovi would be rolled into Microsofts WP7 Marketplace, and various other consolidations will take place between the two companies. We were told that Nokia and Microsoft are trying to position themselves as the third major eco-system, with the others being Apples iOS and Googles Android communities.
However, the reaction from the customers, investors and the employees of Nokia show that this might be a wrong decision. It looks like Microsoft buying Nokia without paying any cash. The most upsetting was the lack of roadmap for Nokia WP7 Smartphones. Mr. Elop indicated that he is hoping to have at least one device by year-end. However, one Microsoft executive replied to a related question by indicating that it takes 6 years to get new cars from concept to the show floor. If that is anywhere close to the approach Microsoft-Nokia would be taking, then they have already lost the battle in this very fast moving paradigm we are in. See Google section below!
Also, Nokias Elop announced that they will be focusing on emerging markets for growth. Some indicated that Nokia will most likely be focusing on the hardware while Microsoft focuses on software. These strategies may not make sense for Nokia; software is where the value is; hardware margins are diminishing, thanks to pressure from the Asian manufacturers; Industry needs Nokia with a cohesive winning strategy!
In my view, there was no reason for Nokia to choose one operating system for their Smartphones exclusively. There is no benefit to Nokia or to Nokias customers for them to use one OS exclusively. In fact, most if not all of Nokias operator customers would prefer multi-OS support. Number 2 handset manufacturer, Samsung supports 3 operating systems, Android, their own Bada and Microsofts WP7! Subscribers as well as the operators want choice, one size does not fit all, and Nokia now tells them that you can only have WP7 with its Smartphones. This may benefit Microsoft in the short-run, but could be devastating for Nokias standing in the mobile ecosystem. In addition, we may see new start-ups emerging in Helsinki in the coming months as some valuable resources depart Nokia. Obviously Mr. Elop needed to make hard decisions, but probably this was not the right decision. Just jumping into the icy waters of North Sea, without any other precautions, your chances of being saved is slim.
Google: “Android Everywhere” – while Nokia’s influence was diminishing due to various factors, Google’s Android was everywhere at MWC 2011. Almost all Smartphones and all tablets announced were Android based. Google’s booths at several Halls attracted the most attendees and the Android badges & models of Android robot were collectors items! As somebody said, this was Google’s MWC! Eric Schmidt, Googles outgoing CEO, announced that Android is now supported by 27 device manufacturers who have released 170 different models so far, and available with 169 operators in 69 countries. He said Android is currently activating 350,000 new phones per day, which is 127 million annual rate! That is an incredible pace! Motorola Mobility’s CEO, Sanjay Jha made news that Google may be coming out with Google Music, using Android Honeycomb (3.0), to compete with Apple’s iTunes. Fragmentation of Android was one of the concerns expressed during the Congress. Eric Schmidt told audience that they plan to converge Gingerbread (for Smartphones) and Honeycomb (for Tablets) in a new version called Ice Cream! How sweet!
By the way, Apple did not have a booth at MWC, but it was present everywhere, in everybodys mind, since lots of new product or service introductions by others were in response to what Apple did in the last 12 months. In addition, iPhone 4 won the GSMA award for best device of the year!!
2011 is Year of Tablets: It was remarkable that Apples iPad was launched just 10 months ago, selling over 15 Million units since then. iPad not only has been a major success for Apple, but also it opened up a brand new device and platform category for mobile ecosystem. There are now more than 60,000 apps just for Apple iPad alone. It is interesting to note that this is about 8 times as many apps as Microsoft Marketplace has for WP7, even though it was launched a couple of months before iPad.
Before MWC 2011, at the CES show in Las Vegas in January, there were already 100+ tablets released or announced from 64 vendors around the world. It is expected that there will be more than 100 vendors in 2011, selling more than 100 Million tablets during this year. At the MWC 2011, we saw several major new tablet announcements, breaking new grounds:
- Samsungs Galaxy Tab 10.1 with Android 3.0 (Honeycomb), 1Ghz dual-core, HSPA+, and with Vodafone being lead operator for 20 countries;
- RIMs Blackberry Playbook, with most extensive enterprise features support, (despite its name!), with multitasking, and Flash support; major advantage is the announcement of 4 different models that support combinations of Wi-Fi, WiMAX, HSPA+ and LTE, which is a first!
- HPs TouchPad, with webOS, with superb user interface, delighting the Palm users, but also announcing that webOS will be coming to PCs / Laptops (at Microsofts expense), thus increasing the appeal to HP TouchPad developers; I expect to see lots of TouchPad apps in the near future.
- Motorolas Xoom (announced at CES earlier), with dual-core rocessor and Android 3.0, and HSPDA & Wi-Fi, dual cameras,
- HTC Flyer, with 1.5 GHz Qualcomm Snapdragon processor, HSPA+ capability, most interestingly comes with a Stylus for taking notes on the device.
- Orange has launched its own branded 7-inch tablet, manufactured by Huawei, being offered as an entry-level tablet; this is a first by an operator. I think we should expect other operators to follow suit.
Some industry analysts still think that the tablet market is at best a niche market and cannot replace the laptops. I strongly disagree. We have seen a major uptake of the tablet market in such a short time, offering consumers and enterprises alike a new mobile device that is both practical and hip. As a heavy user of laptop, an iPad and an iPhone, I can say that they complement each other.
Next Gen Android Phones: First set of Android phones were introduced at previous MWC. During the last 12 months, Android picked up significant momentum, and during this MWC we saw the launching of next generation Android phones. HTC was remarkably ahead, with 5 new phone announcements, as well as capturing the Device Manufacturer of the Year award. Some of the interesting new Android Smartphones were as follows:
- HTCs Facebook phones HTC announced two phones, ChaCha, and Salsa, (interesting names for Smartphones!) with a dedicated F logo that facilitates Facebook interactions with every other function on the phone. This trend of deep integration with social networking will most likely be followed by other manufacturers.
- Samsungs Galaxy S II, successor to previous Galaxy S, with HD screen, 8 Megapixel autofocus HD camera, and a 2nd camera for video conferencing, larger screen but thinner than predecessor.
- First 3D on Smartphones, by LG, Optimus 3D Smartphone, using first dual-core architecture, consumers will be able to watch 3D videos without wearing special glasses, and also capture 3D content via a special double camera on the back of the phone!! As LG stated, this phone will act as a catalyst to create 3D mobile content.
- Sony Ericssons Playstation phone – Xperia Play, based on Android 2.3 (Gingerbread), Snapdragon 1 GHz processor, with slide out panel, with pair of touchpad joysticks, enabling immersive mobile gaming experience, lots of social networking features as well; truly a new experience with Smartphones!
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