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The convergence of the PC, internet and cellular
technologies has had significant influence on the
digital life of consumers, impacting behaviours,
needs and expectations. Understanding these
emerging needs, as well as the shifts in social
media trends, is fundamental to creating the
future services of the mobile cloud and enabling
global digital tribes. The digital tribes and trusted
communities will be the source of new business
models for both the mobile industry and its
business customers. The key to global economic
success is the faster deployment of the mobile
cloud.
Paper by Steve Bell, President of KeySo Global
The World Is Changing At A Macro Level
The world is changing at an accelerated pace with the convergence of the consumer
electronics, broadcasting, PC, internet and cellular industries. Together they are
having a significant influence on the digital lives of consumers, impacting behaviours,
needs and expectations. The companies and industries that serve these consumers
are experiencing mounting
pressures on their business
models and the boundaries
of the businesses and
industries that they
participate in. The mass
marketing and mass
production of the industrial
age are being subsumed by
internet-based technologies
requiring companies to
rethink their entire business
model, including the
concepts of how brands are
created and nurtured.
In this digital world the
emerging global online
interactive communities encourage new ways of learning from each other and
shaping each others’ opinions, no matter what the
traditional cultural or geopolitical divides are. The
power of these communities can make or break
brands and reputations, and the movement will only
get stronger. As more people gain access to
broadband, the internet and mobility, the growth of
communities and networks will explode as the
impact of Metcalf’s law and Reed’s law compound
each others’ effects.
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The staggering reality is already evident with the accelerating pace of social media
development in the fixed cloud. Beyond the statistics is the impact on global
behaviour that is resulting in a fundamental shift in digital human life, which in turn
is changing human expectations across the globe.
An emerging result is that for the first time in the Mobile industry’s history,
consumer expectation is significantly ahead of its plan and its willingness to deliver.
Many will scoff at this thought but these are the same people who only six years ago
scoffed at the concept of people walking into a Starbucks coffee shop, paying five
dollars for a cup of coffee, opening up their laptop and surfing the web.
There are many arguments and reasons why mobile cloud technology is not being
deployed faster to more people. At the heart of most of these arguments is a desire
to maintain the current status quo and extract maximum return on investment on
the already deployed 3G networks. This perspective is obviously compounded by the
current economic downturn. However, a review of global gross domestic product
since 1980 will show that major technology innovations have been implemented
during downturns, with the result that the upswing in both percentage and absolute
terms was significantly greater decade on decade. Add to this the multiple studies
that indicate the deployment of broadband and ICT technologies improve economic
well-being and there should be no doubt that investing in the future mobile cloud
technologies make sense now.
The fact is that the roll out needs to be faster, deeper and broader
than in any previous technology and it should not be restricted to the
developed countries. A review of the global penetration of cellular
technology will show that it took 19 years to hit 10% global
penetration, based primarily on developed countries. As soon as
China and India became focal points for the industry, penetration
jumped to 30% in five years.
The manufacturers and operators in developed markets that wish to
sustain the status quo and delay the full ramp-up of existing wireless
broadband technologies, like WiMAX, run the risk that emerging
countries that are early adopters of wireless broadband, have the
opportunity to become more competitive in the world economy.
What is available in one part of the world has to be available to the
rest of the world. In a reversal of the traditional model, if wireless
broadband is available in emerging countries ahead of developed
countries, what will consumers think and do?
If the existing incumbent providers fail to keep up with the pace of
innovation then the market could pass them by. In an industry
increasingly obsessed with size, it may be the smaller countries and
vendors providing innovative and creative business and service offerings who change
the landscape. Many reports predict that the growing pace of multimedia, social
networking and video will quickly overload
“It’s been a challenging year for
and consume the existing 3G networks and
us,” said John Donovan, the Chief
spectrum. The deployment of 4G networks in
Technology Officer of AT&T.
existing and new spectrum may be too late to
“Overnight we’re seeing a radical
alleviate the emerging consumer anger
shift in how people are using their
created by the overload. A recent article in
phones,” he said. “There’s just no
the Wall Street Journal commented on the
parallel for the demand.”
frustrations of New York iPhone users with
the speed and capacity limitations of the
AT&T network. An average iPhone user reportedly use 10X the network capacity that
other Smartphone users require. AT&T is urgently planning more cell sites in New
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York and other large cities. Additionally the acquisition of Waveports Wi-Fi network
seems a clever move since it is reported elsewhere that three quarters of the
internet traffic on the iPhone is primarily transacted utilizing Wi-Fi. The realities are
that operators in the future will be managing multiple technology networks and
balancing loads across them. As capacity utilization explodes operators will be
scrambling for more broadband spectrum. It makes sense to utilize all available
spectrum and technologies as early as possible. WiMAX in available TDD spectrum
provides the opportunity for early capacity relieving 4G services ahead of delivery of
LTE and LTE TDD.
The point is that network operators should be technology agnostic since their focus
should be on enabling the best possible mobile cloud experience for their consumers
as early as possible and learning to manage multiple technology networks as
efficiently as possible across broad ranges of spectrum.
The Opportunity Space At The Micro Level– The Digital Byte
This changing world has created significant new realities for the consumer.
Consumers are experiencing new levels of knowledge sharing and peer-to-peer
ratings that are shaping experiences and perceptions beyond the traditional brand
and marketing channels. Compounding this abundance of information is the fact that
there is more choice
available in the
digital world than
ever before. At the
same time complex
lives, increasing work
pressures and
demanding families
appear to have
shrunk real available
time to enjoy these
choices!
Peoples’ lives have
become more
digitally fragmented
into increasingly
complex multiple
digital bytes of everyday life. The question most consumers are concerned with is
how these digital bytes, splintered across time and requirements, can be pulled
together to enable a satisfying, complete and whole life.
When they look at the offerings from the cloud and the mobile cloud, the key
questions consumers have are: does is make my life simpler, does it help make me
whole and can this service seamlessly blend into my existing life and link the digital
bytes into a whole?
Understanding of this evolving proposition is critical in defining the differentiated and
sustainable innovative products and services of this new digital world.
Looking specifically at devices for the mobile cloud and how they will change in the
next few years, it is important to recognize the factors that are driving the
development. Many will identify that battery power, screen technology, processing
power and user interface developments will be significant in shaping future devices.
However, the single biggest influence on device trends and capabilities are the
existing mobile operators and their interpretation of consumer needs within the
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constraints of their existing service offerings and business models. In most parts of
the world, the mobile operator is the
predominant purchaser and
distributor of mobile devices. This
Mobile Internet Device
distribution model, in a large number
of cases, is tied to a subscription
•Fundamentals
model that binds consumers to a
•Price for developing markets
network for a fixed period of time.
•Size
This model has been in existence for
nearly 28 years and was the
•Battery life
innovative product of the cellular
•Multi band (global FDD/TDD)
industry in its early days when
•Multi access (HSPA /CDMA
McKinsey, the consultancy company,
/WIMAX /LTE /Wi-Fi)
predicted that the industry would sell
•Form Factor
no more than 1 million devices. The
•Multiple modality
model has clearly worked well but in
•IP friendly
the age of the mobile cloud, where
global roaming, instant access, easy
•Displays (touch & visible outside)
interoperability across multiple
•Voice recognition
technologies at reasonable cost is the
•Enablers
consumer expectation, is this really
•Speed
the best model and should it be the
•Simplicity
one driving future device trends?
•Security
Operators and manufacturers need to
look at consumer needs and their
•Differentiators
business in a broader context, and
•Full internet access
from outside of their existing models,
•Instant on
in order to take account of
•Multiple VoIP QoS
opportunities and threats resulting
•Multiple sessions
from the convergence of services.
This provides the opportunity to
create the value innovation goods and services that generate “whole feeling
experiences” that consumers seek in this fragmented digital world. The threat that
exists in not taking this view is that new entrants provide for the willing consumer in
ways that the incumbents have failed to consider.
Digital Boundary Propositions
Beyond the consumer, the mobile industry has had a long and profitable history
serving businesses. The challenge in
this new digital world for 98% of
companies currently not engaged in it
is that they are behind the digital
boundary. They struggle to understand
how this rapidly changing digital world
will impact the way they operate, the
business they run, the consumers they
serve and the strategies they deploy.
Compounding this is the fundamental
shift from a push marketing
environment to an era when it is
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imperative to have interactive dialogue with consumers and create a need that they
incorporate into their lives.
Most people in the mobile industry are operating ahead of the digital boundary
because, by definition, they are creating the digital world. This is a huge opportunity
for the mobile industry to create new service offerings in and around the mobile
cloud. This assumes that the mobile industry itself learns the fundamental lessons of
this new digital world.
An early lesson will occur as wireless broadband technologies are deployed; a
general assumption that is being made by most operators is that the combination of
location and advertising services will generate the revenue to compensate for the flat
rate subscription fees and the drop in voice revenues resulting from increasing use of
VoIP services. The reality that most other companies are just beginning to
understand is that advertising in the cloud is dead! In the future, it will be the digital
natives who, through online communities of like minded people, will provide trusted
recommendations that will have a greater impact than paid advertising.
The new revenue models will emerge through an understanding of how the
communities of digital consumers are using the power of the mobile internet to
manage their byte sized, complex lives. There will be trusted mobile community
solutions that allow them to connect and have access anywhere, anyhow and at any
time to their trusted communities.
Using these same solutions, companies will be able to build better relations with their
communities of employees, consumers and suppliers, and consequently manage
their businesses better in real time.
The extension of social media into the mobile cloud enables the creation of value
webs and new business opportunities. The future is the creation of global mobile
tribes, connected 24 hours a day 7 days a week anywhere and anyhow, that will
change the shape of business and global markets as we currently understand them.
Enabling The Connected Tribe
Historically, value and power has been based around aggregated knowledge. This
aggregated knowledge has resided within small, large, and global enterprises that
have grown up in the
industrial age. With the
growth of the internet,
web technologies and
cloud computing, the
collective knowledge of
communities and
networks globally has
been doubling every five
years. This collective
information growth,
along with increasingly
easy access, has
resulted in the explosion
of communities that
pose a significant threat as they diminish the value of the aggregated knowledge of
individual corporations. Bubbles of collective knowledge will develop as groups of
individuals come together to form new companies and digital tribes of entrepreneurs,
to commercialize innovative, cross industry ideas and stimulate economic growth.
The creation of global digital tribes could fundamentally shift the centre of gravity of
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economic development over the next 5 to 10 years in favour of developing countries
in the Asia region.
A key component to enabling the growth of the digital tribes is the provision of easy
wireless broadband access globally. A review of historic technology development
shows that for a new technology industry to grow rapidly three components are
necessary to be in place simultaneously and to work together. The component pieces
are a technology (T) that is ready and deployable, with a business model (B) that is
appropriate and a consumer (C) requirement that is real.
This paper highlights the fact that the consumer demand is present, growing rapidly,
and set to explode based on experience with the fixed cloud. That the existing
business models of cellular appear inappropriate, and may need to be rethought for
the mobile cloud. Most significantly that appropriate technologies are available, and
in some cases deployed by new entrants, but the reality is that the incumbent
industry is failing the global consumer by not quickly enabling the mobile cloud.
Paradoxically, without recognizing this fact, the mobile industry incumbents run the
risk of accelerating their own demise in a classic case of marketing myopia. The
opportunity exists for the incumbent mobile industry to rethink its fundamental
business assumptions and to recognize that coexistent multi technology islands of
networks are a necessary reality of demographic, geographic and economic elements
of the new digital world. There should be no war between WiMAX and LTE; they are
both based on the same technology and have very similar business models for
success. A rational businessman would look at the rapidly growing consumer need on
a global basis and seize whatever technology and spectrum is available to serve
those needs and as quickly as possible.
We sit at the dawn of a mobile digital Renaissance, and KeySo Global looks forward
to the opportunity to help many enlightened enterprises discover the opportunities
and challenges of this new digital world and to define strategies that ensure success.
KeySo Global
•A consultancy specialized in enabling the Mobile Internet for
the global consumer
•Helps customers gain the greatest market reach and presence
•Enables customers to leverage all underlying technologies
•Draws upon 20 plus years of global telecom's and wireless
experience
•Analyses and syntheses converging market forces and trends
•Develops and implements market winning strategies
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KeySo Global LLC
Tel: + 1 847 312 1125
Fax: +1 847 478 1633
steve.bell@Keysoglobal.com
www.keysoglobal.com
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