Mobile Industry Predictions for 2017: Ten Years and counting

[former_member182953]

I published my first set of mobile predictions in January 2008. This is my tenth installment. My blog has had several iterations since it was initially part of the Sybase company blog space (we were known as Sybase 365, back then). When SAP acquired Sybase, most of my postings were migrated to the original SCN for Mobile area and now to the “new” SAP Community Network blogs. Some of the very old postings (before February 2011) are unfortunately no longer available in existing SAP archives.

That said, I do have my own copy of that initial posting and found a few interesting predictions:

• “While Google’s Android platform has not produced a production-ready mobile phone, yet, I think we will see continued adoption of this platform by some major phone manufacturers. “ 

As we now know, Android is a worldwide phenomenon and the leading mobile OS for many years. One of the first US Android phones was the HTC manufactured G1 (for T-Mobile) appeared that year.

• “My “favorite handset” – the Apple iPhone – will finally support 3G networks and MMS before the end of Q2, 2008. This will alleviate fears that millions of subscribers won’t be able to send and receive traditional MMS.   Existing iPhone handsets will be able to load upgrades to support (or activate) an MMS client on their handset via Over-the-Air upgrades from their operators.”

In those days, I did NOT like the iPhone – mainly because, when it was launched, it did not support 3G networks nor MMS (being one focused on messaging, I could not support a device that didn’t support a major messaging methodology). In July of that year, the iPhone 3G was released, which did support 3G networks, but not MMS. MMS did not arrive until the 3GS (which was my first iPhone and I’m still counting and anxiously awaiting the iPhone 8!).

I also was somewhat pessimistic about IMS not being widely deployed until LTE became prominent. Ten years later, LTE is virtually ubiquitous around the world and IMS is still not widely deployed. Maybe my pessimism was warranted (although I will say, I was “hopeful” in those days).

Moving onto what 2017 has in store, I think overall this year will see lots of innovation. 5G is hot right now as are Internet of Things (IoT) topics. Security and privacy are also trending and important topics. Hackers are not letting up and therefore, we must be especially diligent in providing strong security to accounts and access. Mobile has and will continue to play an increasingly important role. Messaging is still strong and in fact, A2P SMS especially should continue to be the center point of mobile-first customer interaction strategies – all part of the “digital transformation” that you keep hearing about.

Here are my 2017 mobile industry predictions in no particular order: Mobile Messaging – especially A2P messaging through SMS will continue to grow and become the dominant worldwide channel for businesses to interact with customers. While all messaging methods will grow in subscriber usage (MOUs, etc.), SMS also continues to show resilience and staying power. RCS-type deployments will continue to disappoint and there will be no Android equivalent of Apple Messaging. Some IP messaging platforms will become legitimate alternative channels to A2P SMS. Chatbots will be heavily hyped, but these won’t gain significant prominence, but for a few customer-service solutions – which will ultimately lead to human interaction on the other side. Think of chatbots replacing the voice-call menu tree or requesting needed information for the human responder. We will see a start of production 5G deployments by mobile carriers – initially targeting for IoT applications; however, some 5G deployments will be targeted for consumer devices. By the end of 2017, there will be at least 650 LTE networks and 200 LTE-Advanced Networks launched worldwide. Apple will launch a new iPhone 8 and iOS 11 that will include some new innovations for Apple, including an OLED screen, no hardware buttons, wireless charging, enhanced camera capabilities as well as better support for LTE-Advanced. This device will lead to record iPhone sales in 2017 with Apple iOS gaining some market share, but not changing the over Two-Factor Authentication (2FA) will continue to be the dominant authentication and security mechanism – especially with increasing account breach reports. 2FA over SMS will continue to be the dominant channel, although 2FA through TOTP solutions (such as Google Authenticator) will gain prominence as well. Wearables will continue their slow growth, but with no real killer applications or functionality, they will slowly track upward. Fitness / Health continue to be the predominant applications. Apple and Fitbit continue to lead the pack with one or more existing wearable platforms shutting down in 2017. The most dominant IoT applications will be in transportation – especially vehicle automation, followed by logistics (tracking items) and smart home devices (light bulbs, home automation, etc.). While few vehicle manufacturers will be able to provide capabilities of a Tesla (e.g. downloadable software, self-driving capabilities, etc.); more car manufacturers will provide mobile apps and remote vehicle management than ever before. In the United States, expect some mobile operator consolidation. This likely means either Sprint or T-Mobile USA is acquired. US Cellular could also be acquired along with some of the smaller Tier 3 operators. This will lead to questions of competition and market dominance among the remaining operators. Mobile Point of Sale payment solutions will continue to grow in usage and acceptance by consumers. Apple Pay will top double-digit monthly usage (percentage of Apple users actually using in a month). Consumers will also begin to accept that mobile payment solutions are more secure that directly using credit cards. More major sites will support Apple Pay and Android Pay as options. So here you have my predictions of what might and might not happen in 2017. As this year is already off to an interesting start, I also prediction that this year will out do many of the past year in terms of overall unpredictability – mobile or otherwise. But, through it all, I think mobile usage and devices will play a prominent role. We are definitely in uncharted territory and I’ll leave it at that.

As we do every year, let’s look back at the previous year to see how we did: 1)            Messaging (I’m dropping the “mobile” part), which includes SMS, non-SMS messaging apps will remain THE primary channel for consumers and enterprises to connect and converse, despite all of the fragmentation. Worldwide, P2P SMS will drop in volumes, but in some markets, it will stabilize. A2P SMS continues to grow as a channel to reach consumers for a wide variety of uses, including increasing usage as a side-channel for two-factor authentication. Of course we would predict this and of course, the messaging channel continues to dominate how enterprises and consumers continue to actively communicate. Non-SMS messaging apps such as WeChat, Facebook Messenger, WhatsApp, and others continued to grow monthly active users. WeChat and Facebook Messenger are now being used by enterprises as a channel to reach consumers. But A2P SMS continues to dominate as the primary channel. P2P SMS did drop in overall volumes, worldwide, the decline was only about 5%, per our messaging traffic results. 100% correct 2)            This will be the year of Two-Factor Authentication (or 2FA). In the past couple of months, there have been significant pushes from media (Gizmodo article on banking) and the government (even President Obama, in a Wall Street Journal editorial) for consumers to use 2FA and for businesses to offer it. Overall, the majority of the companies currently listed at twofactorauth.org that do not support 2FA at this time, will support it by the end of 2016. Oh was it ever the year for 2FA! But there was both good and bad. The good was that security analysts around the world have declared that 2FA is a key security methodology to help secure accounts, given the numerous large breaches that have compromised passwords, email addresses and other credentials (think Yahoo!). Bad, in that during the summer, the US NIST indicated that 2FA using SMS as a delivery channel is to be deprecated in their next release of security guidelines. That led to an overwhelming number of news stories declaring the end of 2FA over SMS, which was decidedly not the case, nor warranted. In terms of the companies listed on twofactorauth.org, as of this writing, for many categories, the majority do now support 2FA. We’ll call this 100% correct. 3)            Wearables (smartwatches, fitness bands, etc.) will double the shipments from 2015. Apple will release the Apple Watch 2 which will have significantly more functionality than their inaugural product. Smartwatches in general will become smarter in 2016 with some rivaling the new (2016) Apple Watch in functionality. Fitbit will continue its dominance although the new Apple Watch (based on the new version expected in 2016) will gain. Fitbit continued to lead the wearables category. According to IDC, wearables in Q3 2016, reached 23M units, a 3.1% year over year growth (certainly not doubled, even for the entire year). Apple did release its 2nd generation watch with some minor functionality improvements, but they dropped 71% to 1.1M shipments in Q3 2016. Over a one year period, Apple dropped to fourth in terms of unit shipments, being eclipsed by Xiaomi and Garmin. Was too optimistic on the overall wearables, so 50% correct. 4)            LTE commercial deployments will top 600 mobile operators with 300 available for LTE Roaming (GSA thinks 550, I think more). Additionally, we’ll see over 200 LTE-Advanced commercial deployments. Already we have crossed 1 billion LTE subscriptions. By year end, that should grow to 1.5 billion subscriptions. There will also be some limited 5G commercial service in the U.S. by year end (mainly for IoT and 5G modems). The Global Mobile Supplier Association (GSA) noted that LTE subscriptions was at 1.73 billion at the end of 2016. As of November, 2016, they were forecasting 560 LTE commercial deployments. Our own data, indicates that over half of those may be reachable via LTE roaming. For LTE-Advanced, as of November, 2016, there were 166 networks launched in 47 countries. Unfortunately, there was not even limited 5G commercial service in 2016. Verizon and Samsung did indicate they would begin testing in the latter half of the year, but there have been no details. I fell short on all of these numbers, so let’s say 40% correct. 5)            For Mobile Devices, Android will continue its fragmented world dominance with Apple coming in second and, once again, defying logic and growing again with the new iPhone 7 model(s). Apple will gain in market share. Blackberry will hang in there as will Windows Phone, but as niche players. No other mobile Operating Systems will play a major role in the marketplace. Android did continue to dominate smartphone sales and market share, worldwide. In fact, Apple iOS lost a bit of market share as the iPhone 7 models did not achieve stronger sales until Q4 of 2016. In North America, Blackberry maintained a small, residual market share. Outside of North America, Blackberry is non-existent. Worldwide, we have duopoly with a split of 85% Android and 15% iOS. Since I predicted a growing market share of iOS, we’ll call this 70% correct. 6)            In terms of security of mobile devices, the latest drama between Apple and the U.S. FBI will be a catalyst for a number of new security and privacy initiatives in 2016. The U.S. Congress will not get into the act, given it is an election year, so this will all be settled in the courts. The FCC’s new privacy regulations will touch off another firestorm of controversy as did their Network Neutrality regulations. The courts will be busy for several years sorting all of this out. 2016 was indeed a year for security and privacy concerns. The US FBI and Apple’s case was ultimately managed by the FBI with help from a third party. As expected, Congress did not get involved (although several Presidential candidates used the controversy in their campaigns and the issue remains somewhat unresolved in terms of how much access assistance a device manufacturer can/should provide law-enforcement requirements. The new FCC privacy regulations that were issued in late October did result in some significant push-back; however, by the end of the year, given the election results, it seems that this and the Network Neutrality regulations would be rolled back in 2017. 100% correct. 7)            As a repeat from last year, we will see more marketing and analytic solutions able to use anonymized mobile meta-data to provide unprecedented views on consumer engagement and behavior through mobile device usages. This big data will help retailers, brands and marketers target connections to consumers on a more subtle, yet more responsive manner. Big data collection and usage grew significantly in 2016! In fact, the best usage of data is aggregated anonymized data that is used to provide views on how consumers shop and buy. This comes from a variety of sources, but more and more, mobile-sourced data (from apps, from mobile operators as well as in-store detection). In December, Amazon Go debuted a test store in Seattle, which eliminates check-out lines. The technology employs a number of solutions to detect a consumer’s walk-in, removal or returning items to a shelf, walking out as well as payment – all employing mobile-centric big-data. To me, that’s the ultimate “mobile big data” use case. This is a more ethereal prediction and it’s my blog, so 100% right! 8)            Mobile Point-of-Sale / contactless payment solutions such as Apple Pay and Android Pay and the resulting “mobile wallet” loyalty capabilities will become much more mainstream in 2016. Contactless payments will finally grow to where more US national retailers than not will be supporting NFC payment terminals. CurrentC will launch to consumers (finally), but end up failing as additional retailers pull out of their consortium. And so they did. Apple Pay dominated the contactless payment solutions and continued its roll out in many more countries and banks. In the US, almost 9 of 10 Apple users were aware of the service with 31% (up from 20% in 2015) having used the service according to First Annapolis Consulting. CurrentC launched in beta, then shut down for good in August. It was the disaster we all thought it would be. 100% correct. 9)            Once again, mobile messaging – both P2P and A2P will play roles in the 2016 presidential campaigns, especially after the conventions toward the general election. The final candidates will have mobile apps, mobile websites, and opt-in messaging options. They will also utilize some of the newer non-SMS messaging channels. This was an easy prediction. All of the candidates used mobile channels for the US presidential election – especially A2P SMS to reach their constituents and as well as volunteers. All had mobile-friendly websites (or more specifically, sites that used responsive design to work on all devices). During the night of the presidential election, as in many elections, past, P2P SMS volumes surged to over 160% of normal as the surprising results became clear. 100% correct. 10)         It’s also an Olympic summer with summer Olympics in Rio from August 5th – August 21st. As in past years, SMS as well as messaging channels will see traffic bursts from fans around the world reacting to various events during this Olympiad. Visitors from around the world will be well provided for via mobile as the Brazilian operators’ preparation will pay off with virtually no downtime or disruptions to both local and roaming mobile services; however, “free” WiFi services around the venues in Brazil will be overloaded, leading to service disruptions. In reality, the mobile networks in Brazil held up very well. Additionally, there was no news of any major WiFi outages or service impacts. Mobile did play a key role with spectators using mobile to tweet, post, blog, and report from all of the events around multiple venues. While there were light bursts of SMS, corresponding to some events, it was somewhat diluted, due to all of the other channels that are prevalent. 70% correct. In total, my predictions for 2016 were 83% correct. Not too bad, last year’s predictions results were similar.

 

 

 

 

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