Mobility Trends

1. Future Trends - Mobility
Presenter: Vishal

2. Table of Contents
Economic Update
Emerging Technologies
Convergence, Industry Evolution
Industry Players – Strategy, Status
Why App Stores
Mobile - Future UI, Services
Appendix

3. Economic
Update
Source: S&P, Bloomberg, Office of Mgmt. & Budget, Understanding the S&P Downgrade

4. • Social Media
Hype Curve •
•
Cloud Computing
Mobile
Emerging Technologies - 2011
Source: Gartner Hype Curve - 2011

5. Future
Convergence
SO Social
LO MO
Local Mobile
Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011

6. Industry Evolution
Horizontal vs Vertical
Horizontal
• Technical Advances
• Supplier Market Power
• Proprietary System Profitability
Industry Structure
Pressure to
Integrate
vs
Disintegrate
• Niche Competitors
• High Dimensional Complexity
Vertical
• Organisation Rigidities
Integrated Product Modular
Source: Clock Speed – Charles Fine

7. Industry Evolution
Computer Industry – 1960 to 2000
Horizontal
Mid 90’s
Compaq
Desktop
Internet
Computing
Industry Structure
1960
IBM Early 80’s
Vertical
Mainframes Apple, IBM
Personal
Computing
Integrated Product Modular
Source: HBR Skate To Where the Money will Be , Nov 2001

8. Telecom Industry
Value Chain - Mobile Industry
1990 OEM’s - Other Equipment Manufacturers MNO - Mobile Network Operator
App, Radio Industrial &
Processors Packaging Core Apps (Dialler, Which device & Voice, Msg, IM,
Graphics etc Design Call Logs, Menu, inbox) Where on the device Facebook, Games
Chipset Hardware Device Core UI Service Service
Manufacturing O/S Service
IP Platform Design Apps Design Distribution Delivery
Integrated H/W S/W Middleware & Design of UI Voice, Text, Web
Reference Designs hardware Integration WAP, IM, On device
integration
2011 OEM’s - Other Equipment Manufacturers
Chipsets
MNO - Mobile Network Operator
15% of Industry Revenue 75% of Industry Revenue
Source: VisionMobile, Mobile Megatrends 2010

9. Industry Structure
Evolution - Horizontal vs Vertical
Horizontal Industry Structure Vertical Industry Structure
Characteristics:
Characteristics:
• Modular Components
• Integrated Components
• Standardised
• Proprietary Interfaces
Interfaces
• High Barriers to entry
• Low Barriers to entry
• All or Nothing
• Mix and Match
Maturing Product Mkt. Emerging Product Mkt.
Emphasis: Emphasis:
• Price • Performance
• Flexibility • Functionality
• Customisation
• Convenience
The Double Helix: Industries Moved Between Horizontal to Vertical Structures
Source: Clock Speed – Charles Fine

10. Industry Evolution
Network – Vertical to Horizontal
Horizontal Industry Structure Vertical Industry Structure
2004 end
of Walled
2009 Open to Social Gardens
Ntwks, Open NtwksAPI
2003 IT Ops
Outsourced
2010 Outsource 2008 2005
Sub-brands Service Basestation
delivery Sharing
opens upto
S/W
developers
1980s Mobile
2011 Industry was
Operators as Born
Micropayment
Providers
1999 1st
2014 ?? Convergence MVNO
appear 1990- 8
of Operator Fixed
Standardisation of
+ Mobile Products
Radio & SIM Intf.
Source: VisionMobile, Mobile Megatrends 2010

11. Industry Evolution
Handset OEM – Vertical to Horizontal
Horizontal Industry Structure 2002 1st Vertical Industry Structure
MNO
2005 Manuf. 1 customised
in 3 phones 2003 devices 2010 Apple
outsourced Outsourced Best in class
Operating experience,
2007 from chipsets to
Systems 2008-2009 RIM,
Open ad networks
source Apple – Service
browsers + device
propositions
and O/S’s
2009 OEM
1980s Mobile
App Stores,
Industry was
OEM Sync
Born
Services
1999 1st
2010 ODMs
appear 1990- 8
Windows
2007-8 Standardisation of
Phone (7)
Nokia Radio & SIM Intf.
Ovi Store
Service
20 Years – From Vertical to Horizontal & Back
Source: VisionMobile, Mobile Megatrends 2010

12. Industry Structure
Evolution - Horizontal vs Vertical
Horizontal Industry Structure Vertical Industry Structure
Network Operators Handset OEM’s
• 30 - 50 Years/Cycle • 15-25 Years/Cycle
Characteristics: Characteristics:
• Slow Moving • Agile
• Rigid • Fragile
Handset OEM’s Moves 2x as fast as Network Operators
Source: VisionMobile, Mobile Megatrends 2010

13. Industry Structure
Status Check
Horizontal Industry Structure Vertical Industry Structure
Tier -2/3
Operators RIM
Apple
Tier -1
Operators
Leaders
Assemblers
• New Experiences
• Razor thin margins
• Enviable Margins
1980s Mobile
Industry was
Born
Handset OEMs Chipset Samsung
LG, Sony Ericsson OEMs
Motorola Qualcomm Google
Intel HTC
Nokia
Source: VisionMobile, Mobile Megatrends 2010

14. Industry
Status Check
iPhone 1 Released
Company vs
Mkt Cap. (USD) P/E Net Margins
Performance
Apple 300.66 B 15.56 21.48%
Nokia 22.34 B 8.84 3.16%
Microsoft 204.92 B 9.63 30.22%
RIMM 14.97 B 4.53 17.13%
Google 153.03 B 18.4 29.01%
Intel 112.40 B 9.88 26.28%
Telstra 36.19 B (AUD) 11.24 16%
Source: Google Finance

15. Industry Structure
Key Takeaways
• Operators/Carriers are moving slowly – half the clock speed of handset OEM’s
• T1 OEM are approaching fully formed vertical led by Apple
• Both players are creating gravity centers and developer ecosystem
• Chipset vendors are the a-la-carte assemblers (DELL) of mobile
• Reminds of PC Business ?
1990 OEM’s - Other Equipment Manufacturers MNO - Mobile Network Operator
Chipset Hardware Device Core UI Service Service
Manufacturing O/S Service
IP Platform Design Apps Design Distribution Delivery
2011 OEM’s - Other Equipment Manufacturers
Chipsets
MNO - Mobile Network Operator
Source: VisionMobile, Mobile Megatrends 2011,2010

16. Where is the Value
Horizontal vs Vertical
Biggest profits are at the points of
proprietary integration
OR
Those who control the interdependent
links in a value chain capture the most
profit
Source: HBR Skate To Where the Money will Be , Nov 2001

17. Industry Players
Battle to Capture Value
Components Carriers Nokia RIM Apple Google Qualcomm Windows Facebook
Social
Networks
Cloud Services
Developer
Ecosystem
Network
User Interface
Operating
System
Hardware IP
Manufacturing
Denotes Where Player Started
Source: VisionMobile, Mobile Megatrends 2011,2010

18. Industry Players
Telco’s vs Software
Telco’s Software World
Success Factor Installed base Number of Apps
Primary Customer Consumer Developer
Speed of Innovation 1 OS version every 2 years 5 OS version every 2 years
Time To Market 1-2 years 1-2 weeks
Type of Services Comms centric Catering to entire needs portfolio
Risk Taking Predictability/de-risking Entrepreneurship / uncertainty
Access to Innovation 100s of close partners 100,000s of developers
Business Model B2B licensing B2C Sales/ads/ in app sales
Channel to Market Voice, text and web Smartphone
Discovery On device/deck App Store
First Step We need to sign an ND We need to download an SDK
Process Waterfall: RFI/RFQ, Deliver, QA Agile: Add feature, build, test, repeat
Attitude Developers will come to us We need to go to Developers
Source: VisionMobile, Mobile Megatrends 2011

19. Industry Players
Key Takeaways
• Speed of innovation defined by internet companies, not hardware / networks
Internet players are at top of the food chain and are becoming increasingly assertive. Network operators still
hold most value (insights and retail channels) in the last mile to the consumer
• Innovation requires new competence and regional presence
California is the center for software and services innovation. Japan/Korea is the center of CE innovation
• If you can’t innovate in software, you will be replaced, game has just accelerated 10-fold
Software has superseded carrier efforts in non-comms user needs, location, billing, discovery, authentication
Social Networks
Communities
Relationships
Volume
Conversations
Telephony
Calls
Rendezvous
Source: VisionMobile, Mobile Megatrends 2011

20. Competitive Growth
Internet Companies – Information Goods
• No Diseconomies of Scale
Source: http://blogs.wsj.com/venturecapital/2011/02/26/facebook-groupon-zynga-off-the-chart-revenue/

21. Organisation
Business vs Tech Cycle
Business Cycle
Investments
Intensifying
Competition
2000 2003 2006 2009 2012 2015 Time
Technology Cycle
Investments
Static IT
Cycle
T
T
2000 2003 2006 2009 2012 2015 Time

22. Mobile Internet
Future (Post-PC)
Growing Faster
Desktop
Internet 10B+
1B+
PC
100M+
Microcomputer
10M+
Mainframe
Units/User
1M+
1960 1970 1980 1990 2000 2010 2020
Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011

23. Future
Processing vs Portability
Desktop
Laptop
Netbook
Game Console iPad
Computing Power
Set Top Box Future Devices
Connected TV
Dell Streak
Connected
Printer Smart Phone
Automobile Wearable Device
Portability
Source: Forrester 2010 – The iPad Is Just One Of Many In-Between Devices

24. Paradigm Shift
Desktop Mobile
• Fixed • Location
• Pull • Pull & Push
• Search • Relevance
• Social • Contextual
• Dayparts • Always on
• Information • Entertainment

25. Mobile
User Interface
To Vo Mo
Touch Voice Motion
Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011

26. Mobile
Retail - UI
Source: PSFK Future of the Retail, 2011

27. Mobile
Services - Context
Audio/Video
3d Video Capture, HD Audio, 3D LCD’s
Context
Control
(Multiple chips, NFC, Gyroscope, Voice Control)
Sensors/Inputs
2011 2012 2013 2014 2015 2016
Technology Experience Business Opportunity
NFC Contactless Info Exchange Payments, Ticketing & Security
Depth/Distance Virtual Sizing/fit with
3D or 2D Camera
Measurements 3D Video Capture Augmented Reality
Detect presence of chemicals, alcohol, Breathanalyser, perfume
Chemical Sensors
Carbon monoxide matching, food freshness
Infrared Find pets, empty parking
Infrared images, heat detection
(Micro bolometers) spaces
Targeting/Navigation based on
Barometer Altitude Information
weather, Floor of mall
Source: Forrester 2011 Future of Mobile is User Context

28. Mobile
Retail - Context
Source: PSFK Future of the Retail, 2011

29. Apps are the New Web
New Paradigm
Mobile Apps Web Pages
Packaging Self Contained Set of pages
Personalising Access to location contacts Explicitly typed info only
Discovering App store Text results or URL
Monetising Micropayments Ads
Interacting Touch, sensors, keys Mouse, keys
Measuring Downloads economy Attention economy
Source: VisionMobile, Mobile Megatrends 2011,2010

30. Apps are The New Web
App Stores - OEM’s, Carriers, OS Vendors
Global
Blackberry Store Get User
Android Mkt
Apple iTunes Mobile9
Nokia Ovi Store Handango
Windows
Samsung App Store
LG App Store
Orange App Store
Local
Vodafone 360
Telefonica M-Store
Single Platform Multiple Platform
Legend OEMS Carriers OS Vendors Independent Source: Future of Location Based Service, Ric Ferraro, M Aktihar

31. App Stores
Control Point & Bldg.
App Stores are a control point for
• Discovery of apps
• Distribution of apps
• Monetisation of apps
• Exit barrier for users
• Consumer insights
Building is Hard
• Developer Mkt - Platform Companies
• Billing & Settlement – mobile carrier & payment brokers
• Distribution Surface – handset OEMs
• Delivery & in-life mgmt. – platform companies
• Retailing & Merchandising – brands & retailers
Source: VisionMobile, Mobile Megatrends 2011,2010

32. Openness
Commoditise Complements
iOS Android Windows Phone Blackberry Symbian
Components
Bundled Services
App Developers
Device Vendor
Software Platform
Hardware Platform
Legend Closed Curated Open
Source: VisionMobile, Mobile Megatrends 2011,2010

33. Questions
Thank you
Source: http://www.flickr.com/photos/yggg/774488265/sizes/o/in/photostream/

34. Appendix