Mobile traffic has passed desktop traffic for the first time, which Morgan Stanley predicted to happen within five years in 2010 (unfortunately it seems the Morgan Stanley original report has been removed). Massive changes are afoot. There's even the current debate over whether connecting to the Internet through an app is actually connecting to the mobile web (I see it as one and the same most of the time).
Operating Systems and Platforms
It's a numbers game:
"To me, the first-order issue is the sheer scale of mobile. We’re going from 1.5bn PCs on earth, either corporate and locked down or consumer and shared and in neither case really mobile, to perhaps 3bn smartphones, that are completely mobile and personal. This means that the internet, by whatever metrics you want to use, gets two or three or four times bigger. It also means the internet can 'eat' a lot of new sectors, across things like, say, retail or payments."
Great post from Ben Evans.
Not only is iOS and Android on the rise but Windows Phone is even garnering more and more attention with "Microsoft's operating system has started to carve out a niche for itself with a market share above 10 percent in a number of markets. (Ars Technica)".
Also, if you're interested in the concept of operating systems, platforms, Asymco.com's post is a must-read.
How is it affecting the Telcos?
On top of this, we also have a development in the decrease of SMS and voice traffic, the former of which was overshadowed by data traffic several years ago. Huge competition is developing across the messaging services, with Line targeting 1 billion users by 2015 (as an aside, who in Ireland has ever heard of Line? Incredible that they are adding "as many as 1.7 million new users in a day" and yet it's not the radar here (yet). With Whatsapp matching SMS traffic already, social messaging changing, what are your thoughts on the whole situation?
But even with this, this doesn't really affect the telcos because it still means more and more devices that want to connect. Yes, there is a challenge with how to charge significant fees to be a data pipe but with a potential for mobile connections in all devices. However, they're also not making in-roads a large amount of the revenue stream (image below) that is controlled/taken by hardware manufacturers and app store owners (i.e. Apple, Google and Microsoft), even if they are also collecting higher and higher ARPU (Average Revenue Per User) as people move to 4G/LTE connections in numerous markets. In Ireland, much of this potential could being lost as Three are offering plans with 4G being included at no additional charge (I'm assuming on winning the business and as a loss leader). Will the other mobile operators follow suit or attempt to pull customers on to a more expensive tariff for the faster connection (considering it would be possible to use up 1GB of data in an hour easily with LTE speeds).
I would also be interested to see if people see the benefits of moving to LTE or if they are happy with their existing 3G connections (if you're only checking Facebook, etc - do you really need LTE speeds?).
Additional opportunities will continue to arise for mobile device connections in other hardware. The market for sim usage is already well developed for card terminals, remote monitoring station, etc but as more and more vehicles receive their own dedicated in-car connections both for remote monitoring and maintenance as well as providing a data connection to passengers, there will be other potential markets. Do the Telcos have the mindset to innovate? My heart says yes!
All thoughts welcome.....