Telenor's - Ericsson

the future of devices strategy
Birth of the “connect-me” era
▶ In the summer of 2007, the longrumored
iPhone was launched. Market
expectations were high; Apple
had previously had tremendous success
with the iPod and its related service,
the iTunes music store. When
the first iPhone was unveiled, the
telecom industry was astonished that
Apple had introduced a product that
not only lacked all the latest technological
features, but was not even
compliant with major operators’
requirements – it didn’t even have 3G
or MMS.
However, instead of getting into
the same phone hardware battle as
the rest of the industry, Apple prioritized
superior user experience combined
with the ability to download
content and applications; to manage
the device via iTunes; and to connect
to Apple’s already established
ecosystem.
The iPhone was a classic case of
market disruption, and completely
shifted the industry focus; suddenly
everyone was occupied with creating
smartphones with touch screens and
application stores. Google entered
the wireless-device industry shortly
after Apple. But it did so from a different
angle, by offering the Android
open-source operating system with
its ecosystem of third-party developers
attached for free to the device
manufacturers, and thereby further
stimulating the ongoing transition.
56 EBR #3 2010
Looking ahead, we are now entering
a new phase, where services will be available
anywhere, and where everything and
anything will be connected. The key trends
described below point to a time when anywhere
is the common denominator, and this
will have implications for the future of
wireless applications.
KEY TRENDS
Everything and anything gets connected:
Modems and connectivity enable new types
of devices and services driven by increasing
consumer demand for mobility. We have
already witnessed the take-up of mobile
broadband in the pc industry. The next
growth areas will be m2m and consumer
electronics, with cars, homes, cameras,
vending machines, refrigerators and tvs
among the items getting connected.
New business models with alternative billing
structures such as one-stop shops, and
the ad-funded model, along with more
simplified modularized plug-and-play solutions,
will make it easier for newcomers to
focus on the value-added service instead of
the enabling technologies. The biggest
hurdle today to scaling a business for mobile
devices is managing the complexity of all
unique network characteristics, which
requires costly hands-on interoperability
testing, certification and type approval for
each individual market.
Ecosystems – the new world order: The
increasing interdependency between the key
stakeholders on the market (already important
during the previous era) changes the
boundaries of how we define a company and
a product proposition. Today a company
must manage and balance the interests of
standardization bodies, partners and opensource
communities as well as third-party
developers, which all contribute to creating
value for its products. Devices and services
go together, and their actual value is in the
joint offering, not the components. It is clear
that mobile devices are going the way of pcs,
with their value vanishing unless services
are attached.
Also evident from today’s market is the
growing importance of managing ecosystems
across verticals. Here, the user experience
is the focal point, meaning access to
services as well as remote access to content
on any device with a unified user experience.
Apple has established a strong position with
the iTunes Store, addressing multiple vertical
applications and continuously broadening
the scope with iTunes as the horizontal
glue layer between the various vertical
applications. The iTunes application is available
for both the pc and the Mac environment,
and works as the tool for managing
devices, content and services. New categories,
technologies and quality levels of
content and services have been added
continuously: for example, downloadable
music, audio books, movies, tv-series, podcasts
(both audio and video), applications
(programs and games), and eBooks for
iPhone, iPad, Apple tv and iPod. And on the
horizon are streaming services and a more
accessible cloud-based service offering.
The cloud is taking over: As data moves
to the cloud, so does computing. Services
are now available on the web, and the browser
is becoming an ever-richer application
environment. The shift towards mobile
cloud computing means that we are moving
towards an infrastructure where both storing
and processing of data takes place outside
the mobile device.
We already have access to numerous
mobile cloud computing applications,
including Spotify, Google Maps, Gmail, and
Facebook. Social networks play an increasing
role in our lives; and, after developing
them on the desktop, we are now seeing
them evolve in the mobile environment. In
February 2010 Facebook announced that the
number of mobile users had passed 100 million,
with a higher growth rate for mobile
than desktop. In May 2010 it was announced
that Facebook was the most visited site in
the world. However, data storage and
processing for the majority of applications
still takes place on the mobile devices themselves
and not in the cloud.
Same service – any screen: Content and
service convergence across multiple screens
is the next opportunity to create value. Some
view this as a key development and an alternative
to diversification into services. A user
can, for example, start watching a high-definition
video stream at home on the tv, then
leave the house and continue to watch via
a mobile device. A typical data stream for
high definition would consume 6–8Mbps –
not much for an lte network that will have
typical user rates of 10-100Mbps.
As cloud-based content and services grow,
it is increasingly important that everything
works the same way across all devices. The
key to success is a framework for unifying
devices across all screens and integrating
services across device types. New devices
will facilitate service partnerships, with
seamless transitions between different entry
points enabling access to the same services.
Finally it and telecoms will converge.
Continued value shift from hard to soft:
The wireless device industry is coming
closer to the pc value-chain paradigm with
modularized hardware, software and services.
For device manufacturers, differentiation
and value addition are increasingly coming