How is 2008 shaping up in the mobile and wireless world and which mobile and wireless technologies are you going to be hearing more about in the next 12 months? silicon.com picks the five key areas to watch…
The big squeeze, operators cosying up and a push on data
The January gloom has descended but mobile operators have less to look forward to than most as they face another year of declining ARPU (average revenue per user) in the more developed markets. This means there will be renewed impetus to push data services in these markets -- to claw back lost revenue and get the most out of existing 3G networks.
Gartner research director, Sylvain Fabre, told silicon.com: "There's a serious pressure on margins for the operators and it keeps getting worse. Then there's other stuff like Vivian Reding limiting roaming charges… so the life of a mobile operator certainly is not going to be as rosy and cosy as it has been for many, many years."
Alexandra Rehak, principal analyst at Analysys, added: "There's really no more growth to be had from pure voice on the mobile front. So if you look on the enterprise side we're looking to see a lot more creative packaging of mobile data services for enterprises."
Fabre predicts the year will see increased outsourcing activity and more operators cosying up by network sharing -- as 3 and T-Mobile did in the UK at the end of last year -- as they seek to shave costs to accommodate slimmer margins.
He said: "I think that's one of the things we'll see more of: attempts to squeeze costs out of the operation and move closer to an efficient utility -- like water or gas -- which can make lots of money obviously you do that by doing larges volumes with very low incremental cost."
Device convergence -- the rise of the multimedia handset
Doubt not: the iPhone started it. "Today Apple is going to reinvent the phone," said Apple CEO Steve Jobs last January as he unveiled the iPhone. The Mac maker made 2007 its mission to prove that three "revolutionary products" can come in one slick, touchscreen casing.
Where other devices had feared to tread -- or merely gingerly dipped a toe -- Apple planted itself, colossus-like, right in the centre of the mobile world: one foot in the iPod camp, the other reinterpreting the web for the small screen with Minority Report dexterity. And -- even if it remains a gloriously expensive high end device owned by fashionistas -- there's no doubting its impact. Analysys' Rehak said the device has been "a real catalyst for change in the market".
A year on from its launch announcement and the iPhone has itself been 'reinvented' by various mobile manufacturers. But as well as spawning plenty of would-be imitators, the device has galvanised interest in the mobile web -- by making it an enjoyable, not just viable, experience.
Discussing the rise in popularity of rich media mobile services, Dr Windsor Holden, principal analyst at Juniper Research, said: "Apple is to be congratulated for making more people interested and crucially aware that you can do these things on the mobile." Gartner's Fabre added: "It's certainly a game-changer. The iPhone is giving people a much better experience."
So expect more feature-rich, application-centric devices to emerge this year as operators step up to eat Apple's lunch -- if not steal its thunder. Rehak said: "[The iPhone is] not going to stay as the only great device for watching video and getting your email and talking as well. There are a lot of other devices that are going to be coming out in the market this year that can give it a run for its money."
Mobile 2.0 -- user-generated content, social networking, location-based services…
And if the devices are getting smarter, what you do with them is going to be more interesting too. The iPhone aside, Juniper's Holden points to "that tipping point where we have a fairly significant adoption of 3G handsets" that will help drive richer, multimedia services.
He said: "Within 2008 I think you'll see a much greater adoption of video-based services within Western Europe and the US than we've previously witnessed.
I think in certain countries that will be true of mobile broadcast TV services. I think in others it will be true of streamed services. And in most I think that'll be true of user-generated video content… What we'll see increasingly is that content uploaded into a mobile space so that other users can browse it."
Another area to watch is location-based services. According to Analysys' Rehak: "You'll see it becoming more and more integrated into social networking applications in particular."
Rehak also foresees mobile media and entertainment making a racket this year but points to questions over monetising these services. "I think a lot of people have talked about mobile social networking being a big trend obviously and it will be certainly -- that's going to be a big growth area -- but the question remains as to how that is going to make money for anybody," she said.
Rehak predicts there will therefore be "a narrowing" of the business models as operators attempt to find a customer- and money-winning formula.
Femtocells -- a cost-cutting, data services driver -- or not?
They may not mushroom forth in every home this year but expect femtocells -- aka small cellular base stations installed in homes or offices, which hook up to a broadband connection to improve network coverage indoors -- to pop up in various places this year as operators kick the tyres in trials of the tech and attempt to resolve some of the questions hanging over them. Not least the big one: what's the business case?
The lure for operators is the idea of cheaply expanding 3G network coverage so they can push rich media services onto mobile users and -- in theory -- laugh all the way to the bank. But it's unlikely to be that simple. Operators are "sitting on the fence", according to Gartner's Fabre. "They are saying 'we want this to work… and if we see someone do it successfully we might follow'," he said. Finding a viable mass market business model may never happen, he adds, and femtocells could end up being a 'loss leader' -- something operators have to offer customers but can't expect to make money from, much as voice over IP.
Even so, Juniper's Holden believes the tech will be rising up the agenda by the end of the year. "There's a desire within a number of parties to see these things rolled out and brought into the home as a cheap and efficient way of enhancing 3G coverage," he told silicon.com.
Fabre also expects to see more femtocell trials and even a few small-scale launches this year -- regardless of what happens down the line.
Disruption -- not just the Google factor…
Expect the unexpected. Yahoo! is the latest contender to announce a fresh focus on the mobile world. And with the likes of Google already up and running with an offering in the space -- its Android open mobile software platform -- and also sniffing around US spectrum, the status quo is looking increasingly shifty.
"The operators have been watching Google very nervously because clearly they appreciate the enormous power this brand has," said Juniper's Holden.
Another stand-out newcomer to the mobile world that is clearly shaking things up is Apple with its iPhone. But it's not just about newbies elbowing their way in but existing players reinventing themselves. Analsys' Rehak explained: "We are seeing a huge amount of activity from non-traditional telecoms service players who want to cut across the usual lines of the traditional business models and step in where the carrier might normally be."
Rehak cites Nokia and its Ovi system as an example. "Essentially [Nokia is] taking over the job of what up 'til now the carriers have primarily focused on. It's a business model that a lot of people are watching with great interest," she said.
She added: "We're seeing that the carriers have to let go increasingly of parts of their relationship with the customer because of the activity from these other players. The question for the traditional carriers is what do you do to make sure that you still hold on to enough of the market power to be successful?"
So 2008 could end up being the year the game changes -- watch this space.