Here we present CCS Insight's top 12 predictions for 2013 and beyond. CCS Insight's research team sets out to be both thought-leading and realistic in each prediction. The mobile industry is in a state of constant change, and our predictions have taken into account a vast and growing environment where connectivity is critical.
The iPhone's market share will peak in 2014. As Apple's devices become commonplace, influencers will start losing interest in the iPhone. Sales volumes will still grow, but Apple's overall share of the smartphone market will decline as the company continues to focus on margins instead of volumes. Echoing its approach to the PC market, Apple will be content to limit its market share on this basis.
Microsoft will buy TiVo by mid-2014. The acquisition is fuelled by Microsoft's desire to increase its presence in the living room and evolve the Xbox beyond games into a true entertainment hub. TiVo's strengths in user interfaces and recommendation engine make it a good fit. The move will place further pressure on traditional pay-TV providers.
WhatsApp becomes the next billion-dollar acquisition target in 2013. A bidding war breaks out for the communication service. Potential acquirers include Facebook, Amazon and others. As with Instagram, Facebook will look to buy a popular application that could become a potential threat. Amazon's moves into content distribution with the Kindle Fire mean it will need services like WhatsApp Messenger to round out its offerings.
Amazon partners with HTC to produce a range of smartphones by the end of 2013. The online retailer realises that developing handsets on its own is not viable, so it selects HTC as a strategic partner and takes a stake in the Taiwanese company to secure long-term commitment.
Smartphone experiences become more important to consumers than hardware. Although hardware design remains a key decision-making criterion for consumers selecting a new phone, its importance will be dramatically reduced over the next three years. Hardware innovation enters a lull as the specification "arms race" peaks and the market homogenises around full-touch slab smartphones. Materials innovation also slows: development of metals, plastics and ceramics is limited by considerations such as RF performance, size, weight and robustness. New hardware capabilities such as flexible screens will have no influence on device design before 2015.
Google, Amazon and Barnes & Noble all launch $99 tablets in 2013. $99 becomes the target price as platform companies sharpen their focus on the tablet market as a way of promoting their retail, digital content and advertising business models. The move effectively kills any opportunity for pure-play hardware manufacturers to profitably compete with Android tablets, forcing them to consider Windows RT.
Industry support for Firefox OS snowballs. A successful launch in Brazil in early 2013 and the requirement for an alternative to the dominant Android mean Firefox OS begins to succeed where other open-source alternatives have failed. Manufacturer support grows beyond TCL Alcatel and ZTE to include Huawei and an abundance of makers of entry-level phones. Operator support expands beyond South America to other emerging markets, notably those in Africa, India and China.
Use of mobile and Web technologies in business and government rises sharply over the next three years as "digital natives" gain senior positions. Currently, government and corporate IT policies are generally set by older employees not well-versed in the use of Web practices or mobile technologies. A generational shift will start to feed significant numbers of digital natives into responsible positions. This will have a profound effect on business processes and policies for how organisations serve their staff and customers.
A consumer backlash forces providers to rethink privacy in cutting-edge contextual services like Google Now. Growing use of advanced contextual services such as Google Now prompts people to realise how much metadata providers are capturing about their users. In 2013, providers are forced to offer more comprehensive opt-out options for data collection, as well as disclosing how they capture data and how they intend to use it.
At least two European pay-TV providers fall casualty to the escalating cost of content rights by 2015. Securing the rights to broadcast content over traditional channels is no longer enough, and the inclusion of digital rights has pushed up the overall cost of agreements. Existing providers will be pushed out by entrants with deep pockets, and those that fail to acquire rights will find it hard to differentiate in an increasingly crowded and competitive market.
TD-LTE will gain a significant presence outside China by 2017. The success of China's home-grown 4G standard will be determined by momentum achieved by China Mobile. Apple will develop a TD-LTE-enabled iPhone by 2014. Momentum in China will kick-start development of the technology elsewhere and it will achieve larger scale as operators deploy in markets where spectrum is scarce.
Intel discontinues the Atom brand in 2013. Windows 8 tablets and other designs with Intel's Atom and Core processors are poised to sit alongside various ARM-based competitors in stores. Intel can ill-afford such a recipe for consumer confusion, in addition to the Atom brand's historical association with the failed netbook category. The Atom family is incorporated into Intel's Core line-up and rebranded as the Core i1.
A longer version of this article was published as part of CCS Insight's Hotline service. For more information please see www.ccsinsight.com.