I have a confession to make. Part of my role as a mobile industry analyst and consultant for the better part of 20 years has been to predict "what's next." But with regards to mobile, when asked to predict what are going to be the "next big things," I find myself stumped, in the sense of seeing anything truly game-changing on the immediate horizon. This is not meant to sound negative or pessimistic. There is tremendous innovation going on, in many sectors of mobile, and in other areas of the digital ecosystem. But most of this I would categorize as "small i" innovation, not "big i" innovation. As far as something game-changing, I think we're in a bit of a "harvesting," or "pause" period.
To explain my view, let's take a quick historical tour of some of the most important innovations in mobile, or that have affected mobile, over the past 20 years, across three broad categories:
The six most important developments here:
- Development in microprocessor technology that allowed for the "portable" form factor of a mobile device.
- Invention of "spread spectrum" technologies that allowed for logarithmic improvements in efficiency, interference management, and capacity in RF networks.
- Development of broadband Internet – initially on fixed networks, and now, on mobile networks.
- Wi-Fi. Like cordless phones were the precursor to the concept of cellular phones, Wi-Fi was the beginning of data "untethering."
- GPS. The ability to incorporate GPS into small form factors has been a big part of what makes "mobile computing" unique from desktop computing.
- Sensors. Accelerometers, motion sensors, gyroscopes…an increasing array of these are being built into small form factors.
User Experience Innovation
The four most important developments here:
- Input technologies. These started with keyboards and haptics that allowed for the input of text and content on a small form factor and progressed to touchscreen technologies. Touchscreen technologies were pioneered in the mid-1990s by General Magic and then increasingly improved upon over the next 10 years by Palm and Apple.
- Speech recognition. This technology has experienced continual improvement over the past 20 years and is now a viable input technology in many contexts.
- Display technologies. In this area we have seen a progression to color, flat, bright and HD screens.
- Social networks. Social networking started with instant messaging and then evolved through MySpace, Friendster, Facebook, Twitter and LinkedIn. This area has altered the nature of digital social interaction.
Business Model Innovation
Three clear game-changers here, in my view are:
- "App store" concept and OTT. Starting with iTunes music, app stores legitimized online purchases of digital content and then created a viable, democratized development framework and business model for applications and content, not exclusively controlled by a "carrier" or multiple system operator.
OTT applications such as WhatsApp exploited a loophole of certain mobile operators stubbornly holding onto their insanely profitable text messaging business and the inability of Microsoft to appropriately leverage Skype.
- Storage/Cloud. Started with business data, but becoming the prevalent means with which our content will be stored, secured, and retrieved.
- Sharing economy. This really started with eBay, then progressed to ZipCar, Uber, bike-sharing programs and AirBnB. I think we'll this concept expanded to the airwaves, as spectrum sharing becomes a means to deal with soaring demands for limited network capacity.
The automotive industry represents an interesting analogy for where I see the mobile business today. Over the past 20 years, cars have become steadily, and significantly, better. Car quality is fantastic, they are highly reliable, more efficient, and pack important technologies that make the driving experience safer and more pleasant. But we're not seeing fundamental changes in car design, or the driving experience. Mainstreaming of the innovations being pioneered by Tesla and the Chevy Volt is still a few years away. In the meantime, the transportation infrastructure has not kept up with the pace of device proliferation and growth, which has started to markedly detract from the usefulness and appeal of the automobile as a transportation medium.
One of my broad conclusions from the recent Mobile World Congress 2014 trade show is that we're harvesting what has been built over the past several years, and laying the foundation for the next phase of major innovation, which I think is three to four years away. Let's look at this across a few important categories of the mobile experience:
Devices. At the high end, every new model Galaxy or iPhone packs many small improvements, but nothing altering. But the major focus is on producing smartphones and cheap tablets devices that can be afforded by the next billion or so of potential users.
The next major phase of innovation will require a rethinking of what primary devices a white collar worker will be using in several years' time. This would be Phase II of Steve Jobs' "post-PC era." As the delta narrows between capability and form factor of smartphone/tablet/PC, especially with pervasive broadband and cloud storage, we're likely to see a collapse of these categories and a focus on simplification of what is required to lead a "mobile" lifestyle.
Networks. The next few years will see a focus on: maximizing what we have with LTE, with techniques such as carrier aggregation; optimizing capacity to deal with the surge in data demand, especially video. An alignment of many areas of technology and business model development – bandwidth optimization, compression, channel aggregation, spectrum sharing, software defined radio, small cells, MIMO, and others – are required to pull all of this off.
"Big i" innovation in networks would see both a dramatic improvements in average network speeds, and fundamental changes in the economics of data delivery.
A lot has also been made about software-defined networks (SDN) and network functions virtualization (NFV). But if you look at some of how this is encapsulated, for example, in AT&T's Domain 2.0 approach, this is really about breaking the pervasive ~20 percent of revenue that mobile operators have to plow into capex. This means enabling the operators to monetize network capabilities on top of merely "connection fees" and providing a degree of service development agility on par with their Internet counterparts such as Facebook and Amazon. It is as much business process improvement as it is technology innovation.
OTT, Content Everywhere, Business Models. I don't see a breakthrough here, just a continued "chipping away" at the prevailing pay TV business model. Reading between the lines of the machinations between Netflix, Apple and the network providers, I think we're still trying to determine whether and how our networks can handle a significant increase in demand for video over the Internet. Other than that, the barrier to OTT and TV Everywhere initiatives is mainly the business model and negotiations between the content providers (big media companies) and the distributors (major operators, plus Amazon, Netflix and Apple). This is going to be an incremental, and not a "great leap forward" space.
Internet of Things. This is an area that has a lot of people excited, and certainly it was a dominant theme at MWC. I don't doubt that there will gazillion more "connected" devices by 2020. But I see this space as the aggregation of a lot of smaller categories, whether it's fitness tracking devices, health monitoring or home thermostats.
A game-changing product or development, for example, would be to leverage fitness/health tracking devices and the quantified-self movement, into a broad, national effort to bring greater efficiencies to our bloated health care system.
During this "harvesting period," the major focus will be on efficiency, cost and process improvement, leveraging what has been built over the past few years. There will be some great products, and continued improvements to the mobile experience. The seeds for a major "what's next" are there, but I do think we're a few years away from significant leaps in technology, the emergence of fundamentally different business models, or the development of new product categories that dramatically change the way we communicate, produce or consume content, or conduct business.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is Managing Director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.