Smart device shipments broke records in Q3 2012 by reaching 303.6 million, and are expected to grow to 362 million in the holiday quarter. This statistic, coupled with the fact that smartphone users worldwide will download more than 45 billion apps this year – almost twice as many as last year – makes for a truly exploding market.
According to Yankee Group, a research and advisory firm equipping companies to profit in a mobile world, 2013 will mark the arrival of several trends that, until now, have only been anticipated. These trends will be driven by two primary factors: customer behavior and the mobile industry are changing.
IP-based communications apps—sometimes referred to as over-the-top (OTT) services—are becoming increasingly popular. Yankee Group’s 2012 European Mobile User Study finds 44 percent of respondents are already using an app such as Facebook (News - Alert) Messenger, WhatsApp, Viber or Skype as a low-cost alternative to traditional mobile voice and SMS. Adoption is being fueled by increased penetration of smartphones. By the end of 2012, there will be 1.2 billion smartphones in use globally, up from just 419 million in 2010.
Operators’ core voice and messaging business is under increased pressure. Yankee Group predicts that operators will lose $1 billion per month in voice/messaging revenue in 2013 and all mobile operators will be either digital lifestyle providers or value bit providers.
In advanced mobile markets, usage levels for voice and messaging services are showing signs of saturation. For example, according to Ofcom’s July 2012 Communications Market Report, the volume of mobile calls made in the U.K. declined for the first time ever. Revenue from these core services are also subject to constant downward pressure due to price competition between operators and mobile virtual network operators (MVNOs), as well as regulatory measures such as lower mobile termination rates.
Text messaging over the Internet has been gaining steam around the world, and regular SMS is drawing lower revenue than ever before. Capabilities such as Rich Communications Suite (RCS) are emerging, allowing mobile users to connect deeply with each other and not be constrained by technical boundaries.
“As the year draws to a close, there are indications that the mobility dust is beginning to settle,” said Declan Lonergan, Yankee Group VP of research and co-author of the report, in a statement. “Most regions (Europe is a notable exception) are showing signs of a firmer economic recovery. North America’s M&A frenzy seems to be played out for now, and virtually all players know the hand they’ve been dealt. Thus, we see 2013 as the year when they must leverage that knowledge and place their mobility bets for the long term.”
Mobile commerce is also a big part of the predictions for 2013. Yankee group predicts that Google (News - Alert) will start subsidizing mobile payments credit/debit card transaction fees. Google just signed a deal with mobile carrier billing company Bango to bring carrier billing to Google Play, beginning in Australia. The deal could be a vital factor in driving up conversions and revenue for Android (News - Alert) developer.
Image via Silicon Republic
In a press release, Bango (News - Alert) CEO Ray Anderson suggested that carrier billing could be a big step in helping Android developers monetize their products. "As user numbers soar, we will see an increasing flow of developer talent and compelling content channeled through Google Play," said Anderson. "We're expecting that operator billing from Bango will boost conversion rates and developer monetization."
Despite this, Yankee Group predicts that Android smartphone market share will decline in the U.S. in 2013. Yankee Group also predicts that a cloud-based mobile payment system will see a significant data breach.
The cloud has been a big buzzword in 2012 and won’t stop in 2013, where predictions involve more than 50 percent of companies looking to the cloud for their mobile app deployments. An example of this is Brightcove’s App Cloud, a powerful cloud hosting and content delivery platform. Earlier this year, the company released a free version of App Cloud called App Cloud Core, which enables Web app developers to build and deploy an unlimited number of mobile and tablet applications for free. All users have to do is download the SDK, test the app on iOS or Android using Brightcove Workshop, then upload the ode and Brightcove will compile it in the cloud.
Yankee Group’s report, “2013 Mobility Predictions: Time To Place Your Bets,” also predicts that MVNOs will “feel the squeeze” as operators get serious about machine to machine technology, Microsoft’s (News - Alert) Windows Store will abandon the 70-30 split and registration fees and small cells will stumble.
The only thing to do is wait and see if any of these predictions end up becoming a reality, as 2013 is right around the corner. One thing is for sure – the mobile industry is already booming and is set to innovate and advance as it continues to offer capabilities we once only dreamed of.
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Edited by Allison Boccamazzo