WHAT WILL BE THE MOBILE TECHNOLOGIES FUTURE?
Fortune Senior Editor David Kirkpatrick led a power-packed session at Davos called The Future of Mobile Technology. Panelists included Google CEO Eric Schmidt, FCC Chairman Kevin Martin, Sony CEO Sir Howard Stringer, NBC Universal CEO Jeff Zucker, SK Telecom CEO Kim Shin-Bae and China Mobile CEO Wang Jianzhou.
Kirkpatrick attempted to steer the conversation towards asian growth in mobile (China Mobile dominates the Chinese market and is adding 6 million new mobile subscribers per month, SK Telecom dominates Korea with more than 50% market share) and the bleak prospects for mobile advertising revenue. He quoted Forrester as saying that the U.S. mobile advertising market is projected to be under $1 billion even as far ahead as 2012. Today, he said, only 3% of Internet advertisers are putting display ads on mobile devices.
Google Android And The Mobile Tipping Point
Schmidt played down the revenue estimate, saying the tipping point in mobile had not been reached. When it does in the next year or so, he said, those revenue projections will be very low. He said his goal with Google’s new Android platform is to help the market reach that tipping point, and make money from mobile advertising along the way.
Schmidt also argued that mobile devices are potentially more interesting than PCs, since they have or will have GPS and other features that will allow for new kinds of applications, as well as location-based advertising. The key, he said, is that new services will be on an open platform with open standards (Android, of course), and that the new 700MHz spectrum rules permit it (they do, mostly). That sets the stage, he said, for a “huge revolution” in mobile. Without it, we have closed network “islands.”
Asian Growth: Mobile Devices Becoming Extension of Humanness
China Mobile CEO Wang Jianzhou noted that they have 317 million mobile customers in China today, and the total market is half a billion users. He said that people are using mobile devices as extensions of themselves to reach out to others via voice and SMS, and that if someone doesn’t have a mobile phone they will lack basic functions of what it is to be human.
His company is adding 6 million new subscribers per month. When asked if he is considering expansion outside of China, he replied that they have so much growth potential there that they are completely focused on that market.
NBC Sees Dollar Signs In Mobile, Sony Not So Much
Both Stringer (Sony) and Zucker (NBC) want to sell content to mobile users, but they have very different opinions on how effective they’ll be.
Zucker lamented the currently fragmented U.S. market, but seems optimistic that they’ll be able to move their merchandise effectively in the future (particularly short form video). He also said revenue splits need to change dramatically – today content creators are offered only 10% of revenue from sales, with the vast majority going to the carrier. Competition and openness will change this, he said.
Stringer was less optimistic, noting, for example, that Chinese customers don’t buy content, just blank CDs. “It won’t be easy to hang onto the price of content” he said, adding a quip: “When you defend the status quo when the quo has lost its status, you’re in trouble.” Stringer is highly charismatic and entertaining, but his distress came through clearly. At one point when someone asked him when new Sony OLED screen technology would come to mobile devices at a reasonable price point, he noted the high cost of production and joked “making a profit on consumer electronic devices is one of our goals.”
FCC Defends Its Compromise
FCC Chairman Kevin Martin defended their recent decision to partly open up the mobile market, but reject many of the key rules requested by Google.
For example, requiring network operators to sell access to others at wholesale rates would reduce their incentive to “upkeep the pipes.” Investment in infrastructure is key, he said, and forcing open networks could hurt the industry.
I asked Martin whether Google’s open letter put pressure on him and his commissioners to open up the spectrum rules. He said it didn’t, citing far more private pressure to keep things static from the existing carriers. It did give him a tool to help convince his commissioners to open up at least partially, he said.
HOW ABOUT MOBILE COMMUNICATION
Approximately 60% of the world’s population has a mobile device used predominately for voice communication;data still remains a small component. Mobile communications are a delivery and transactional vehicle that fosters job creation in emerging economies and can transform other industries such as health, banking oreducation. Adirect correlation exists between increased mobile phone penetration and increased macro-and micro-economic development.
The vision for the future of mobile communications is a fully interconnected world where every citizen will access, create and use content. This is the fastest growing technology in the history of mankind and is also the most effective technology known to date to enable individuals, particularly those at the base of the pyramid, to participate in the global economy.
The nearly 4 billion mobile phone subscribers in the world are realizing multiple macro- and micro-economic and social benefits. This will only continue as more individuals become connected to the global economy and more products and services are deployed. Council Members coined the phrase “Humanity’s Nervous System” to describe this interconnected and highly personalized world.
As an industry, mobile communications are relatively recession-proof and will continue to experience growth, create jobs and unlock innovation. Economic crises result in change – as such, mobile communications will play a huge role in reducing current inefficiencies and raising the productivity of both individuals and businesses.
Three fundamental dimensions impact the future of mobile communications:
1. Access: the ability for individuals to utilize both voice and data mobile communications ubiquitously
• Key enablers for access include:– cost reduction of services (infrastructure sharing, handset recycling)– a global regulatory framework with the removal of mobile specific taxes and over-regulation
• Key uncertainties include:– whether universal access is a fundamental human right– whether we should strive for regulated universal access or defer to market forces
2. Applications/Platforms: the value added services and capabilities available to end-userswhich would be an extension of the larger public InternetKey applications for improving the state of the world would include health, education and financial services.
• Key enablers include:– an open and interoperable system which creates opportunities for “bottom-up”innovation– the increasing sophistication of handsets and user experience
• Key uncertainties include:– why there hasn’t been greater uptake in health, education and financial service mobileapplications given rapid global subscriber adoption– regulation with mobile banking and financial services– who pays: financing for health and education– the literacy challenge of those who only require a phone for voice services
3. Data Ownership (and Associated Personal Rights): the information generated and gathered on individual behaviours and transactions.This wealth of information holds tremendous transformative potential but clear rules andtransparent regulatory frameworks are needed to ensure personal wealth creation andthe prevention of abuses.
• Key enablers include:– ownership: you own your own data– accountability: a “post-privacy view” using watermarks to create an audit trail of whouses it– use of anonymous and aggregated data to create new socially intelligent applications(i.e. health, urban logistics, government services)
• Key challenges include:– establishment of a global framework for data usage and protection– general awareness of this dimension and its broad and fundamental power– privacy and security of data and application– liability of data ownership or managemen
t
Of these issues, three are not sufficiently addressed by existing stakeholders or global governance institutions: (1) the standardization process could be streamlined to be more effective and efficient; (2) inter-industry challenges and regulatory constraints (particularly in banking, healthcare) are not sufficiently addressed; and (3) an international framework for personal data ownership needs to be created. If these issues are not properly addressed, fragmentation will continue and a unique moment in time to realize an integrated approach could be missed.
The World Economic Forum has unveiled the programme for its 39th Annual Meeting in Davos-Klosters. Under the theme “Shaping the Post-Crisis World”, more than 2,500 participants from 96 countries will convene, including a record 41 heads of state or government. Key finance, foreign affairs, trade and energy ministers will also join heads of non-governmental organizations, social entrepreneurs and religious leaders at the Meeting.
Sessions in the Annual Meeting programme related to the Future of Mobile Communications include:
Digital Asia: A World unto Itself
Power to the People — Politics in the Internet Age
Update 2009: Digital Convergence Continues
Social Computing — Transforming Corporations and Markets?
From Adoption to Diffusion: Technology and Developing Economies
Mobile Revolutions in the Developing World
Reality Mining: Changing Behaviour
Global Industry Outlook 3
The vision for the future of mobile communications is a fully interconnected world where every citizen will access, create and use content. This is the fastest growing technology in the history of mankind and is also the most effective technology known to date to enable individuals, particularly those at the base of the pyramid, to participate in the global economy.
The nearly 4 billion mobile phone subscribers in the world are realizing multiple macro- and micro-economic and social benefits. This will only continue as more individuals become connected to the global economy and more products and services are deployed. Council Members coined the phrase “Humanity’s Nervous System” to describe this interconnected and highly personalized world.
As an industry, mobile communications are relatively recession-proof and will continue to experience growth, create jobs and unlock innovation. Economic crises result in change – as such, mobile communications will play a huge role in reducing current inefficiencies and raising the productivity of both individuals and businesses.
Three fundamental dimensions impact the future of mobile communications:
1. Access: the ability for individuals to utilize both voice and data mobile communications ubiquitously
• Key enablers for access include:– cost reduction of services (infrastructure sharing, handset recycling)– a global regulatory framework with the removal of mobile specific taxes and over-regulation
• Key uncertainties include:– whether universal access is a fundamental human right– whether we should strive for regulated universal access or defer to market forces
2. Applications/Platforms: the value added services and capabilities available to end-userswhich would be an extension of the larger public InternetKey applications for improving the state of the world would include health, education and financial services.
• Key enablers include:– an open and interoperable system which creates opportunities for “bottom-up”innovation– the increasing sophistication of handsets and user experience
• Key uncertainties include:– why there hasn’t been greater uptake in health, education and financial service mobileapplications given rapid global subscriber adoption– regulation with mobile banking and financial services– who pays: financing for health and education– the literacy challenge of those who only require a phone for voice services
3. Data Ownership (and Associated Personal Rights): the information generated and gathered on individual behaviours and transactions.This wealth of information holds tremendous transformative potential but clear rules andtransparent regulatory frameworks are needed to ensure personal wealth creation andthe prevention of abuses.
• Key enablers include:– ownership: you own your own data– accountability: a “post-privacy view” using watermarks to create an audit trail of whouses it– use of anonymous and aggregated data to create new socially intelligent applications(i.e. health, urban logistics, government services)
• Key challenges include:– establishment of a global framework for data usage and protection– general awareness of this dimension and its broad and fundamental power– privacy and security of data and application– liability of data ownership or managemen
t
Of these issues, three are not sufficiently addressed by existing stakeholders or global governance institutions: (1) the standardization process could be streamlined to be more effective and efficient; (2) inter-industry challenges and regulatory constraints (particularly in banking, healthcare) are not sufficiently addressed; and (3) an international framework for personal data ownership needs to be created. If these issues are not properly addressed, fragmentation will continue and a unique moment in time to realize an integrated approach could be missed.
The World Economic Forum has unveiled the programme for its 39th Annual Meeting in Davos-Klosters. Under the theme “Shaping the Post-Crisis World”, more than 2,500 participants from 96 countries will convene, including a record 41 heads of state or government. Key finance, foreign affairs, trade and energy ministers will also join heads of non-governmental organizations, social entrepreneurs and religious leaders at the Meeting.
Sessions in the Annual Meeting programme related to the Future of Mobile Communications include:
Digital Asia: A World unto Itself
Power to the People — Politics in the Internet Age
Update 2009: Digital Convergence Continues
Social Computing — Transforming Corporations and Markets?
From Adoption to Diffusion: Technology and Developing Economies
Mobile Revolutions in the Developing World
Reality Mining: Changing Behaviour
Global Industry Outlook 3
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