A view of the mobile landscape for Nokia UK

I was recently invited to present to a group of Nokia partners meeting at the National Space Centre in preparation for the launch of the firm’s first Windows Phone – the Lumia 800. Although not strictly within the Labs team’s ‘innovation’ brief, co-operating with firms like Nokia is a great way to stay up-to-date on the rapidly changing mobile industry and to demonstrate our ‘thought leadership’ credentials.

As part of my presentation the Nokia UK team wanted an independent perspective on the mobile industry and  – as broad a topic as it is – I took the opportunity to highlight five points specific to the UK:

  1. The importance of using local market data for decision making.
  2. The dominance of smart-phones.
  3. The delay in 4G services and likely network capacity issues resulting.
  4. The increasing trend to consumerisation and the relevance to businesses.
  5. The  shift in importance from technical platforms to ecosystems.

The UK is not in North America

The UK is not North America

This raised a chuckle around the room, but behind the apparent absurdity of pointing this out is a serious point…

It seems an obvious thing to say, but too many commentators inappropriately offer global data when they really are only addressing one geography. Worse, too often that data ignores the differences between those markets – especially between the UK and the US which are superficially similar.

Here are a few example differences:

  • The US has two mobile standards (CDMA and GSM) versus the UK’s one (GSM).
  • Number porting between mobile operators is long-established in the UK and widely understood / used.
  • Mobile penetration in the UK stands at well over 100% (some estimates place it around  120%) whilst the US is at around 80%.
  • 4G (high speed wireless data) technology has launched in North America.

Key Point: None of this makes the US or the UK better or worse – it’s just important to remember they are different. Decision makers – including Tribal’s partners and customers – need to make their decisions with the right information. Global trends are useful for investors and analysts, but we need to take care to use regional data for our own planning when relating to real end users, their preferences and priorities.

The UK has reached a smartphone ‘tipping point’

 

Just under 50% of the UK mobile-phone owing population now have a ‘smartphone’. The 50% line will be crossed any day and will definitely be true by early 2012 – one firm of analysts reports this figure moving at 2.5% per week, although that is difficult to verify. The fact that 70% of devices sold in UK are smart-phones is certainly not contentious and all of these measures are well ahead of where they had been predicted to be just a few years ago as adoption accelerates.

The T-Mobile G1 was the first Android device to be available in the UK. It launched 3 years ago.

Google’s Android platform is powering half of ‘smart-phones’ sold, followed by RIM’s BlackBerry models with 23% and Apple’s iPhone at 19% according to Kantar Worldpanel ComTech. Windows Phone has yet to make an impact on those figures, but with little marketing of the platform or specific devices prior to November 2011 that’s unsurprising.

Key Point: Android only arrived into the UK as the ‘G1′ with T-Mobile in September 2008 – the rate of change is huge and significantly faster than many firms’ planning and product cycles. If addressing the market now Android should be a key consideration – despite the media attention Apple’s iPhone is still in third place. However, the speed of change suggests this market is still one that can be significantly disrupted in a short space of time so a focus on multi-platform solutions and building skills in transferable technologies will be investments more likely to give long-term returns.

The UK is behind on 4G

4G is a technical standard with many different benefits, but the key elements for UK users will be that it moves all services onto an IP-based network and delivers greater speeds – up to about 100Mbit.

In the UK 4G spectrum auctions will also go some way to un-clogging the imminent ‘capacity crunch’ that is going to affect all mobile network operators as our demand for wireless data soars – offering more a significant capacity improvement, even over existing spectrum.

However, the UK isn’t now scheduled to have its first 4G spectrum auctions until the end of 2012, putting it 4 years behind the earliest adopters and concerning many over the business impact of the delays. Even Lithuania and Uzbekistan are more advanced in their roll-outs!

The upside – limited as it is – is that 4G handset technology is still immature and the normal challenge of smart-phone battery life is even greater with these devices. Some of these problems will have been resolved by the time manufacturers ship devices to UK consumers.

Key Point: Allocating new wireless spectrum is complex technically and commercially, but the extension of OFCOM’s (necessary) consultation process has resulted in delays to the UK 4G spectrum auctions. The impact to mobile users in the UK is that over-the-air services are going to have to exist in an increasingly crowded space. Smartphone-users may see service-levels reduce in the short-term and businesses planning to use wireless data will need to ensure that their services are tolerant of  low-bandwidth / higher latency connectivity and ‘offloading’ to WiFi networks – a measure which many network operators are turning to as a short-term fix.

Tribal customers such as Higher Education establishments may notice these effects sooner than the general population as students turn to campus networks when 3G networks become overloaded by the relatively high density of mobile users in those areas.

Consumerisation

Consumerisation is often described as the flow of ideas, technology and – most importantly to me – user expectations into the workplace. Sometimes it’s characterised as people’s home computers being more powerful to use than their work-supplied ones, but crucially its also about it being more pleasant to use and more capable. This is especially true for smart-phones and tablets where enterprise workers may choose to use their own devices in preference to a work-supplied computer to give them greater flexibility where to work.

Consumerisation is also a huge driver for ‘bring your own device’ (BYOD) strategies – the attempt to make staff more productive (and happier) by letting them select their own IT tools (typically using ones they already own) and actively putting in place ways to secure and manage this to enable it. Users’ enthusiasm for this is often driven by usability – consumer services have to be pleasant to use and can’t require hours of ‘training’ or people won’t use them. No one needs ‘Facebook training’ despite it being a hugely complex social network, media sharing and application platform.

All those entering the workplace for at least the last 5 (and probably 10) years have grown up with high-speed Internet, mobile phones and games consoles and this ubiquity, ease of use and speed of development have become the benchmark by which they assess the tools provided in the workplace.

Key Point: Producers of mobile services should look to the consumer market for standards of user experience, performance and capability. The apparent contradiction of device manufacturers like Blackberry and Microsoft adding both entertainment and enterprise features to their products is driven by a recognition increasingly users move between personal and business use. Accordingly businesses should develop a BYOD strategy (even if it is only to clearly disallow it) and recognise that tacit permission is not a strategy – this requires measures (and typically tools) to enable it in a managed way.

It’s all about Ecosystems

 

The quote above is from Stephen Elop, Nokia CEO at a press conference with Microsoft CEO Steve Balmer. I suppose you could argue that ‘they would say that wouldn’t they’ – it suits the ‘two Steves‘ to talk about ecosystems because they’re both backing a new one (Microsoft’s Windows Phone).

But I think they’re right and it shows elsewhere… Kantar Worldpanel ComTech note that there’s a big gap between the number of people planning to stay with Android for their next handset upgrade and those planning to stay with the same device manufacturer.

Ecosystems consist of far more than just a mobile device’s operating system though… All the large players – Android, Apple, Blackberry, Windows Phone and even Symbian have:

  • 3rd party developer programmes
  • Application stores
  • Music and digital content stores
  • Online services such as email, mapping, media sharing and social networking.
  • Device recovery, management, ‘remote kill’ and tracking features.

This provides a huge barrier to entry by new players – witness Palm and then HP’s failed attempt with WebOS – and has required many established firms (previously building their own OS) to consolidate around other’s ecosystems – SonyEricsson and Motorola adopting Android and Nokia adopting Windows Phone.

Key Point: For consumers, handset manufacturer is becoming less relevant than the ecosystem it belongs to, but this (entirely intentional) ‘lock in’ effect users may also have the undesired consequence of ‘locking out’ potential ‘switchers’ due to the inconvenience. Businesses users and app producers – like Tribal – will also need to adapt as commercial arrangements, access to customer through app stores, support and innovation shifts to the ecosystem provider who’s focus is global. As mobile ecosystems increasingly overlap with other businesses (music, online services, entertainment etc) external – and less predictable – influences too will also have a greater impact.

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