Rocky road ahead for mobile market

News Analysis

Rocky road ahead for mobile market

Ian Grant

Device technology is advancing so fast that legislation and network infrastructure are falling behind. The mobile landscape resembles the seabed moments before the tsunami hits: as the uptake wave sucks back the water, it reveals the rocks and reefs that are normally hidden, and are dangerous only on contact.

The impending tidal wave of mobile communicating devices is exposing real hazards that CIOs must deal with.

Market analyst Gartner predicts that by 2013, 80% of businesses will support a workforce using tablets; that by 2014, 90% of organisations will support corporate applications on personal devices, and that by 2015, 10% of your online "friends" will be non-human.

These developments, even if only half true, will have profound effects on the way companies relate to their customers and staff, and therefore on the use of IT in the organisation.

Inadequate regulation

CIOs need to be aware, indeed to worry, that the legislative and regulatory environment that governs these relationships is running well behind the technology and its applications.

The greatest concerns relate to online copyright and intellectual property protection, as well as commercial freedom of speech. The anti-copyright piracy provisions in the Digital Economy Act are due for judicial review in February; Nominet will soon debate proposed changes to its terms and conditions that will allow the authorities to take down websites without a court order; regulators are increasingly willing to fine firms that breach data protection rules; and governments are increasingly anxious to lock down the ­internet following the Wikileaks disclosures and the social networking-inspired change of government in ­Tunisia. Through it all run the Tigris and Euphrates of security and privacy.

All this does not yet include the full effects of "the internet of things", which is largely predicated on mobile networks and is led by mobile devices.

The most visible effect so far of the internet of things has been congestion in mobile networks following the launch of smartphones, and Apple's iPhone in particular. This is going to get worse. Smartphone owners use more apps and bandwidth than traditional phone users, and some analysts say 80% of phones sold this year will be smartphones.

Asymco, a Helsinki-based market analyst firm, says that in 2010 more than 60 apps were downloaded for every iOS device sold, up from 10 apps in 2008. Apple says its users have downloaded 10 billion apps.

Asymco analyst Horace Dediu draws three conclusions. Apps overtaking digital music both in units and data volumes was a watershed, he says. "Apps are a new medium: they will impact all other media," he says.

As the number of apps attached to any single device rises, the user's cost of switching rises, hence there will be greater reluctance to use corporate kit, especially if it has less functionality. Finally, apps consumption is likely to overtake the PC software market, he says.

Windsor Holden, principal analyst at Juniper Research, says this is only the beginning. "Any device capable of carrying a SIM will have one," he says.

Researchers are already using the location signals from mobile phones to monitor traffic flows and adjust traffic signals in real time.

Last year Nokia launched an in-building mapping system that helps visitors to find items in an exhibition hall or museum. Tie this in with an intelligent building evacuation system, such as that developed by BAE Systems under the Aladdin project, and the mobile becomes the virtual thread to lead potential victims out of the labyrinth.

Some researchers are thinking even further ahead. Mohamed Gaber, senior lecturer at the school of computing, University of Portsmouth, wants to crowd-source the spare processing power on mobiles for crime investigation and health management applications.

He is testing a scenario where police officers capture the sensory information in a crime scene, such as fingerprints and digital images, on smartphones. Data is analysed locally on the officers' networked phones and the results fused in real time.

"We have discovered we can get excellent results with as few as eight mobile phones used together, where each phone handles a maximum of 40% of the all the possible measurements," Gaber says.

Most CIOs will shudder at the security and potential data breach implications of such apps. But they may be on the trivial side compared with retail apps.

Retail to drive innovation

Market researcher Foresee Results has shown that almost one-third of 10,000 e-tail shoppers had visited a retail website using their mobile phones. Two-thirds did so while in the retailer's physical store. More than a quarter also looked at competitors' websites to compare prices and offerings. It found the percentage that used their phones to buy goods quadrupled from 2% in 2008 to 8% in 2010.

"Shoppers who are highly satisfied with a mobile experience say they are 32% more likely to buy from that retailer online, and 31% more likely to buy offline, as well as being far more likely to return to the main website, recommend it and be loyal to the brand," the analysts say.

Retail is likely to be the forum for intense innovation around mobile devices, turning shopping into the Minority Report experience via your phone's location rather than (as suggested in the movie) by scanning your retinas.

That said, last month Intel said it was developing "anonymous video analytics", which work with large, touchscreen in-store displays that can identify people by their gender and age. Intel has been developing this Anonymous Impression Metric (AIM) platform since late last year when it bought a small Canadian digital signage company called CognoVision.

Kraft, one of the firms piloting the technology, hopes to use it to capture what is on a shopper's grocery list, to push recipe suggestions based on their age and sex, and to let them share and "like" recipes on Facebook. But how much more convenient it would be all round if Kraft had access to the shopper's mobile phone.

Flood of data

While retail is likely to prove fertile ground for innovation, sports and entertainment, especially video-based, provides the high volume mobile traffic at present.

In June 2009, Google reported that uploads to YouTube, its video distribution service, had leapt 400% a day, mainly as a result of the launch of the iPhone. These days the world uploads 35 hours of video a minute to YouTube.

Skype's new boss, Tony Bates, told the Financial Times in January that 40% of its traffic on the internet-based voice network was video. This is despite being banned by most mobile network operators. In terms of international traffic, Skype, with 45 billion minutes of traffic, is responsible for 73% of all international calls, much of it video.

According to Cisco, mobile video will grow at a compound annual growth rate of 131% from 2009 to 2014. This is already changing the traffic profile of mobile networks, affecting quality of service and the user experience, but also the network's capacity and cost structure.

All UK mobile network operators except 3 have "fair usage" clauses, and only last month T-Mobile announced it was capping data traffic at 500Mb for new users. 3 reckons more than 90% of traffic on its network is data, and its current advertisements push "all you can eat" data.

Many analysts believe this offer is not sustainable in the short to medium term, or until the networks get more capacity. The operators are trying to manage the rising flood of data in several ways: capping and charging for it, restricting access to data-intense sites, choking available bandwidth at peak times, and, controversially, lobbying for a "two-tier internet", segmented by willingness to pay for better quality of service and/or content.

Congestion may be a temporary problem. Ofcom plans to auction more radio frequencies in the 800MHz and 2.6GHz bands. This will add 100MHz of paired spectrum to the 165.8MHz of paired spectrum already allocated. But the threat of legal action has delayed the release of the spectrum until about 2013, says Ofcom. This means that true 4G mobile networks, likely to offer up to 100Mbps connection speeds, will not be available in the UK until 2014.

In the meantime, Ofcom has offered the so-called 4G frequencies to the London Olympics committee free of charge. This will enable broadcasters to use data-intense wireless television cameras to get closer to the action, and to continue experiments with 3D TV, first trialled at the Winter Olympics in Vancouver. It will also allow local mobile networks to get to grips with the new technology and applications.

This month will see the usual technology promises displayed at the Mobile World Congress in Barcelona, some of which might be deliverable applications by 2014. "Augmented reality" is likely to be a hot topic, says Juniper's Holden. While definitions vary, this is taken to mean a data-enhanced application based on where the smartphone is, or can see via its camera and/or scanner.

One demonstration application seen by Computer Weekly 18 months ago linked a photo of a French cathedral via Nokia's Ovi Maps location service to a database on the history of the building, its opening times and entry prices. This was supplemented by advertisements for nearby restaurants and bars. Clicking on the ads took you to menus and price lists, as well as discount offers.

One suspects that the land rushes of the 19th century could pale before the rush to grab some mobile real estate, and the economic rewards are likely to be even bigger. But that depends on the tide covering those legislative rocks and reefs noted above. Turning the increasingly mobile internet into a collection of walled gardens is unlikely to produce a desirable result.


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