The Year in Mobile: 2013

As reported by GIS User:   Just like there is no “year of electric cars” or “year of razor blades” or “year of the Greek yogurt,” there is no “year of mobile” or “year of this or that.” However, as we have seen over the 30+ years of mobile evolution, the next year is better than the previous one and so on and so forth. So, 2013 ends in the long tradition and continuum of human endeavor to make significant progress in multiple mobile dimensions and make an impact on individuals and societies alike. 2013 proved that connectivity has become the core of our fabric and we are entering the “connected intelligence era” that will enable the Golden Age of Mobile.

In no particular order, here were some of the highlights of mobile 2013:

Number of mobile subscriptions ~ humans: the total number of mobile subscriptions got tantalizing close to the number of humans on the planet. Next year, we will go past the milestone but it shows the pervasiveness and strength of the mobile technology that it has become the basic part of our Maslow’s hierarchy.

More data please: As smartphones approach the 2B mark, the data appetite of consumers showed no signs of abating. In Sweden, the mobile broadband subs are consuming over 7GB/mo. In the US, some Android devices are consuming over 4 GB/mo on average. Operators will need to continue to refine their pricing and margin models as the demand for more spectrum will continue.

The dominance of Samsung and Apple: The tussles in the device segment has all the intrigue and juxtaposition of a Shakespearean drama and the ups and downs of a Pavarotti’s masterpiece. Through sheer muscle tenacity and the execution speed of Usain Bolt, Samsung was able to firmly dominate 2013 despite Apple’s grip on the high-end smartphone market. These two account for almost 50% of the smartphone shipments and almost all of the profits in the space. Apple continued to set the tone for the market with the launches of new iPhones and iPads. Though iOS trails Android in raw deployment, it trounces it in consumer usage. It is also remarkable how quickly consumers upgrade to the latest iOS in stark contrast with the Android fragmentation. Apple finally got access to the big Chinese market.

The disappearance of the legacy device brands: Nokia, Motorola, and RIM were dominant players a few years ago but Apple ensured the smartphone script is rewritten. They all made serious strategic errors one after another and while Nokia and Motorola have found new families to host their aspirations, their story should be a reminder of the turbulent cycles of the device business and that the complacency virus spares no one. The rise of the local OEMs should keep everyone on their toes in 2014.

Android juggernaut: In 2013, Android continued to create distance with Apple in terms of downloads, easily going past the mind boggling 1 billion milestone. Android has changed the industry for the better. While there is trouble in the house, Android will continue to play a major role in the device and app ecosystem in 2014.

The growth of OTT Services: As we discussed in our 4th wave paper earlier this year, OTT Services will be the biggest growth segment for the next decade. In 2013, the segment grew 50% ahead of any other telecom segment. Young IP messaging stalwarts fundamentally altered the messaging landscape with Whatsapp performing exceptionally. SMS usage and revenue numbers were impacted worldwide.

The digital revenue streams are very distributed with diverse players such as Facebook, Twitter, Starbucks, Expedia, Uber, Pandora, Amazon, AT&T, Telefonica, Verizon, DoCoMo, Netflix, China Mobile, Rovio, Square, Softbank, Ebay, Hertz, Apple, Google, and Microsoft. In our work with players around the world this year, it is clear that there is significant energy and application in mining the opportunities on the 4th wave. With nascent efforts in Bhutan, Vietnam, Malaysia to moonshots in the US and Europe, mobile is rewriting the rules in virtually every industry. Fasten your seat belts for another fast paced year in 2014.

Post-PC beat PC+: Apple expertly wrote the post-PC narrative and while the PC+ crowd has a legit argument, perception is often reality and there in no doubt that from here on out, the industry will be talking about the post-PC world in one voice. Even Microsoft will grudgingly admit to the transition and likely shift its strategy accordingly. As we wrote long time ago, Tablets have fundamentally altered the computing paradigm. In our SMB research released earlier this year, it was clear that smartphones and tablets are the tools of choice for the enterprise and that is not only altering the device business but also the software landscape. Mobile broadband, the cloud, and the applications are altering the enterprises – big and small. Microsoft should take solace from a tough year of progress. Blackberry is practically done and Microsoft has established itself as the distant but a viable third mobile ecosystem. Had it not been for a series of strategic mistakes, Microsoft might have made better inroads in 2013.

LTE launches: LTE is the fastest growing generation of cellular technology in the history. With over 250 networks launched, the desire to launch IP networks quickly is on top of the agenda. US leads with all major operators having substantial LTE deployments but other nations are fast catching up. While there has been quite a bit of focus on LTE, WiFi has been emerging as the white knight and its importance only grew in 2013 with 60-70% of the mobile data traffic being carried by WiFi networks in most of the countries. It might lead to some interesting business models in the coming years. 5G entered the industry lexicon.

M&As: It is natural for fast growing and competitive industries to consolidate. 2013 wasn't any different. There were some blockbuster and expected M&As: Microsoft acquired Nokia, Softbank surprised with Sprint/Clearwire acquisition, Verizon finally got hold of its destiny from Vodafone. As we have eluded to several times in our past research notes, we expect the global M&A to continue with several block buster deals slated for 2014. Stay tuned.

Patent wars: In maturing markets, patent wars are the unfortunate part of the ongoing battle for dominance. Mobile saw its share of patent wars. With roughly quarter of the USPTO grants becoming mobile related, it shouldn't come as a surprise though.

Regulatory tussles: Regulators are generally always behind in understanding a fast growing industry. It was clear in 2013, that the convergence of the computing and communications world has left the regulatory world woefully short of expertise and imagination. Governments around the world will do better by hiring folks from the industry to get a grip of the fast-paced every-changing dynamics of the mobile world as the very competitiveness of a nation depends on it. From spectrum to privacy, from competition to commerce, regulators need to get up to speed on unexpected trajectories of the new world.

Security and Privacy: From Snowden revelations to industrial espionage, from credit card data loss to enterprise security, the security and privacy of mobile data, applications, networks, and devices became front and center of the security and privacy debate.

Operator disruption plays: In the telecom space, the #4 player generally doesn't have a big impact on the overall mechanics of the industry. However, when it has nothing to lose, it can provide a potent dose of disruption to the market. Free in France and T-Mobile in the US were examples of that this year. In France, by offering cheap mobile data services at low margins, the newcomer altered the economics of the segment tumbling the incumbent revenues by 10%. In the US, through a series of financial and marketing maneuvers, T-Mobile was able to alter its net-add trajectory and had meaningful sub gains for the first time in three years. Also, for the first time, T-Mobile forced the top three to react to its moves and not the other way around. It also inspired other smaller players in other countries to rethink their strategies.

Connected devices: The promise of M2M and connected devices has been there for some time. Internet of Things (IoT) has morphed into the gimmicky Internet of Everything. While the hockey stick curve hasn't arrived yet, there was plenty to celebrate with the introductions of Google Glasses, wearables, fitness bands, smart watches, connected autos, glamorous thermostats, winking light bulbs, home security and energy management solutions and much more. GE is spending billions for its “industrial Internet” initiative. A nice platform has been set for continued feverish growth and product introductions in 2014.

Mobile’s impact on commerce: Mobile is changing every industry but its impact on commerce is particularly notable. In the 2013 holiday season (according to IBM), mobile made 17% of the online sales increasing over 55% from 2012. Tablet users spent $126/order.

Meteoric rise of mobile apps: In 2010, we evaluated the impact mobile apps will have on the industry. Much of the growth has been expected, however the players who lead in revenue and downloads have fluctuated across the various platforms. In 2013, Google started to match Apple in downloads though Apple easily wins in the revenues category and thus still remains more attractive to the developers though the gap is closing.

There was much more – Twitter IPO, Surface, Moto X, spectrum scandals, Facebook’s love for mobile, Google mobile advertising dominance, the rise of the Chinese OEMs, decline of HTC, and several other events captivated our attention.

2014 is going to be another terrific year for mobile. The progress and surprises will come from all quarters. New players will emerge, new business models will take hold, and we will take a significant step forward in the new year. I am sure that you all will do your part in shaping the mobile cosmos.

Fuel ‘Fingerprints’ Could Mean More Efficient Vehicle Engines

As reported by GigaOM: Modern cars are crammed with computers that measure and respond to everything from brake pressure to luxury features. Soon, they will also come with a mini-computer than can sniff the contents of gasoline and tell the engine how to react.

The new technology, which relies on a $25 sensor, promises to improve fuel efficiency and reduce pollution. It also shows how many of the sensors and connected computers that used to found only in industrial operations are making their way into everyday things.

Thousands of fuels - and none of them fit

“Many people don’t realize that fuel is not the same every ten miles you go,” said Alain Lunati, a former petroleum executive who now heads SP3H, a startup based in Aix-en-Provence, France.

As Lunati explained in a recent phone interview, the gas we buy varies from station to station due to factors like the refinery source or the additives that gas retailers add to the fuel blend.

The difference in gasoline matters because car engines are built and calibrated around one specific gas blend that varies with each car model. Optimal engine performance occurs when the car uses the exact same gasoline that the auto maker did; however, in reality, a driver has little hope of finding that same fuel when it’s time to fill the tank.

“The engine is only calibrated with one fuel, but there are an infinite number of fuels,” said Lunati. “It’s statistically impossible to find the fuel that is calibrated with your engine.”

As part of its research, SP3H has sampled 3000 different fuel blends from 60 countries.

The fact that you’re not using the same fuel as the manufacturer doesn't mean, of course, that you’re harming your vehicle. Your car is doing just fine since engines are built to ingest a standardized range of fuel variations, and gas stations ensure that what they sell falls within this range. (And there’s no need to buy that premium gas, by the way).

The issue, instead, is a question of waste. According to Lunati, cars’ use of non-optimal fuel means a decline in fuel efficiency of up to 5 percent and up to a 20 percent increase in greenhouse gas emissions.

Those numbers are not jaw-dropping for an individual car. But what if this inefficiency could be reduced across a nation’s entire vehicle fleet?

Personalized gasoline

When he worked at petrol giant BP, Lunati said he used industrial sensors that could detect the precise molecular composition of fuel. The sensors, which are also used in the chemical and pharmaceutical industries, stood three feet high and cost over $3 million apiece — hardly a practical option to strap onto a Toyota Camry or Ford Focus.

Now, though, SP3H is producing a mini-version of the sensors for cars that uses near-infrared technology to acquire a “fuel fingerprint” of whatever is in the tank. This information can then be relayed to the car’s central computer system, which can in turn direct the engine to adjust the fuel injection, consumption and treatment process.

The system, which can be applied to gasoline, diesel or any other type of fuel, is not part of the auto manufacturing process yet, but Lunati said it soon will be.

“The system is already there. Cars now have around 60 computers, including one for engine optimization that uses 10 parameters that adjust in real time to outside temp, the temperature of engine, pressure, altitude, and more.”

He added that SP3H already has deals with car makers around the world, and is in talks with one of America’s two auto giants to license the patented technology. SP3H’s business plan calls for the car companies and parts makers to manufacture and and integrate the sensor as they see fit, and expects test models to be on the road by next year.

A SP3H prototype envisions the sensor to be about 3 inches long and a few hundred grams, and to cost about $25.

A cleaner global fleet

If SP3H succeeds, the result will be a new low-cost way to monitor fuel quality on the road and in real time. This could yield an immediate reduction in CO2 from vehicles, especially if more countries also adopt the start-stop technology that is taking off in Europe.

And in places like China and Brazil, where SP3H plans to road-test them first, the sensors could make an additional difference. According to Lunati, the fuel quality in such countries varies to a much greater extent from gas station to gas station than it does in the U.S. or Europe — and the fuel product from some unethical sellers is so bad it can kill engines. The mini-sensors could make it easy to find out who is selling bad or dirty fuel to the benefit of both motorists and the air.

Bridge Inspection Robot has Magnetic Wheels, Shuffles up Walls

As reported by Engadget: Most wall-climbing robots rely on advanced forms of suction to keep them adhered to a flat surface, but Japan's latest wall crawler employs a different method: magnets. Hailing from the Osaka City University Graduate School of Engineering, BIREM (which stands for Bridge Inspection Robot Equipping Magnets) is designed to -- as the name suggests -- inspect bridges. Riding four spoked wheels adorned with eight magnets a piece, it can creep across metal girders at a rate of 7.8 inches per second. Its flexible midsection promises to give it an edge over uneven structures, and its creators hope that it will eventually lower infrastructure inspection costs. You won't see it crawling across the Golden Gate any time soon, however -- the team doesn't expect to commercialize it for another three years.

Telematics Evidence Helps Prove Knife Attacker’s Location in Court Case

As reported by Fleet World:  Daniel Paita has been convicted for a knife attack on a man in Glasgow in February last year after the device pinpointed his location despite Paita claiming he was not in the area on the day.  

The evidence collected by the device was passed onto the police by motor anti-fraud team Asset Protection Unit Ltd (APU), which now works closely with Police forces to reduce motor fraud.   

After Paita was sentenced Thursday. the 19th of December at The High Court, Edinburgh, APU’s Neil Thomas was clear about the role telematics can play and the benefits of private anti-fraud teams cooperating with the police.

‘It is extremely pleasing to have been an important cog in convicting an individual like this, it might never have happened at all had the device not been installed in his car. They are able to generate data about the inner workings of a vehicle but also show its location at any time, which is a great help to us, the police and victims if vehicles are used for criminal activity,’ said Thomas.

Nearly Half of All Phones in UAE are Smartphones

As reported by The National: Nearly half of the registered phones in the UAE are smartphones, new data from the telecoms regulator showed.

“During the period between July 1, 2013 and September 30, 2013, 46 per cent of handsets registered on the UAE’s networks were smartphones, a figure that has increased during each quarter in 2013,” the Telecommunications Regulatory Authority (TRA) said in a statement.

That is up two percentage points from June, when the smartphone penetration rate stood at 44 per cent.  At this rate, smartphones would account for half the phone market sometime around the middle of 2014.

The TRA report also showed that the iPhone 5 was the most popular smartphone in the country during the quarter, with a 2.8 per cent share of all registered handsets. Coming second was the Samsung S3 with 2.5 per cent. The iPhone 4S came third with 2.3 per cent, and tied for fourth were the iPhone4 and BlackBerry 9900 at 1.8 per cent.

Following them were: Samsung S4 at 1.6 per cent; Galaxy S Duos at 1.2 per cent; BlackBerry Bold 9790 at 1.1 per cent; and BlackBerry Bold 9780 at 1 per cent.

Overall, Nokia dominated the market with a 56.2 per cent market share. Samsung came second with 16.4 per cent. Third was BlackBerry with 10.2 per cent, and fourth was Apple with 7.8 per cent, then LG at 1 per cent, Sony at 0.9 per cent, Huawei at 0.5 per cent and HTC at 0.6 per cent.

“Unlike Nokia and Blackberry, Samsung and Apple recorded increases in their market shares in third quarter,” said the report.

Apple’s iTunes was the most popular applications website during the quarter, followed by Nokia OVI; Samsung Apps; BlackBerry App World; and Android Applications, the report says.

Users of smartphones and fixed line phones made a total of 13.7 billion visits to social media sties during the quarter. Facebook topped the list with 91 per cent of the visits. It was followed by Twitter with 8 per cent of the total visits, Maktoob at 0.1 per cent, then LinkedIn and MySpace.

California Bill Would Require 'Kill Switch' For Smartphones

As reported by USA Today: Two California officials have announced plans to introduce legislation requiring smartphones to have a "kill switch" that would render stolen or lost devices inoperable.

State Sen. Mark Leno and San Francisco District Attorney George Gascon announced Thursday that the bill they believe will be the first of its kind in the United States will be formally introduced in January at the start of the 2014 legislative session.

Leno, a San Francisco Democrat, joins Gascon, New York Attorney General Eric Schneiderman and other law enforcement officials nationwide who have been demanding that manufacturers create kill switches to combat surging smartphone theft across the country.

"One of the top catalysts for street crime in many California cities is smartphone theft, and these crimes are becoming increasingly violent," Leno said. "We cannot continue to ignore our ability to utilize existing technology to stop cellphone thieves in their tracks. It is time to act on this serious public safety threat to our communities."

Almost 1 in 3 U.S. robberies involve phone theft, according to the Federal Communications Commission. Lost and stolen mobile devices — mostly smartphones — cost consumers more than $30 billion last year, according to a study cited by Schneiderman in June.

In San Francisco alone, more than 50 percent of all robberies involve the theft of a mobile device, and in Los Angeles mobile phone thefts are up almost 12 percent in the last year, the San Francisco DA's office said.

Samsung Electronics, the world's largest mobile phone manufacturer, earlier this year proposed installing a kill switch in its devices. But the company told Gascon's office the nation's biggest carriers rejected the idea.

But the CTIA-The Wireless Association, a trade group for wireless providers, says a permanent kill switch has serious risks, including potential vulnerability to hackers who could disable mobile devices and lock out not only individuals' phones but also phones used by entities such as the Department of Defense, Homeland Security and law enforcement agencies.

The CTIA has been working with the FCC, law enforcement agencies and elected officials on a national stolen phone database that debuted last month.

Gascon and Schneiderman have given manufacturers a June 2014 deadline to come up with solutions to curb the theft of stolen smartphones.

"I appreciate the efforts that many of the manufacturers are making, but the deadline we agreed upon is rapidly approaching and most do not have a technological solution in place," Gascon said. "Californians continue to be victimized at an alarming rate, and this legislation will compel the industry to make the safety of their customers a priority."

Placing an Economic Value on GPS/GNSS Spectrum

"With other industries fighting for the finite raw material of
spectrum, the GPS industry must continue to generate and
update its economic valuation work or risk being marginalized
in policy debates." Bartlett Cleland

As reported by Inside GNSS:  The nation’s leading GPS experts are struggling to quantify how the world’s premier navigation and timing system affects the U.S. economy, an effort critical to building a political firewall around GPS spectrum in the face of ballooning demand for broadband capacity.

“It is an impossible question,” said James Schlesinger, chairman of the National Space-Based Positioning, Navigation, and Timing (PNT) Advisory Board. “It’s methodologically harder than evaluating the Gross Domestic Product. What we are being asked to do is calculate something that is incalculable.”

The research challenge was highlighted in comments by Jules McNeff, vice-president at Overlook Systems Technologies, in the current issue of Inside GNSS: "In the case of GNSS services, these [benefits] are more difficult to quantify because they are both direct and indirect, include second- and third-order benefits, and are not simply revenue streams from direct subscription services. They are spread across all economic sectors and represent revenues from increased efficiencies in logistics and related economies of operation, improved safety, reductions in personnel costs and exposure to hazards, and others."

Alternative data from a similar market report.

The PNT advisory board, which agreed to look at economic impacts last year at the request of the National Executive Committee for Space-Based PNT (ExCom), spent part of its December meeting weighing reports from three researchers it had commissioned to find and assess data on GPS benefits and spectrum valuation that others had already gathered. One of the most recent studies discussed was Issue 3 of the GNSS Market Report, a study released by the European GNSS Agency (GSA) a few months ago.

GSA found that the annual shipment of GNSS devices worldwide jumped from 125 million in 2006 to roughly 850 million in 2012, said Nam Pham of ADP Analytics. By 2022 that is expected to grow to 2.5 billion units a year, bringing the total number of GNSS devices in circulation to around 7 billion — enough for every person on the planet to have one. The total global revenue for GNSS devices was forecast to grow to $143.9 billion by 2022 from $59.4 billion in 2012.

According to the GSA study, the GNSS market is dominated by location-based services (LBS), said Pham, a category that includes GNSS-enabled consumer products such as smart phones, tablets and digital cameras. The GSA found that though such devices make up the vast majority of the GNSS devices, they likely will be responsible for only 47 percent of the revenue from 2012 to 2022 — a scant lead over the 46.3 percent generated by rail and road applications. Surveying and mapping is expected to produce 4.1 percent of revenue for the period followed by agriculture and aviation/marine uses at 1.4 and 1.3 percent respectively,

Of the global activity in 2012, North America generated more than 70 percent of the aviation revenue and nearly 60 percent of that from agriculture. Thirty percent of LBS revenue was from North America, while surveying and road applications came in at around 25 percent each, rail at roughly 15 percent, and maritime applications at around 10 percent.

Direct revenue is only one of the economic factors for any given industry, said Pham. Companies buy raw materials and hire workers who in turn use their wages to buy homes and other goods. Pham estimated that GNSS manufacturers contributed $32 billion in output and $6.8 billion in earnings to the U.S. economy, generating more than 105,000 total jobs in the process. He based his figures on the 2011 U.S. Census Bureau Annual Survey of Manufacturers.

Work with the Data You Have, Not the Data You Want
The European study, however, appeared incomplete to at least one member of the board — an assessment with which Pham agreed.

“There is something missing there,” said board member James Geringer, a former governor of Wyoming. “I think of all the other downstream applications . . . any of the aerial imagery that uses GPS. It is a meaningless service without the GPS or other coordinate references,” Geringer said. The geospatial information system (GIS) firm ESRI, where he serves as director of policy and public sector strategies does $1 billion in annual business by itself, he said, adding, “You’ve got a great big hole in there somewhere, it seems to me.”

Geringer’s point illustrated the shortcomings in the available data at the heart of a wide-ranging discussion within the board, which was weighing how to approach the question and at what point it should present numbers — even preliminary numbers — to the ExCom.

It is like trying to measure the value of energy, Schlesinger said.

Even so, the European study appears to be one of the best available in that it is recent — it was released in October of this year — and broad in scope.
Most of the economic studies on GPS tend to be very narrowly cast and 5 to 15 years old — so old they fail to capture the benefits of new applications and rapid shifts in technology, said spectrum expert Bartlett Cleland,

Cleland presented the result of a literature review on the market research. Among those new applications, he said, are GPS-enabled clothing, including shoes that help you find your destination, and GPS-based sports analytics that teams can use to assess and improve their play against a specific opponent.

Moore’s law that computing power doubles and costs are halved every 18 months is “roughly applicable” to the GPS industry, Cleland said, and is a realistic guide for how often you need to do new studies on an industry.

“About every 18 months you have to reshuffle the deck,” he said.

Getting Equipped for the Spectrum Gold Rush
The need for better data on PNT’s economic impact was made clear during the fight over LightSquared’s proposal to repurpose spectrum near the band used by GPS, thereby creating what tests eventually showed would be debilitating interference to GPS receivers. The economic data presented by the wireless broadband industry at the time seemed to give the telecom companies the upper hand in the policy debate, said Geringer.

GPS signal strength is below the normal noise thresholds of
the spectrum.  Additional 'noise' in the form of competing
communication signals make the GPS signal more difficult
'dig out' of the spectrum.

Many studies support the argument that broadband needs more spectrum, said Cleland. The number of studies is partly due to the industry being well organized.

Interest in the subject is global, he said, and some broadband companies have the cash to support economic-benefit research for their industry. For example, he said,  a report from the International Telecommunications Union and the United Nation’s Educational, Scientific and Cultural Organization details the global economic effects of broadband with GDP numbers, penetration to growth rates, and analysis of ancillary benefits such as eradication of poverty or increased educational opportunities. Related reports are also available as well from the Telecommunications Industry Association and even individual companies such as CISCO.

LightSquared's potential interference ended up with the FCC
denying them a license, and a lawsuit against several of
the industry players from Harbinger Capital.

“With other industries fighting for the finite raw material of spectrum,” Cleland said, “the GPS industry must continue to generate and update its economic valuation work or risk being marginalized in policy debates.”

That fight is only going to become more intense as companies scramble to capture consumers who want “everything, everywhere,” said John Kneuer, a former National Telecommunications and Information Administration chief and a spectrum policy expert. Wireless carriers are trying to provide content inside the home, cable companies like Comcast and DISH are devising ways to deliver content outside of the home, and applications providers like Google and Amazon are maneuvering to become content conduits.

The broadband industry is converging on a ‘singularity” where all the companies are competing with each other to control the same customers  — and it all rides on the availability of spectrum, said Kneuer.

The Advisory Board will continue its work into next year, said the board’s vice chairman, Brad Parkinson, while cautioning against the expectation that they could come up with a single number that policy makers could use for an ‘elevator speech.’

The sum of the economic effects of GNSS throughout the world “is certainly many tens of billions of dollars per year, but the analysis to date tends to be based on cost rather than value,” Parkinson said. ‘There is a good reason for that. It is really hard to come up with the total value. Hence, we tend to undervalue the GPS contribution.”

Although Cleland said that he didn’t see why “GPS doesn’t sit right alongside a lot of these technology issues in importance,” he said it was unlikely that the pressure on GPS spectrum will ease.

“The broadband debate and the need for spectrum will never end,” said Cleland. “It will never end.”