Are You Ready For The Open Mobile Era?
Tech Sheets - The High Tech Blog
Posted by Craig Wigginton on June 20, 2012
As I reflect on the crazy rollercoaster ride that’s been the wireless sector over the last 3 years, I’m led to thinking that attitudes in mobile these days shift quickly—even among some of the sector’s staunchest protectors of the past. The reason for this is the almost constant market turbulence erupting around three pillars of change at the core of the industry. These days rapid mobile Web innovation, coupled with insatiable consumer demand for mobile Web and data services and an evolving policy debate focused on a more open and equitable competitive environment are combining to have an enormous impact across the sector. Many observers have described this disruption as the onset of an Open Mobile era, one that is defined by a period of hypercompetition where new entrants wielding disruptive technologies are slashing away at incumbent advantages and profits. This is no great surprise considering the impact the likes of Apple and Google have had in mobile over a very short period of time. No doubt now that Silicon Valley has established itself as a major force of innovation in the once conservative wireless industry. As a result, traditional standards and established market “rules” remain volatile, forcing mobile incumbents to embrace a newly democratized world and abandon reliance on bygone revenue streams.
Recent data from Deloitte’s 2012 Open Mobile study would seem to concur. Our survey of 250 senior executives offers fresh insight on the opportunities and challenges that lie ahead for the sector and reveals a rapidly evolving mobile power structure. For example, nearly 50 percent of the respondents believe “Web” companies, rather than network carriers or handset makers, will dominate mobile in five years. Moreover, 89 percent believe the role of network carriers will be limited to just delivering data access anywhere and anytime. Meanwhile, 87 percent believe that carriers must make the transition from the closed, “walled gardens” business model of the past to new organizational models built around open development ecosystems to sustain competitiveness.
These data points may well be a small snapshot of a much bigger picture but they highlight some of the profound challenges that hypercompetition is introducing for established wireless incumbents. It seems future growth in mobile now rests on the proliferation of open platforms, across multiple facets of the value chain, in fast emerging vertical industries such as mobile health (mHealth). In these areas, tapping into the burgeoning mobile software applications market is also considered critical to success. Against this backdrop, the threat of diminishing returns from traditional network assets and basic connectivity is rising. But many incumbents still worry that their industry dominance will ebb if they embrace the shift towards more open platform strategies.
However, there are signs some are starting to respond with a more collaborative approach to stimulating growth – that is, placing emphasis on innovation strategies to avoid the “dumb pipe” scenario. One approach, already in play at some carriers, is a collaborative innovation center that helps telecom companies forge closer links to the software development community and beyond. The challenge now will be to navigate towards the most promising future growth opportunities in areas outside the traditional boundaries of wireless.
If you are interested in learning more about where those opportunities are likely to emerge and what incumbents should do about it, make sure to read the new Deloitte 2012 Open Mobile study. The Deloitte 2012 Open Mobile study can be downloaded at: www.deloitte.com/us/openmobile.
In the meantime, what are your predictions for the open mobile era and what do you think this hypercompetitive market will look like over the next three years?
|Craig Wigginton is the U.S. national sector leader for the Deloitte & Touche LLP Telecommunications Practice and currently serves as the Telecommunications Audit and Advisory Services practice leader as well. In addition, Wigginton is the cross-functional Northeast regional sector leader for Technology and Telecommunications.|
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.