A mobile paradox—huge growth and customer demand, yet significant business and market challenges—is causing many companies in the mobile value chain to question where the industry is heading. They’re struggling to understand the key drivers that will shape the industry and what this new world will mean for them in terms of new challenges and opportunities. Most of all, they want to know the winning strategies for achieving success in this New Mobile World Order.
A number of major disruptions, or strategic inflection points, in the mobile industry are radically altering the entire mobile ecosystem as we know it. Some of these disruptions have been slowly building up steam over the last couple of years, although many of these have just started and have yet to really play out. In the recently published white paper, “The New Mobile World Order: Perspectives on the Future of the Mobile industry,” Cisco IBSG identified eight strategic inflection points that are causing—and stand to cause even greater—disruption and uncertainty in the industry:
- Explosive demand for mobile data—a 26-fold increase between 2010 and 2015
- The rise of software platforms—from “walled gardens to walled ecosystems”
- Availability of new, fast mobile networks—LTE everywhere and the rise of Wi-Fi
- A more active regulator in many countries—spectrum, net neutrality, consumer protection
- Changing industry structure—consolidation and concentration
- Growth of network connected devices—Internet of Things
- Move to cloud delivery models—“everything as a service”
- The rise of the OTT threat—largely the battle for video distribution and services
These disruptors are defining the scenarios of how the future mobile industry may look and operate. While there are several plausible future scenarios, I believe two key scenarios are both more likely to transpire and are the most informative in identifying key business choices and helping develop winning strategies for future success. The Mobile Segments scenario is primarily a continuation of the mobile world today—large players dominate each segment of the value chain, focusing on their core strengths and capabilities and cooperating with their fellow segment giants. Conversely, Mobile Explosion is a world where most things are wireless, interoperable, and cloud-based, increasing competition and further blurring the lines between the value chain segments.
While it is impossible to predict the future, some of the current trends and early indicators suggest that the tipping points, or industry drivers, are pushing the industry in the direction of the world of Mobile Explosion. Given this trend, players in the mobile value chain are rightly asking, “What are the solutions to the key challenges and business choices that this new world presents?” The following are highlights of the paper’s conclusions on the top strategic considerations to ensure future success for players in each of the six key segments of the mobile value chain.
- Content Providers (e.g., Sony, Disney, New Corp.)—multi-platform, cloud-based lockers, and alternative business and distribution models
- Mobile Service Providers (e.g., AT&T, T-Mobile, Orange, Verizon Wireless)—Wi-Fi integration, OTT collaboration, Big Data, cost and performance optimization, mobile cloud, and vertical solutions
- Equipment Providers (e.g., Ericsson, Alcatel-Lucent, Cisco, EMC)—cost reduction, network-data center integration, small cell, and multi-network access
- Software (e.g., Microsoft, Adobe, Oracle)—mobile enablement, mobile cloud, security, and vertical solutions
- Internet Services (e.g., Google, eBay, Amazon, OTTs)—SP collaboration, cloud, value-chain integrators, and innovation
- Devices (e.g., Samsung, Apple, Nokia, RIM)—innovation beyond handsets, cloud extension, connected home, and alternative networks
This white paper further details the key disruptors and tipping points that will redefine mobility to produce two plausible scenarios for the future of the mobile industry. These scenarios and industry segment assessments provide a framework for mobile industry executives to evaluate their future and rationally evaluate strategic options under different conditions.