December 22, 2009
A year ago, I posted an entry about what I thought would be the key trends for 2009.
I'll stick to my comments and continue to believe that regulation had a stronger impact on the mobile sector than the economic crisis. The recent announcement that the French telecom regulation authority eventually (after years after back and forth discussions and lobbying) granted the 4th 3G license to Free/Iliad (one of the largest ISPs) is a good example of that. The new entrant will not launch before early 2012 but aims at captuting 10% market share by introducing cheaper tariffs (a competitive 3 hour package for less than 20€), bundling Internet access and offering interesting conditions to MVNOs. Evolution of termination rates or roaming tariffs as well as other regulations on spectrum have a much greater impact on operators' bottom line than reduced spending from consumers.
I think polarization of the market increased between early adopters and the masses. There has been significant growth of SIM-only offerings (e.g, O2 Simplicity) and low cost offerings (Fonic in Germany for example reached 1M customers in July 2009, 18 months ahead of its target plan). 2 European mobile users out of 3 are still only interested in "making calls and sending SMS, nothing else". Despite the hype, Android and the new platforms still do not reach a significant installed base. However, a major shift occured in 2009: consumers are now aware of the benefits and potential of their mobile phones. Thanks to the proliferation of touchscreen devices and better user-experiences but also thanks to Apple's TV commercials and print ads, attitudes are now shifting and that's why the mobile revolution is just getting started. Brands are now educating their customers and want to appear innovative. Back from London on Eurostar last Friday (no I wasn't stuck for the night!), I was pleased to see NatWest heavily promoting its iPhone app on many billboards.
Linked to consumers' growing mobile appetite, I think there was an awakening as well for brands and companies of all sizes. They have started investing in mobile like never before. Not necessarily with a cohesive approach and still testing the waters for many but still that's the reason so many wanted to launch an application. Many of them start being confused by the proliferation of app stores and realizing basic merchandizing principles apply in a digital store like in any retail environment. If you don't promote your app, then it will be lost in the back catalogue. That's why mobile advertising budgets will increase next year: we will move from development and creation costs to mobile media spent. That being said, mobile advertising remains in its very early days in absolute value terms. Traditonal brands are investing the space but pure play mobile content providers still represent in value the largest chunk of the market. The good news is that they are continuing to invest in mobile and shifting their TV/print $ to more efficient mobile ads because there is a media/channel continuity (do you remember the Crazy Frog TV spots a few years ago?).
It was not too difficult to predict that there would be a lot of hype around applications. However, I expected brands to raise the ROI issue sooner than later. It seems like this has not really happened yet. However, the new hype is around WebApps. With Flash, html 5 and larger mobile web audiences, I continue to believe that brands will realize there is a life beyond the iPhone and beyond applications. Needless to say I agree with Mary Meekers' claim that the mobile Internet will be bigger than you think (worth having a read at her Web 2.0 Summit presentation).To be more precise, I don't think this is a either or solution. Apps and mobile websites serve different purposes and are complementary. Otherwise, how could the iPhone be so successful with its App Store and with its Safari browser?
One of the most striking news of 09 was Google's acquisition of AdMob for $750,000,000. I am not a financial analyst so I am not going to put this in perspective of the $1,5bn acquisition of YouTube a few years ago or of the Velti/Ad Infuse acquisition (though you get my point when you know the amount at stake in the latter transaction). Was it worth spending such a premium? Future will tell but it is a clear signal that Google as high expectations for the market in the years to come.
Another news from Google was less noticed even though it is directly related. I am not referring to the recent news that the company wanted to acquire Yelp, but that they have bypassed their digital map provider (Tele Atlas) in the US and will launch their own free Google Maps Navigation service on Android. Competitors will have to add lots of value-added and premium services to justify why they charge customers for navigation services.
Such an announcement has to be put in perspective of the promosing trends around social location (Foursquare, Rummble, Centrl, Gowalla…and many others) and mobile augmented reality. Lots of hype but very interesting trend to anticipate.
If you want to get the big picture of Google's move in the mobile market, here's a good post / summary I recommend you to read. It sums it up quite well.
Of course, I have missed plenty of other announcements and trends. What where the key trends / news in 2009 accoding to you?