Seems Like My Work Is Done: As We Shift From 'Hunters' in Mobile Industry to 'Farmers' - Most of the cool stuff is done and dusted

Today my thoughts in a longer blog about how I am seeing the mobile industry now in 2014. We are now shifting from the era of the 'Hunters' to the era of the 'Farmers'. The unknown big wins and prizes (and perils) have mostly been discovered and most of the big players in the industry are shifting to tried-and-true parts that work, abandoning those that don't. From hunters to farmers.

Early on in a new industry there is a need for discovery and experimentation. We had that in the mobile data industry in the past 16 years. Now we are transitioning into the steady stage when the 'Hunters' are no longer so much in need and now the existing opportunities need to be developed and systematically optimized, ie the need of the 'Farmers'. A different type of competence which then in turn pushes those who prefer the hunting to move onto better (newer) hunting grounds.. And our industry will be run increasingly by those efficiency-nazis, the accountants.. Save me more money!

APPLE

In the past about year-and-half we've seen just about all major 'controversies' settled in and around mobile. Recently we saw from the Apple court documents that yes, Apple was aware of the need of larger screens (told you so) and cheaper iPhones (told you so). There were many who argued - including on this blog - that Apple didn't need big screens - and that Samsung would fail with its push into that direction - or cheaper iPhones would never come and of course Apple would not do anything as crass as colors.

We can go back all the way to Spring of 2007 (before the first iPhone was sold) when I made the first public forecast of the impact of the iPhone - not only that it would change the world of smartphones (told you so) but that it would also change the IT, media and advertising industries totally (told you so). Nobody else was making that prediction before the first iPhone launched. Today nobody doubts it. I was not a 'fan boy' of utter optimism about the early iPhone (which after all wasn't a proper smartphone in 2007) but I did say Apple would reach the target of 10 million sales. Most were either skeptical of the number thinking it would be nearer 1 million not 10. And others were total Apple fanboys who were wildly optimistic thinking sales would be far greater, 20 million or so. But I said right from the start, that 10 million was do-able by Apple in the first year - which would become a world record in new launch of a phone brand - but far more than that, I was also the only one to give the regional split of where the original iPhone as it was in 2007. would succeed and where it would not. You didn't see the international split offered by anyone at that time. And even considering other pundits who would later offer forecasts of iPhone international sales, mine was far the most accurate such analysis in 2007 (told you so).

I said initially there was no need to split the product line in 2008-2009. I was the first to call the moment when Apple's dramatic market share growth in smartphones had stalled (the market share is now in gradual decline) and then started to call for the split in the product line. While I was not perfect on my call of 'peak iPhone' - it was more a plateau for a few years before the full decline started last year, I was nonetheless the first analyst anywhere to call that end of the growth - meaning it was now time to split the product line. And yes, we know now from Apple's court documents that Apple management had arrived to the very same conclusions just about the same time (told you so).

There was earlier controversy. Back before the iPhone I was the first analyst to call the year when musicphones would outsell the iPod. I was crucified here on this blog for those 'anti Apple' comments while my clear purpose was only to highlight the need for Apple to enter the mobile phone market. We found out later from statements by Oppenheimer that yes, right about that time, Apple too had come to the conclusion that musicphones like those made by SonEricsson under the Walkman brand at the time, were about to eclipse the iPod in sales and Apple's iPhone was the musicphone response to SonyEricsson and others. Told. You. So. But yes, at the time when I explained it on this blog, man, the level of vitriol posted here in the comments of how much I hate Apple (I love Apple, I was a Macintosh trainer earlier in my career) and that I didn't understand the iPod and that iPods and musicphones were not in the same market, blah-blah-blah. Well, Oppenheimer clearly established the truth. Again Tomi was right on this blog. And you heard it nowhere else. And I was massacred in the comments on this blog for daring to suggest a mobile phone could threaten Apple's wonderful iPod portable music player. Yeah. I didn't know the business of the iPod (or iTunes)? It was the first case study in our book Communities Dominate Brands, the signature book for this blog.

APPS

So then almost always when we had iPhone related stories after 2008, when it became a proper smartphone (the first version of the iPhone in 2007 was only a featurephone) and it became possible to install apps onto the iPhone, there was the chorus on this blog that Tomi doesn't understand Apple because we can't just measure iPhone unit sales, its the ecosystem. The apps. The iPhone App Store. And look at all those downloads. Yeah. I don't undestand apps? I wrote literally the world's first book on mobile industry apps. But I also understand ecosystems my second book - m-Profits - was the world's first business book for this industry and that explained clearly that not every app idea (or service idea) was going to succeed commercially - with the location-based services the most obvious glaring example we could see already in 2002. So yeah, Tomi doesn't understand the apps and not the ecosystem. Ha ha ha.

What did I tell you. That Apple's lead in the App Store was temporary and will be eclipsed by that or those smartphone platform(s) that lead in market share. Like right now is happening, Android is taking over country by country and the projections are that either end of this year or early next year, Android will ahve more monthly downloads of apps than Apple. Told. You. So. But for years those Apple'istas have been here deriding me that I don't understand the industry. I left those comments be for a good reason, I knew over time I would be vindicated and here we are. Nobody doubts now that soon Android will have more downloads than Apple's App Store.

So if the iPhone was just a phone anyway, inspite of the Apple magic and had to conform to the industry requirements (haha, MMS? 3G? video recording? Forward-facing camera? hahaha) now the last vestige of the myth of Apple-is-different is busted as the App Store also conforms to normal economics, not some mythical iEconomics which has some magical powers to suspend economic laws. Today nobody (among serious mobile industry analysts) suggests the iPhone can grow into mass market size market share ie 20% or 30% or more. All agree the iPhone market share is shrinking and will settle into the 10% range or below in some years to come. That was what I told you ... in 2007. My view has not changed once since the iPhone came. It will be like the Mac in PCs, Apple does a premium product with premium prices with its own OS and it will have a niche market share. Yes, large niche but still a niche only. As the iPhone now in 2014 can be seen, will also become. But still two years ago we could see major analysts suggesting iPhone could grow to take mass market size globally (hahaha). Its not that I don't love Apple, I do. The most profitable position is EXACTLY where Apple is now and that is where I want it. It is not executing this strategy perfectly (yes, you read me correctly, Apple could still be even more profitable) but nobody else can assail its position currently in the handset space. But I told you. In 2007. And in my occasional Apple updates since.

NOKIA

The Nokia saga went rather exactly as I predicted (except fro some timing issues) and now all those contentious points are pretty well settled. The Burning Platforms memo was indeed superbly stupid, could not have been written by a (sane) CEO of Nokia. So bad that Elop was reprimanded by the Nokia Board for authoring it and Elop himself admitted to the Nokia shareholder meeting that yes his memo had damaged Nokia smartphone sales (told you so). Not just 'the memo' but the timing of the Windows partnership was dumb, in fact the whole Windows misadventure was a total fiasco - said so by nobody other than past Nokia CEO and the Chairman at the time of the decision Jorma Ollila (told you so). Bill Gates over at Microsoft when he was still Chairman called the Windows Phone project the biggest failure under Ballmer. Duh! But go read how many Microsoft trolls were here calling me an idiot and not undestanding (ecosystems, Windows, Office, enterprise, cloud...). Oh, and the nastiest Microsoft 'cruel trick on consumers' - the next version will fix it. haha. That old chestnut. We knew. I told you so on this blog, that Windows Phone 7 won't fix it. Windows Phone 7.5 won't fix it. Windows Phone 8 won't fix it... and it didn't.

I called the retail boycott against all Windows based smartphones due to the hatered of Skype by the carrier/operator community. Again, this was confirmed by Elop in testifying to the Nokia shareholder meeting - that the boycott was not just against Nokia Lumia series, it was against all smartphones that were running Windows. Not because they 'had' Skype - early Lumia did not even support Skype (and other smartphones DID) - it was the OWNERSHIP of Skype which had caused the boycott against Windows. Exactly as I explained and what Elop himself explained to Nokia shareholders. Well, we know the end. I said Nokia's handset business would be sold. And that 'at least the Lumia unit' would end up owned by Microsoft. I even said there were legitimate other candidates who would have wanted to buy Nokia (we saw that Lenovo bought the Motorola business from Google shortly after the Nokia-Microsoft deal was concluded).

I said at the time that a Linux based alternative rather than Windows would have been better and now that Elop is no longer in charge, Nokia rushed its X Series ie Android (ie Linux based) smartphones to the market alongside the Windows based Lumia. We saw that in Q1 when only a few of the announced X Series even selling and only for a couple of weeks, they grabbed 21% of Nokia branded smartphone sales, totally crushing Lumia. Duh! Any sane CEO would have done this two years ago. But yeah. Elop was obviously fired ie removed from post of CEO. And that Elop was so incompetent as CEO he would have to be fired. His tenure was even shorter than that of the failed CEO period by Olli-Pekka Kallasvuo at Nokia. (told you so, told you so, told you so...). Meanwhile the X Series was doing so well Microsoft was forced to shut it down now, before it kills what remains of Lumia. And Microsoft is too coward to give us the X Series sales numbers. Back to Elop, there were silly rumors that he might become Microsoft's next CEO. I told you that would not happen.. and it didn't.

SMARTPHONES

Today more than half of all mobile phones sold are smartphones and now almost all in the industry agree that soon there will be no dumbphones manufactured anymore. I have called that date to be 2019 when all new phones sold will be smartphones. But when did you hear this as the prediction of not what might happen, but what will happen? I may have been that source, as I was arguing already in 2005 that by around year 2020 the world would see the end of featurephones being sold. I was not the first to make the prediction that all phones would be smartphones in the future, but I was definitely one of the first and as far as I can tell, I was the first to nail the rough timing (and all signs suggest that is very close to the mark). The huge controversy is now past and I was once again proven right. In an argument that raged on for almost a decade.

So I was the first to start to report on smartphones counted as computers. Now we are starting to see that also being accepted as a legitimate measure. Gartner is the first of the major analyst houses to track total IT industry computing device shipments with this definition (last year). I have been reporting it on this blog for years. And I have been giving you the market shares of the 'total' computer industry when smartphoens - and tablets - are included. Big argument back in the day five years ago. Now no argument anymore.

I called the end of the Microsoft hegemony and that Android was about to - and today has - passed Windows as the most used computing platform not just in devices sold but by now also by installed base. Those were controversial issues in the past but today they are held as 'obvious' (told you so).

MOIBLE INTERNET

We have tons more from the point that there are two types of 'internets' - the one for the legacy PC based world (6th mass media internet) and the newer, more powerful mobile internet, which can do everything the PC based internet does but can do far far more (7th mass media). It was the source of long and deep arguments for much of the past decade. Now it is no longer heresy. Google itself teaches its clients around the world that you have to 'mobile optimize'. In other words, there are two types of internets. (told you so). And obviously more of the users are on mobile than traditional PC based internet.

TABLETS

Along those stories, a tablet is not a 'mobile' it is only an ultraportable. Like my dear friend Gary Shwartz writes in his book Fast Shopper Slow Store - tablets immobilize people. Yes they are very VERY good replacements of laptops and in many cases can do what smartphones do - but they will not replace the smartphone. They are only ultraportable PCs and their market is a tiny slice in magnitude of what will be the global smartphone market. Duh. Told you so.

SMARTWATCH

Same of the wristwatch-metaphor. Remember all that hype and excitement about the iWatch and Samsung's Galaxy Gear. We now have the first consumer survey by Endeavour Partners which says exactly the same thing. Its a fad. After half a year many who bought the expensive gadget have tossed it and tons of them now show up at eBay... (told you so).

MESSAGING

So then Tomi's fave story 'SMS'... There was a time when many in the IT industry thought that email would crush and destroy SMS. I got into those debates early on back in my days at Nokia and early in my career. Then when it became obvious that SMS was used by people who had no access to email and the total population of SMS users was massively bigger, several times larger than email, those quieted down. But then came the IM crowd (Instant Messaging) which transformed into the OTT (Over The Top) argument now with Whatsapp, iMessage, Blackberry Messenger, Mxit etc. Skype, Facebook, Twitter all now allow alternate messaging and all are used on mobile phones. So what happened. First, the obvious truth, as I told you in 2001 - SMS is addictive. Mobile messaging is addictive. It has since been proven in university studies to be as addictive as cigarette smoking - so there is no going back, it will not end. Thank you Tomi and 'Told you so'. SMS text messaging is worth over 100 Billion dollars annually today, its user numbers are not declining, they still grew in 2013. The total SMS traffic is not declining, it still increased in 2013. The total revenues are not declining, yes SMS revenues GREW in 2013. And just the premium SMS part - voting on TV shows, delivering news, advertising, coupons, jokes, prayers, and all sorts of payments like paying for parking or at a Coca Cola vending machine - all that is premium SMS. Hos big is premium SMS? In 2013 it was worth 55 Billion dollars accordig to fresh numbers by Juniper in May 2014. How big is 55 Billion dollars? Its taking all the box office revenues of Hollywood movies, and add in Bollywood and Nollywood and in fact all movies in cinemas in all countries. Add all that cinema box office revenue together. And then add the total music industry on top of that! Yes, from Lady Gaga to Justin Bieberlake or whatever he's callled (or are they two people, I don't know) to Rolling Stones to Public Enemy to Beethoven and Bach. Total global cinema, plus total global music. And Premium SMS alone, not counting person-to-person SMS, is bigger than those two giant industries that have existed for a century. Premium SMS is 16 years old.

So yes, there is a story about OTT messaging cannibalizing SMS. It is cannibalizing the GROWTH in person-to-person SMS, but not yet causing any decline. We are near (some day at) the peak of SMS and that peak will come in three stages. The first peak will be revenues. Then the next peak will be total traffic. And the last peak will be active users. But that peak in active users turning from growth to decline won't happen for years and years to come. Are you aware how huge SMS is? SMS is used by more people than who use voice calls on mobile. Not just a Finland thing or Scandinavian thing or European thing. Even the CTIA of the USA reported already five years ago that even in the USA, more SMS are sent than voice calls. Globally, SMS had reached 6 Billion active users in 2013 said Acision. That was 84% of total mobile phone users. But voice calls are only used by about 81% of mobile phone owners.

So how's that biggest OTT messaging platform doing in 2014? We heard a few months ago that Whatsapp had reached a massive milestone, 500 million users. Yes. 500 million. Versus 6 Billion. SMS text messaging has 12 times - not 2 times - 12 times more users than the biggest OTT messaging provider Whatsapp. What about the biggest OTT of them all who does any messaging? Facebook? Facebook has 1.3 Billion active users (not all on mobile). SMS is still 5 times larger by active users! Again, I have been arguing this point year after year, book after book, conference after conference, article after article. And today there is near unanimous consensus with the last few who argue this point being laggards in the USA. Come on, if Coca Cola (I believe its an American company) teaches that your moble marketing budget should be split 70:20:10 with 70 going to mobile messaging (and they specify this is SMS and MMS, not OTT), then the 20% is to 'mobile internet' and that 10% is to 'everything else' including smartphone apps like OTT providers, but also QR codes and Augmented Reality and NFC and mobile payments etc etc etc... then you should listen.

The CTIA is an American industry lobby. Or Mondelez. Whose that? Its the new name of Kraft - yes American reader's Kraft best known for 'Macaroni and Cheeze' the world's largest food company. Kraft's ie Mondelez's mobile strategy is 'leave no phone behind' and yes, that means their mobile strategy starts with... SMS. I rest my case. When I did the keynote at the MMA Global event last year in New York City - yes, heart of the global advertising industry it was one speaker after the next who sang the song of SMS (and often added, super-SMS is called MMS for the advertising and media industries). SMS. Told you so. MMS. Told you so.

Will OTT services eventually eat this part of the mobile messsaging, probably yes. As I taught you a decade ago, as we know SMS is addictive, the only way to get those addicted users to quit using SMS is to give them more addictive messaging on mobile. Blackberry Messenger was the first proof that this would happen. The heavy youth users abandoned the majority of their SMS use as they switched to BBM using their dad's old Blackberry they got as their first smartphone.. soon all kids begged for Blackberries for Christmas. Sadly for RIM ie Blackberry the manufacturer, that BBM service works perfectly fine on the old phone, so this addicted users base did not switch to buying new Blackberry smartphones, they also wanted their cool videos and high quality cameras and large screens and bought Galaxies and iPhones, while holding the old 'Beebee' (or 'my Baby' as its often called by the youth) as their second phone just dedicated for messaging. So as BBM fizzled now we see Whatsapp attempting to take that role. Like SMS being a gateway drug and Blackberry being Cocaine, Whatsapp is now Crack Cocaine.. Yeah, really heavy usage and all heavy users have created accounts. But its still only 1 out of every 12 humans who send messages on their phones. And even those Whatsapp users will still occasionally send and receive SMS, such as voting for TV shows or receiving a coupon or offer. (I should mention RIM ie Blackberry is a reference customer of mine)

Now we have industry bodies such as the Digital Marketing Association (not 'mobile' marketing assoc) and UK Regulator Ofcom teaching businesses that there is a huge gap between what consumers want to get on SMS, and what businesses and enterprises and governments are doing. This builds on what mobile industry bodies from the MMA to Mobile Data Association to Mobile Monday etc have been teaching for years. So while OTT is growing among consumers, SMS use is still growing by leaps and bounds on the business-to-consumer area, especially in marketing and customer service uses like sending notices, alerts and now increasingly doing various security checks (sending a new password for example). (and the MMA, MDA and MoMo have used me at their various events and quoted in their publciations to help explain this to their memberships around the world).

Suddenly this issue is pretty well settled. Well, obviously we do SMS, but we are also exploring newer and more powerful options haha.. That is good. As long as we don't forget that SMS is the world's most widely used mobile data services or app, it reaches 6 Billion pockets and 84% of all mobile phone users globally are using it. The reach stops when we hit barriers of literacy, so if that consumer can't read or write, then your iPhone app is not going to reach that poor African older woman rural user anyway, who was not allowed to go to school when she was young.. She won't be using an iPhone and have a credit card to buy your app haha... But how many years did we endure the 'should we do SMS' argument? Years and years and years. I literally was the world's first expert to discuss premium SMS as a commercial product (in English) to an international audience only months after it had launched - in Finland (as it was launched by some of my friends, so I happened to watch that invention from its birth).

APPS

So where is the apps opportunity? Is it a huge business or mostly a mirage? What did I tell you? I said that apps and the mobile internet had a lot of overlap and most things could be done by both means. Some particular service concepts worked exceptionally well on one and not the other, a time-killer game like Tetris would be dumb to build as a cloud service and put unncecessary traffic onto the network. But a search engine like Google would be madness to deply as a stand-alone app (and having its total search engine link data uploaded say daily..). Games would be the main benefactor of the apps opportunity. I said so before there was an iPhone. I said it when the iPhone introduced its App Store in 2008. I say so today. And today, what do the apps economics experts say? Its mostly gaming that has most major downloads and has most usage on phones and makes most money. Games games games. Told. You. So. There is no magical 'new economics' of apps n smartphones. You have to do your mobile web version of your consumer service whether you are British Airways or McDonald's or BMW. And if you're smart, you do part of your consumer service on messaging ie SMS and MMS (like British Airways, McDonalds and BMW on award-winning mobile campaigns).

ADVERTISING

So then there was the argument about do we want ads on our phones and will advertising succeed on moible and even if it did in such weird countries as Japan or Finland, what of the rest of the world, can it succeed there too? Haha. Today we know. The world's largest media empire WPP who own such ad agencies as Ogilvy & Mather, Grey, and Young & Rubicam etc - their chairman Sir Martin Sorrell just last year explained why mobile is, and will be, the fastest growing part of the global ad industry. Why? Because according to 'SMS' ie Sir Martin Sorrell - there is a mismatch with the high amount of time spent viewing the mobile phone screen, and the little proportion of money allocated to advertising on it. That is in imbalance compared to legacy media like TV, print and the internet - where according to Sir Martin, there is 'too much' money spent compared to the amount of media time those media get from consumer eyeballs. Duh. Told you so. I chaired the world's first mobile advertising conference 13 years ago and have been reporting on this aspect of the industry ever since. Its been growing by leaps and bounds. (Ogilvy is one of my reference customers)

MONEY

One of the last controversies was that about money. Will mobile kill cash. Some of you readers will remember this battle got so heated, I was cencored at the global bankers meeting in Australia a few years ago for daring to suggest that yes, mobile will kill cash. Today that is no longer controversial. While not all in the banking and money industry agree, we have global giants such as Visa and JPMorgan Chase singing the tune that mobile is the future of payments. Countries such as Sweden and Turkey are in the rush to end cash as they see the power of mobile payments. We don't have to go visit Kenya or Japan or South Korea or Estonia to see the mobile payments miracle in action. But I told you in my book in 2002 (I delivered the keynote to the world's first m-Commerce conference the year before). This matter is not yet settled, but there is growing agreement that plastic won't kill cash, e-money won't kill cash, it will be mobile that will kill cash. Even here it seems much of my work is done.

HUNTERS TO FARMERS

So we have a shift in how the industry operates. The hunters have gone into the wilderness and some have come back with amazing spoils like Uber and Angry Birds, others have died like Motorola and Nortel. We've seen epic comebacks by huge brands that left mobile but rushed back like AT&T and IBM. Others lament their departure and consider coming back like HP or joining late like Nikon and Nintendo.

Now the industry is more like farmers. Now we see the consolidation that we saw earlier in the PC industry when IBM exited and HP bought its biggest rival Compaq. In mobile handsets we see how Ericsson and Nokia have quit the handset business and Lenovo bought the Motorola business from Google to gain market share. Same pattern. Expect more of it. Same in the operator space, Zain ie former MTC is buying operators often in Africa and the MIddle East. UK has its EE what was Everything Everywhere (ex T-Mobile and Orange). The fate of US fourth carrier/operator T-Mobile has been in the hands of the regulators several times as various players have tried to buy it. Carlos Slim built his America Movil empire into Latin America mostly by buying local carriers and operators there. Expect more of these to come, similar to what we saw in the previous century in the car industry and now for example seeing in the airline industry similar to how Air France bought Dutch national carrier KLM we saw Swedish Telia buying Finnish Sonera etc. Like wrote back in 2002 we in the mobile industry can learn a lot from whats happening in the airline industry.

But the excitement and that part of thrilling fun is gone. Hunting a moose in the forest - while being in danger of being attacked by a grizzly bear, is more exciting than farming corn... We had the last big market battle in what I called the 'Bloodbath' series. (insert here rant about Elop madness). Those wars are over. Samsung won the hardware war (and is now in the same position as Nokia was in 2008-2010, where it sees shrinking profits while commanding huge marketshare lead globally and advantages of scale). Android won the OS war. The Bloodbath is done. Those who died were Palm, Ericsson, Motorola, Windows Mobile, Dell, Symbian, Nokia, Maemo, Meemo, HP, bada. Blackberry is nearly dead. HTC is on the ropes. Windows Phone failed and lives on artificial respiration until some day Nadella pulls the plug. Samsung, Apple, LG, Huawei, ZTE, Sony are winners who existed before the Bloodbath started. So too is Android, iOS and technically still Blackberry OS and Windows Phone. )

Newcomers we never heard of like Coolpad and Xiaomi have entered the smartphone hardware wars and Lenovo took a major slice after it entered. New OS players are trying to make an inroad like Firefox, Tizen and Sailfish. But they will be tiny for years to come. This Bloodbath is done. Now its time for consolidation. Will Huawei buy ZTE or vice versa. What will Lenovo buy next (Pantech?). Can Microsoft unload its Nokia unit to someone? Might the tiny Linux based OS providers join forces to die together rather than die separately (Firefox, Tizen, Sailfish). The battle now is like the end game was in the PC industry. Now you grow by acquisition. There are too many players bleeding profits so consolidation has to happen. Its free market economics haha... (oh, and among my refernce customers: HP, Intel, IBM, LG, Symbian, Ericsson, Motorola )

Thats whats happening now in mobile. The cool stuff is mostly done here. The major players will focus more and more on the bottom line, the era of the CFO is here, accountants will rule. The golden era of mobile is coming to an end. So whats next? AR the 8th Mass Medium?

Comments

[tontridge]

What? The golden era of the smartphone has come to an end and now there is nothing to see here move along? Crap, plain utter crap, this industry will affect the world more than any other tehnology ever has. The smartphone era has only just begun. period.

[Winter]

Tomi,

I see yet one other battlefield: Mobile phones wiping out all other "Personal Computing" devices. The friction between all the media and computing devices is hurting. We all want to use our phone:

1) to consume and show our media (Photos, movies, music) on any device near. Like the iPhone stand music players. But we do not want to physically part with our phone. Chromecast is going that way: I have a computerized TV, why can't I just play the contents of my phone on it?

2) to keep all our data and programs we work on. We do use Dropbox/Google Drive etc for that. But that sounds as such detour. I have my files and programs in my pocket, why invoke a third party that will spy on me? I want to sit at a screen and keyboard and start to work with my applications and my settings in my phone.

Much of this can be done in "The Cloud". So the question remains whether in 6 years, phones will be thin clients, with everything, files and apps, "up there" and the phones just a personal ID. Alternatively, they will be fat clients with enough storage and computing power to satisfy my personal needs.

I think that the factor that will decide the equation is the enormous power use of the networking, computing, and storage needs of 7B people. If power generation becomes truly distributed (e.g., solar), then centralized data centers with long communication lines will be at a disadvantage. If power generation stays centralized, e.g., large solar farms in the desert, then a cloud solution will be more economical.

So your earlier prediction that there will still be desk/laptops for the rest of the decade might be true. But I think all those computers will start to work like Smartphone peripherals.

[Andreu Castellet]

Tomi, fellows,

Interesting, inspiring stuff, as usual.

However, I miss a proper reference on the new generation of wearables -true wearables, not health or sports sensors tied via Bluetooth to a smartphone-, particularly Google Glass and similars. Have you already elaborated your own, detailed point of view on the matter? Do you think Google Glass can have such a disruptive impact on the ecosystem as Apple's iPhone did?

[abdul muis]

Tomi,

I guess you making a mistake / typo. Second paragraph on the APPS. Quote "...That Apple's lead in the App Store was temporary and will be eclipsed by that or those smartphone platform(s) that lead in market share..."

I believe android apps download per month ALREADY eclipse iOS apps download by a very wide margin since last year. and if I'm not wrong, the revenue got from the ads (not including iAP) is higher in android compared to iphone. Perhaps you meant the PAID APPS DOWNLOAD or REVENUE of the downloaded apps.

[RottenApple]

@Winter:

"Much of this can be done in "The Cloud". So the question remains whether in 6 years, phones will be thin clients, with everything, files and apps, "up there" and the phones just a personal ID. Alternatively, they will be fat clients with enough storage and computing power to satisfy my personal needs."

This is a viable scenario for stationary desktop computers, but not for mobile devices that may or may not have a connection to the internet. Phones that stop working in more remote areas are not user friendly.

Also let's not forget that many, many mobile users do not have an internet flatrate contract and do not even want one (I, for example, have no need for it as I have WLAN access most of the time when I use my phone.) So this would inevitably limit the target audience.

"So your earlier prediction that there will still be desk/laptops for the rest of the decade might be true. But I think all those computers will start to work like Smartphone peripherals."

Only if smartphone OSs become more like desktop OSs. As pure hardware, most smartphones are already on par with low end 'real' computers, but where things break down is how software is being used on them. You can't run a desktop system in permanent sandbox mode like the iPhone where there's one controlling instance that decides what can and what can't be done.

Personally, I have a feeling that things are going the wrong way with mobile. It's no longer about finding the right applications for it but often the opposite: find a way how mobile can do a job it's not really optimal for (case in point: mobile payment systems.) It's a lot like the dotcom bubble at the turn of the millennium. Inane schemes to make money with the internet were cooked up left and right - and in the end it all fell to pieces when it became evident that this is not what the users wanted and needed. I see a similar trend here.

[Winter]

@RottenApple
"This is a viable scenario for stationary desktop computers, but not for mobile devices that may or may not have a connection to the internet. Phones that stop working in more remote areas are not user friendly."

It is even worse, I do not see how the telecom providers van supply 7B people with broadband 4G access (or 10G for that matter). What I do see is an increase of local WiFi providers that supply "free" broadband locally (e.g., like Starbucks, hotels, and public transport already do). But you are right, without 99.9% assurance of broadband connectivity, a cloud only solution is unattractive.

My bets would be on phones as fat clients. But I know the Google's of the world and the likes of the NSA, MSS, and FSB want everything in the cloud.

@RottenApple
"Only if smartphone OSs become more like desktop OSs. As pure hardware, most smartphones are already on par with low end 'real' computers, but where things break down is how software is being used on them. You can't run a desktop system in permanent sandbox mode like the iPhone where there's one controlling instance that decides what can and what can't be done."

That evolution is already happening. Google is rumored to combine ChromeOS and Android. There is absolutely no reason why Android could not get a more work-efficient UI.

For example, the OLPC ($100) laptop has a Linux based OS, Sugar, that could do everything needed for such a mobile OS. Ivan Krstić, the man who designed the security model for it (Bitfrost) now works for Apple.

[Here Here]

The world is ready and now all there is left is some kind of evolution?

What does it mean to wind this game? Apparently it's not about profits or revenues but people using your product. Headcount.

In the end of the day the winner provides services for most of the people but doesn't get most of the profits. Never get most of the profits.

[Wayne Borean]

Tomi,

Ah, but the hunting time is the exciting time. Now, well, there may be more money involved, but it is BORING.

But of course I'd day that. I'm a hunter at heart :)

Well said. Looks like you covered everything in impeccable detail. Only one quibble - you really need to run a spell/grammar check on it. But hey, it's one hell of a piece of analysis.

Wayne

[Wayne Borean]

Winter and Rotten Apple,

You are looking at it the wrong way. What I would expect is for Desktop systems to become more like Mobile systems. It all comes down to numbers, and Mobile has the numbers.

Ever wonder why Microsoft is so desperate to gain market share in Mobile? Because they saw this coming fifteen years ago. Can you imagine being Bill Gates, knowing where the market is going, and being totally unable to do anything to get into that market? He must have been freaking. Totally freaking.

What is going to be interesting is now we have four basic form factors:

1) Fixed location boxes, which includes all desktop systems, on up to things like the AS400, and various supercomputers.

2) Laptop/Notebook systems. Note that this includes anything with a keyboard. Thr Surface and Surface RT are not tablets.

3) Tablets of all sorts, ranging from the iPod Touch on up.

4) Mobiles.

The biggie is Mobile. The others are far smaller. This means there should be a transfer of Mobile technology to the other form factors, within certain limits. Some units in each form factor (AS400 for example) are specialty devices, and won't be impacted. Some form factors are already integrated - Tablets are essentially Mobiles without the cellular radio.

This will be disruptive. The largest OS supplier for Desktop and Laptop/Notebook is going to get creamed.

Wayne

[RottenApple]

@Wayne Borean:

"You are looking at it the wrong way."

No, we don't.
It's not about numbers. These are essentially completely different markets. If you talk about media consumption, yes, there is no reason for using a fully featured desktop. And that's precisely the part of the desktop market that's eroding.

But for actual content productions, mobile devices - and that includes the current breed of tablets are far from suitable. Yes, there may be some convergence, but just because some market A is bigger than some other market B doesn't mean that B is irrelevant. But that seems to be the prime argument of a large part of the 'mobile first' crowd.

No, this part of the desktop market will stay forever - sure, there will certainly be some synergies with mobile - so it still needs some companies to serve it. As such I find all those 'recommendations' to Microsoft plain and simply idiotic. Ballmer listened to it and produced one of the biggest flops in recent software history.

And since these are ultimately different things they need different solutions. The world still needs OSs made for desktop systems. Let's be clear: Without desktop computers producing all this fancy content, mobile phones would be worthless pieces of electronic junk. It's just that some people don't see something that obvious.

[geektech]

What about the unificacion of the apps, every OS could run the apps from the other, and the hardware like pc, we could install any OS on any device.

That is comming and that would be interesting to watch.

Sailfish Os is creating a luncher for Android and even can run Linux, native apps and Android apps on a vm enviroment, much secure than Android.

[RottenApple]

@geektech:

"That is comming and that would be interesting to watch."

I don't see any of it happening. And some companies, most importantly Apple, have a vested interest that it's never going to happen or they'd lose much of their leverage on the market.

Aside from that it's not that easy - the executable formats and APIs are just too different. I agree that this is where things should head, though, but the big players will never work towards it.

[E.Casais]

"My bets would be on phones as fat clients."

This is a point I made here a long time ago, but the evolution towards fat clients with thin servers (mainly data exchange servers) or towards thin clients and fat servers (mainly storage servers) depends on the interplay between networking technology and the -- so often neglected in commentary -- storage technology.

The "cloud" was made possible by the apex in the lifecycle of the hard-disk drive: fairly efficient, fairly reliable, multi-terabytes, cheap rotating storage units that can be put together by the gazillions to serve distant Internet users. Network broadband is not enough by itself.

Flash memory is what made the mobile phone possible (not just the smartphone, the entire mobile phone industry) -- right from the beginning with storing one's personal phone book. Mobile networking was always constrained, and still is; thus fatter and fatter clients. The advent of 4G (and the interests of Google, Apple, Microsoft, Facebook and Co) now shifts the emphasis towards the cloud.

However, as soon as a new cheap, reliable and bountiful storage technology becomes commercially available, then the balance will move the other way -- why should I need to have an insecure, NSA-riddled cloud if I could keep a terabyte of information on a miniSDcard form factor?

Look at all "rich/fat terminals", and you will see a new storage technology as an essential enabler. PC? Diskette and Winchester drive. Walkman? Cassette tape and then CD. Digital camera? Flash memory cards.

Regarding mobile phones, the advent of the memristor will really determine which way they will evolve. Flash is still too expensive, and is already reaching some of its technical limits.

[Winter]

"The advent of 4G (and the interests of Google, Apple, Microsoft, Facebook and Co) now shifts the emphasis towards the cloud. "

We are talking about 7 billion people running a digital life over broadband with 99.9% assurance in time and coverage. That is not expected soon. I would expect that storage technology for personal and data center use will evolve the way they did in the last decade(s). So, I still would bet on fat clients.

Also, almost nobody ever talks about the energy costs of moving all these bits around the planet:

The True Cost of an Internet “Click”
http://energyzarr.typepad.com/energyzarrnationalcom/2008/08/the-true-cost-o.html

~36.8 kJ per GB

See also:
The Hidden Expense of Energy — Print Is Costly, Online Isn’t Free
http://scholarlykitchen.sspnet.org/2012/01/19/the-hidden-expense-of-energy-costs-print-is-costly-online-isnt-free/

[Spawn]

> But for actual content productions, mobile devices - and that
> includes the current breed of tablets are far from suitable

And only reason that is so are in- and output methods. Yet, as of today, connecting a keyboard with your mobile and using your large screen TFT is possible.

Focus was consumption, thats a huge marget, but without question is productivity/production coming. From Microsoft's mobile & productivity over the Apple & IBM deal to the Google's ChromeOS & Android merger. Ubuntu's smartphone concept, where you essential have a docking station to turn your smartphone into a full-powered workstation-desktop, is where mobile moves to.

The huge problem here is that our for producivity preferred input- and output methods are not exactly transportable. They are still from the fat workstation era. I would expect some transformations, innovations in that area to address the growing demand.

[RottenApple]

@Spawn:

"Ubuntu's smartphone concept, where you essential have a docking station to turn your smartphone into a full-powered workstation-desktop, is where mobile moves to."

That's the only feasible scenario if you ask me. Everything else taking place right now looks somewhat half-assed to me. I wonder if anyone is seriously pursuing this option, because if they don't, the content producers will happily decline to use your solution. As you said, it's mostly a very conservative environment where innovation is not particularly loved, especially if it disrupts well established workflows.

I wonder particularly about the Android/ChromeOS merger. One is geared towards content consumption, the other towards accessing the cloud - none towards offline content production. Seems to me that an important bit is missing in the equation here.

[Troed Sangberg]

Now we go visors! It's a brand new world all over again ;)

https://www.youtube.com/watch?v=7NYwbS7e9M0

Cheers Tomi

[John A]

Just read some news that Tizen are delayed again. So I guess it be Android, iOS, Windows Phone and Blackberry 10 in the smartphonemarket.
I think the others are to late and far behind as Sailfish/Jolla.

I am not sure if Microsoft will stay in the hardware business with Nokia in the long term (or with their own Surface brand). I think Nadella will go back to the "old way" with OEM.s making their hardware.

I have no idea if some of the new Windows Phone brands ever will take of. But if they do maybe they only keep the patent portfolio and shut down/sell the rest of Nokia hardware factories etc..

[RottenApple]

@John A

" keep the patent portfolio"

As I understand the deal, Microsoft hasn't bought any patents. They merely licensed them and they still belong to Nokia. So, great. They got lots of expensive patent licenses but no application for them...

[abdul muis]

Tomi,

You were right about BB. John Chen just said that BB WILL be survive, but won't be iconic again.
http://www.theglobeandmail.com/report-on-business/top-business-stories/can-blackberry-be-iconic-again-ceo-john-chen-isnt-sure/article19818324/