Yankee Group at MWC 2013: Firefox OS gains buzz, operators push for RCS
At this year's installment of Mobile World Congress (MWC), held Feb. 25-28 in Barcelona, Spain, it was clear that the mobile ecosystem is moving forward. In 2012, we wrote about how the world's largest mobility trade show demonstrated the growing importance of devices and all things mobile in consumers' lives. If that was the case last year, the 2013 show proved that we're into a new stage in the era of mobility.
It is no longer enough for a person to own a mobile device and simply feel connected; the experience needs to be of the utmost quality. Networks now have to be not only reliable but also ultra-fast, communication services, and mobile apps must add value to people's everyday lives. In addition smartphones and tablets need all the capabilities consumers now expect.
At MWC, we got a firsthand look at just how the organizations in attendance plan to push the mobile application ecosystem into the future. In this report, we highlight some of the things that caught our eye within the exhibition halls, as well as what we learned in our interactions. Below we highlight three key areas of interest to FierceMobileContent's readers: operator delivered communications services including RCS, device news (or lack thereof) and the big splash Mozilla made at the show.
Mobile Broadband: MWC Showcases Global Shifts in Connectivity
Our discussions with leading industry players at MWC highlighted the dramatic shifts that are taking place in the communications services landscape, with new winners and losers being created. To succeed in the communications services market going forward, companies must deliver the Three Rs: reach, richness and reliability.
- Reach - Like e-mail, voice and messaging are migrating to become almost completely independent of the access device or network. In Barcelona, Telefónica launched its TuGo app. This enables O2's postpaid customers to use their bundled voice minutes and SMS from any device that has an Internet connection and can run the TuGo app. The appeal of the operator-managed service will increase as unlimited voice/messaging price plans gain momentum.
- Richness - The feature-richness of communications services continues to improve. This is being led by OTT players offering presence, group messaging, delivery confirmation, location-sharing and video-sharing, among many other advanced features. OTT players will continue to drive innovation in such features, and this has created major concerns within the operator community. Though some OTT players express interest in partnering with MNOs, their advances are usually not particularly convincing.
- Reliability - So what's left for MNOs? As mentioned above, they will continue to transition to data-centric price plans and hope to drive ARPU-uplift as a result. In the communications space, MNOs will do everything they can to remain relevant. The best way they can achieve this is to leverage their traditional strengths in service reliability, security and full cross-network interoperability. With this in mind--and despite slow progress with standardization and commercial implementation during the past one to two years--we uncovered strong continued interest in rich communication services (RCS) at MWC.
Operators still believe in RCS
Overall, we detected steady progress around RCS, with MNOs increasingly viewing it as a solution for enriched and interoperable communications, as well as a platform over which third-party services can be delivered. The fact that RCS is also a platform play was highlighted by the winners of the GSMA joyn Innovation Challenge at MWC. Some of the key value delivered by the winning entries was based around secure data sharing. Some operators we spoke with indicated that they intend to integrate their existing OTT apps with RCS-based services once a richer feature set is implemented in the form of RCS5. For example, we expect Orange to integrate its OTT Libon app with RCS-based services at some point.
Mobile and connected devices: vendors again forgo a big show for major launches
As was the case with the Consumer Electronics Show (CES) in January, MWC lacked much new device innovation. Vendors seem to be eschewing the big shows for major launches, assuming (correctly, we believe) that it is better to have a stand-alone launch than to get lost in the noise of huge multipurpose events.
BlackBerry (NASDAQ:BBRY) made its big splash in New York at the end of January and even stepped away from the Barcelona show itself, choosing to position itself in an office building across the street from the venue. CEO Thorsten Heins got to speak on the main stage, but otherwise BlackBerry's presence was limited to a small number of people holding signs to prevent those with pre-arranged meetings from getting lost crossing the street.
And while there was much talk about Apple's (NASDAQ:AAPL) iPhone or Samsung's next Galaxy device, as well as lots of speculation about Nokia (NYSE:NOK) tablets, there was not a lot of buzz around actual announcements made at the show. Another, perhaps more significant, exception was Mozilla's demonstration of its new Firefox OS, a mobile platform the company is hoping can rise up and challenge the established market leaders.
Mozilla's Firefox OS grabs headlines
Not only was there a big media splash on Sunday night of the show, but a number of mainstream vendors--including Alcatel-Lucent, HTC, LG and ZTE--announced phones running the Firefox OS. Huawei has committed and Sony is also expected to announce soon. Geeksphone, the Spanish startup that built the prototypes, seems to be relegated to producing developer prototypes and collecting consulting fees from the larger manufacturers. Phones are expected in Spain, Brazil, Colombia, Venezuela and four other markets by the middle of 2013.
The phones we saw running on the Firefox OS have evolved significantly since last year's prototype, with smoother graphics and all the capabilities one would expect in a smartphone. The interface is not as dramatically different as BlackBerry 10 or Microsoft's (NASDAQ:MSFT) Windows Phone 8, but it is a worthy competitor to the icon-driven interfaces of iOS or Android, which continue to dominate the global market (see chart below).
New Mobile Platform Entrants Must Contend with Leaders' Dominance
Source: Yankee Group's Mobile and Connected Devices Forecast & Monitor, January 2013
Telefónica and the Mozilla Foundation have been leading the initiative, but nearly 20 other major operators have signed on, including América Móvil--the chief rival of Telefónica, at least in Latin America. It seems the need to have a counterweight to iOS and Android counts more than the kind of take-no-prisoners competition these two Latin American enemies practice.
Interestingly, Telefónica told us that the idea was not to have a cheap device but a lower total cost of ownership (TCO). That is, Firefox OS devices are not meant to be low-cost alternatives to no-name Androids but worthy competitors in the various smartphone price tiers. Lowering TCO presumably refers to possible bundling options but also to Telefónica and the Mozilla Foundation's view that HTML5 will lower developers' costs, thus making apps cheaper.
That will be a hard sell to consumers, in our opinion, given that they will focus more on the device price and plan details and less on whether their favorite mobile game is U.S. $1 cheaper in Firefox's application store. Still, the strong operator support and the presence of worthy devices from name-brand vendors have broadened the fight for a third ecosystem. We may like BlackBerry 10's and Windows Phone 8's user interfaces better, but operators still control distribution in much of the world.
Brian Partridge is a vice president of research and an active contributor to Yankee Group's connected devices and mobile broadband research agenda.