Fueled by disruption on several fronts, 2012 will see some major mobile industry consolidation, as well as mobile VoIP services’ lasting impact on carriers and more options on data pricing plans for consumers.
Over the course of 2011, the mobile industry has been a year of mixed emotions. It has witnessed dynamic changes and suffered tragic losses, such as the launch of the iPhone 4S and death of Steve Jobs. We’ve also seen the emergence of video calling, and the rapid mainstream adoption of not only iPads, but tablets in general .
At the same time, there’s been unprecedented growth in the sector. According to IDC, early year estimates predicted that the smartphone market would grow nearly 50% globally in 2011, jumping from approximately 300 million shipments in 2010, to 450 million by 2011.
This, coupled with the rise of mobile commerce as a main market driver, and it’s really no wonder why many feel that this past year has been the year of mobile.
Looking ahead to 2012, there’s guaranteed to be some big surprises lurking in the shadows. Here’s what I believe will be some of the top headlines you’ll see in the coming year:
Microsoft buys Spotify, goes head to head with iTunes
All the speculation and rumors you heard will end up coming to fruition. In 2012, we will see Spotify
become a separate division within Microsoft to compete head on with iTunes. Microsoft has long wanted a pure music play and Spotify delivers an active, engaged audience of more than 2.5 million paying subscribers and a total users base of more than 10 million. With Zune all but prospering, look for Spotify to be bundled with Windows 8 as well as of course Windows Mobile 7.
Also, not to be neglected, is the common lineage between the two. The Swedish music streaming giant already has a pre-existing (and successful) partnership with Microsoft-affiliated social networking giant Facebook. In 2007, Microsoft partook in one of Facebook’s fund raising rounds and took a $240 million equity stake in the company at a valuation of $15 billion.
As a complement to its other properties, Spotify will continue to flourish within the Microsoft domain and it’s likely we’ll see it integrated into the Xbox Live platform alongside Skype and in a new version of Microsoft’s product suite. Microsoft will benefit enormously from a brand aspect and have a new asset to monetize its existing customer base with.
Mobile VoIP growth makes dramatic impact on operators
Next year will see the tipping point for true mVoIP (mobile Voice over IP). With 4G finally rolled out across the U.S. and technology improvements from companies like Rebtel and Viber, dropped calls will become a thing of the past. mVoIP will therefore go from being a fad, to something that is embraced beyond the digerati, and finally catching on with the mainstream.
Juniper reports that mobile VoIP clients downloaded to the smartphone will account for four fifths of 640 million mVoIP users by the end of 2016, while alliances between carriers and mVoIP specialists will remain relatively few in number. In the short term, operators will respond with their own services, partnerships with over-the-top (OTT) service providers and following on more rumors of consolidation, eventually buying them.
Google to spin-off Motorola
After purchasing Motorola Mobility for $12.5 billion in August, Google will spin-off the company in an attempt to save face with other handset manufacture partners like HTC and Samsung and remedy the risk of them leaving the Android eco-system in favor for Windows Mobile 7. In what will basically amount to a patent acquisition deal, Google will share patents with their OEM partners to allow for more direct competition with Apple.
(Maybe not such a surprising move after all, considering research firm Canalys recently shared that Android captures nearly 50% of the global smartphone market?)
Also, look for Google TV to jump back in the spotlight with Motorola poised to offer Google TV-enabled set-top boxes and cable providers jumping on board to compete with streaming providers such as Netflix.
Carriers forced to transition to tiered data plans
Some research firms have already predicted that the role of voice within the broader communications market will change substantially over the next few years, especially as it appears to be headed into integration with other applications.
To save customer churn, carriers will begin to offer tiered data plans to cope with the ever-increasing network strain and alleviate their reliance on voice revenue. In the transition process to tiered data, a portion of consumers are likely to initially be averse to the shift. We might even see this lead to a brief period of less data consumption on mobile devices due to a fear of being charged high per MB if they go over the their limit. Over time however, tiered pricing will be for the better, as it will facilitate a better and sustainable user experience by way of a model that makes sense from an economical perspective for the operators.
More carriers offering alternative pricing models and packages to stay competitive should turn out to be a big win for the consumer over the next 12 months.
Andreas is CEO of Rebtel, the world’s largest independent mobile VoIP company. Prior to Rebtel, Andreas was COO of Taptu, UK-based mobile search engine, and previous to that he was COO of TradeDoubler, a digital marketing and technology company. Previous to these positions, Andreas spent three years at Goldman Sachs.
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