[Note: This post was originally published as the main editorial in the Mobile Industry Review newsletter. Would you like to receive it in your inbox now-and-again? It’s free to subscribe.]
Bad news. Or, is it good news? Let me know what you think…
I arrived into Barcelona as the city bathed in glorious, glorious sunshine. The contrast from dreary London was astonishing. I had to remind myself that, yes, this is how much of the world lives on a normal basis — especially in Silicon Valley where it’s generally T-Shirt weather all year round.
I’d picked up my press badge at the airport so didn’t need to wait in the registration queues. Instead I popped over to Bubble-Over-Barcelona, one of the finest MWC fringe events taking place last week. They’d brought the Valley to Barcelona!
Sadly I couldn’t stay too long as I had things to do at MWC-proper.
I waltzed through the entry gates at the Fira and was in amongst the thronging mobile hordes within seconds.
I walked up the central boulevard, taking in the atmosphere. I did a quick pass through the courtyard area and strolled into Hall 1 where the CBOSS girls were in full swing (more on this, here). Quickly, I ambled through the infrastructure halls and then darted across to Hall 8 where I patrolled up and down for some time. Hall 8 is where the business is for me. It’s where you tend to find most of the handset vendors and the big service providers. Both RIM and Nokia had relocated up to the App Planet zone so it wasn’t long before I was ambling around there either.
Afterwards, I stopped for a little while by the rather iconic Fira water fountains and looked around.
And then a realisation hit me: The mobile industry as we knew it — as the old guard knew it — was completely and utterly dead.
I burst out laughing to myself as I recognised what had prompted this viewpoint. The answer was iPhone. Or, more accurately, THOUSANDS of iPhones.
At MWC this year, I couldn’t move for iPhones. It felt like everyone I saw had an iPhone.
I couldn’t help but wonder what effect this was having on the mobile industry itself. If even the people charged with constructing the mobile future are all using iPhone as their default choice, what hope does the wider mobile industry have?
It’s quite clear that the operators aren’t having a good time of it right now. That’s not likely to change for the positive either.
Many operator executives spent most of last week screaming — nay, bitching — about the problems they’re having and how the European regulator is outrageous to suggest that roaming revenues (a nice profit centre) need to be cut dramatically.
This is on the back of many-an-operator issuing profit warnings or dividend reductions.
For decades, the fixed reality was that operators made a crazy amount of money. You could stick’em in your portfolio without worrying because despite the odd cyclical issue, you’d always be able to depend on the dividend income.
The new reality is somewhat different. It’s OTT — over-the-top — that is, the operator is being reduced to a bit-pipe, whether it likes it or not. The decision has been made.
And it’s being endorsed by the thousands of executives I saw at MWC brandishing iPhones!
Speak to them individually and point out this stark contrast and they’ll explain that, yes, they’re committed to developing services to rival/out-class with the iPhone. They’ll also then explain that it’s purely personal preference that they themselves have got an iPhone.
Is this a sign of things to come? It’s no good getting annoyed at Apple’s dominance when you’re busy stuffing money into their pockets personally.
If your company executives are all uniformly using an iPhone, what chance does innovation outstide the Applesphere have?
You see, last year at MWC, I saw lots of BlackBerries. I saw lots of Androids. I even saw a fair few Nokias. The key was variety. Lots of variety.
This year it was iPhone only. Occasionally I’d see an Android or a BlackBerry. The only Nokias I saw were in the hands of people I later realised were wearing the branded Nokia T-Shirts.
In my rough-n-ready sampling throughout the MWC halls, the iPhone was utterly triumphant.
It’s the service providers that are bugging me though. These folk are meant to be helping the operators compete with immensely cool new services that should completely eclipse anything Apple could dream up.
MWC was filled with service providers busy selling software and services in this regard. Yet most of their executives had already gone native.
Of course, Apple isn’t the be-all, end-all of the marketplace. At least, not in many of the developing countries, simply because of a function of money.
But in the West? In the developed countries? Apple is a behemoth and a real, real problem.
Let me develop the issue a little more, for clarity. Say, for argument’s sake, you’re a mobile operator, seriously worried about the fact 25% of your iPhone customers have already moved to using iMessage? (I’m making up the stats, but run with me).
So you’re worried sick. You need a solution to counter these misguided consumers who are now no-longer using your SMS gateways. Forget the lost revenue, that’s not the issue. The problem is how Apple is manipulating your customers! How many more iOS iterations will be needed before your Apple ID is your “phone number”? What’s your response to Apple introducing some kind of rotating/flexible SIM card? Yeah, I know. Don’t even go there.
So you need some fixes. Of course, since you’ve sold iPhones to millions of your customers already, you — er — well, they’re lost. You can’t do anything with them as you’ll need Apple to play ball. And they won’t.
So. Well, we’ll move on. Let’s look at the rest of the customer base. Why don’t we introduce some better stuff for them to use? Let’s go and find some suppliers to fix this.
And where better to find some suppliers to help you “innovate” (i.e. try and be a wee bit like Apple)? MWC is perfect.
One of the trends, then, coming out of this year’s MWC is RCS — Rich Communications Services. Or, to put it a little bit more bluntly: It’s iMessage. Text messages on steroids. Location services that actually interoperate. Picture messaging that actually works. Video calling that doesn’t uniformly suck. One click and it works. You know, that sort of thing.
Whoop! Back to that panicking operator example. You need to counter the iPhone and you need to show your worried iPhone-toting board members and iPhone-toting investors that you’re doing something other than staring at the wall.
So you talk to your lovely new RCS providers. Most of them you already know in some way. The GSMA has knocked out a standard (“JOYN”) — please, no mentions of the Wholesale Application Community — and there’s a nice bit of buzz around it. Get some meetings with the suppliers in the diary. Get some proof of concepts out the door. Get the engineering team on standby. Write a few thought-pieces for the senior management. And do your best to ignore the fact that each of the suppliers you see at the product pitch sessions is using an iPhone.
This, my dear reader, is the crux of the issue for me: If they’re busy trying to compete with the whole Apple experience, why aren’t they thinking different and using another operating system or device?
It’s because it’s easy. It’s nice. And because, let’s face it, many of the decision makers and influencers in the mobile industry aren’t actually that geeky or technical. They’re business people who just like stuff to work — and they’ve typically got a bit of money. Plus they feel like they should be living the mobile dream — at least, without getting their hands dirty with a self-compiled Android ROM. So they’re using an iPhone.
If they’re using an iPhone, it’s safe to assume that they’ve been converted in some small way.
There are all sorts of exceptions to this argument — I can imagine quite a few readers will be picking holes supported by valid points, however I ask you to suspend your disbelief for a little while. Go with it and consider my point: The vast majority of the industry’s individuals have already swapped mentally and personally to Apple.
If the majority of the industry is already in Apple’s bag (especially those tasked with helping the operators compete against Apple), what does this say for the rest of the planet?
No wonder the company’s knocking back billions of dollars in profit every quarter.
I should point out that Android — yes — that’s obviously got a huge following. Windows Phone is developing nicely. The jury is out for RIM but BB10 is sounding promising. Symbian’s still around. But the elephant in the room is unmistakably Apple, especially given the fact they don’t even bother with MWC in any capacity beyond sending the odd executive.
For an event wholly dedicated to the mobile industry, isn’t it curious that the biggest player from a profit standpoint (even more, from an influence standpoint) is nowhere to be seen?
No. They don’t need to bother.
What, then for the rest of the industry? Just how influential is Apple on the marketplace? Has the tide turned inexorably toward Cupertino? At what point can Apple make their own decisions that seriously reduce the operator to total irrelevance? Arguably they still rely on the operator subsidy — but… really? Do they? What if they financed devices on their own — and you bought your operator service via iTunes? If they launched something like this in 2013, would it fly?
I’ve certainly made a few emotive statements in the paragraphs above and I do recognise that I’ve been rather sweeping — I haven’t made much mention of Google, the other manufacturers or the operator groups. (I should point out that I do also fully accept that there’s a bigger world out there than Apple!)
At the same time, I remain seriously concerned about the rest of the industry’s ability to do anything to avoid Apple continuing to dominate in terms of profit, mindshare and influence.
Roll on MWC 2013…