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2018 mobile industry predictions

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In my 11th edition of mobile industry predictions, 2018 is already starting off with technological bombshells, thanks to the U.S. FCC repealing network neutrality regulations in 2017. However, this debate is far from over.

Blockchain is gold: Any company mentioning blockchain suddenly rises to the top, and public companies discussing blockchain see stock valuations sometimes rise dramatically. Those results are primarily based on the hype that bitcoin and other cryptocurrencies experienced in December. Mobile networks continue to flourish, and 5G will likely become reality this year.

2017 predictions: How they fared

First, I’d like to review 2017 predictions to see how they fared against the reality of this dynamic, ever-changing industry. For each 2017 prediction, I will rate the correctness.

2017 prediction: Mobile Messaging: Messaging through SMS will continue to grow and become the dominant worldwide channel for customer interactions. SMS will show resilience and staying power. RCS-type deployments will continue to disappoint. There will be no Android equivalent of Apple Messaging. Some IP messaging platforms will become legitimate alternative channels to A2P SMS.

2017 reality: A2P messaging and messaging channels grew and our A2P messaging statistics reflected growth with double-digit percentage increases over 2016. Ovum indicates “A2P messaging is projected to grow at 8% CAGR from 2015 to 2018.”

I was wrong about RCS. A2P RCS is making a resurgence thanks to the catalyst of Google Jibe’s RCS Business Messaging. Other RCS hubs including Samsung, Mavenir, and ecrio, are providing solutions around the GSMA Universal Profile 1.0 and 2.0 standards, reducing RCS fragmentation. RCS is poised to become an important engagement channel.

2017 mobile messaging prediction score: 75% correct, because I thankfully I got the RCS part wrong.

2017 prediction: Chatbots: Chatbots will be heavily hyped, but won’t gain significant prominence, barring a few customer-service solutions, which will ultimately lead to human interaction. Chatbots will replace the voice-call menu tree or request needed information for the human responder.

2017 Reality: Strongly hyped, chatbots are being used more, especially around customer service; however, their prominence is still questionable. Bots are mostly used in non-SMS social chat apps. For some platforms, the ability to discover new bots is a factor. A few SMS-based are being deployed and will play an increasing role in A2P RCS as a core element of conversational messaging on that channel. AI enhancement of chatbots has become commonplace, leveraging solutions like Google’s api.ai (now called Dialogflow) and Microsoft’s Bot Framework, among several.

2017 chatbot prediction score: 100% correct

2017 prediction: 5G: We will see a start of production 5G deployments by mobile carriers, initially targeting IoT applications; however, some will target consumer devices.

2017 reality: Almost a complete, but close, miss. GSA noted that 103 operators in 49 countries are “investing in 5G technology in the form of demos, lab trials, or field tests.” As of December 2017, 32 operators have made public commitments to deploy 5G in 23 countries, including Verizon Wireless, who has committed to roll-out 5G in 3-5 cities. Huawei indicated that Vodafone Italy had achieved the first 5G data connection in Milan, Italy, marking the start of their planned network rollout.

2017 5G prediction score: 20% correct

2017 prediction: LTE: By the end of 2017, there will be at least 650 LTE networks and 200 LTE-Advanced Networks launched worldwide.

2017 reality: At the end of 2017, there were 647 commercially-launched LTE networks with 680-700 anticipated networks. Per GSA, there are 216 LTE-Advanced networks in 105 countries.

2017 LTE prediction score: 100% correct

2017 prediction: Apple: Apple will launch a new iPhone 8 and iOS 11 featuring innovations, including an OLED screen, no hardware buttons, wireless charging, enhanced camera capabilities, and better support for LTE-Advanced. This will lead to record iPhone sales with Apple iOS gaining market share, but not dominating Android.

2017 reality: Apple launched the iPhone 8 and iOS 11; however, also announced and shipped the iPhone X, which included the OLED screen, no home button, and the other features. Wireless charging is available for the iPhone 8 and iPhone X. LTE-Advanced support is mostly unchanged in the new devices. Android-iOS market share varies worldwide, but Android remains in the 80-85% share with iOS at 15-20% share.

2017 Apple prediction score: 85% correct

2017 prediction: Two-Factor Authentication (2FA): 2FA will continue to be the dominant authentication and security mechanism, especially with increasing account breach reports. 2FA will be the dominant channel over SMS, although 2FA through TOTP solutions will gain prominence.

2017 reality: Breaches continued in 2017, resulting in hundreds of millions, if not over 1 billion subscribers’ data compromised. Deloitte was specifically determined to lack 2FA in place. The FIDO/Javelin State of Authentication 2017 report cited that SMS OTP for mobile was second only to password usage. It was 4th for online, with static and dynamic Knowledge Based Authentication (KBA or “secret” questions) coming in 2nd and 3rd. Software OTP (such as TOTP solutions) followed SMS OTP.

2017 two-factor authentication score: 100% correct

2017 prediction: Wearables: Wearables will grow, but lacking killer applications or functionality, will slowly track upward. Fitness/health continue to be the predominant applications. Apple and Fitbit continue to lead the pack. One or more existing platforms will shut down.

2017 reality: Jawbone, once worth over $3 billion, is said to be in liquidation, and TomTom cut jobs as they began restructuring toward their mapping and navigation. Apple re-took the lead in Q-3 with 23% share, with Xiaomi (21%) and Fitbit (20%) behind. In terms of predominant functionality, health and fitness lead the market; however, with LTE-enabled Apple’s Series 3, applications like messaging, alerts, and communications are gaining usage.

2017 wearables prediction score: 100% correct

2017 prediction: IoT: The most dominant IoT applications will be in transportation, especially vehicle automation, followed by logistics and smart home devices. Few vehicle manufacturers will provide capabilities of Tesla (e.g. downloadable software, self-driving capabilities, etc.), but more car manufacturers will provide mobile apps and remote vehicle management.

2017 reality: According to IoT Institute, asset tracking and monitoring was the most popular use case, followed by automation of manual processes and predictive maintenance. 2017 predictions were a little too specific; however, “automation of manual processes” can cover some consumer-focused IoT implementations. Huge changes in vehicle IoT were not realized, although there has been plenty of press around fundamental changes. The most innovative IoT solutions were in the industrial space.

2017 IoT prediction score: 30% correct

2017 prediction: Mobile operators: Expect some mobile operator consolidation in the U.S., with Sprint or T-Mobile USA being acquired. US Cellular could be acquired with some smaller tier 3 operators, leading to questions of competition and market dominance among remaining operators.

2017 reality: Sprint and T-Mobile again flirted with merging, and again called it off. US Cellular remains independent. Due to the FCC-imposed “quiet period,” there was little M&A among mobile operators in the United States.

2017 mobile operator score: 0% correct

2017 prediction: Mobile point of sale: POS will continue to grow in usage and acceptance by consumers. Apple Pay will top double-digit monthly usage. Consumers will begin to accept mobile payment solutions as more secure than credit cards. More sites will support Apple Pay and Android Pay.

2017 reality: Mobile contactless payment solutions increased. A November Bank Innovation report indicated that Apple Pay should reach 86 million users in 2017. Apple Pay is in 20 markets, representing 70% of the world’s card transaction volume, and in the US at more than 50% of all retail locations. Android Pay and Samsung Pay increased; however sort of split up the Android world. Apple Pay Cash launched in late Q4, enabling users to transfer money through iMessage and other channels, setting up iMessage to become a more comprehensive communications app.

2017 mobile point of sale score: 100% Correct

2017 was a tough year for predictions. I was 61% correct, compared to 2016 predictions, which were 83% correct, and an 82% correct rate in 2015.

2018 mobile industry predictions

2017 has set the table for new technologies to come to commercial fruition this year. In no particular order, here are my ten mobile industry predictions for 2018:

Mobile messaging continues dominance as the primary engagement tool for consumer interactions. SMS will continue to lead and surpass 2017 volumes. Messaging media usage will increase, including Facebook Messenger, WeChat, and others. For the first time, A2P RCS will launch commercial services with key brands and businesses interacting with consumers through RCS.

2018 will be the year that RCS returns, specifically optimized for A2P (or enterprise/business/brand engagement). While person-to-person or P2P RCS will grow, the biggest impact will be consumer interaction. Most will be through AI-assisted chatbots. By the end of 2018, there will be between 500 -700 million MAUs using RCS globally, starting to rival non-SMS messaging apps. This number will be higher if Apple iMessage supports RCS Universal Profile. 2018 may be the beginning of the end for many mobile apps as users discover that conversation interfaces work as well as, or better than, mobile apps with similar functionality.

Apple will grow its worldwide iOS market share, building on the success of the iPhone X. New iPhones in 2018 will leverage the new technology and capabilities introduced in iPhone X. Expect more enhancements to iMessage and improved LTE Advanced capabilities for more networks globally. 2017 revelations around battery slow-down issues ultimately won’t have much effect. Apple Watch will continue dominance in wearables, increasing its share to almost 30%.

Apple HomePod will launch with innovative capabilities, enabling close integration with Apple mobile devices that Amazon Echo and Google Home will not have. HomePod won’t overtake Amazon or Google, but will become the genesis of a new class of personal digital assistant that will grow in influence.

Authentication leveraging mobile solutions will gain more visibility and usage by global consumers. Two-factor authentication (2FA) over SMS will continue as the most-used solution by consumers, followed by 2FA via mobile apps. Mobile operators will close security vulnerabilities around SMS. Biometric authentication will grow in prominence.

Developer-centric API solutions for mobile channels will increase usage – especially in messaging engagement, fueling mobile messaging as a medium for customer engagement. Self-service by developers and non-developers in messaging – and even chatbot solutions – will bring mobile channels to more businesses, quicker and easier.

Expect over 750 commercially deployed LTE networks, over 300 LTE-Advanced commercially deployed networks, and over 50 5G commercially deployed networks. The GSA noted that 2018 should see over 3 billion LTE subscriptions. At the end of 2017, there were 116 mobile operators “investing in pre-standards 5G networks.” Many will provide fixed-wireless solutions and some specialty solutions. I doubt that we’ll see many mobile handsets supporting 5G; that will likely come to fruition in 2019 and beyond.

The US Network Neutrality debate is not over. There will be legal and legislative challenges to the December 2017 repeal of various FCC regulations around network neutrality. This is a politically charged issue. Most Americans, as well as technology giants, supported the network neutrality provisions, but many mobile operators wanted them repealed. Expect confusion, but little negative consumer-facing activity by mobile operators and ISPs because of less regulation. Most people won’t notice accessibility changes.

Mobile-network connected IoT devices will continue to dominate the IoT space as industries rush to provide mobile-connected sensors. This will be especially important to asset-tracking across industries, especially those where movable assets must be tracked and maintained. Interestingly, these mobile-network connected sensors will primarily use existing networks. Companies providing IoT solutions will benefit by providing big-data mining, tracking, and maintenance capabilities to manage and process asset data from millions of connected sensors. IoT activities across industrial and consumer-focused solutions will increase substantially.

Blockchain (per Gartner, still in the Peak of Inflated Expectations) will be coupled with mobile platforms and applications to provide innovative solutions for finance, security, and mobile wallet/loyalty programs. Going beyond mobile-based cryptocurrency wallets and apps, mobile devices can be used as blockchain nodes that can store a variety of secure transactions. Innovations will demonstrate that mobile devices can be excellent for blockchain-based solutions, which can be as easy as downloading a specific app for consumers.

Last word

2018 mobile industry predictions cover a wide swath: Mobile messaging (SMS, RCS, messaging chat apps), authentication and blockchain as they relate to mobile, IoT, Apple, network neutrality and much more. This year, I’ve decided to stay away from mergers and acquisitions, though I think we’ll see some, but not as many, as previous years.

A variety of new businesses will emerge and become noteworthy in areas such as chatbots, IoT, 5G, and AI, but don’t rule out existing technology leaders. They, too, are working on innovative and amazing technology. Without doubt, 2018 will be another exciting year in the mobile industry.

William Dudley
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January 3, 2018
William Dudley

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