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February 18, 2016updated 31 Aug 2016 5:12pm

MWC 2016: What’s on the agenda as the mobile industry tries to sustain long-term growth

Analysis: Are glamorous new technologies and devices enough, or is a new approach needed?

By Alexander Sword

The upcoming Mobile World Congress (MWC) event in Barcelona has been dominating technology news for several weeks, with the biggest names in mobile vying to steal the headlines with their announcements.

The most obvious theme for the show is the launch of better, and in many cases, bigger devices. Samsung’s Galaxy S7 will probably be the star of the show, but other big vendors such as HTC, Lenovo, Microsoft and Xiaomi are expected to release devices.

However, there are signs that it is no longer enough simply to put out a device with slightly better specs than the last one and hope for the best.

This year’s MWC, for the first time, will take place in the context of slowing growth in the smartphone sector. Gartner research revealed that growth in the sector has recently slowed to 2008 levels. This is not exactly a decline; the number of smartphones being shifted has still increased, from roughly 1.2 billion in 2014 to 1.4 billion in 2015.

However, vendors will be taking account of the fact that the sector cannot grow at the same rate forever. One of the big factors in this drop-off is China. Accenture research found that only 61 percent of Chinese consumers wish to replace their device in 2016, compared to 82 percent in 2015.

Globally, the number of people planning to buy a new smartphone has fallen to 48 percent in 2016. This represents a 6 percent fall from the figure in 2015 and a 9 percent drop from the peak in 2014.

There are several possible reasons for this, but a big one is that people may simply be happy with the phones they currently have and are unconvinced of the benefits of upgrading. A uSwitch survey of British smartphone owners in August found that curved displays, eyeball tracking technology and customised exteriors on devices were only found useful by 4 percent, 7 percent and 8 percent respectively.

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These scores were far lower than the number of users who wanted phones that were simple to use, at 28 percent, with better mobile reception and battery life desired by 21 percent of users. They also placed high value on more robust smartphones.

John Curran, MD of Accenture ‘s managing director of communications, media and technology, wrote that: "We have reached an innovation interlude. There is no killer application on the near-term horizon for smartphones or tablet PCs, and we don’t expect one to be at the show and this may not crystallise for the next few years.

"Consumer electronics hardware innovation has hit a lull. It is stuck in neutral and needs to find a way to accelerate growth as it has steadily for so many years. Devoid of high-impact innovations, the show will pivot towards another growth opportunity: providing services."

There are signs that vendors may be hearing users’ pleas to focus on more bread-and-butter device features . An advert uploaded to the Samsung Indonesia YouTube channel titled ‘Get Ready for #TheNextGalaxy’ has revealed the focus of the new device on durability, including its water-proofing.

It also includes the phone being left briefly on a wireless charging pad and quickly reaching 100 percent battery.

A renewed focus on improving fundamentals is not the only growth avenue available. Todd Carothers, Executive Vice President of Marketing and Products, at CounterPath, suggested that the next step for device vendors would be building what is commonly called an ‘ecosystem’ with the devices at the centre.

"Device vendors have seen this coming," said Carothers. "That is why many of them have scrambled to find auxiliary, symbiotic services that strengthen appeal to customers. Apple has iCloud, iTunes, Apple Pay, Find My Devices (aka Find My Phone), Find My Friends, FaceTime, iMessage. The goal of these apps is to provide better value to end users and their community of friends."

Security is another feature of devices that smartphone vendors will be focusing on extensively at the conference. Accenture’s Curran suggests that new security technologies such as biometric security will start to emerge into the mainstream in 2016 and MWC will see some examples of this.

This may not necessarily be focused on the device. Yaniv Sulkes, AVP Marketing at Allot Communications, says that securing the network itself will be a key focus as well.

Continuing on the theme of devices, it goes without saying that mobile devices no longer just means phones, and there will be a continued focus on the IoT at this year’s MWC. Last year notably saw the launch of the Huawei Watch and the Pebble Time Steel in the wearables category.

Macario Namie, VP of Strategy at Jasper, said that smart cities and connected cars will also see a greater focus at MWC, citing trends at CES as an example of this increased industry interest.

In addition to the glitz and glamour of the new devices and applications, MWC will have to have some focus on what’s under the bonnet. Mentions of the next generation of cellular networks will be ubiquitous, with Brocade having already announced 5G solutions to be unveiled at the conference.

Adrian Baschnonga, EY Lead Telecommunications Analyst, wrote: "While some operators have announced technology trials and early deployments are expected within the next two years, wider rollouts are only expected in 2020 once standards have been finalized and new spectrum has been set aside."

Baschnonga urges caution to the telcos and says that they should avoid "over-hyping" the next technology, since the currently available 4G will serve customer demands for some time.

"Rather than vaunt 5G on its technical merits alone, operators and vendors should highlight the specific services, such as autonomous vehicles, that will gain the most from a step-change in network performance while considering the new business models required to bring such propositions to market."

For those who can’t wait until 2020 for 5G, companies such as Huawei will be trying to stretch the limits of what is available without a step-change.

The Chinese networking and devices giant will be showcasing what it calls ‘4.5 G’, which delivers data rates of up to 1Gbps. This will allow HD voice, 2K/4K HdD video and virtual reality experiences, according to the company.

"4.5G is becoming a new network benchmark," said Qiu Heng, President of Wireless Network Marketing Operation at Huawei at a recent event. "4.5G is great, but we don’t want to wait until 2020 to use it. You can use it now.

"It is an evolution from the existing 4G network. It means that operators can re-use their equipment and investment to achieve a higher return."

But mobile devices are not simply ‘cell phones’ – it is not just cellular networks that they run on, but other wireless networks such as wi-fi.

Graham Peel, CEO at Ranplan, says that "Despite early reluctance, mobile operators are increasingly embracing WiFi to deliver seamless connectivity and capacity for in-building and metropolitan environments."

Peel says that network operators need to coordinate operations to ensure that they are effectively using all types of connectivity.

As well as the discussion of mobile devices as products and the technology that enables them, MWC 2016 will see an increased focus on mobile as a platform, and how it can be used by advertisers.

On Tuesday 23 February, MWC will feature an event featuring such heavy-hitters in advertising as Google, M&C Saatchi, IDC, AOL, Nestle and Yahoo.

Points on the agenda include advertising techniques for the mobile platform, as well as more fundamental existential debates such as the proliferation of ad-blocking on mobile devices. Apple and Samsung both now support ad-blocking through the default browsers on their respective smartphones.

It’s hard to identify a central unifying theme for any big industry event. However, if there is a trend underlying all of the above, it may be that the maturing mobile industry is moving away from hype and ‘wow’ products and trying to usher in a new era of long-term survival.

 

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