The Wireless Industry in 2015: Four scenarios from the Wireless Foresight project: The Wireless Industry in 2015: Four scenarios from the Wireless Foresight project ”Wireless Explosion – Creative Destruction” ”Slow Motion” ”Rediscovering Harmony” ”Big Moguls and Snoopy Governments” A project at Wireless@KTH, a research centre at KTH (Royal Institute of Technology) in Stockholm


Slide2: The Foresight project A small core team with different backgrounds (presenter: Jonas Lind, Stockholm School of Economics, telco industry, business strategy) Support from the Boston Consulting Group Input from a reference panel of 20 people from industry and academia Final report will be presented in Stockholm on June 5th Report download on: www.wireless.kth.se/foresight (early June) Method: Identify Fundamental Drivers (valid in all scenarios, high probability) Infer trends from the Drivers (lower probability, uncertain direction) Vary important trends (=Differentiators), make n-dimensional space Reduce this space, group differentiators, and formulate scenarios


Slide3: Fundamental Drivers – valid in all scenarios Jonas Lind, Center for Information and Communications Research, Stockholm School of Economics, May. 2002


Wireless explosion – creative destruction: Wireless explosion – creative destruction Rapid growth (usage, market size, technology, applications, etc.) Old telco industry lose to IP datacom attackers Technologies and functions dis-integrating Closed telco-style systems lose Modularisation (IP and other open APIs ) Each module a niche market with intense competition


Slide5: Active users take control Advanced users want choice and freedom (20 years on the Net) Mobile life-style Unlicencend spectrum release (operators lose power) Ad-hoc networks, self-deployed wireless access Open Source software in wireless Underground culture: IPR-enforcement eroding ”Creative Destruction” Rapid Innovations transforming industries Old market leaders lose and attackers win Intense competition, many players Market leaders unable to exert monopoly power Infrastucture based on IP and datacom paradigm


Slow Motion: Slow Motion All problems in one scenario (economic collapse, radiation problems, 3G fails, battery bottleneck, user uptake) Slow pace of development (market size, applications, industry)


Slide7: Problems Global economic recession Operator crisis, spreading as dominos 3G fiasco Health problems from radiation Environmental awareness Security and virus Slow user uptake Power consumption and battery capacity Network ”Complexity management” unresolved Wireless industry impact No application explosion Simple services: messaging, news, etc.


Slide8: Wireless industry has matured Slow pace of growth Lower profit margins Concentration has increased in most segments Traditional Telcos still dominating Operators: Consolidation leading to fewer actors Equipment vendors: Focus on NICs and on traditional operators Terminal vendors: Large segment of cheap and reliable terminals Big NICs catching up


Rediscovering harmony: Rediscovering harmony Fundamental value shift (postmaterialism, balance in life, media saturation, environment) Medium industry growth


Slide10: Postmaterialism/postmodernism Follows from socioeconomic development (NICs will still have ”industrial” materialism) Quality of life Friends and family (many tribes) Individualism (individuals in a social context) Environment and healthy living Credibility and social awareness Companies must show credible ethical conduct Environment, honesty, social responsibility


Slide11: Balance in life Information overflow made us ”tune out” Media saturation (low tolerance for hype) Slower pace of life Credible Brands Brands must build on credible commitment Claiming to be ”Funky” don’t work People very sensitive for manipulation Wireless Industry Less demand for hyped wireless apps High demand for social communication and simple apps for the mass-market


Big Moguls and Snoopy Governments: Big Moguls and Snoopy Governments Large companies merge, government fight terrorism Medium industry growth Moguls Merger of companies into ”Moguls” Brand rules Focus on user convenience Operators/service providers are global companies


Slide13: Governments exert tight control Easier to control few large players Issues of security and IPR-enforcement driving No copyright piracy All communication and transactions secure and surveilled No new spectrum for unlicenced bands Wireless industry less dynamic Less competition, slower development Users locked in by portals New players get less opportunities Large companies prevail


Slide14: Jonas Lind CIC - Center for Information and Communications Research Stockholm School of Economics, Sweden jonas.lind@hhs.se The Center for Information and Communication Research (CIC) at the Stockholm School of Economics pursues market and business focused research on the use of Communication & Information Technology. Web site: www.hhs.se/cic Jonas Lind: my own research at Stockholm School of Economics The Tech-industry life cycle -structural changes (fragmentation, convergence, etc.) innovations, growth, maturity historical analogies from earlier industries strategic implications Tele-economics competing infrastructures spectrum allocation (network topologies, broadcast/cellular trade-off) forecast for total landline replacement future peak size of total mobile market (ARPU or % of GDP) Jonas Lind, Center for Information and Communications Research, Stockholm School of Economics, May. 2002