Informa’s MWC Round Up – Day Three

Mark Newman, Chief Research Officer at Informa Telecoms & Media comments on all the major news from day three of Mobile World Congress.

Dorito loco tacos, cupcakes and frozen yoghurt washed down by Red Bull
Barcelona has been good this year for those of us who by day three are having a tough time retaining our enthusiasm for small cells, hetnets, adaptive traffic management and the whole gamut of technology launches that come with a new Mobile World Congress.

Mobility is now a feature of a society at large and in the last days we have heard from fast food chains, soft drinks suppliers and global food giants about how they are using mobile phones and services to engage with their customers.

Mobile advertising may be having a tough time justifying itself as a standalone business model but mobile marketing has unquestionably emerged as a powerful weapon in the armoury of consumer brands. Kraft today announced a major initiative with Nokia to develop branded content on Nokia devices in Nokia territories. The Finnish handset group, which made a successful return to the Mobile World Congress this year in the applications-centric Hall 7, also unveiled a licensing deal with Red Bull whose approach until now has focussed on partnering with operators. And late yesterday evening, shortly before the Eric Schmidt show, Taco Bell showed us how a QR code printed onto the paper wrapper of a Dorito-coated taco helped it to better engage with its customers.

Financial groups back in credit
Initiatives around retail, commerce, banking and payments have hogged the headlines at this year’s show. Not long ago it seemed that mobile operators were making the running in payments and commerce but global banking and payment giants including Visa, Mastercard and Western Union have all made impressive advances.

Announcements this year – today it was Orange’s turn to announce a joint venture with Visa – are seeing mobile operators emerge as local market distributors for services developed by – or with – an established global bank or payment company.

Even companies you wouldn’t normally associate with mobile payments are getting into the space.

Opera, the mobile-browser maker, has launched Opera Payment Exchange (OXP) to facilitate payments on the Opera Mini browser, which is used by 160 million people. Facebook, meanwhile, is partnering with mobile operators to aggregate links to their billing systems and enable virtual-good purchased and other in-app payments through users’ mobile bills – something that will encroach on the space currently dominated by in-app and online mobile payment providers such as Boku and Zong. The social network has struck deals with AT&T, T-Mobile and Verizon in the US; Deutsche Telekom, Orange, Telefonica and Vodafone in Europe; and KDDI and Softbank in Japan.

Boku preempted Facebook´s announcement with news prior to the show of that it is expanding beyond carrier billing to MasterCard-enabled point-of-sale payments on phones.

In other “retail” initiatives, Groupon has made huge strides in the mobile space. It announced earlier in the week that in December one quarter of all Groupon vouchers were purchased via a mobile device. Two new merchant initiatives, Groupon Now and Groupon Rewards, are helping drive the craze for cupcakes and frozen yoghurts and, in doing so, breathing new life into small, independent retailers. Groupon also revealed plans to roll out mobile service to more than 30 countries in the near future. It already has its daily-deal service via the web available in 48 countries.

Jasper move closer to global platform capability
Elsewhere today, M2M service platform supplier Jasper Wireless announced a contract win with Middle Eastern operator Etisalat. It comes fast on the heels of wins with Telefonica and NTT DoCoMo, firmly positioning the American group as the leading independent platform supplier.

This is first major announcement of an M2M platform deployment in the Middle East. It helps give Jasper Wireless a presence in almost every region of the world, the only exception now being Africa. The contracts Jasper Wireless sign with carriers tend to incorporate exclusivity – at least for a limited period of time.

Staying with M2M, Nokia Siemens Networks has made the first public announcement of Cumulocity at Mobile World Congress, the infrastructure manufacturer’s new M2M service management platform – and the result of two years of development work.

The much-discussed issue of M2M device and network technology cycles was aired again today in one of the conference sessions. Vertical industries voiced their need for clear answers about whether carriers will support their M2M services ion 2G and 3G networks in the long term. Speaking at the Embedded Mobile seminar, Alex Jones, emerging technologies group at British Gas and Stephan Durach, head of entertainment and mobile devices at BMW Group, both requested a roadmap to show when 2G and 3G networks would be discontinued to release spectrum for LTE.

David Haight, VP business development at AT&T’s emerging devices division, responded that the carriers’ wholesale migration to LTE would bring the industry along in its wake. Earlier, Vodafone’s M2M Business Development Manager, Marc Sauter said Vodafone would continue to support 2G at least until 2020.

Device vendors race to the bottom
There were less announcements generally today, giving us the chance to reflect on some of the trends that are emerging, particularly in the devices space. We reckon that the most important theme at the show is the heated “race to the bottom” in terms of expanding device portfolios to include low cost smartphones and smart feature phones. So many mobile trade shows and campaigns gravitate towards flagship devices that pack in the latest technological bells and whistles. While MWC has had its share of top devices, the greater story is a new generation of capable, compelling low cost devices.

Nokia’s new mid-tier Lumia 610 represents an important change in the Windows Phone line-up. With more flexible memory and processor requirements than with previous devices, Nokia and Microsoft now have a very capable, attractive device that can compete effectively with lower tier Android devices. And with Nokia’s growing Asha line, new sync compatibility with Microsoft Exchange now push that device into contention for small and medium business segments in a way no other feature phones can.

Broadcom’s expanding portfolio of chipsets is specifically design to provide full multimedia capabilities with low power consumption and low cost to allow for better pricepoints in the low and mid-tier segments.

For the timebeing, however, Android devices are completely dominating the low-end smartphone space. Operators in Africa are reporting the widespread availability of $80 Chinese-manufactured Android devices and Bharti Airtel CEO Sunil Mittal has made a plea for the development of a $50 device.

Lastly, it is interesting to speculate on why the visitor numbers this year are up on 2011. The event is now outgrowing the wonderfully-locating Fira exhibition centre and will move next year to a new site on the edge of the city and close to the airport. We reckon that the growth is down to the emergence of new value chains and marketplaces with applications and content companies now just as likely to forge deals with OEMs and software platforms as well as operators. The event is also capturing more innovation and services for the business market.