The Future of Pc/Mobile Convergence: Competing technologies and emerging business models for the mobile Internet

Date: March 22, 2010
Pages: 154
Price:
US$ 2,875.00
Publisher: Business Insights
Report type: Strategic Report
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ID: F9C7679D4A9EN
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The Future of Pc/Mobile Convergence: Competing technologies and emerging business models for the mobile Internet
The global mobile phone industry has been extremely successful in the past decade, with an average year-on-year subscriber growth of 24%. While the market has reached saturation in the more developed countries, it is still growing strongly in developing countries due to a combination of cheaper mobile phone handsets and the relative lack of fixed line infrastructure. Mobile operators therefore face two challenges: how to maintain or stimulate demand in the mature markets and secure a new client base and acquire market share in the developing markets.

There were an estimated 1.2bn computers in use worldwide at the end of 2008 with mobile PCs driving the current and future computer expansion although general PC growth is slowing. As is the case with the mobile phone industry, the bulk of the installed base (nearly 60%) can be found in mature markets. However, developing countries will increasingly account for a larger share of the global installed base and PC penetration is expected to double by 2013.

The lines have become more and more blurred between the mobile phone industry and computer industry with consumers demanding more portability and mobility, processing capability and access to data and applications anywhere and at any time. The availability of multifunctional devices such as smartphones with cloud computing capacities and portable PCs with integrated mobile technology able to access 3G, EDGE and other mobile networks for data transfer is further contributing to the convergence between the PC and mobile markets.

Key features of this report

  • Overview of the market trends, technological and regulatory changes that shape pc/mobile convergence.
  • Identification of the current issues influencing the convergence between the PC and mobile technologies.
  • Description of the converged products and services currently available.
  • Forecasts of products and services available in the future.
  • Analysis of the threats and opportunities posed by PC/mobile convergence.


  • Scope of this report

  • Review the current technologies, standards, regulatory frameworks and devices impacting the mobile phone and computer industries.
  • Identify changes in consumers’ lifestyle and needs that stimulate offerings of converged mobile and PC products and services.
  • Understand how technological advances in both mobile telephony and computing are leading towards a convergence between mobile telephony and computing.
  • Assess the implications, threats and opportunities of PC/mobile convergence for mobile operators, handset manufacturers and IT companies.


  • Key Market Issues

  • PC and mobile phone users in mature, developed, markets have higher expectations from their ICT providers. They demand more portability, high-speed data and seamless mobility. They also expect multifunctional devices, networked products and combined services. Faced with an increasingly competitive environment and demanding clients, IT and mobile companies are looking at new ways of creating and sustaining demand through the integration of more advanced multimedia services.
  • All-in-one devices that combine telephony with access to the Internet and multimedia services are becoming more popular across the board, intensifying the competition between IT companies, fixed broadband operators, mobile operators and integrated operators. Mobile and computer companies are trying to broaden their service offerings to meet and stimulate demand in increasingly competitive mature markets, leading to networked products and converged services such as on-demand video, digital TV, high speed Internet, VoIP and wireless applications.
  • In developing countries mobile phones are replacing landlines due to the relative lack of fixed infrastructure. Investor interest and future expansion and upgrade will pave the way for mobile broadband and converged services in those markets.
  • Technological advances in wireless information transfer will make next generation wireless technologies a more cost-effective and efficient option than 3G mobile Internet for mobile operators. This is, however, hampered by the finite amount of spectrum currently available. The digital switchover and resulting digital dividend will bring convergence between the PC and mobile even closer by making a vast amount of spectrum available to mobile operators.


  • Key findings from this report

  • Mobile communications are replacing traditional fixed communications across the world. This trend is caused by increasing user mobility and demand for portable devices and “always on” ICT services in developed countries, and relative lack of fixed telephone infrastructures in developing countries.
  • Technological advances combined with tougher competition and changing lifestyles are contributing to the convergence between the mobile telephony and PC industry and accelerating the decline of traditional computing and telephony.
  • The IT and telecoms industries share technological standards for the provision of wireless connectivity, which contributes further to the convergence of the two industries.
  • Mobile and PC penetration levels are close to saturation in developed countries, while there is still room for growth in emerging markets, where penetration levels are much lower. Emerging countries therefore present greater growth opportunities for ICT companies and a number of them have already implemented strategies to exploit those markets.


  • Key questions answered

  • What are the major trends and drivers behind PC/mobile convergence?
  • What technologies and enablers will influence further development in converged mobile and PC products and services?
  • Who are the major players in the PC/mobile converged market and how do they position themselves?
  • What are the main threats posed by the convergence between PC and mobile products and services and how can companies protect themselves?
  • How will the PC/mobile converged market evolve and grow in the next 3-5 years?

  • The Future of PC/Mobile Convergence
    Executive summary 10
    Market overview 10
    The competitive landscape shaping convergence 10
    Emerging converged products and services 11
    Leading player strategies 12
    The future of PC/mobile convergence 13

    CHAPTER 1 INTRODUCTION

    Introduction 16
    Who is this report for and what is it about? 17
    Definitions 18
    3G 18
    Convergence 18
    Desktop PC 18
    EDGE 18
    GSM 18
    HSPA 18
    LTE 19
    Mobile broadband 19
    Mobile internet 19
    Notebook 19
    Netbook 19
    Wi-Fi 19
    WiMAX 19

    CHAPTER 2 MARKET OVERVIEW

    Summary 22
    Introduction 22
    From desktop computing to mobile computing 23
    Desktop computing is in decline but remains an important ICT segment 23
    Portable devices are challenging desktop computers 23
    The recession hits desktop PCs sales hard 25
    The PC industry is adapting to the new trend 26
    Usage of mobile computing services is set to increase 27
    Mobile telephony: from GSM to 3G 28
    Mobile telephony is the most popular ICT service in the world 28
    The developing countries lead the mobile telephony boom 28
    Mobile data services revenue is on the rise as usage increases 33
    3G Mobile technologies drive PC/mobile convergence 35
    Wi-Fi versus 3G 37
    Wi-Fi is cheaper for both the operator and mobile user 37
    Congestion is the main issue with Wi-Fi 38
    Cost issues 38
    Ease of use 38

    CHAPTER 3 THE COMPETITIVE LANDSCAPE SHAPING CONVERGENCE

    Summary 42
    Introduction 43
    Trends and drivers 43
    Consumers are mobile and demanding 43
    The shift from voice to data services forces new strategies 44
    Lack of fixed infrastructure in developing countries benefits mobile ICT 45
    Internet penetration in Africa 46
    ICTs remain more expensive in developing countries 48
    Price competition is key 48
    Falling ARPU leads to converged service offerings 49
    User-generated content and social networking blurs the line between
    IT and telecoms services 50
    The impact of the recession was milder than feared 51
    Regulatory drivers and barriers 52
    European Union initiatives 53
    The Federal Communications Commission (FCC) 53
    CDMA Development Group (CDG) 54
    International Telecommunications Union (ITU) 54
    Connect a Child Connect a Community 54
    Connect Africa 54
    Third Generation Partnership Project (3GPP) 55
    The GSM Association (GSMA) 55
    The Internet Engineering Task Force (IETF) 56
    LTE SAE Trial Initiative (LSTI) 56
    Voice over LTE – One Voice initiative 56
    Next Generation Mobile Networks (NGMN) alliance 56
    Regulatory situation regarding radio spectrum allocation 57
    In Europe 57
    In the US 58
    Convergence technologies and standards 58
    EDGE 58
    Evolved EDGE / EDGE Evolution 59
    HSPA (High Speed Packet Access / 3.5G) 59
    HSPA+ (evolved HSPA / HSPA Evolution) 62
    Combining HSPA and EDGE 64
    Long Term Evolution (LTE) 65
    LTE advanced 68
    WiMAX 68
    CDMA (Code Division Multiple Access) 72
    Main challenges to PC/mobile convergence 73
    Limitations of mobile computing 73
    Recommendations 74
    Limitations of mobile telephony 74
    Recommendations 75

    CHAPTER 4 EMERGING CONVERGED PRODUCTS AND SERVICES

    Summary 78
    Introduction 78
    Mobile broadband 79
    Mobile broadband is increasingly popular 79
    Mobile broadband penetration is lower in developing countries 81
    Mobile VoIP 84
    Voice over Wi-Fi 85
    Multiplay devices 87
    Handsets and smartphones 88
    Notebooks and netbooks 90
    Tablet PCs 90

    CHAPTER 5 LEADING PLAYER STRATEGIES

    Summary 94
    Introduction 95
    Google 96
    PC/mobile convergence is a huge opportunity for Google 96
    Making partnerships to play in both the software and hardware fields 96
    Identifying market shifts and trends 98
    Opportunities through mobile advertising 99
    Apple 100
    The huge success of the iPhone and the App Store 100
    Expansion into mobile advertising and search 100
    Mixed reactions to the iPad 101
    Opportunities in mobile VoIP 101
    Microsoft 103
    Microsoft is struggling in the mobile market 103
    Windows Mobile does not meet consumer expectations 104
    Microsoft’s shifting mobile strategy 104
    Targeting emerging markets 106
    Nokia 107
    Strategies to make up for lost ground 107
    Competing at both ends of the market 107
    Closing the app gap 108
    Sticking with Symbian while developing Maemo 108
    Preparing for the cloud 109
    Motorola 110
    Bouncing back and restructuring 110
    Positioning as a leader in converged services 110
    Building partnerships 111
    Identifying successful future technologies 111
    Mobile applications development 112
    Capitalizing on social networking and music 112
    Acer 113
    Aiming to dominate the portable computing market 113
    Mobile strategy 113
    Pricing strategy 114
    Emulating Apple 115
    Partnerships to aid growth 115
    Launching the Acer app store 115
    Huawei 117
    Successful low pricing strategy 117
    Shifting the business model towards innovation in LTE 117
    Innovation in consumer electronics 118
    Verizon Wireless 119
    Reinventing its networks 119
    LTE deployment 120
    Partnerships to drive app sales 120
    New offers for customers 121
    Verizon’s new pricing strategy looks set to be a success 124
    Vodafone 125
    Shifting towards a new strategic direction 125
    Opportunities in mobile Internet 125
    Opportunities in mobile music 126
    Taking advantage of smartphones, new payment plans and the 3G network 126
    Vendor summary 128

    CHAPTER 6 THE FUTURE OF PC/MOBILE CONVERGENCE

    Summary 132
    Introduction 133
    The future of PC/mobile convergence 134
    Mobile broadband and data services will drive growth in mature markets 135
    Competition between mobile operating systems will intensify 136
    Emerging business models 138
    Fully converged 139
    Semi converged 140
    Advances in enabling technologies drive growth 140
    Mobile VoIP solutions will be deployed as part of mobile operators' move to
    4G 141
    PC/mobile convergence will accelerate cloud computing adoption 142
    The importance of the digital dividend and spectrum availability 144
    Emerging markets will provide growth opportunities 145
    Index 149

    LIST OF FIGURES

    Figure 2.1: Global computing market ($bn), 2009-2014 24
    Figure 2.2: Mobile connections and penetration in Africa, 2008-2014 29
    Figure 2.3: Mobile connections and penetration in Asia-Pacific, 2008-2014 30
    Figure 2.4: Fixed phone lines in Africa (m), 2008-2014 31
    Figure 2.5: Global fixed voice lines and revenue, 2009-2014 32
    Figure 2.6: Global mobile data services revenue share, 2009 35
    Figure 2.7: Total global mobile services revenues ($bn), 2008-2013 36
    Figure 2.8: Wi-Fi hotspot market share (%), 2007-2008 39
    Figure 3.9: Total global mobile phone shipments (m), 2009-2014 46
    Figure 3.10: Internet penetration (% of population with a connection), 2006-2009 47
    Figure 3.11: Global mobile voice and data revenue share, 2009 50
    Figure 3.12: Available HSPA devices, Dec 2009 61
    Figure 3.13: Global LTE subscriptions (m), 2012-2015 67
    Figure 3.14: WiMAX users by region (m), 2007-2102 69
    Figure 3.15: WiMAX user penetration by region (%), 2007-2012 70
    Figure 3.16: Global 3G+ Subscribers forecast by technology family, 2013 72
    Figure 4.17: Fixed and mobile broadband subscribers (m), 2009-2014 79
    Figure 4.18: Consumer fixed and mobile broadband revenue ($m), 2009-2014 80
    Figure 4.19: Global broadband users, incl. mobile broadband (m), 2009-2014 82
    Figure 4.20: Wi-Fi certified handsets by type, March 2010 86
    Figure 4.21: Wi-Fi enabled phone shipments (m), 2007-2012 87
    Figure 4.22: Smartphone shipments by region (m), 2009-2014 89
    Figure 5.23: US smartphone market share by platform, Sep-Dec 2009 97
    Figure 5.24: Verizon total data revenue ($bn), Q3 2008, Q2 2009, Q3 2009 123
    Figure 5.25: Verizon total data ARPU ($), Q3 2008, Q2 2009, Q3 2009 123
    Figure 5.26: Vendor summary – Google, Apple, Microsoft 128
    Figure 5.27: Vendor summary – Nokia, Motorola, Acer 129
    Figure 5.28: Vendor summary – Huawei, Verizon Wireless, Vodafone 130
    Figure 6.29: Influences on the future of PC/mobile convergence 134
    Figure 6.30: Competing mobile operating systems’ strengths and weaknesses 138
    Figure 6.31: Emerging PC/mobile convergence business models 139
    Figure 6.32: Global mobile cloud computing subscribers, 2008-2014 143
    Figure 6.33: Per capita PC penetration per region, 2008-2012 147

    LIST OF TABLES

    Table 2.1: Global computing market ($bn), 2009-2014 25
    Table 2.2: Mobile connections and penetration in Africa, 2008-2014 29
    Table 2.3: Mobile connections and penetration in Asia-Pacific, 2008-2014 30
    Table 2.4: Fixed phone lines in Africa (m), 2008-2014 31
    Table 2.5: Global fixed voice lines and revenue, 2009-2014 32
    Table 2.6: Top ten mobile markets worldwide by subscriptions, data revenue and service revenue, 2009 34
    Table 2.7: Global mobile data services revenue share, 2009 35
    Table 2.8: Total global mobile services revenues ($bn), 2008-2013 36
    Table 2.9: Wi-Fi hotspot market share, 2007-2008 40
    Table 3.10: Total global mobile phone shipments (m), 2009-2014 46
    Table 3.11: Internet penetration (% of population with a connection), 2006-2009 47
    Table 3.12: PC ASPs in the US, 2008-2009 48
    Table 3.13: 37 Commercial HSPA+ networks launched by December 2009 63
    Table 3.14: 29 HSPA+ networks in deployment or planned 64
    Table 3.15: Global LTE subscriptions (m), 2012-2015 68
    Table 3.16: WiMAX* users by region (m), 2007-2012 69
    Table 3.17: WiMAX user penetration by region (%), 2007-2012 70
    Table 4.18: Consumer fixed and mobile broadband subscribers and revenue, 2009-2014 80
    Table 4.19: Global broadband users, incl. mobile broadband (m), 2009-2014 82
    Table 4.20: Wi-Fi certified handsets by type, March 2010 86
    Table 4.21: Wi-Fi phone shipments (m), 2007-2012 87
    Table 4.22: Smartphone shipments by region (m), 2009-2014 89
    Table 5.23: US smartphone market by platform, September-December 2009 97
    Table 6.24: Global mobile cloud computing subscribers, 2008-2014 143
    Table 6.25: PC penetration per region (PCs/1,000 people), 2008-2012 147

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