Making sense of mobile

It was not that long ago that the idea of using mobile phones to run applications and access the web was seen as a niche field of technology. In 2012, it became undeniable that mobile devices have eclipsed PCs and laptops as the defining computing platform of the day.

According to market watcher IDC, an estimated 717 million smartphones were shipped in 2012, up 45% from 2011. Around 117 million tablets were shipped, IDC estimates, up 70% from 2011. Meanwhile, IDC estimates that just 367 million PCs were sold during the year, up less than 1% from 2011.

But while it was unquestionably Apple’s iPhone that ignited the smartphone revolution, it could be argued that 2012 was they year of Android, Google’s open source mobile operating system.

A report by Kantar Worldpanel ComTech in December reported that Android had claimed 61% of the European smartphone market share for 2012, compared with Apple’s 25.3% share. (Apple’s iPad still dominated the tablet market, however).

It was yet another disastrous year for BlackBerry-maker Research In Motion, which failed to get its new, touchscreen operating system, BlackBerry 10 (BBX), out to market before the end of the year. RIM hopes that BBX will reverse the huge market share gains of Apple and Android, and stave off growing competition from Windows, but in June its release was pushed back to January 2013 due to ‘development overruns’.

In apparent frustration at the poor performance of Windows-based tablets, Microsoft took matters into its own hands and in June announced its self-built device, the Surface.

The growing importance of mobile is clearly not lost on Microsoft, as the latest version of its iconic operating system, Windows 8, features a new user interface designed specifically for touchscreen devices.

That decision reflects the curious conundrum that software companies such as Microsoft, which have both consumer and business users, are faced with. Now that employees are empowered to choose their own devices, the best way to achieve widespread business adoption is possibly to design the device for consumers.

Mobile payments

Many pundits had predicted that 2012 would be the year that mobile payments broke into the mainstream. That did not happen, as both business and consumers continued to get to grips with the myriad possibilities that the technology raises.

In October, supermarket retailer Sainsbury’s trialled a mobile app that allows customers to scan products’ barcodes using their smartphone, and then pay for all their shopping in one go at the till.

Tesco delved into virtual reality when it trialled a six-foot in-store touchscreen in November, enabling customers to buy goods by scanning pixellated quick response codes with a smartphone. 

A number of retailers including Asda, the Co-operative and WHSmith installed near-field communication (NFC) readers – which may lead to more mobile payments once NFC-enabled mobile phones are more widespread – next to traditional point-of-sale terminals.

In May, the Post Office announced that it was rolling out 30,000 NFC payment terminals at 11,500 branches across the UK – reportedly the largest NFC roll-out in Europe to date.

The technology even made its way onto London buses in December when card readers on some of the capital’s Stagecoach vehicles were upgraded to allow customers to use NFC-enabled credit cards to pay for single journeys.

Other companies pursued ‘mobile wallet’ services, which allow consumers to use their mobile phone to make payments using pre-paid funds.

One example was Starbucks, which in November updated its mobile app to allow customers to use pre-paid credit to buy coffee by scanning a QR code at the till.

In August, MasterCard secured a five-year deal with mobile conglomerate Everything Everywhere to introduce mobile payment services, beginning with a digital wallet that would allow the telco’s 27 million customers to make contactless payments at any of 100,000 participating retail chains.

A joint m-commerce venture between Vodafone UK, Telefónica UK and Everything Everywhere, previously known as Project Oscar, was given the go-ahead by the EU in September. The joint venture was renamed Weve in October, with the participants announcing that it was to focus on the development of mobile marketing and wallet services in the UK.

And in July, Telefónica, owner of the O2 network, announced it had landed deals with Facebook, Google and Microsoft to launch new abilities enabling the telco’s users to pay for digital goods, such as content, using their mobile phone bill.

Clearly, there are many ways that mobile phones could be used to make payments, but it would be unwise to assume that consumers will necessarily adopt them.

Contactless payment cards are seen as a precursor to widespread mobile payments. But according to ICM Research, only 8% of Brits actually use their ‘tap and go’ cards.

ICM concluded that UK consumers may just be unready for contactless payments, although that situation could be reversed if security improved.

Fourth generation

In the UK, one of the biggest developments in mobile technology was the launch of the country’s first 4G mobile network services.

In August, communications watchdog Ofcom announced that Everything Everywhere would be granted the first licence to operate 4G services in the UK.

EE, the company’s 4G subsidiary, was launched in October with a variety of service plans for consumers and businesses. It was not without its critics; some observers complained that the monthly allowance of its cheaper plan would be used up in minutes if the download speeds worked as advertised. 

Rival telcos will be able to launch their own 4G services when Ofcom auctions off licences to use the 800MHz radiofrequency early next year. And they will be keen to do so, in the hope that increased data consumption will make up for dwindling voice revenues (Ofcom revealed in July that 2011 was the first year since mobile phones were launched that the number of calls made declined).

However, in doing so they are potentially opening themselves up for even greater disruption. Free ‘over the top’ voice-over-IP services such as WhatsApp, Apple’s iMessage and Telefónica’s Tu Me all saw rapid adoption in 2012, and have the potential to accelerate the decline in voice revenues.

In all, the mobile technology sphere saw a mind-boggling outbreak of innovation, at the device, software and network levels. Businesses could be forgiven for not knowing exactly where this might lead.

However, IT leaders champing at the bit to invest in innovation need look no further than the mobile arena. Here is a field of technology where participation is essential, but experimentation is still the watchword.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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