Mobile Industry Predictions for 2018
Welcome to the 11th annual edition and 2018 version of my Mobile Industry Predictions. Once again, I’m delighted to share my thoughts and prognostications about how the overall mobile industry will fare. I can say that (probably fortunately) many predictions of previous years did not come true; however, many have done so.
2018 is already starting off with some technological bombshells, as in December 2017, the US FCC repealed network neutrality regulations as they have been known; however, this debate is far from over. Blockchain is gold: any company that even mentions blockchain all of the sudden rises to the top and for those public companies that start talking about blockchain, their stock valuations sometimes rise quite dramatically. Much of that is based on the hype that bitcoin and other cryptocurrencies brought to the discussion in December. Mobile networks continue to flourish and 5G will likely become reality this year.
Before we delve into what is in store for us in 2018, we should review the previous year’s predictions to see how we fared against the reality of this dynamic, ever-changing industry. It is just as important to review how the industry performed in relation to previous predictions. For each 2017 prediction, we will rate the correctness of the prediction to try to quantify how we did.
 Mobile Messaging – especially A2P messaging through SMS will continue to grow and become the dominant worldwide channel for businesses to interact with customers. While all messaging methods will grow in subscriber usage (MOUs, etc.), SMS also continues to show resilience and staying power. RCS-type deployments will continue to disappoint and there will be no Android equivalent of Apple Messaging. Some IP messaging platforms will become legitimate alternative channels to A2P SMS.
2017 Reality: A2P messaging continues to grow and even our own A2P messaging statistics reflect that grow with a double-digit increase percentage over 2016. All messaging channels continue to grow (for example, Facebook Messenger topped over 1.2 billion MOUs as of April 2017). Ovum indicates “A2P messaging is projected to grow at 8% CAGR from 2015 to 2018,” and certainly our own results and that of various other competitors in this space reflect that. I’m happy to report that I was wrong about RCS. A2P RCS is making a resurgence thanks to the catalyst of Google Jibe’s RCS Business Messaging early access program incorporating leading A2P SMS aggregators & providers around the world. Other RCS hubs including Samsung phones, Mavenir, ecrio and others are also providing RCS solutions around the GSMA Universal Profile 1.0 and 2.0 standards which is reducing RCS fragmentation across the world. Finally, RCS is poised to become an important engagement channel. 75% correct because I thankfully got the RCS part wrong.
 Chatbots will be heavily hyped, but these won’t gain significant prominence, but for a few customer-service solutions – which will ultimately lead to human interaction on the other side. Think of chatbots replacing the voice-call menu tree or requesting needed information for the human responder.
2017 Reality: Chatbots or ‘bots’ were indeed strongly hyped in 2017. They are being used in more and more situations – especially around customer service; however, their prominence is still questionable. Bots are mostly used today in non-SMS social chat apps such as Facebook Messenger and others. For some platforms, the ability to discover new bots is a factor. A few are being deployed within SMS based and they will likely play an increasing role in upcoming A2P RCS as a core element of conversational messaging on that channel. AI enhancement of chatbots has also become more commonplace leveraging such solutions as Google’s api.ai (now called Dialogflow) or Microsoft’s Bot Framework, among several. 100% correct.
 We will see a start of production 5G deployments by mobile carriers – initially targeting for IoT applications; however, some 5G deployments will be targeted for consumer devices.
2017 Reality: We must call this an almost complete miss, but a close miss. GSA noted that 103 operators in 49 countries are “investing in 5G technology in the form of demos, lab trials, or field tests that are underway or planned.” As of December 2017, 32 operators have made public commitments to deploy 5G in 23 countries. This include Verizon Wireless who has committed to roll-out 5G in 3-5 cities, starting with Sacramento. In November, 2017 Huawei indicated that Vodafone Italy had successfully achieved the first 5G data connection in Milan, Italy, marking the start of their planned network rollout. 20% correct
 By the end of 2017, there will be at least 650 LTE networks and 200 LTE-Advanced Networks launched worldwide.
2017 Reality: GSA says that LTE is a “global success, connecting over 32% of all mobile subscriptions worldwide.” At the end of November 2017, there were 647 commercially launched LTE networks with 680-700 anticipated commercially launched networks by end of 2017. Also, per GSA, there are 216 LTE-Advanced networks launched in 105 countries. 100% correct.
 Apple will launch a new iPhone 8 and iOS 11 that will include some new innovations for Apple, including an OLED screen, no hardware buttons, wireless charging, enhanced camera capabilities as well as better support for LTE-Advanced. This device will lead to record iPhone sales in 2017 with Apple iOS gaining some market share, but not dominating Android.
2017 Reality: Apple indeed did launch the new iPhone 8 and iOS 11; however, they also announced and shipped the new iPhone X, which included the OLED screen, no home button and the other features. Wireless charging is now available for both the iPhone 8 and iPhone X. LTE-Advanced support is mostly unchanged in the new devices. Android-iOS market share varies a bit, worldwide, but Android remains in the 80-85% share with iOS at 15-20% share. 85% correct.
 Two-Factor Authentication (2FA) will continue to be the dominant authentication and security mechanism – especially with increasing account breach reports. 2FA over SMS will continue to be the dominant channel, although 2FA through TOTP solutions (such as Google Authenticator) will gain prominence as well.
2017 Reality: Breaches continued in 2017 with many prominent companies targeted resulting in hundreds of millions, if not over 1 billion subscribers’ data compromised. One of them, Deloitte, was specifically determined to lack of 2FA in place. The FIDO/Javelin State of Authentication 2017 report cited that SMS OTP for mobile was second only to password usage. It was 4th for online, with static and dynamic Knowledge Based Authentication (KBA or “secret” questions) coming in 2nd and 3rd. Software OTP (such as TOTP solutions) was next after SMS OTP. 100% correct.
 Wearables will continue their slow growth, but with no real killer applications or functionality, they will slowly track upward. Fitness / Health continue to be the predominant applications. Apple and Fitbit continue to lead the pack with one or more existing wearable platforms shutting down in 2017.
2017 Reality: Let’s start with who exited the wearable business. Jawbone, once worth over $3 billion is said to be in liquidation and TomTom cut jobs as they began restructuring more toward their mapping and navigation. As of Q3, 2017, Apple retook the lead in the wearable market with 23% share, with Xiaomi (21%) and Fitbit (20%) right behind it. In terms of predominant functionality, health and fitness continue to lead as Xiaomi and Fitbit controlling over 40% of the market; however, with LTE-enabled Apple’s Series 3, we are seeing additional applications such as messaging, alerting, and communications starting to gain usage. 100% correct.
 The most dominant IoT applications will be in transportation – especially vehicle automation, followed by logistics (tracking items) and smart home devices (light bulbs, home automation, etc.). While few vehicle manufacturers will be able to provide capabilities of a Tesla (e.g. downloadable software, self-driving capabilities, etc.); more car manufacturers will provide mobile apps and remote vehicle management than ever before.
2017 Reality: According to IoT Institute, Asset tracking and Monitoring was the most popular use case, followed by Automation of Manual Processes and Predictive Maintenance, rounding out the top three. These predictions for 2017 were a little too specific; however, “automation of manual processes” can cover some of the consumer-focused IoT implementations (e.g. for smart home devices which continue to proliferate). Huge changes in vehicle IoT were not realized in 2017, although there has been plenty of press around this fundamental changes. Clearly, the most innovative IoT solutions were in the industrial space. 30% correct.
 In the United States, expect some mobile operator consolidation. This likely means either Sprint or T-Mobile USA is acquired. US Cellular could also be acquired along with some of the smaller Tier 3 operators. This will lead to questions of competition and market dominance among the remaining operators.
2017 Reality: Sprint and T-Mobile once again flirted with merging and once again, they called it off. US Cellular also remains independent. In fact, due to the FCC-imposed “quiet period,” due to the incentive auction of 600 MHz spectrum, there was little major M&A among mobile operators in the United States. 0% correct (I’m going to have to quit trying to predict M&A activity among U.S. MNOs! I never seem to get these correct!)
 Mobile Point of Sale payment solutions will continue to grow in usage and acceptance by consumers. For example, Apple Pay will top double-digit monthly usage (percentage of Apple users actually using in a month). Consumers will also begin to accept that mobile payment solutions are more secure that directly using credit cards. More major sites will support Apple Pay and Android Pay as options.
2017 Reality: Mobile contactless payment solutions (better term that mobile point-of-sale) did increase. In fact, a November Bank Innovation report, indicated that Juniper Research estimated that Apple Pay should reach 86 million users in 2017. Apple Pay is now in 20 markets that represent 70% of the world’s card transaction volume and in the US, at more than 50% of all retail locations. Android Pay and Samsung Pay have also increased; however these two sort of split up the Android world. Finally, Apple Pay Cash launched in late Q4 2017 enabling users to transfer money to each other through iMessage and other channels. This is setting up iMessage to become a more comprehensive communications app. 100% Correct.
2017 was a tough year for predictions as I was only 61% correct, compared to the 2016 predictions, which were 83% correct and 82% for the 2015 predictions.
Now onto 2018. As we’ve shown, 2017 has been setting the table for many new technologies to come to the main course of commercial fruition this year. In no particular order, here are my ten mobile industry predictions for 2018:
- Mobile Messaging continues its dominance as the primary engagement tool for businesses to interact with consumers. SMS will continue to lead and will grow above 2017 volumes. Other messaging media usage will also increase including Facebook Messenger, WeChat, and many others. For the first time, A2P RCS will launch commercial services with many key brands and businesses interacting with consumers through RCS.
- Speaking of RCS, 2018 will be the year that RCS returns, but specifically optimized for A2P (or enterprise/business/brand engagement). While Person-to-Person or P2P RCS will grow, the biggest impact with be on consumer interaction. Most of it will be through intelligent (AI-assisted chatbots). Expect that by the end of 2018, there will be between 500 -700 million MAUs using RCS across the world, starting to rival many of the non-SMS messaging apps. This will be even higher, if Apple iMessage supports RCS Universal Profile. For many mobile apps, 2018 may be the beginning of the end as users discover that conversation interfaces work as well as or better than downloading mobile apps with similar functionality.
- Apple will grow its worldwide iOS market share, building on the success of the Apple iPhone X. New iPhones in 2018 will leverage much of the new technology and capabilities introduce in iPhone X. Expect more enhancements to iMessage as well as improved LTE Advanced capabilities for more networks around the world. The late-December 2017 revelations around the “battery/slow-down” issues won’t ultimately have much effect. Apple Watch will continue its dominance in wearables, increasing its share to almost 30%.
- Apple HomePod will launch and have a number of new innovative capabilities that will enable close integration with Apple mobile devices (iPads, iPhones) that Amazon Echo and Google Home will not have. While 2018 won’t see HomePod overtake Amazon or Google, it will become the genesis of a new class of personal digital assistant that will grow in influence.
- Authentication that leverages mobile solutions will continue to gain more visibility and usage by consumers all around the world. Once again, two-factor authentication (2FA) over SMS will continue to lead worldwide as the most used solution by consumers, followed by 2FA via mobile apps such as Google Authenticator and many others. Many of the vulnerabilities associated with SMS will be minimized as mobile operators continue to close security vulnerabilities around SMS. Additionally, biometric authentication will also grow in prominence.
- Developer-centric API solutions for mobile channels will continue to increase usage – especially in messaging engagement, which will help fuel the growing mobile messaging usage as a medium to interact with businesses. Self-service by developers and even non-developers in messaging and chatbot solutions will bring mobile channels to more businesses, quicker and easier.
- There will be over 750 commercially deployed LTE networks, over 300 LTE-Advanced commercially deployed networks, and over 50 5G (all standards) commercially deployed networks by the end of 2018. The GSA noted that in 2018, we should see over 3 billion LTE subscriptions. At the end of 2017, there were 116 mobile operators “investing in pre-standards 5G networks.” Many of these will provide fixed-wireless solutions as well as some specialty solutions. I doubt that we’ll see many mobile handsets supporting 5G in 2018. That will likely come to fruition in 2019 and beyond.
- The debate over US Network Neutrality is far from over. In 2018, there will be legal and potentially legislative challenges to the Dec 14, 2017 repeal of the various FCC regulations around network neutrality. This is a politically charged issue. Most Americans as well as many technology giants supported the network neutrality provisions. Many mobile operators did want them repealed. Expect plenty of confusion, but little negative consumer-facing activity by mobile operators and ISPs because of less regulation. Most people won’t notice any changes in their accessibility.
- Usage of mobile-network connected IoT devices will continue to dominate the IoT space as numerous industries rush to provide mobile-connected sensors. This will be especially important to asset tracking across a variety of industries, especially those where the industry must track and maintain movable assets. Interestingly, though, these mobile-network connected sensors will primarily use existing networks (e.g. 3G, LTE, etc.). Companies that provide IoT solutions will also benefit in providing big-data mining, tracking, and maintenance capabilities to manage and process asset data from millions of connected sensors. Overall, all IoT activities across both industrial and consumer-focused solutions will increase substantially.
- Blockchain (per Gartner, still in the Peak of Inflated Expectations) will be coupled with mobile platforms and applications to provide new and innovative solutions for finance, security, as well as mobile wallet/loyalty programs. This goes beyond mobile based cryptocurrency wallets and apps. Instead, mobile devices can be used as blockchain nodes that can be used to store a variety of secure transactions. New innovations in 2018 will show that mobile devices can become very good devices for blockchain-based solutions which can be as easy as downloading a specific app for consumers.
For better or worse, the predictions for 2018 cover a wide variety of areas: Mobile messaging (SMS and RCS as well as messaging chat apps), authentication and blockchain as they relate to mobile, IoT, Apple, network neutrality and much more. This year, I’ve decided to stay away from mergers and acquisitions; however, I do think we’ll see many more – but maybe not quite as many as in years past. A variety of new businesses will begin to emerge and become noteworthy in new areas such as chatbots, IoT, 5G, and AI. But don’t rule out the existing technology leaders either. They too are working on some new and amazing technology. It will another fun year.
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Mobile Industry Predictions for 2018