'Open' SIMs, brain chips and Google's Nest: What to expect in wireless in 2015

We look at events that will shape the industry this year

Analysis In mobile and wireless technologies, history will see 2014 as a year in which most of the dramas were about M&A rather than breakthrough technologies (although at least the industry was starting to move on from patent wars). However, it will also be seen as a year when the groundwork was laid for many trends that will shape the sector for a long period to come – especially in terms of network architecture and new competitive dynamics for operators.

Here Wireless Watch selects an event or two from each month last year to illustrate this point. Some of these were big news at the time, others were not, but in hindsight, pointed to important changes ahead.

JANUARY

Unprecedented disruption looms for Chinese operators

A year of intense disruption in the Chinese market would have far-reaching impact on the global industry. All three mobile operators started to build out LTE, offering a welcome windfall to vendors. The first MVNOs were launched in the country and there was relaxation on restriction of foreign ownership in some areas of the market, including app stores.

Meanwhile, the cellcos entered into a massive infrastructure sharing agreement to reduce costs as, in common with their counterparts abroad, they found that LTE does not guarantee improved profits in an era of escalating demand for data and rising price wars. China Mobile launched an iPhone for the first time, contributing to those price wars, but the real handset news revolved around the increasing power of local brands such as Xiaomi and Lenovo in the world’s largest smartphone market.

Even at $3.2bn, Nest should only be a small part of Google’s IoT strategy

Google’s acquisition of Nest Labs sent a $3.2bn message of confidence to the emerging smart home business, and by extension to the Internet of Things. However, the fact remains that this was a hefty price to pay for some surprisingly attractive thermostats and smoke alarms. As the year went on, however, the agenda became clearer, particularly when Nest set up the Thread Alliance. This aims to establish its own implementation of the 6LoWPAN protocol for short range, low power wireless connectivity as a standard, squeezing Bluetooth and ZigBee. This is just one example of Google using its acquisition as a stalking horse to influence platforms for the smart home, which will be a vital growth area for its applications and big data services in the coming years.

As Lenovo buys Motorola, Chinese vendors take aim at the Samsung/Apple duopoly

This was the year when the handset old guard finally disappeared. The giants of the pre-iPhone era, Nokia and Motorola, had long been usurped by Samsung and Apple, but in 2014 they both changed ownership (in Motorola’s case for the second time, being sold by Google to Lenovo). Nokia’s devices business ended up with Microsoft, a deal which freed the Finnish firm to reinvent itself yet again and focus, unfettered by handsets, on infrastructure, mapping and IPR.

The timing was bad – the devices appear to have little role in the new, cloud-oriented Microsoft which new CEO Satya Nadella is creating, and may well be written off, in time, as a mistake, in the same way that Google has pulled back from its integrated device/OS adventure. Its choice of buyer for Motorola was symbolic because it highlighted the rise of Chinese vendors, not just as providers of low cost handsets but as powerhouses across the device spectrum. By the end of the year, Xiaomi had rocketed up the ranks at home and launched in five new markets including India, and along with Lenovo, Huawei, ZTE and others, was threatening the Samsung/Apple leadership. Samsung’s market share and profits in the mobile market have both been reduced sharply, though it remains the biggest vendor. But the Chinese era in the smartphone sector has certainly begun.

FEBRUARY

MWC - key themes, with the network itself on centre stage

Mobile World Congress is the place where the industry shows off its new technologies, but also its visions for the future. Many of 2014’s key discussion points in Barcelona were network-related. Gone was the brief era when MWC became a device-dominated show. Although the major gadget launches still generate the largest column-inch counts, the balance has shifted to infrastructure – an infrastructure which is increasingly based on software not hardware. Some years ago, operators were no longer differentiating significantly on network quality or capability – most had achieved a given level of 3G coverage and service, and the key to attracting customers lay in flashy devices, combined with almost suicidal flat-rate tariffs.

Now all the carriers have the same devices, and the all-you-can-eat offers are largely gone. This has shifted the competitive race to innovation in pricing and bundling; to services, even over-the-top ones, but most importantly to the one area which is still unique to MNOs: their licensed-spectrum networks.

The race to implement more and more advanced features from the 3GPP menu is not just a carrier game of "mine’s bigger than yours", but a truly necessary attempt, at least in the developed mobile markets, to differentiate themselves with the most advanced network capacity and capabilities. This has led to many key developments from accelerated trials of virtualisation to the start of discussions about "5G".

MARCH

Netherlands allows open SIMs, cellco could lose the vital key to its kingdom

The SIM card is the key to the cellcos’ kingdoms, enabling them to track and communicate with every device that comes onto their network – and, of course, charge for the activity. As connectivity moves beyond handsets and tablets to ‘things’, there has been much discussion of an open SIM card which could be activated by the device maker, or could even be programmed on the fly to link to any network in range, with no participation from the network operator.

The SIMless network will be one of the biggest changes to the mobile carriers’ landscape that they have ever experienced and several events in 2014 pointed to that end point. Regulators in The Netherlands became the first in the world to allow any company to issue its own SIM cards; various platforms for cloud-based, rather than SIM-based, authentication were on show; and Apple included a "soft SIM" option in its latest iPad. This allows the user to select from a list of operators (and switch between them) when activating the device, passing the control from the carrier to Apple.

Next page:
APRIL Nadella cuts the Windows umbilical cord at last

The most important moment for new Microsoft CEO Satya Nadella came with the release of Office, still the firm’s most iconic application, for the iPad before it was shipped for the company’s own Surface tablets.

Nadella had indicated that he was breaking with predecessor Steve Ballmer’s policies of putting Windows ahead of everything else, and of integrating devices too. But with this move he put substance behind his cross-platform, "cloud first, mobile first" mantra and cut the umbilical cord with Windows, which limited Ballmer’s freedom of action for far too long. He has followed the symbolic release of Office for iOS with many other decisions that point to a cross-platform future – and even, eventually, one without Windows at all, but this was the starting point.

GE seeks to turn its Industrial Internet into a standard

Consumer and enterprise markets are, unsurprisingly, served by very different technology ecosystems, even when underlying standards are the same, and the split will continue into the internet of things (IoT). Much of the sound and fury is about the consumer side – smart home, wearables, connected cars and so on. But many of the profits will come from the vertical and enterprise side of things and that market may not be driven by operators or mobile providers, but industrial giants.

General Electric is the most important so far, and in April turned its internal initiative, the Industrial Internet, into a consortium of the same name, aiming to set a global standard. The IIC (Industrial Internet Consortium) was initially supported by GE itself, AT&T, Cisco, IBM and Intel, and the aim is to establish standards-based interoperability for gadgets and sensors, particularly those embedded in machines, and thus to support the massive big data opportunities in these markets.

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