Delegates at Mobile’s conference, ‘Convergence: Where Mobile Meets IT’, heard speakers from every part of the value chain – including operators, distributors, handset manufacturers and the IT arena – discuss where they see convergence going. The audience also heard an analyst overview of trends and directions in the market.
The refreshing coffee breaks provided an opportunity for networking, with lively discussions on the state of the market and views on convergence. One issue that was on everyone’s lips was the varying meaning that convergence has for different businesses, depending on their market perspective. Another topic up for debate was the impact of the looming recession on convergence and its possibilities. Some argued that because of the economic downturn most businesses do not want to invest in converged products, while others were convinced that the recession was precisely the time to invest in efficiency gaining solutions.
One thing that everyone agreed on was that the industry really is on the verge of unifying products and services. David Lock, a consultant at DRL Associates, said: ‘We are at the edges of convergence now. Convergence is something we talked about five years ago, but we still needed network speeds that were acceptable, we needed the hardware, the software and the middleware but now we are beginning to see those come together. It’s a sensible time to have this conference and the discussion.’
Aaron Rattue, GfK
‘It’s what you do with the phone that brings the money’
The spectre of recession was very much present in a presentation by Aaron Rattue, GfK’s senior sector analyst. He showed the audience a chart of falling sales figures for most consumer durables, and only two industries stood out with positive growth: telecoms and IT.
The convergence of the two industries has been driving growth. Operators have been active in pushing the sale of laptops by subsidising them – 10% of all laptops sold in September were heavily subsidised or free, said Rattue. Mini laptops, or netbooks, made up 12% of all laptop sales in September and GfK expects them to grow by 60% next year.
Operators are making the money they invest in subsidies back by selling mobile broadband connections, with 17% of all tariffs sold last month including some type of mobile broadband connectivity, revealed GfK figures.
But how long can growth and mobile and IT sales last?
Mobile phone sales have been growing at a good rate for several years, but the corporate channel has been struggling to increase growth, Rattue said.
‘This is an indication that people have already bought the hardware and now we need to help them make the most of it. The increase in IT is now in services. It’s what you do with the phone that brings the money.’
Yves Consendai, HP
‘The important thing is not to bring out technology for technology’s sake’
Yves Consendai, product marketing manager at HP, gave the audience a glimpse of how the IT sector views the convergence of their industry with mobile. The laptop manufacturer is a great example of the opportunities presented by the mobile industry to the IT sector, as only a few weeks ago the company launched two mobile phones with Vodafone.
Echoing Rattue’s views, Consendai said: ‘We already have the converging hardware, now we need the services to go with it.’
The important thing, he said, is not to bring out technology for the sake of technology, but because it offers a solution that benefits the end user. Too many products have been launched just because they are possible, not because there is any need for them.
Issues that the company is looking to address regarding converged technologies include eliminating complexity, creating continuity, giving choice and reducing cost.
Giving users continuity would include services that seamlessly switch between different technologies, such as a Wi-Fi network and a cellular network with no effort from the user. But the availability of the networks is an important prerequisite for this. In the US, where Wi-Fi networks are free, the take up of converged solutions is much higher, he said.
Convergent services could save small businesses money in roaming costs for example, Consendai said. There could be an automated callback, so when an employee uses their mobile abroad to call the UK, the call would automatically be re-initiated and the caller would get an incoming call, which is less expensive than an outgoing roaming call.
But the industry needs to work closely together for these services to become commercial, he added.
‘How can you add value?’
For Vodafone, convergence is not about technology but about the value that comes out of it. Richard Phillimore-Smith, senior manager of enterprise mobility solutions at Vodafone, said: ‘What it gets back to is what it means for the customer. The key considerations need to be about benefits for the customer.’
According to Phillimore-Smith, the best example of convergence is the BlackBerry Storm, which brings together business needs and the requirements of an end user. The next important convergent feature that Vodafone is focusing on is navigation, he added.
For O2, convergence is also about the technologies that make it possible, such as femtocells and picocells. Steve Pluta, head of solutions architects at O2, said: ‘Femto and picocells are significantly going forward because they are cost efficient.’
The operator is hoping to make convergence more user friendly and get more people to adopt converged products.
‘You are carrying around significant processing power which is not being utilised by businesses and the main reason is that they don’t understand everything you can do with it,’ Pluta said. Only about 30% of business people use email on the move, he added.
Meanwhile, Orange has conducted research into what businesses want in terms of convergence. Jason Ellis, head of data access at Orange, said: ‘Customers say: “Make my business better and make it cheaper”.’ But the problem for operators is what kind of products to bring out.
‘The economics are not there for the operators, you can’t deliver all products and services efficiently,’ he added.
Ellis said that for dealers there is clear value in managed services: ‘Dealers have to think about how they can make money from mobile, from broadband and from laptops.
‘How can you add value? Buying a mobile phone is transactional but when you start selling IT and email, they can be packaged. Dealers can make money from packaged solutions.’
Handset manufacturers, Nokia and HTC
‘We have a competitive advantage already’
From Nokia’s perspective, convergence means becoming a significant player in not just hardware, but also in services. Adrian Williams, head of business mobility at Nokia, said: ‘We want devices and services to be seen as one from the point of view of the customer.’
Williams emphasised the importance of making these converged, efficiency increasing devices available at different price points depending on the type of user. ‘We have a competitive advantage already in the scale and the brand we have, now we look to gain additional competitive advantage by building ourselves in services,’ he added. The next big area of convergence, he said, will be in social networking.
From HTC’s perspective, convergence is ‘fixed mobile convergence, which is email on the move in simple form, in more complex it’s voice with seamless handover’, said Kevin Engelbretson, channel manager at HTC Europe.
These kinds of services can have massive efficiency gains and cost savi