Happy Weekend! Mobile Weekender is a collection of our favourite mobile news of the week from BI Intelligence, Business Insider’s paid research service.
T-MOBILE, AT&T, PUSHING WIRELESS BATTLE BORDERLESS: No. 2 US mobile operator AT&T has spent much of the past year acquiring Mexican telecom entities, such as Nextel Mexico in April and Iusacell in January. So far in 2015, the mobile operator has spent around $US4.4 billion on its Mexican acquisitions, and just two weeks ago, it announced a $US3 billion expansion plan to build a robust “North American Mobile Service Area” in Mexico that provides mobile internet and communications to hundreds of millions of potential consumers.
AT&T’s plan to offer the first borderless wireless network in North America was a good one until T-Mobile beat it to the punch. On Thursday, No. 4 US mobile operator T-Mobile unveiled its “Mobile without Borders” offering that accomplishes AT&T’s strategy and more. T-Mobile’s new service enables its Simple Choice customers to call, text, and use mobile data across the United States, Mexico, and Canada at no extra cost, effectively creating the first wireless plan that covers the entire North American continent.
This latest move has two distinct implications for the wireless industry:
Mobile borders are going to fall faster than assumed. While the evolution of the mobile industry to offer services cross-border was an eventual certainty, T-Mobile’s abrupt launch of such a service is going to prompt its competitors to respond in kind. And while North America is the obvious first step, Google’s Project Fi is already exploring Wi-Fi-based international mobile solutions that span continents.
International wireless costs are going to drop for businesses and consumers alike. T-Mobile set a precedent for affordability with its free cross-border service expansion, and while it’s highly unlikely that AT&T and eventually Verizon would offer international wireless plans for no extra cost, they will have to make the additional cost fairly low to stay competitive.
This is just the latest of T-Mobile’s long list of consumer-friendly moves. T-Mobile’s tactics have been effective in growing its subscriber base over the past several quarters, and T-Mobile’s most recently supplied subscriber stats indicate that it may have just overtaken Sprint for the No. 3 spot. The company’s growth will sustain as long as it can continue to build out its infrastructure and win a lot of the spectrum being offered in the 2016 incentive auction.
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TABLET POPULARITY IN THE ENTERPRISE GROWING: Although most employees in Germany, the United Kingdom, and France use multiple devices to complete their business tasks, a large and growing minority of those employees use solely tablets, according to a new report from the IDC. Forty per cent of employees in these markets rely on tablets alone to complete business activities, and this share is expected to increase in the coming years. Here are some highlights from the report:
More functional mobile devices, particularly in the form of 2-in-1 devices like the Microsoft Surface, are slowly cannibalising portable PCs in some enterprise environments. Larger screen sizes, combined with convertible or detachable keyboards, are helping the hybrid category replace some mobile PC functions.
The importance of the tablet is largely dictated by the mobility needs of businesses. Employees who spend most of their work time travelling or interacting with consumers are more likely than not to use a tablet as their sole business device. Executives and marketers, who are responsible for document creation, are more likely to use a tablet in tandem with other devices.
The popularity of tablets and 2-in-1s in the enterprise is growing steadily, thereby keeping tablet shipment growth from experiencing severe atrophy. While growth in tablet shipments has slowed over the past two quarters, the device is still gaining traction among businesses.
A separate report from Gartner found that the larger “mobile PC market,” which includes tablets, 2-in-1s, and ultraportable notebook devices is expected to grow strongly this year, from 37 million shipments in 2014 to 63 million in 2015.
MICROSOFT’S RESTRUCTURING PLANS HIGHLIGHT OPPORTUNITY IN THE MOBILE PHONE MARKET:Microsoft is doubling down on its struggle to sustain the Windows Phone by restructuring its phone division (at a hefty $US7.6 billion write-down of its Nokia acquisition) and eliminating 7,800 jobs, CEO Satya Nadella wrote in a memo Wednesday. While Microsoft once held a respectable share of the global mobile device market, its failure to adequately adapt to today’s market pushed it toward obsolescence (see chart, below). Here’s what Microsoft will aim to accomplish with a revamped phone division:
Make one great phone to compete in the high-end market. A new flagship Windows phone, which has been so long in coming that even the most staunch of Windows phone loyalists have lost hope, will be a top priority for the division. Microsoft will “focus [its] efforts in the near term while driving reinvention,” according to Nadella. With the a new flagship looking to launch alongside the mobile Windows 10 this fall, it’s likely that the flagship is the immediate priority.
Help third-party manufacturers make great Windows phones, possibly a la Android. The memo states that Microsoft wants a Windows phone ecosystem that “includes” its first-party device family, but it will likely feature low-end smartphones from third-party device makers that Microsoft hopes will woo value mobile phone shoppers.
Win the enterprise. Microsoft is well suited to gain traction in this arena despite Apple and Google’s current hold due to their vast cannon of enterprise software.
Notably, the company’s continued effort to reincarnate a popular first-party Windows flagship phone highlights the unsung opportunity for a mobile entity that can strike the right balance between hardware and software.
The current Apple/Google mobile platform duopoly is unsustainable in the long run,
and a third major platform is desired by major telecoms and would be beneficial to consumers. One of the biggest barriers of a third major platform gaining traction in the mobile market has been the inability to adequately court developers to create the apps that will draw users to the platform, and users will not come to a platform that does not have a robust app offering. Microsoft has seemingly addressed this issue in part with the capability of Windows 10 to port apps from iOS and Android over to Microsoft seamlessly, though the viability of this technology hasn’t been fully tested yet, and it’s difficult to presume that the process is as simple as it’s been touted to be. If Microsoft can deliver a killer flagship, get a robust app ecosystem working on its platform, and prove that its continuity between devices with Windows 10 is really seamless, it’s got a shot of claiming that third spot.
WHY APPLE WON’T HAVE A FRAGMENTATION PROBLEM LIKE ANDROID: One of the most important aspects of Apple’s newest mobile operating system, iOS 9, is that its installation demands significantly less free storage space than its predecessors’. While iOS 8 demanded a whopping 4.6 GB of storage space for iPhone users to upgrade from iOS 7, iOS 9 will require just 1.3 GB of free storage to upgrade. The less required storage space to upgrade isn’t the only major benefit of iOS 9, though. And, as recently discovered by developers accessing the beta version, iOS 9 boasts a new feature in which Apple will temporarily delete some apps on a phone in order to find 1.3 GB of free storage for the upgrade, and then automatically reinstall them after the update is complete, MacRumors notes. This feature will theoretically prompt faster-than-ever adoption of a new mobile OS, as lack of storage and reticence to delete content to free up space have been the largest roadblocks for consumers to upgrade.
Considering that mobile OS fragmentation is a frustrating and complex issue for app developers to deal with, the generally cohesive iOS ecosystem has been an important factor in iOS-first development. iOS 8 saw the slowest upgrade rate of Apple’s mobile operating systems, but the consumer-friendly updates in iOS 9 should reconcile lingering fragmentation issues.
iOS 9 is currently open to developers and consumers via public beta, and will be made available for full release download this fall. If history is any indicator, iOS 9 will launch in mid-September: iOS 7 launched on September 18, 2013, and iOS 8 launched on September 17, 2014.
AMAZON TO TAKE ON DROPBOX, OTHERS, WITH MOBILE CLOUD STORAGE: Amazon launched a dedicated mobile app for its consumer cloud storage solution, Cloud Drive. The Android version of the app was released in late June, and the iOS version launched last weekend, reports TechCrunch. Cloud Drive lets users store photos, videos, and documents in a cloud. It competes with the likes of Dropbox, which has a partnership with Microsoft, and Box, which recently teamed up with IBM.
Amazon’s mobile app is fairly sparse at the moment; while mobile consumers can stream songs and videos stored in Cloud Drive and open text documents, they will be unable to edit files. Nevertheless, the app’s existence indicates that the company is looking to expand its consumer cloud offerings. A robust and productive mobile cloud storage app, combined with Amazon’s competitive pricing in the consumer cloud market and its notorious ability to scale, would give the company a lot of steam. Amazon is already the standout leader in enterprise cloud infrastructure services market by revenue, beating out Microsoft, Google, IBM, and Salesforce combined.
IBM JUST REVEALED THE NEXT BIG MILESTONE IN CHIPS: IBM, in partnership with other entities including Samsung, has created the first functional and commercially viable 7-nanometre chip. This new chip will be smaller, significantly more efficient, and four times more powerful than the cutting-edge 14nm chips in use today and better than the 10nm chips in the process of reaching the commercial market now. While 7nm chips are much smaller and more efficient than their predecessors, it’s uncertain whether they will follow the “cheaper” aspect of Moore’s law, which states that computing technology will dramatically increase in power and decrease in cost at an exponential pace. Though IBM has not offered a solid timeline, it’s expected that the commercial piloting of 7nm chips will start between 2017 and 2018.
This is a big deal and relief for the mobile industry, as smaller, more powerful chips have become increasingly difficult to create and more important than ever in the expanding arena of connected devices. Smaller and more cost-effective chips, following the basic tenets of Moore’s law, is the key ingredient to creating products like super powerful smartwatches and capable contact lenses.
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Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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