This post first appeared on the SAP D!gitalist site on January 13, 2020.
As I do each year, I am reviewing my 2019 mobile industry predictions from the beginning of last year. Certainly, 2019 was an exciting year for mobile, and this coming year will not disappoint.
At the beginning of 2019, we were in an extended government shutdown, but that blip is now ancient history. Since then, so much has happened – much of it good, but some of it not so good. 5G became a commercial reality; IoT flourished, but both also managed to disappoint in some areas. In our messaging world, rich communication services (RCS) gained ground, but mobile operators lagged, despite many actions from Google. Still, gains were made in all of these key areas.
So, let’s take a look at each 2019 prediction and see how they turned out.
1. Omnichannel mobile messaging will be the key driver to mobile-centric consumer engagement with SMS continuing to lead the way.
While we’ve been at SMS-based messaging for many years, it continues to find more growth and use cases. But we will see more diverse channels, including social/chat apps and even RCS make huge strides in functionality. Commercial usage of WhatsApp will surge, but not without some consternation.
2019 reality: Omnichannel messaging is indeed leading the way for mobile-centric engagement. More and more, messaging providers are offering multiple messaging channels, including such social/chat apps such as WhatsApp, Facebook Messenger, Telegram, WeChat, and others, as well as email in addition to their primary SMS offerings. WhatsApp has been, not surprisingly, the most popular non-SMS messaging channel for A2P; however, it does have some limitations such as the requirement for pre-approved templates and many restrictions on the type of engagement. RCS is now part of many discussions with businesses, with virtually all of the messaging providers offering trials and/or limited commercial launches. Ovum noted that a communications platform as a service (CPaaS) is needed to complete the last mile of delivery in the right format (e.g., channel) and at the right time. Throughout 2019, CPaaS has made strides as the leading infrastructure for omnichannel mobile messaging.
Outcome: 100% correct
2. RCS will more than double its monthly active user (MAU) numbers with enterprise / A2P RCS or RCS business messaging leading the way.
Over 60 countries will have the majority of their mobile operators supporting RCS Business Messaging (e.g. A2P RCS) around GSMA Universal Profile 2.x+. With a global Android smartphone market share of around 80%, RCS will quietly continue to grow; however, it will not displace other business messaging channels, but provide an additional and compelling alternative to simple SMS.
2019 reality: As of the end of 2019, the global MAU numbers were at 353 million per the GSMA. This is up from about 185 to 190 million MAUs at the end of 2018, so less than double, but around 92-95%. RCS has not displaced any messaging channels, but virtually every messaging provider in the world has an RCS program, and businesses are really hearing about it. Mobilesquared has noted that by the end of 2019, there are 10 “gold” countries (meaning 100% of their major operators are supporting RCS on at least some of their devices [not differentiating between A2P and P2P support]). In terms of Business RCS support by the majority of operators in a country, it is less than 60 – closer to 25. Finally, in 2019, Google took matters into its own hands with Google Guest, enabling RCS support for subscribers on networks that hadn’t fully launched RCS yet, and the US carriers announced a consortium called the Cross-Carrier Messaging Initiative (CCMI). For this prediction, we again overstated the number of countries but were close on the MAUs (per GSMA).
Outcome: We’ll call this 75% correct.
3. Apple will surprise in 2019 with new innovations around devices and iOS 13.x.
Notwithstanding its realization of the soft market in China and higher prices on new devices, Apple will remain among the top five most valuable companies. The Apple ecosystem of devices and services will exceed expectations and grow, but some services will not do well. Apple Business Chat may be phased out or rethought. I’m going out on a limb here and predict that by the end of 2019, we’ll have a better understanding of Apple’s plans to support RCS universal profile v 2.x+.
2019 reality: Apple remained in the top three, with Amazon and Microsoft, in terms of market value (per Statistica in early August). Of course, those top three move around, but Apple remains in the top five. Apple released the new iPhone 11 line, which has camera functionality that has really not been well equaled across the smartphone spectrum. iOS 13 also was launched with a plethora of new, popular features. And Apple Business Chat? Well, it’s actually hung in there with some usage, but it was certainly not rethought or phased out in 2019. It’s not hugely popular as an engagement channel, as it’s more of a P2A (Person to Application) solution for customer support. We still do not have any statements from Apple about their support for RCS; however, we should note that 5G requires RCS as there is no SMS spec in 5G – only RCS. Some analysts believe that Apple will only support P2P RCS vs. RCS Business Messaging.
Outcome:We’ll call this 75% correct; there’s still no true understanding of Apple’s RCS support.
4. The T-Mobile and Sprint merger will finally be approved and will complete, creating a very unique mobile operator in the United States.
This will lead to new pricing models for mobile data with some reductions in data pricing. All three mobile operators (after the merger) will have live 5G networks, but few 5G subscribers. On the flip side, the proposed AT&T merger with Time-Warner will continue to linger in court but will not be approved by regulators.
2019 reality: This did not happen. It was approved by the US Justice Department and the US FCC; however, “the key impediment to the transaction, which the US Justice Department and the Federal Communications Commission have already OK’d, is a court challenge brought by Democratic attorneys general from 13 states and the District of Columbia. They maintain that the combination would harm consumers through higher prices and weaker service” (according to Bloomberg News). We may know the judge’s decision in February. Meanwhile, the US Court of Appeals in Washington, D.C., unanimously upheld the lower court’s ruling in favor of AT&T on February 26, 2019, stating it did not believe the merger with Time Warner would have a negative impact on either consumers or competition.
Outcome:I’ll give myself only 20% correct, given the approval of T-Mobile/Sprint merger by US DoJ and US FCC; otherwise, everything else is a miss.
5. Chatbots will grow in influence with consumer services being one of the most widely used solutions.
Various trends indicate that chatbots will soon match human behavior, leveraging AI. These will be provided through messaging apps, as well as voice assistants such as Amazon Alexa, Google Assistant, and Apple’s Siri.
2019 reality: Chatbots form the basis of conversational commerce as well as customer service. Almost all chatbot software solutions feature AI to help learn user inputs and intents, so that the appropriate skills are applied. As interest in RCS began to ramp more in 2019, so did the interest in chatbots, as RCS plus chatbots make a very good combination. Otherwise, the use of chatbots by consumers grew in 2019. Some figures quoted in a Forbes article note that “interest in Americans using messaging to interact with brands rose from 52% in 2018 to 62% in 2019.” Customer care is also the highest use case, with 80% of the respondents using chatbots for this purpose, up from 67% the previous year, across all channels.
6. Subscriber usage of messaging chat apps, like WhatsApp and Facebook Messenger, will grow, but only slightly.
WhatsApp may get to 1.6 billion, but no more. In all, messaging chat apps will barely exceed 6 billion MAUs by the end of 2019. In terms of consumer engagement, several of these have become overwhelmed by spam and thus, their open rate will remain considerably less than the “95% within three minutes” standard that SMS has set.
2019 reality: As of July 2019, the social/chat apps just barely topped 6 billion, reaching an estimated 6.053 billion MAUs. We show WhatsApp at around 1.6 billion MAUs, but this is an estimate as it hasn’t officially reported its MAUs since 2017. Companies like WeChat do have spam and bot issues, as do several others. WhatsApp did officially launch its A2P APIs, which will help grow its influence – especially in markets where WhatsApp is well used.
7. Authentication using mobile devices will continue to move away from SMS.
This trend is despite SMS-based two-factor authentication (2FA) remaining a key method for validating users across a wide variety of use-cases. Alternatives such as soft-token authentication (using mobile apps such as Google Authenticator) will grow in usage as will FIDO Alliance-compliant solutions as some higher security requirements come back to external (non-mobile device) tokens (Yubikey being one of the most common). Alternative solutions around GSMA Mobile Connect and even RCS will begin to make some impact.
2019 reality: While there were a few publicized cases of SIM swap that negated the security of SMS-based 2FA. As a result of that fraud, SMS-based 2FA remains the most common method that consumers use and businesses offer in terms of multi-factor security. TOTP-based 2FA (such as Google Authenticator) is being found in more places, including banks and many social media accounts. We are also seeing increases of Yubikey offerings, especially for high-value accounts such as password managers, Google accounts, and more. In October, the big-four US MNOs rebranded their Project Verify as ZenKey (based on GSMA Mobile Connect capabilities); however, it’s still a slow rollout. And finally, in 2019, Apple announced and launched: Sign-in with Apple, which includes 2FA as well as highly private alternatives to Facebook and Google logins.
Outcome: 90% correct, as RCS did not make any impact in the authentication space.
8. 5G continues to dominate the news cycles as the industry slowly pivots to the newest generation for mobile data.
By the end of 2019, expect 40 telecom operators to make 5G services available to their subscribers (limited or full commercial launches). For LTE, expect that 775 LTE networks and 300 LTE-Advanced networks will be fully commercial by the end of 2019. For the IoT world, expect over 100 NB-IoT and LTE-M networks to be commercially deployed by mobile operators.
2019 reality: GSA notes that there were “56 operators in 31 countries that have launched one or more 3GPP-compliant commercial 5G services (some with smartphones; some with 5G routers; some offering services widely; some with limited geographic, device, or customer availability)” Additionally, “there were 791 commercially launched LTE networks and 323 operators have deployed/launched LTE-Advanced or LTE-Advanced Pro technologies in their commercial networks” (GSA: LTE – 5G Market Statistics – December 2019). Finally, as of September 30, 2019, GSA also notes 142 deployed commercial NB-IoT and LTE-M networks across 114 operators. (GSA: NB-IoT and LTE-MTC Global Ecosystem and Market Status).
9. Calls for United States regulations to better protect users’ security and privacy will grow.
Expect laws like the EU’s GDPR to be proposed and debated by lawmakers, both at the state and federal levels, but we won’t see much implementation in 2019. The mobile industry will have a mixed response, with some indicating that current laws do well to protect consumer privacy and security, while others will support more stringent privacy regulations. Many mobile operators and key app providers will proactively offer better security and privacy assurances to try to circumvent any proposed regulations.
2019 reality: Privacy and security were big topics in 2019. In June 2018, the California Consumer Privacy Act (CCPA) was signed into law, and it became law on January 1, 2020. This is one of the most comprehensive privacy laws since the EU’s GDPR, and many companies spent 2019 rushing to abide by it. Additionally, as expected, there are almost 20 states considering their own versions, spurred by the California law. Nevada and Maine already passed laws. The CTIA noted that a multitude of state-specific rules would confuse consumers and stifle innovation, especially if other states pile on. As expected, this seems to be happening. Big tech companies, including Google and Facebook as well as mobile operators, are hoping for a single federal law that covers the whole nation. As of December, there were frameworks in committees, but no laws have been put forth.
10. Streaming video services from mobile service providers will expand in 2019 with new offerings from Apple, AT&T, T-Mobile USA (either with or without Sprint), which will leverage mobile networks.
Expect some of these will offer zero-rated streaming for some mobile data networks. For example, some networks outside the US, such as Vodafone Australia, offer unmetered video streaming for a monthly surcharge. All of these mobile-centric streaming offers will be the latest attempts to compete with Netflix, Amazon Prime, and other video over-the-air providers.
2019 reality: Apple TV+ streaming was launched in 2019, optimized for all Apple products from Apple TV to the iPhone. AT&T/Time Warner launched HBO Plus as well. With AT&T’s Unlimited Elite data plan, consumers get HBO included. That plan also includes the Stream Saver capability to “watch more video on your wireless devices while using less data by streaming content that it recognizes as video at Standard Definition quality, similar to DVD, (about 480p).” Vodafone UK (and many MNOs) are offering “unlimited plans” that emphasize the usage of streaming. Vodafone UK allows users to pick from Prime Video, Now TV, Sky Sports, or Spotify as part of their plan. Finally, Statistica notes that the percentage of consumers who have a subscription video on-demand (SVOD) service in the United States from 2015 to 2019 rose from 64% in 2018 to 74% in 2019.
My final word
And with that, we’ve finished our 2019 assessment of last year’s predictions. They were 86% correct, based on my subjective calculations – a bit better than the 2018 prediction assessment of 81.5% correct. As always, this is my assessment of my predictions, so I can’t say that I’m totally objective, but I try to be as much as possible.
2020 will mark my 13th annual consecutive mobile industry predictions, so please look for my predictions for what the first year of the 2020s should have in store for us.