Mobile 2.0 - Facing the Crunch

Nice piece by mjelly (James Cooper) on why he thinks Mobile 2.0 will weather the coming storm:

1. handsets and networks are still improving
2. consumer adoption is just moving into the mainstream
3. mobile is starting from a low base not a boom or bubble
4. the recession happened for mobile in 2005/6
5. mobile internet is being driven by hyper-growth markets
6. lots of innovation is still happening in mobile
7. multiple players are driving growth

I am also more cautiously optimistic than in the past (just search the term Planet Mobile on the blog here to see uncautious pessimism), mainly because I see Apple starting to drive this world like it did the early PC environment. Who will play IBM and Microsoft is unclear, but there are more and more lining up (Android etc), and we are starting to see mobile plans at reasonable pricing. What can be achieved is clear just by studying Japan and Korea .

Just to show that its not a slamdunk, however, Disruptive Wireless (Dean Bubley) cautions that:

I think it's going to be pretty patchy over the next few years, to be honest.

While I agree most of your assertions, there are a number of counterpoints:

- slowing handset upgrade cycles, and lower levels of subsidy
- possible "capacity crunch" for mobile broadband on existing 3G networks and delayed capex for upgrades. Less likelihood for operator CFOs to want to bid for spectrum, rush to LTE etc
- slow adoption by mobile operators of real "Telco 2.0" business models - too much emphasis on unwanted end-to-end controlled services like Mobile TV
- Lower consumer spending may impact the "second device" market and hence impact uptake of smartphones, 3G dongles etc
- Patchy adoption of services like Mobile IM, and a risk of cannibalisation of SMS revenues

I think that on balance, mobile will probably survive OK over the next few years. But I wouldn't be over-optimistic, there will be some pain as well.

One thing I would say by the way, is that those Europeans thinking this is ripe for their plucking need to get off their featherbedded *rses - it is my view that the US is now ahead in innovation terms (Shock - I actually agree with Mary Meeker - see her slides, page 29!).