Connections drive change

John Stefanac
John Stefanac
Once people understand the role Qualcomm plays in mobile technology, they often ask me to predict what the next game changing advancement will be.

The rate at which mobile technology is moving from the unimagined to the everyday makes this a very tough question.

There are people all over the world currently conceiving of and designing a plethora of innovative services and devices.

When combined with the rapidly increasing data rates of 3G, and soon 4G, mobility will become an even more integral part of our lives.

The reality is that new mobile technologies will constantly arrive.

Some will make the kind of impact that texting or the iPhone did, and some won't.

For me, the next big thing is actually more fundamental and revolves around an unprecedented shift in the business models the telecommunications industry is built on.

Traditionally, telcos have held the relationships with the users of mobile technology - they provide users with devices and bill them for using their services.

Recently, however, businesses in other sectors have developed mobile technology-based products, marketed these direct to consumers and begun to wrestle ownership of the end-user relationship off the traditional telco.

The best example is Amazon.

Through a partnership with American telco AT&T, it has created a 3G book-reading device (Kindle) that creates a relationship direct with the consumer and marginalises the role of the operator.

The Kindle roams in exactly the same way as an AT&T mobile phone.

It even works abroad via AT&Ts global roaming partnerships.

What makes this different from a phone is that the customer has no idea which mobile network their Kindle is on, and most importantly they never see a bill from a telco for using the network.

Their relationship is with the bookshop.

The user buys a book and all they see is a bill for the book.

There are no subscriptions or monthly fees.

Amazon has already worked through the technical telco stuff with the telco and built the price of network roaming into the cost of the books.

Life for the consumer is easy.

In this business model, Amazon is operating as a Mobile Virtual Network Operator (MVNO).

There are many MVNOs, but traditionally these are telecommunications providers that rent from existing networks, and rebrand the services (internet, phone etc) as their own.

Amazon represents a player from a vertical industry entering the world of telecommunications, and shaking it to its foundations.

More and more vertical businesses are adopting this model.

For example, there are SLR camera manufacturers putting 3G mobile chips into their cameras.

This means you can upload photos from wherever you are straight on to Flicker or Facebook, or email them to friends or family direct from the camera.

Imagine being out with your children and being able to upload a photo of them straight to grandma's 3G-enabled digital picture frame sitting on her mantelpiece.

Hospitals around the world are trialling and introducing medical devices that can provide real-time medical monitoring.

If your heart rate or blood-glucose levels, for example, could be monitored on the go, this would not only mean that the results would be more realistic, but that you wouldn't have to spend all day sitting in a hospital.

Results can be sent straight back to the doctor, or even to your own mobile phone if you're managing an ongoing condition like diabetes.

This new business model provides exciting opportunities for both start-up and established businesses across a raft of industries.

At the same time, the implications for incumbent telecommunications providers are enormous.

When Amazon unleashed its Kindle on the market, AT&T did well, but other mobile operators were left standing in the cold wondering what had just happened.

For years, operators have been competing against each other, based on the value of their brands, for individual customers and businesses.

Now, they will be competing for contracts and chunks of business of an unprecedented size.

What if Apple decided to become an MVNO and the combined data usage of the iPhone populous was up for grabs for one operator? The dynamic of the entire industry would shift.

The brand war just got more intense.

The evolving business models also have positive implications for the consumer - largely due to the number of 3G-connected devices we will all possess and efficiency this will generate.

Today, I have a 3G smartphone, 3G notebook and a Kindle, but this number will grow exponentially.

Some vehicle manufacturers, for example, are building 3G chips into cars to track the performance of the car and notify the owner when maintenance is needed, in the same way as medical devices can track our body's performance and alert medical staff if it's not looking good.

So, if our cars and our bodies are safer because they are being monitored, surely this will affect the insurance industry?I've probably raised more questions than I've answered here, but one thing is for sure - 3G mobile technology is changing the business world and unearthing exciting new opportunities.

Mobile operators, vendors, developers, vertical industries and consumers will all be affected by the new business models emerging out of this wireless world.

Each party needs to adapt to the changes made by the others.

It's an ongoing story and, in my opinion, it's the next big thing in mobile technology.

• John Stefanac is based in Sydney.

 

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