Once upon a time, Netflix, the great disruptor, was considered the archenemy of established film and TV businesses everywhere. Those days are long gone and to prove it, Netflix CEO Reed Hastings opened MWC late on Day One with a quick Q&A keynote session. Netflix has come in from the cold; not that Hastings needed to prove it, but what better way to start the keynote than by mentioning Netflix documentary White Helmets, which won an award at the Oscars overnight.
However, today, most TV operators see Netflix as just another broadcast partner. In a question about Netflix's relationship with operators, Hastings said that, today, Netflix is in more than half of all US households and yet TV penetration remains stable. "Netflix is one source of great content, like HBO." This is why Comcast has integrated Netflix into its set-top boxes (STBs) with some success and so has Liberty Global in Europe. In a moment of modesty, Hastings acknowledged that while entertainment and content is continuing to rapidly move online, everything will be distributed online in five to 10 years. Come that day, Netflix will be just a small fraction of online entertainment.
As predicted by Ovum, Hastings called for collaboration with the mobile industry. He encouraged operators to offer tariffs that allow consumers to watch unlimited amounts of video without additional data charges, adding that Netflix was open to operators optimizing traffic generated by its video streams to conserve bandwidth and reduce congestion and costs. Hastings also stressed that Netflix was doing its bit, deploying video transcoding technology that reduces the bandwidth required to deliver a high-quality stream to a 4–5" screen to 0.5Mbps and working toward reducing that load to as little as 200Kbps.
Hastings stopped short of discussing more expansive forms of partnership related to collaborative forms of video delivery and monetization, such as emerging content delivery network (CDN) architectures, mobile app bundling, and carrier billing. However, this does not mean that Netflix is not interested in these. Indeed, Ovum's research and discussion at MWC indicate that the company is actively pursuing or investigating a number of options that will improve and extend its mobile reach. Ovum's research into the wider area of telco and OTT provider partnerships has also shown that negotiations revolve around which party has the most power and leverage. Hastings very clearly emphasized just how powerful Netflix is.
Indeed, the key term last night was "global." Netflix is global. Distribution is global. Content is global. Storytelling is global. The audience is global. You would think it was somewhat disappointing for tech heads at MWC that had hoped the Netflix CEO would talk about exciting new technologies. Instead, Hastings opted to talk about storytelling. At one point, it was as if you could hear the audience sigh as Hastings explained how content is not designed for a specific type of devices or screen. Instead of talking to a tech audience, Hastings seemed to be talking more to one made up of creative content producers, saying: "What does it mean when content is global?"
Unlike traditional TV, which tends to be focused on domestic home markets, or US content that has historically dominated global home entertainment, global distribution through services such as Netflix allows access to a global audience. And what the global audience needs is all kinds of genres, all interests, and all languages. This is why Netflix collects stories from around the world and why it shares stories globally. Hastings mentioned a forthcoming Spanish drama series; other Netflix Originals that are being produced in Brazil, Germany, and the UK; the work Netflix is doing with Turkish TV producers, and forthcoming Korean and Japanese productions.
Also, it's not simply about TV or movies – Netflix is about all genres, from stand-up comedy to TV shows and feature films. "And, actually, we've only just got started!" boasted Hastings. If you really haven't got the message yet: Netflix even promises funding for content that may not have a chance to be produced through legacy entertainment channels. Clearly, Hasting was pitching to producers of content everywhere: Netflix offers a global audience for all kinds of entertainment.
Ovum did not expect Reed Hastings to announce big news. Instead, we expected Hastings to continue to paint a modest picture of a connected world, where the presence of Netflix continues to benefit everyone. As long as Netflix continues to dominate global online video, this is the new orthodoxy. It is a story that we will no doubt hear again as Netflix continues its global "Mr Nice" promotional campaign.
MWC 2017 has already seen the expected flurry of activity around 5G, and it's only Day Two. The most significant announcement so far has not come from the impressive number of individual vendor announcements, but instead has come from the grouping of major vendors and operators that are looking to accelerate the timeline for a stepping-stone approach to 5G standardization as part of the so-called "non-standalone 5G new radio (NR)" initiative.
In 2016, Ovum said that there would be intense debate around what would go into the first phase of 5G standardization efforts in 2017 and warned that industry differences shouldn't lead to fragmentation around approaches to 5G standards. With this latest move, the need for the industry to move forward together on approaches to 5G standards is even more pressing. At stake are the size of the 5G ecosystem and how easy it will be for end-user equipment from one vendor to interact with equipment from another vendor. Put simply, the size of the market for 5G equipment and services is at stake.
At the heart of the issue now is what will comprise the first phase of 5G standardization efforts, which are starting to take place this year. Vendors that are not part of the 5G acceleration initiative don't want to separate the 5G core and radio standardization efforts. Meanwhile, non-standalone 5G NR will speed up commercialization of interim 5G services by working on a new 5G radio access carrier before full-5G services come to market later. This would enable operators to benefit from enhanced 5G mobile broadband services coming to market sooner than currently expected, with fully standardized 5G services (e.g. fixed wireless services) coming later.
The non-standalone 5G NR companies want to use existing LTE infrastructure with a 5G radio access carrier with the aim of starting large-scale 5G trials and deployments as early as 2019, following standardization, which is expected in 2018. Based on the current 3GPP Release 15 timeline, the earliest 5G NR deployments based on standardized equipment will likely not be possible until 2020, the companies argue. They want to secure agreement for a work plan proposal of the 5G NR specification, the stepping-stone approach to 5G, at the next 3GPP RAN Plenary Meeting on March 6–9 in Dubrovnik, Croatia.
The companies that came together to support the initiative are an impressive selection of global industry heavyweights: AT&T, NTT DoCoMo, SK Telecom, Vodafone, Ericsson, Qualcomm, British Telecom (BT), Telstra, Korea Telecom, Intel, LG Uplus, KDDI, LG Electronics, Telia Company, Swisscom, TIM, Etisalat Group, Huawei, Sprint, Vivo, ZTE, and Deutsche Telekom.
Nokia, Samsung, Orange, and Verizon are some of the players that are, so far, not a part of the list of companies wanting to accelerate 5G commercialization using existing LTE equipment and a new 5G radio. Instead, these companies are pushing ahead with their own initiative led by Verizon, the Verizon 5G Technology Forum (V5GTF), which also comprises some vendors from the acceleration initiative such as Qualcomm and Ericsson. The V5GTF is focused on Verizon's 28GHz and 39GHz fixed wireless 5G ambitions and expects that its full-system trials will lead to commercial deployment by the end of the year.
Of course, it's only right that operators and vendors should pursue their own commercial and strategic goals based on their individual market needs and core strengths. However, the whole point of a common approach to standards is that operators and vendors compete in certain areas on the basis of fully interoperable equipment. When this hasn't happened, as with MMS and 3G (in its initial stages), a fragmented approach to standards led to equipment that is not interoperable and weak service uptake. The industry has to work together to make sure that different approaches to 5G standardization don't fragment the ecosystem in pursuit of illusory near-term gain.
Day Two of MWC is less about flashy new product launches and more about what's happening behind the scenes and future product roadmaps. One particular area of interest on everyone's agenda is artificial intelligence (AI).
Although many companies are keen to talk about AI and make it part of their marketing campaigns, very few have commercial deployments and even less have ownership of their own AI technology. As we roam around the show floor from meeting to meeting, it becomes increasingly apparent that AI technology in consumer products tends to focus more on the context and less on the individual.
Those that are building and implementing personal data and information into their AI engines are more likely to make a difference in the future. However, it is also impossible for a single company to know everything about one individual, and, therefore, collaborative approaches should prevail.
Although premium smartphones stole the limelight on the opening day of MWC, industry players are well aware that growth is very slow in this segment. There is still strong growth in mid-range and low-end smartphones and the attention of several brands turned at MWC toward addressing these markets. For example, Day Two at MWC saw the launch of the next handset in the Android One program from Turkish brand General Mobile. Android One is aimed at providing a high-quality, affordable, and "pure Google" smartphone experience in emerging markets.
High-quality experiences are now available on very affordable handsets, even to the point where this segment is eating away at premium handset sales. Brands that want to operate in multiple price points have to be particularly careful that they do not end up cannibalizing premium sales with their mid-range devices. This is a factor behind the multibrand strategies that several Chinese manufacturers are using.
Localization, content discovery, and ease of use are still big hurdles for new smartphone users in emerging markets. This gap has led to solutions such as the Apus Launcher, which has 450 million users in emerging markets, and the Indus OS Android fork that is gaining market share in India with its strong focus on localization and local language support.
At the second day of MWC 2017, AT&T, Ericsson, and Qualcomm claimed a world-first VoLTE call for IoT on existing mobile network infrastructure with new software and a new LTE-M device. The move is important because it brings together two important emerging technologies: low-power, wide-area IoT, in this instance LTE-M, and VoLTE. These are technologies that individually enable new services and capabilities and, combined, will open up many more.
By bringing voice to IoT devices via VoLTE, operators will be able to offer new types of services, which, as ever with IoT, promise to touch on all areas of our lives. In reality, service providers and vendors will not just need to make the technology a viable commercial reality to make the most of VoLTE and LTE-M, they will need to work effectively with companies in adjacent sectors and understand where they can bring most value in IoT contexts.
At the very least, VoLTE-enabled IoT opens up new service-monetization opportunities for operators and will, if services using the two technologies take off, create significantly more traffic on their networks. For all the talk at Barcelona of new services, charging for connectivity and monetizing traffic remains at the heart of what service providers do, and it will remain that way as we move toward 5G and beyond.
Although growth in the enterprise mobility management (EMM) market will be predominantly driven by apps going forward, the continued importance of device management and security capabilities must not be overlooked. Sophos, a security software company, has announced the release of Sophos Mobile 7, the latest version of the vendor's flagship EMM offering. Sophos Mobile 7 will support unified security and management for mobile devices, laptops, and IoT devices. Additionally, this new release will offer enhanced security features and extend containerization support for Android Enterprise (formerly known as Android for Work). The new features introduced in Sophos Mobile 7 further demonstrate how the vendor is evolving its capabilities in line with important enterprise mobility trends, including the need for businesses to manage a broader endpoint estate securely and via a single platform. Furthermore, the new IoT functionality introduced sees Sophos follow other established EMM vendors in formally positioning itself to compete in this space.
For businesses, understanding how other organizations are approaching enterprise mobility initiatives and the challenges they are experiencing can be valuable when defining a strategic approach. Interest around mobile reporting, analytics, and benchmarking technologies is accelerating and IBM are a company responding to this trend with its new Mobile Security Index. The free interactive tool enables organizations to compare device, app, data, network, and overall security to others in the same industry. The tool gathers the quantified insights from real-world data collected from devices managed via IBM's MaaS360 EMM offering. The Mobile Security Index complements IBM's recently released Mobile Metrics tool, which provides MaaS360 customers with benchmarking data and insights that support EMM.
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