The latest smartphones, 5G networks and more Internet of Things will be hot topics when one of the world's biggest technology events kicks off next week. From Monday 22 February through to Thursday 25 Feb an army of business entrepreneurs and gadget geeks will descend on Barcelona for Mobile World Congress (MWC) 2016.
This year will see more than 50 British companies at the event tucked under their own 'GREAT Britain Pavilion' thousand square metre exhibition space, including many UK stock market-quoted companies.
The big guns of ARM (ARM), BT (BT.A), Sky (SKY) will all be there, even banking group HSBC (HSBA) is going along on this industry jolly. A host UK midcap technology applications and services suppliers also plan to show off their wares, including antennaes techy Laird (LRD), IT/comms testing kit designer Spirent Communications (SPT), and FTSE 250 cyber security pair NCC (NCC) and Sophos (SOPH), and they'll be joined by lesser-known names such as Amino Technolohies (AMO:AIM), Anite (AIE), Bango (BGO:AIM) and Intercede (IGP:AIM).
Sources tell us that this will be one of the largest single nation technology contingents at the show, and probably the biggest presence ever for the UK.
The event always gets industry tongues wagging by before anyone gets too carried away Adrian Baschnonga, lead telco analyst at consultancy EY, offers some thoughts about what he believes will be the key talking points.
Picking apart the 5G opportunity
Last year’s Congress saw vendors fly the flag for 5G, stressing the game changing role it could play in the connected society. While some operators have announced technology trials and early deployments are expected within the next two years, wider rollouts are only expected in 2020 once standards have been finalized and new spectrum has been set aside.
'The key challenge for the industry is to avoid over-hyping 5G,' says Baschnonga. 'While superfast mobile broadband is a key ingredient for the Internet of Things, newer iterations of 4G will be able to support customer demands for some time yet.'
Rather than vaunt 5G on its technical merits alone, operators and vendors should highlight the specific services, such as autonomous vehicles, that will gain the most from a step-change in network performance while considering the new business models required to bring such propositions to market.
What next for smartphones and wearables?
Flagship smartphone announcements will as usual be a centrepiece of this year’s Congress but nothing can hide the fact that life is tough at the top for the heavyweight device vendors.
'Emerging markets are now driving global smartphone shipment growth but pricing pressure is pronounced as home grown vendors square up to global brands while the gap in features between high-end smartphones and mid-range devices continues to shrink. Leading vendors will have their work cut out justifying price premiums going forward as smartphone penetration peaks in many markets and consumers become increasingly cost-conscious.'
In this light, wearables and virtual reality equipment are assuming greater significance for established vendors. Wearable device shipments more than doubled last year but they still account for just 5% of the smartphone market in volume terms, while virtual reality devices are further back still on the adoption curve.
'Looking forward, take-up rates for wearables will pivot on the mass market appeal of smart watches, while targeting business users could help widen addressable markets. Tie-ups with fashion and lifestyle brands can be exploited further, while a healthy ecosystem of apps is vital if wearables are to resonate with consumers in the long term.'
The Internet of Things is coming of age
The Internet of Things has been high on the MWC agenda in recent years and this year will see more news of key developments. Mobile operators are ramping up their IoT connections while the promise of a hyper-connected world is fuelling plenty of M&A in the technology sector.
Yet the sheer range of use cases at hand – from connected cars and homes to factory automation and smart agriculture – will force larger players to become more selective in their strategic approach. Cross-industry cooperation has been a hallmark of the market so far, but the challenge now is to refine business models and overhaul partnerships so that initial successes can mature into scalable service propositions.
'Standardisation remains a sticking point – the current world of IoT is a patchwork of competing technologies that may ultimately result in a confusing landscape for customers. The privacy and security demands of the Internet of Things requires greater focus – in an age of escalating cyberattacks, the collaborative nature of many IoT solutions means that guaranteeing end-to-end security is far from straightforward.'
Regulatory challenges in the digital ecosystem
Regulation remains a thorny area in the mobile industry as the boundaries blur between telecommunications and technology providers. Operators will renew their calls for an even playing field where all service providers are subject to the same rules, and which they view as the surest route to continued investment in the digital economy.
'The net neutrality debate is also evolving in new directions,' explains Baschnonga. 'Although recent EU reforms allow operators some scope to prioritise certain services, India’s recent ruling against zero-rating – where operators and web players work together to subsidise consumer mobile packages – highlights a new twist in the open internet narrative.'
'The premise of the open internet is no longer just a bone of contention between different industry groups; it will have a large say in determining how far operators and tech companies can work together on new pricing models and packages in years to come. This kind of conundrum was unthinkable just a few years ago, when the default telco attitude to over-the-top app providers was one of suspicion.'