The Asia Pacific Mobile Industry Adapts to the Connected Consumer

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The Asia Pacific mobility market is expected to continue experiencing strong growth in 2014 as companies across the mobility ecosystem adapt to meet the demands of the Gen C consumers.

"The unique Asia Pacific market dynamics create the world's most exciting mobile market. The combination of a young population, economic growth and a lack of fixed infrastructure in the developing countries make mobility central to the lives of the consumer," says Charles Reed Anderson, Head of Telecoms & Mobility, IDC Asia/Pacific.

"We are in the midst of an amazing transformation. In countries like China, more consumers watch videos online than watch television. In ASEAN, we are seeing a huge growth in mobile commerce, with some leading eCommerce vendors reporting that between 20% - 40% of all their transactions come from mobile devices. Companies that target these consumers need to adapt their business models to meet the changing user preferences or risk getting left behind, " stresses Anderson.

"However, for those companies that can adapt, it will be an exciting time as they unearth new revenue streams by moving into adjacent markets and providing additional products and services to their customers," Anderson adds.

Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 mobility predictions in 2014. These trends are what IDC believes will have the biggest impact on the APEJ mobility market.

Prediction 1: BYOD as an enterprise mobility strategy is dead

BYOD will continue to dig deeper in Asia/Pacific. IDC believes that close to 90 million smartphones shipped in 2013 will be employee liable, or under a BYOD scheme - a 269% increase over 2012. But BYOD is a compromise between users and the enterprise; the company will reluctantly allow users to use their own devices at work, and in return users reluctantly do work on their own devices.

In view of that, IDC expects a new trend to emerge: Eligible users will be given a choice of devices that they can use for work, also referred to as the "Choose Your Own Device" (CYOD) model. Organizations evaluating mobility strategically will look to CYOD as the main adoption model where management and security can be standardized and guaranteed, and business processes can be mobilized. Just as 2013 is the year where enterprises in Asia/Pacific realized they needed more than mobile device management (MDM) solutions, 2014 is the year where they realize BYOD as a mobility strategy is dead.

Prediction 2: Internet of Things will revolutionize products and business models

In 2014, Asia Pacific will start to reap the benefits of the Internet of Things (IoT), with the groundwork being laid to fundamentally change the way that cities function, industries operate, companies compete, employees work and consumers live. The core technologies that will support this evolution are tried and tested, including the modules, networks and platforms that underpin the Internet of Things. However, in 2014, IDC anticipates much of the innovation that drives the industry forward not to come from the traditional vendors, but rather the entrepreneurial new IoT application vendors and analytics companies that will find new ways to leverage technology "products" and the data they capture to create the solutions that change the way we work and live.

Prediction 3: Customer First, Mobile First strategies emerge to target the connected generation

More mobile devices than PCs are used to access the internet in Asia Pacific, and in the developing and emerging markets in particular. In Indonesia, for instance, three times as many mobile devices are used to access the internet as PCs. Many companies are realizing that for interacting with employees, partners or customers, mobility is the core strategy. For many large organizations, this transition will take time to evolve and therefore will create market opportunities for innovative and entrepreneurial companies to address the underserved mobile customers in selected industries, including financial services and retail.

Prediction 4: A new appcessory market will emerge to develop the solutions that extend the usability of consumer wearables

When innovative technology solutions are first developed, such as consumer wearables like Google Glass, it can be difficult to visualize their potential. In 2014, IDC believes an appcessory market will emerge that leverage these technological breakthroughs to drive dynamic consumer and enterprise solutions. To drive this market, R&D communities and application hubs will be created to help entrepreneurial solution developers extend the usability of the new consumer wearable devices by leveraging the data they capture to drive mobile advertising and xCommerce opportunities as well as by developing vertical-specific industry solutions.

Prediction 5: The creation of innovative two-sided business models to generate future revenue streams for mobile operators

Developing market operators face a "catch 22" situation: Increased smartphone penetration is driving digital content consumption and network traffic, but to handle the increased traffic, operators need to upgrade their network capacity, however the low customer ARPUs do not support the investment case. Operators must identify two-sided business models where revenues can be generated by either the content providers, device manufacturers or other parties. This model is not new, however, the current models are not driving the necessary revenues so a new way of thinking is required. Examples of how this could work could be a three-way partnership with the operator, video content owner and device manufacturer to create a TV alternative in countries like China where considerably more people watch online video content than broadcast TV.

Prediction 6 - Tablets replacing laptops in the enterprise becomes a reality

IDC expects organizations across Asia/Pacific will start to replace portions of their notebook fleet with inexpensive, high performing Windows 8.1-based tablets and convertibles. As manufacturers continue to launch ever-more impressive devices in terms of performance and usability, user demand is growing. However, IDC expects the real drivers will be from the IT side, including Window XP nearing end-of-life, application and security interoperability with Windows-based tablets, the ability to leverage existing end-point management solutions and processes, and, of course, price.

Prediction 7 - Asian ODMs venture beyond borders

Outside the developed countries of Asia Pacific, local Original Device Manufactures (ODM) compete fiercely in their own respective countries. Over the past years, many local darlings have emerged. The likes of Xiaomi in China and Micromax in India now enjoy similar brand recognition as Apple and Samsung in their home countries. In 2014, local ODMs will begin to expand beyond the borders of their home countries and venture into other markets in the region. Similarly, global brands like Huawei, ZTE and Lenovo will re-double their efforts to gain more recognition on the world stage. IDC expects both regional ODMs and global brand to invest heavily in 2014 to build up their respective brands in and out of Asia/Pacific.

Prediction 8 - xCommerce boom will give rise to new consumption models and industries

Just as smartphones and mobile apps have drastically changed the areas of computing, software and communications, IDC expects mobile platforms to drastically change and expand the area of xCommerce in 2014 and beyond. Mobile commerce is particularly well suited for the Asia/Pacific region and IDC expects most eCommerce providers to expand their capabilities for mobile shopping in the near future. This will not only apply to companies with existing eCommerce platforms and it will not only be explored as a mere mobile extension of these platforms. IDC expects many types of mobile app providers to incorporate commerce functions in 2014, ranging from communications to social networking to gaming apps and more focused mCommerce apps. This, in turn, may help topple the dominance or near-monopolies of existing eCommerce players.

Prediction 9 - Technology and web-based giants will move into adjacent business areas signaling a new wave of business disruption

The increasingly globalized, interconnected and borderless world has opened up countless new possibilities and paved the way for new Over-the-Top Providers (OTTPs), content media providers, web giants and many new age cloud providers to become new ICT champions. IDC believes that 2014 will mark the beginning of the emergence of the "service provider of the future" as telecom service providers, web giants and OTTPs take the first tentative steps towards capturing new types of business opportunities.

Prediction 10 - Operators to take a cautious approach to monetizing Big Data

Operators have been leveraging Big Data solutions for many years to drive operational efficiencies, to support decision making processes, and to create more comprehensive customer profiles by analyzing both internally and externally (e.g. social media) captured data. The components are in place for operators to start monetizing this data through aggressive mobile advertising initiatives, however, IDC does not expect this to occur in 2014 despite the lucrative new revenue streams it would unearth due to the uncertainty over government regulations on data privacy and immense risk of customer backlash.

IDC expects these operators to shy away from "pushing" this data out to the market, rather, they will instead leverage a "pull" strategy where they retain full control of the data but can apply it to specific advertiser requests, minimizing the regulatory and customer backlash risks.

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