2012 Mobile Outlook

2011 was an active year for mobile platforms – new versions of the major smartphone operating systems were released, Android tablet manufacturers responded en masse to the iPad, and partnerships, acquisitions, and new players that will shape the space in the coming year all came about.

What does that mean for 2012? I’ve got a couple ideas.

iOS (Apple)

Apple leaves 2011 in a comfortable position – they aren’t the largest smartphone vendor any more, but they still have the most widely distributed handset and a sizable amount of the profit. Though Android is applying significant pressure, consumers still seek out Apple’s mobile products, which should maintain their control – if not dominance – of the mobile space through 2012.

Look for Apple to continue to iterate on its mobile products, incorporating popular features from other platforms (with the usual Apple polish) while introducing new features that are unique to their platform, some of which will go on to define what it means to be a smartphone. Given Android’s increasing sales, also look for Apple to bend to the desires of the carriers somewhat more than in the past; core areas (UI, battery life) will be unaffected, but carrier apps that provide features unavailable to regular App Store developers are likely.

Android (Google)

2011 was a massive year for Android – two big releases (Gingerbread, Honeycomb), a big push into the tablet space, and a large number of innovative phones across all price ranges were released. 2011 was a bit rocky, too – Android faces some serious patent challenges from Microsoft and others, and consumers are starting to see the downside to Android’s customizability, especially when it comes to updates.

2012 will be a good year for Android on inertia alone, but Google needs to use the time to position themselves well for the future. Google’s purchase of Motorola and the increase patent litigation will put pressure on Android manufacturers to think twice about betting their future solely on Android, a fear that Google will have to calm. Furthermore, Android isn’t looked to for new ideas – it’s looked to for common features, cheaply. For them them to gain mindshare (and, eventually, marketshare), they will have to invest resources in making Android a truly excellent platform to use, not just a platform with impressive technical qualifications.

Windows Phone 7 (Microsoft)

2011 was a year that really didn’t happen for Windows Phone. The one big release saw much love from owners but little attention from the market, and the Nokia partnership did not impact consumers until the last quarter of the year (and not at all in North America). Even Microsoft’s already miniscule marketing campaign for the platform petered out, with no major ad campaigns that caught my eye (at least in Canada).

Microsoft’s challenge for 2012 isn’t technical – it’s marketing. They have a very capable platform with competitive - and in my personal opinion, compelling – features that don’t try to play the ‘me too!’ game with Apple. Furthermore, the introduction of the Metro design language to the Xbox and in Windows 8 could introduce users to a new way of thinking about computing. That’s not going to happen if Microsoft doesn’t step up to the plate and aggressively market Windows Phone as compelling alternative to the other phones in the space.

BlackBerry (RIM)

Any way you slice it, 2011 was a bad year for RIM. Despite increased sales, and layoffs designed to appease the markets, RIM saw a continually declining stock price, constant takeover rumours, and calls for its executives to resign. Even their flagship product release for the year, the PlayBook, saw massively underwhelming demand and markdowns in excess of $200 in the latter portions of the year.

To top it off, 2012 looks to be even worse for RIM, with little hope for recovery. Their much-heralded “new OS”, BB10, won’t arrive until the fourth quarter. There may be new devices running old software, but savvy consumers will be cautious when purchasing the last of a dead technology. No exciting new features for BB10 have been announced, either – it will do email, show videos, and surf the web in a new way, but one that is unlikely to be much different from the old way and certainly not enough to reverse the trend away from BlackBerrys to more engaging platforms. A takeover is possible, though there aren’t many companies up to the task – others in this space have already made their purchases, and RIM has been quick to spurn recent pursuers.

…and some broad themes

There are a few themes that, in my opinion, will come to define the year 2012 in the mobile space. The first of these is that 2012 will be the year that smartphones will become the primary units sold by carriers. Carriers today have a large user base on so-called feature phones, and still sell a large number of these low-cost phones. However, with the potential for new revenue through data add-ons, a general decline in traditional (voice) revenue, and the availability of low-cost smartphones (less than $200 off-contract), I expect carriers to aggressively reduce feature phone selection in their product offerings.

A second theme I expect for 2012 is a general decline in native mobile applications. HTML 5 gives developers incredible flexibility to build good applications with web technologies, applications that will work across devices. Maintaining three separate codebases – one for iOS, one for Android, and one for the web (covering desktops and other phones) – is time-consuming and expensive. Using the “same” application everywhere will allow companies to put more effort into core features over pure platform parity. Now, that doesn’t mean that apps won’t be available through the App Store/Android Marketplace – they will – or that we won’t see separate versions of an app for iPhone and Android – we will. Rather, what we’ll see is that the technologies new apps are built with will shift from platform-specific to platform-independent HTML and Javascript, allowing developers to re-use core logic while maintaining device-appropriate visuals.

Finally, I expect that we will see the importance of cloud-based services to the smartphone ecosystem play a more visible role. Consumers don’t choose smartphones for their hardware, their fancy looks, or their enterprise-grade reliability; they choose them for what they allow them to do, and how they allow them to communicate. That means these devices must support the services they already use, and the communities they are already a part of. If I’m a Facebook/Dropbox/Instagram user, then my device must support that combination. Platforms that allow user combinations to happen – iOS through its strong developer base and simple cloud services, Google through the introduction of apps for its services (which many already use), and Microsoft through first-party support for third party services (Facebook chat, the People hub) – will have a significant edge on those who dont (RIM).