In its annual mobile technology report, Forrester Research has outlined the trends it expects to see in the coming year. Technologies like 4G and LTE, Near Field Communication (NFC), barcodes and augmented reality will see increasing amounts of hype in 2011, and the use of mobile/social/location combinations will soar, the report says. But for companies, the goal should now be on developing mobile business cases and strategies, and not jumping on the bandwagons surrounding these types of disruptions.
These technologies – LTE, NFC and mobile AR – will take years to emerge, says Forrester. Strategy needs to come before technology.
2010 Trends Continue
Forrester’s 2011 report began by analyzing its performance on last’s year’s predictions. Overall, the firm gave itself a B+ on accuracy. It says that the trends we saw last year will continue in the year ahead. These included around 20 trends that were lumped into four general categories: disruptive forces, emerging trends, consumer use of mobile for commerce and company spending on mobile.
Last year, Forrester had claimed that we would see non-telco companies like Apple, Google and Facebook seeing increased importance as key players in the mobile ecosystem, we would see increasing device and OS (operating system) fragmentation, the increased integration of location and social into mobile services, increased consumer use of mobile commerce services and mobile product professionals would be increasing their mobile budgets.
While those still hold true, says Forrester, new trends for 2011 are emerging.
To summarize, the trends are as follows:
1) Mobile/Social/Local Combinations will Explode but will Generate Little Revenue
As we also recently noted, everyone is getting into mobile/social/local services these days from Facebook to Google and Amazon to Groupon. But Forrester says that while the number and usage of these services will increase, it does not expect the services to generate meaningful revenue in 2011. Also, in a side note, there’s bad news for Foursquare buried in the report. Although Forrester doesn’t name names, it says that “location-based social networks” will struggle as standalone activities as major players like Facebook integrate location into their services, like Facebook has done with Facebook Places.
2) 2011 is the Year of the “Dumb” Smartphone User
Smartphones will become more affordable, thanks to handset subsidies. And these new users will be less engaged and active than smartphone early adopters. Forrester expects they’ll download fewer apps on average, but will consume more mobile media thanks to consumer education and convenience provided by the phones.
Despite the fact that these former “dumb phone” users may download fewer apps than early adopters, the overall app forecast is still good. In fact, Gartner also just released a report that stated mobile app store revenue will pass $15 billion in 2011. It said:
Worldwide mobile application store downloads are forecast to reach 17.7 billion downloads in 2011, a 117 percent increase from an estimated 8.2 billion downloads in 2010…By the end of 2014, Gartner forecast over 185 billion applications will have been downloaded from mobile app stores, since the launch of the first one in July 2008.
Worldwide mobile application store revenue is projected to surpass $15.1 billion in 2011, both from end users buying applications and applications themselves generating advertising revenue for their developers. This is a 190 percent increase from 2010 revenue of $5.2 billion.
(Note: The “dumb” reference in Forrester’s trend title is not meant to a slight at the intelligence of these new users, by the way, but the phones they’ve upgraded from: feature phones, also sometimes called “dumb phones.”)
3) The Mobile Fragmentation Problem will Continue
Forrester says it expects fragmentation to continue, but it’s not just referring to the multiple variations of a single OS. It means that some customers have smartphones, some have feature phones, some use apps, some use SMS, plus there are multiple OS’s in existence, in multiple versions, with multiple screen sizes and there are a higher number of devices out there. In short: fragmentation. The costs of porting, maintaining and promoting apps will remain high.
4) The “Apps vs. Internet” Debate Will Continue…to be Irrelevant
Says Forrester, it’s not a question of “either/or” when it comes to a choice between apps vs. the mobile Web, but both. Frequent and intense users of services like banking and brokerage will want curated experiences in the form of apps, but the Internet will remain the fallback for more occasional information and needs. Mobile developers frustrated with the costs of building mobile apps for multiple platforms should rely more on the Web. Even if HTML5 doesn’t scale within the next 2 to 3 years, mobile browsing experiences are improving, the report notes. But for targeting the “SuperConnecteds” and “Entertainers” (referring to two types of mobile users the firm classified previously, referring to, respectively, heavy users and those who listen to music, watch video and play games), apps are still needed.
5) Mobile Marketing Spend will Surpass $1 Billion
Marketer will begin allocating dedicated resources to mobile in 2011. In the U.S., Forrester forecasts that marketing spend on mobile display ads and search will surpass $1 billion in 2011. Marketers will find quantifiable ROI on mobile for generating real leads, driving foot traffic, and selling products and services.
6) Mobile Will Increasingly Prompt Users to Interact with Their Environment
In 2011, NFC will begin to matter. The market will move away from the trial stage in regions where there is NFC infrastructure in place, but barriers will still need to be removed for the technology to really take off. These include consumer demand, education and business model issues. Other technologies like QR codes (a type of barcode) and augmented reality will prompt users to hold up their phones to interact with the world around them. These initiatives, however, will remain nice, but will help raise awareness of the new forms of interaction provided by mobile.
7) The Attention to 4G will Vastly Outweigh the Impact of 4G Networks
More operators will launch 4G networks in 2011 to a lot of buzz, but Forrester says to ignore the hype. “4G will have as little impact as 3G had when it launched in Europe and the U.S. in 203.” It took nearly 7 years for half of mobile subscribers in those regions to have 3G capable phones, says the firm. Expect similar trends for 4G.
8) Companies will Invest First in Convenient Services for Consumers
Forrester says that mobile product and service professionals, particularly in the travel industry, will invest first to keep their most lucrative customers happy. And in the hierarchy of benefits that mobile offers – revenue generation, cost savings and convenience – convenience will reign during 2011.
9) Casual Gaming Will Continue to Boom
Smartphones have become powerful gaming devices for the mass market, and this trend will continue in 2011. In the premium mobile space, new business models based on subscriptions, microtransactions and in-app billing will expand from the games category into others, like music and news.
10) “Mobile” Will Mean More than Mobile Phones
Consumer adoption of tablets, eReaders, portable media devices and other mobile products has grown in 2010 and this will continue in 2011. Apps and services will need to work across devices and consumers will want ubiquitous access to content and services. This will force service providers to sync content via the cloud to maintain a consistent experience across platforms.