Five predictions for the mobile industry in 2012


By The Drum Team, Editorial

December 27, 2011 | 7 min read

Dr KF Lai, co-founder and chief executive officer of BuzzCity, looks ahead to what 2012 will hold for the mobile industry.

The fragmented world of mobiles

What would you think of a world where mobile devices all operate off of the same system, tablets replace laptops AND phones, coupon giants go the way of the Netscape & Friendster and m-Commerce remains a distant dream?

NO, we wouldn't believe that either! The mobile industry is constantly changing, but based on our experience of the past year, we're confident that these 5 predictions will hold true:

1. Marketers finally accept fragmentation.

2. Tablets are recognised as a new type of media, unique from PCs and phones.

3. Coupon companies go mobile, add fulfillment, then soar.

4. Small businesses embrace mobile social media.

5. m-Commerce comes of age in emerging markets.

Let's take a closer look!

1. One OS? One Device? Forget it!

Fragmentation is here to stay and 2012 is the year when developers and brands finally give up on trying to target a particular operating system or device, because specialisation means missing out.

The dizzying array of mobile devices, platforms and operating systems may be good news for consumers, but it can easily trip up marketers. The industry needs sensible strategies. In 2012, we'll all finally realise that pumping most of a marketing budget into an application that only reaches a sliver of their potential user base just doesn't make sense.

The solution? Make the mobile internet the first port of call as well as your primary presence. The mobile web has universal standards; it's an efficient distribution system and the 'biggest platform ever made'. It's an easy shift in perspective and one that will be the norm in the year ahead.

Beyond 2012, watch out for HTML5, which provides users with a rich app-like experience without having to download an app. But there is still a way to go before the majority of mobile devices can support this technology.

2. Tablets are recognised as a medium in their own right

Tablets are hot, sure, and not just Apple's iPad, as Android-based units start to capture market share. But when Apple first released the iPad in April 2010, pundits worried that the new device would cannibalise the market for both PCs and phones. This hasn't happened. And it won't. Tablets are a unique media consumption device with their own set of challenges and opportunities. A new ecosystem is forming, where phones, PCs and tablets are linked by cloud services and content.

3. Coupons Go Mobile, Add Fulfilment and Soar

So what's the story with coupon companies? Some people love them, others say there are too many players in the industry and they're just a passing fad. Take a look at Groupon. Its share price is still in the gutter and well below the US$31 high it hit after going public in November and many analysts doubt the company will make it past 2012. But Groupon's Cyber Monday holiday sales were 500% stronger than a year earlier.

Critics argue that discount sites don't create consumer loyalty, because bargain shoppers are by definition flighty. But too much time, effort and technology has been invested in coupons for them to go the way of the Dutch tulip. There are just too many clever people spending time tweaking their business models for the entire coupon industry to simply fade into obscurity. The ability of these companies to assemble an audience and present shoppers with a compelling set of offers is a value-add for all – consumers, retailers and publishers.

But here's what most observers are missing: the mobile angle.

The next step – which we'll see in the year ahead – is that companies like Groupon will add mobile fulfillment to their models. We're at a watershed where the dominant payment method will soon be determined. But whether it's using a mobile wallet, mobile banking or a peer-to-peer money transfer service like PayPal, the mobile internet + coupons + mobile payments is a winning formula.

The coupon market will consolidate in 2012. The consolidation will be rapid and exciting to watch. But a handful of smart companies that understand mobile commerce will emerge on top.

4. Small Businesses Gravitate to Mobile Social Media

In the old days, a company needed to hire an ad-man, like Mad Men's Donald Draper, to promote their business. Even today, major brands and SMEs alike rely on media professionals to design and develop their online presence – everything from websites to apps.

It is increasingly easy though for small businesses to market their services and develop relationships with a consumer base on their own. Small business owners are simply turning to Facebook, Twitter and other social media. And since support for mobile devices is provided by the social networking platforms themselves, businesses can easily focus on maintaining a conversation that delights and rewards mobile consumers for their loyalty.

Take for example one of our Indonesian clients, which attracted Facebook followers by offering to give away free iPod Touches. The company attracted a huge following, which they can cultivate as Facebook facilitates recurring interaction. This was not a one-off exposure, but rather the groundstone for forming relationships with customers. It's like building a piece of media, owning a page of a magazine. And increasingly in 2012, small businesses will do just that . . . and in the process, teach traditional marketers a thing or two about consumer relationships.

5. M-Commerce Comes of Age in Emerging Markets

In the United States, e-commerce – including online, catalogue and mobile sales – now accounts for more than 40% of all retail sales in most sectors. Seventy-four percent of electronics, music & videos are purchased online. Upwards of 65% of clothing, furniture and office supplies.

Expect to see similar trends in emerging markets . . . as soon as regulators step in to halt the handful of VAS players who unscrupulously take advantage of loopholes in mobile billing. Proper regulation protects consumers and legitimate businesses and encourages more people to access e-commerce for the first time.

The markets that take control and regain consumer trust will set an example in 2012 to the laggards that m-commerce, properly conducted, can pay handsome dividends.

And there you have it, our five predictions for 2012. Let us know in twelve months how they pan out! The market has evolved at a tremendous pace over the past several years . . . and it's virtually unrecognisable from when we started BuzzCity in 1999. We're confident that the year ahead will be a good one for us all. On behalf of the BuzzCity team, we'd like to wish you an early Happy New Year!

By Dr KF Lai, CEO, BuzzCity

Dr KF Lai is co-founder and Chief Executive Officer of BuzzCity. Lai uses his entrepreneurial skills to spearhead BuzzCity’s strategy, leading the company’s engineering, product management and technology groups. Since its launch in 1999, BuzzCity has grown to be a leading global mobile advertising network.


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