As is our annual tradition, MEF starts the year with ‘Predictions’ – an overview of the main themes coming in the next 12 months. Historically we have been very good (or lucky, or both) in the accuracy of our predictions, so much that this year we would like to remind you of how we fared with last year’s (as you can imagine the answer here is: “remarkably well”). Let’s not forget though, this is an opportunity for us to start a debate, so please comment and let us know what you think is coming in the near future.
Digital transformation – from fast to deep
We have seen the impact of the pandemic, it has energized the move towards mobile, personal solutions. However, the transformation has not yet finished. Some enterprises have pivoted to digital transformation as an emergency mobilisation of their services: making them remote. We are going to see a more profound review of what mobility, and digital services can do, not just to customer experience, but to business models for many companies in 2022. Moving to a digital mindset is much more than making your employees and customers access services via the web or the mobile. The winning companies from this period will be able to re-think how they create and distribute value.
Cyber Attacks – The emerging threat is now taking centre stage
The other side of digital transformation is now not just a novel type of fraud, but the main type of fraud. By 2025 cyber fraud is expected to be worth USD 10.5 trillion. This threat has been largely underplayed by many in the industry. The consumer is concerned, and the industry needs to coalesce in its efforts to fight and reduce this threat considerably.
New Media have become ‘old’
It does not take a single year to become old, but it only takes a few glances at the mirror to check reality. In 2022 “new media” needs to have a moment of reflection: websites, email and even social media are finding signs of early aging. Young users do not do websites or email and have got ‘different’ social media platforms. The Facebook user profile is aging quickly, with youths preferring services such as TikTok (a mixture of YouTube and short messaging I’m told by the youth). As TV and radio can show, there is still a successful role to play for old media – but it’s important to realise what your role is.
Game – platforms vs. developers
In 2021, Epic Games sued Apple for anti-trust violation. Epic largely lost, but it gained approval for developers to find alternative payment mechanisms outside of the smartphone platforms (such as Apple and Google). We are going to see more attempts to price and sell games outside of the app stores in 2022. The mobile game market is worth a lot of money (US$84 billions in 2020 according to MEF estimates); even a marginal move can create a big impact in the market.
Payments – the impact of Buy Now Pay Later
While payment methods happily compete and present new solutions (e.g., the messaging platform Signal launch of micro payments) the real focus will be around the services developed around payment. Buy Now Pay Later (BNPL) solutions are emerging as a strong value-add. This has not happened without controversy: charges and customer profiles have come to the attention of regulators lately. Expect more innovation in payments, but also more oversight.
5G – the upgrade cycle is taking over
If you expected a 5G revolution in 2021, you might have been disappointed. But the strong line up of network coverage and handsets devices is now driving a good rate of upgrades. Consumers are not flocking to buy new handsets for 5G services but are buying new devices and then finding the positives of more stable and faster connections. A good old evolution, not a revolution.
The Metaverse is not here, but AR/VR are
So much talk about the Metaverse, yet it is not here. It will start somewhere, but at first it will be a patchwork of competing and not interoperable solutions. Roblox, Epic’s Fortnite or Meta’s Oculus? Who will win the metaverse platform race? Well in 2022, it will be the older terms augmented reality / virtual reality. The interest in the metaverse will generate more opportunities for the more mature and easy technologies such as AR and VR.
Mobile Marketing- An interlude year – but Messaging formats will grow faster
The death of the browser cookie and the subsequent revolution on advertising tracking has been postponed by Google’s announcement that the Chrome browser will still support tracking cookies until the second half of 2023. So more of the same for 2022?
Not really. In 2022 big advertisers will move quickly towards new solutions – expect more focus on AI based solutions as well as a continuing growth of messaging formats for marketing. Messaging is still a small part of the advertising spend but its engagement, tracking and response KPI’s are making it more central in marketing strategies.
The split Mobile Operator
Operators are asking themselves some existential questions. The investment in 5G and the coming of 6G/OpenRAN is now making addressing this question timely if not urgent. Some operators are moving towards a more enterprise-centric model – some are taking a fuller ‘wholesale’ role- a handful of them are taking a role in the digital economy making their bets on new consumer services. Expect more shifts in strategies in 2022, few can still afford to stay on the fence.
Creating solutions for enterprise customers is a key solution: in the late 2010 business revenues would account for less than 20% of the total, things are changing now with flat or smaller consumer ARPUs. For instance, more operators are now entering the CPasS market with gusto, even if some could say with a visible delay. Offering solution instead of connectivity is a bit leap though, that will require a considerable investment and change. The wholesale approach is now much more common (from network sharing to new edge solutions), the new evolution in technologies (Open RAN, Hyperscale Cloud, Edge) are well aligned to support new business models.
While this model is aligned with the strengths of many operators it still requires large investment and cultural shift. The most arduous, yet potentially the most rewarding approach for mobile operators is to build/bundle new digital consumer services for their end users (consumers but also enterprises customers) running a digital service factory on top of the network functionality has long been a target for many operators. While success have not been many, we are seeing some notable success.
Foldables phones – the new form takes place
Folding phones are now back in fashion. These are not the clamshell devices of the 2000s; nowadays, screens are folding as well. The Samsung Fold 1 in September 2019 was the category opener, but in 2021 we have seen the Microsoft Surface Duo 2, the Samsung Fold and Z Flip and the Huawei Mate X2.
Our prediction is that as component prices lower other big device vendors will join the ‘fold’ to differentiate. Google and OnePlus are top of our prediction list, but even Apple could start innovating on their line-up. In 2022, we will see the first mass market foldable phones.
Agree? Disagree? Leave your thoughts in the comments below!
What did we say for 2021?
Predictions are as good as the last ones you made. So here we present what MEF’s Board saw coming for 2021. All in all, expectations were met we did not get everything quite right but surely we did provide a good summary of the main topics in the year. Let’s hope we will have similar results for 2022.
Here is a summary of our 2021 predictions and how they panned out.
A Year of 2 halves: the good and the bad
A difficult/bumpy recovery for the economy, but the energy unleashed by lockdown and transformation. I think this was a fair description for an exciting but difficult year still.
Mergers and Acquisitions on the rise
2020 saw some of the biggest mergers and acquisitions but 2021 did thrive even more. No need for discussion or listing the M&A, this prediction was spot on.
The Mobile Ecosystem is well placed
The pandemic has shown the possibilities of remote access, mobile is at the centre of the digital transformation evolution. Twelve months ago, this was not such an easy statement to make, but the market proved a real resilience and effective response.
The key ingredient for Digital Transformation is identity
This has been a long expectation at MEF. Truly digital identity has moved in leaps and bound in 2022, yet it has not got the attention we did expect. The prediction was in the right direction, but we did expect much more.
SMS One Time Password Vs. Authorisation Methods – Changes are coming
It was suggested that SMS will lose OTP traffic to other solutions. The threat is still there, but the OTP market is now growing even more. The vision for the future is correct, in the short term long live to the SMS one time password.
Marketing Automation: tactics for growth in CPaaS
The CPasS future is still showing strong growth, but it is not enough to repeat an existing recipe for growth. MEF was proven right but the acquisition and investment in the year: the race to solution is visible throughout the industry. The challenge nowadays is not just to provide good reach and reliable connectivity, but to enter the enterprise premises and provide solutions for their marketing and transactions. Automation and effectiveness are the driving forces.
Rich Services will become much more visible
Rich multimedia services are becoming more visible – from Whatsapp, to Facebook, from Snapchat to TikTok, engagement is bountiful in media platforms. Even RCS has found some successes (e.g. India, France, Mexico). Visibility might not yet be mass market, but it is showing the future.
Differentiating = Quality of Service = Security
Has security become the new differentiation? No, this prediction has not really happened. Though, maybe it was a wish as much as a prophecy. Security is taking a bigger place in the Mobile Ecosystem, but not fast enough.
Regulation: Big Tech will see the end of self-regulation
A new chapter in regulation has surely started. For the first time, large US companies have been put to a level of scrutiny not seen before. It is not the end of self-regulation as we called it, but this is a trend to watch.