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2014-03-04 06:45:08
Feb 27th 2014, 10:05 by P.L. | BARCELONA
THE best advice for a first-time visitor to Mobile World Congress (MWC) is:
wear comfy shoes. It takes an age to walk from one end of the event to the
other. There is plenty to detain you in the eight halls, packed with the stands
of mobile operators, device-makers, network-equipment vendors and others, some
of them the size of small villages. In the several auditoriums, earnest public
discussions take place. Elsewhere, many private talks are under way. Deals are
struck, disagreements aired.
MWC is the mobile industry s annual jamboree in Barcelona, organised by the
GSMA, the network operators trade association. Held this year from February
24th to 27th, it has sprawled far beyond its enormous main site. Samsung, for
example, presented its newest flagship smartphone, the Galaxy S5, its new smart
watch and a wristband in a conference centre on the other side of town. An
auxiliary show for startups took place about 3km away. Your correspondent has
often wished he could have been in two places at the same time. (Once, to his
embarrassment, he had agreed to be.)
For years, the latest smartphones have captured people s attention. This time
seemed different. Demand at the top end of the market is decelerating. That has
brought a shift in focus to three other areas. The first is cheaper
smartphones, for which demand has taken off. Mozilla, a foundation best known
for its Firefox browser, presented a device using its own mobile operating
system, Firefox OS, that may cost as little as $25. The second is the narrowing
gap in quality between the leading brands and phones made by a vast array of
Chinese companies. Some, such as Huawei, are well known outside China; others,
such as Gionee or Oppo, are not. That may cause further discomfort for Samsung,
which has dominated the market for phones using Google s Android, by far the
most widely used operating system. Its earnings fell in the most recent
quarter.
The third shift is away from the phone, to wearable devices and other gadgets
connected to it, such as that Samsung watch and wristband, and wristbands from
both Sony and Huawei that were also on show. Around these there was an air of
suppressed excitement rather than outright enthusiasm because bands, like
Samsung s Gear Fit, that measure your heart rate, steps taken, calories burned
off and so forth, are just the beginning of no one knows what. Simon Segars,
the chief executive of ARM, a British company whose technology underlies the
chips in almost every smartphone, thinks that the phone is becoming a hub
from which other connected gadgets will be controlled. Around the show were
plenty of examples of what is coming, from connected cars to smart homes. The
potential of the wider internet of things , with uses in industry, utilities
and smart cities as well as homes, is greater still.
But devices are only a part of the whole. Operators and network-equipment
vendors spent much of their time at MWC looking ahead to how networks will cope
with ever-rising demand for data flowing to and from myriad devices.
Enhancements to even the fastest LTE, or fourth-generation (4G) networks are
already on the way for example in the form of carrier aggregation , which
combines separated, narrow parts of spectrum to create greater bandwidth. And
vendors and operators have started to look ahead to the next round, 5G, due in
around 2020. No one can yet define it, but the work on setting standards has to
start now. Neelie Kroes, the European Commissioner, enthused at MWC about what
superfast networks might do not just for Europe s telecoms industry but also
for its whole economy. Having been ahead of the game in 3G, Europe fell behind
America and much of Asia in rolling out 4G. Ms Kroes sees opportunity ahead.
Europe s operators may wonder where they will find the wherewithal. Their
troubles were summed up by the presence in Barcelona of a prominent guest: Mark
Zuckerberg, of Facebook, who spoke to a packed hall on February 24th.
Fortuitously Jan Koum, of WhatsApp, the messaging service for which Facebook is
paying $19 billion was also at MWC. Messaging apps have gutted operators of the
revenue they once enjoyed from SMS messaging: rather than pay for an SMS, users
spend a bit of their data allowances instead. WhatsApp, with over 450m members
and ambitions for 1 billion, is the biggest and fastest growing. It said this
week that it would, like other services, start offering calls as well as
messages.
Operators have struggled either to respond with services of their own the
industry s joint efforts have been too slow to get off the ground or to find
new sources of revenue. Meanwhile, European operators complain that their own
markets, divided along national lines, usually with four operators in each
country, are too fragmented. Thanks to national and European regulation, for
instance, they find it much less easy to merge than Facebook and WhatsApp. As
the Financial Times reported on February 26th, the European Commission this
week presented its objections to the purchase by Spain s Telef nica of e-Plus,
the German subsidiary of KPN, a Dutch operator, which would reduce the number
of operators in Germany to three. Telef nica reported falling revenues on
February 27th, having announced cost cuts the day before. That merely
emphasises the sector s difficulties.