2014 Prediction: Consolidation Will Firm Its Grip

The Yankee Group has issued a new report titled "2014 Predictions: Mobility Hits a Tipping Point as Markets Consolidate, Players Build Out Capabilities." In it, researchers postulate that it is inevitable that mobility will continue its path to become more deeply rooted in consumers’ daily lives.

The report notes that the mobile ecosystem is ready for consolidation, which will happen as competing companies attempt to deliver consumers an enhanced mobile experience. It’s expected that as this market matures and finds its groove the weaker players will naturally be weeded out; this will happen over the next several years.

According to the Yankee Group’s report, the bottom line is "The mobile ecosystem has been experiencing dramatic growth for a number of years now. But in 2014, several segments, namely mobile commerce, mobile app development and mobile broadband, will reach a tipping point as consolidation works to pare down the market. We expect to see new entrants and established players alike exit their respective markets. Elsewhere, the onward march of mobility into everyday lives will continue unabated." These comments were made by Declan Lonergan, Yankee Group vice president of research and co-author of the report.

The report outlines the following predictions:

• More than half of MNOs in developed markets will offer their own IP communications apps;
• Mobile video watching will match PCs and begin to approach DVR/TV levels;
• More vendors will exit than enter the saturated mPos market;
• Marketing investment for mobile customer experience measurement will take center stage;
• The MBaaS segment will become polarized and undergo a 'survival-of-the-fittest' scenario;
• Kony will put itself up for sale;
• By year’s end, 70 percent of Tier 1 MNOs will have NFV trials in place and 20 percent will have a production implementation;
• Consolidation of centralized SON players will peak;
• Low-volume M2M projects will deliver growth to M2M specialists;
• An influx of wearable tech entrants will open the door for downward price pressures to divide the market by device and use case.

An expansion on some of those highlights says:

• Mobile video viewing levels will equal those of PCs. A combination of factors (better devices, faster networks and more affordable data plans) is leading people to spend more time watching video—and not just short, viral content—on their mobile devices. In addition to reaching PC levels, mobile video viewing by some measures will begin to approach that of TV and DVR.
• Consolidation will come to the mobile point-of-sale (mPoS) market. For several years, the mPoS market has promised big things for the micro-merchant. But with an unabated stream of new entrants to the market, something’s got to give in 2014. We predict a surge of consolidation as several players look to exit the market.
• Kony will break out the “For Sale” sign. The time of the mobile enterprise application platform (MEAP) has come and gone. As new, agile app development players steal the spotlight, traditional vendors have a decision to make. For Kony, that means putting itself up for sale as it looks to join the likes of Antenna Software as an acquisition target.
• NFV will be the new black for mobile network operators. Increasing traffic and demand for highly performing networks have operators looking for new ways to deliver. By this time next year, we believe 70 percent of mobile network operators will have a network functions virtualization (NFV) trial in place, while another 20 percent will have solutions already implemented.
• Contrary to popular belief, small M2M deployments will pace the market. Although they may not grab the headlines of government-sanctioned, large-scale smart meter rollouts, we believe the small-scale machine-to-machine (M2M) implementations will drive the market in 2014. Already today, 66 percent of IT decision-makers we survey say their planned deployments will have no more than 499 devices.

As you can see, several of the report’s forecasts are focused on mobile data and MNOs’ attempts to deliver enhanced user experiences combined with profitable services. To cope with the growth in demand for data, MNOs will continue to invest in enhancing their network infrastructure and operational efficiency.

These are just a few of the predictions and highlights of the 18 page report. If you want to download the free PDF version of the report you can do so by clicking here.