I’m admittedly bowing to the tendency this time of year to offer predictions and resolutions for the New Year. In offering them, I adhere to Gregg Easterbrook’s standard of quality for such things, which he summarizes with the following guarantee: “All predictions wrong or your money back.”
With that caveat out of the way, here are my predictions for the mobile industry, keeping in mind that this blog targets primarily people who are curious about all things mobile but do not consider themselves to be experts. If you’re looking for really technical stuff, this may disappoint.
- The privacy-to-value line will continue to shift: I’ll leave the thrilling task of dissecting the “Click if you agree” end user license agreements, or EULAs, to others. To me, they can be summarized as follows: “We, Company X, ask that you forfeit more of your private information, information we can monetize, and we will do our best to offer you value commensurate with that forfeiture.”
- Evolving privacy policies will result in new benefits and cause few qualms: The fact that it remains difficult to retrieve meaningful mobile metrics is one of the reasons why the mobile advertising business’s value is relatively low. Firms will address this by extracting more information based on a data that identifies specific mobile phones. I don’t mean iPhones or Windows Phones. I mean Matt’s phone or the phone in your purse. In return, we will benefit by receiving offers ever more customized to our location, time of day, and personal preferences. For me, that might involve receiving discounts on restaurants featured on Food Network delivered while road tripping. Firms already do this, by the way. My prediction is that the practice will increase, and the market, for the most part, will shrug in response. Aside from some enterprising journalists and advocacy groups, I just don’t sense much concern about user privacy.
- Big Data – a term you’ll hear from network news personalities in 2013: No industry wants to find its name to the right of the word “Big.” Just ask Oil, Tobacco and Pharma execs. Data collection and analysis is heading for the same fate because sophisticated data mining techniques will enable marketers to leverage their mobile investments more efficiently and precisely. It will enable market research companies to track user behaviors across screens, from television to smartphones, and deliver advertising and content accordingly. This precision will inspire a renewed wave of concern from the same journalists and advocacy groups who have railed against the trend in the past. For the rest of us, though, it won’t cause a stir.
- Crisis in console gaming will boost mobile: the rise of mobile gaming, now accounting for about 50 percent of all downloads from app stores, will make it harder to justify investments in console gaming. Its economics have always been challenging. Like pharmaceuticals, console gaming requires enormous upfront costs to pay for development, manufacturing and distribution, and marketing. Just a few market duds can sink a firm. As consoles have become more powerful, the cost of development has risen, roughly doubling with each hardware generation. Yet games retail pricing has not kept pace; great games still go for $49.95-59.95, just as they have for a decade. The result is an industry characterized by consoles that do and cost more, thus making it harder to sell in volumes and challenging publishers to recoup their fixed costs. Since many console third party publishers also have significant mobile businesses, expect to see more of these companies divert investment toward more profitable mobile games at the expense of costly console gaming.
- The television industry will not move significantly closer to disintermediation: the rising cost of cable subscriptions will drive more and more users to cancel and rely on lower cost methods of accessing content. Expect content creators, distributors and third parties such as Hulu and Netflix to increase their offerings to cater to this most cost-sensitive segment of the market, but not as a substitute for television. That’s because those offerings will revolve around enabling mobile devices to consume content, which, in turn, will drive up the cost of mobile data. These increases will gobble up potential savings in reduced or eliminated cable bills. As a result, I still expect Hulu executives to wonder about their future in 2013.
So there you have it – five predictions sure to be wrong to some degree or another. No matter the outcome, though, I wish you all a prosperous and happy 2013. Thanks for reading.