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Mobile Forecast: 2016 Promises Major Advances for Info on the Go
by
Posted On January 12, 2016
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Although the mobile device is now a pervasive personal technology, it’s worth noting that it was just 9 years ago (2007) when Apple introduced the iPhone—the first truly compelling mobile product that would move the industry forward. Mobile innovation has been happening at a very rapid pace for a few years now. Today’s smartphones combine communication (how many people still have landlines or long-distance accounts?), the ability to check the time (how many people younger than 20 wear watches anymore?), photography (et tu, camera?), calculation, address books, note-taking, and so many other functions.

With the release of Google’s mobile-friendly search ranking algorithms in April 2015, companies and organizations across the globe worked to make their websites mobile-friendly so they would be able to benefit from this change. It affects “mobile searches in all languages worldwide” and has “a significant impact in Google Search results. Users will find it easier to get relevant, high quality search results optimized for their devices.” Google also released a tool that analyzes websites’ designs to see what improvements might be needed to make them mobile-friendly.

Is Microsoft’s Dominance Ending?

Mobile searching is different from the PC-based keystroke and Windows model that has dominated the search environment since the beginning of the PC industry in the late 1970s. Microsoft’s fall from grace came to a head in December 2015 when former CEO Steve Ballmer questioned the company’s universal app strategy as well as its current accounting practices. Ballmer made it clear that Microsoft’s performance in the mobile and app sectors was lackluster. With the decline of the traditional desktop market, and now the declining laptop dominance, Microsoft appears to face an uncertain future. Its strategy under current CEO Satya Nadella has been to provide developers with the bridge tools to let them create Windows 10 universal apps to run on PCs, the Xbox One, and mobile environments, and yet keep their base in the Windows environment. However, with the traditional OS in decline, many users don’t upgrade to Windows 10, let alone use it as their platform base for apps.

Microsoft’s acquisition of Nokia a few years ago, along with its failure to make any strong showing in the smartphone marketplace—Microsoft accounts for 3% of the smartphone market—shows a company in decline. It also makes up less than 3% of the mobile browser market. However, the company apparently plans no major changes to its current mobile strategy, recently announcing that mainstream Windows 10 Mobile support will end in early 2018—which is bound to leave current Windows Mobile users questioning their long-term reliance on the product.

A November Neowin.net editorial compared the current position of Microsoft with that of BlackBerry. Once one of the leaders in the smartphone market, it was predicted to account for less than 1% of the marketplace by the end of 2015. Author Andy Weir notes that “despite my personal affinity for Windows, even I can see that Microsoft’s approach to mobile devices has always been a mess, and there remains little evidence of a clear and cohesive strategy to propel its smartphone platform to success.” In a world in which mobile is everything—and in some cases the only thing—this doesn’t bode well for Microsoft.

The Move to Mobile Accelerates

ITU (International Telecommunication Union) is a body that tracks internet developments around the world. A press release about its 2015 annual report states that “over the past 15 years, information and communication technologies (ICTs) have grown in an unprecedented way, providing huge opportunities for social and economic development.” The affordability of mobile broadband increased to between 20% and 30% just in the past year. Although wired broadband accounts for 0.8 billion subscriptions today, mobile broadband is estimated at a staggering 3.5 billion. ITU finds that about 350 million people still have no cellular coverage, yet 46% of the world’s households are now on the internet.

There is huge potential for using mobile devices for financial services in developing countries. According to a recent World Bank Group report, in 2014, 2 billion adults in the world had no access to banking services—which is 38% of all people age 15 and older. The World Bank is working to create comprehensive “financial inclusion” to allow everyone to be “better able to start and expand businesses, invest in education, manage risk, and absorb financial shocks.” Mobile money and other alternative forms of banking are providing opportunities for increased prosperity and advancement around the world.

Mobile phone billing is available to Apple users in Russia in an agreement with Amsterdam-based Beeline. This service is similar to one available now in Germany with Telefonica’s O2. German startup Number26 is offering “mobile-first” bank accounts in Europe to “create a true pan-European bank account.”

eMarketer predicted that U.S. point-of-sale mobile payment transactions would reach an estimated $8.71 billion by the end of 2015, with transaction value expected to reach $27.05 billion in 2016. Due to “a growing user base, broader merchant acceptance and the greater frequency of consumers using their phones to make point-of-sale payments on medium- and high-priced products,” eMarketer notes that “both users and transaction values will undergo aggressive gains over the next several years.”

Creating a Reliable, Global Mobile Payment System

PayPal formed in 1998 as an electronic alternative to traditional paper methods for internet-based commerce. In 2015, the company reported that it operates in 203 markets with 173 million active, registered users and handles account balances in 26 currencies. Given the size of the market—and the rosy future for mobile commerce—other companies have developed their own mobile payment solutions, including the following:

  • Amazon Wallet, which launched in July 2014 and was discontinued in January 2015 while still in beta
  • Apple Pay, which launched in October 2014
  • Facebook’s peer-to-peer payments, which it added to Messenger in March 2015
  • The Apple Watch, which launched in April 2015 and has embedded near-field communications (NFC) payment functionality
  • Google’s Android Pay, which it introduced in May 2015
  • Pinterest’s Buyable Pins, which it launched in June 2015
  • Samsung Pay, which launched in the U.S. in September 2015

Bitcoin, released in 2009 as a form of online payment for products and services, is growing more popular today in China as the country’s Yuan and financial system have faltered. Often called the first cryptocurrency, bitcoin has engendered major support globally, and it is now accepted even by such staid financial institutions as the British Barclays.

The U.S. House of Representatives Committee on Energy and Commerce held a December 2015 hearing titled The Disrupter Series: Mobile Payments. Brian Dodge, EVP at the Retail Industry Leaders Association (RILA), notes that “never before in history have consumers had access to so many different merchant platforms and a variety of payment technologies to choose from. For retailers, meeting this challenge has meant a massive investment in new payment terminals, workforce training, mobile shopping platforms and customer service to ensure we are meeting the needs of our consumers from product selection to check out—regardless of where it occurs.” Does it sound confusing and unstable? At this point, it is.

At the hearing, Indiana University’s Maurer School of Law professor Sarah Jane Hughes spoke about Apple Pay, Samsung Pay, and Android Pay, the three leading systems. “These are early days, particularly for Samsung and Android Pay. Investors interested in mobile payments technologies should not depart this space based on such early returns, in my opinion. With three new major-branded mobile payments offerings in the past 15 months, it simply may be too soon to tell the extent to which [or] how consumers will adopt which of these mobile options or others that may be available.”


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Nancy K. Herther is American studies, anthropology, Asian American studies, and sociology librarian at the University of Minnesota Libraries, Twin Cities campus.

Email Nancy K. Herther

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