Wireless Foresight

Bo Karlson is Wireless@KTH's director of external relations and general manager. He was the manager of the Wireless Foresight project. Karlson holds a Ph.D. in industrial management from the Royal Institute of Technology (KTH). Before joining Wireless@KTH, he was assistant professor in the Department for Industrial Economics and Management at KTH. His areas of expertise include project management. Organizational theory, business models, industrial development, and research methodology. Aurelian Bria is currently pursuing a Ph.D. in the Department of Signals, Sensors and Systems at the Royal Institute of Technology (KTH) in Stockholm. He received his M.Sc. degree in electrical engineering from the Politehnica University of Bucharest, Romania, in 1989. In autumn 2000 he joined the Swedish strategic research program Personal computing and Communication (PCC), starting his research in the field of wireless infrastructure. Peter Lönnquist holds an M.Sc. degree in psychology and in 2001 he became a Ph.D. student at the Swedish Graduate School for Human-Machine Interaction. Formerly a member of the Human-Computer Interaction and Language Engineering Laboratory at the Swedish Institute of Computer Science (SICS), he now does research in the design and evaluation of ubiquitous service environments and “the disappearing computer” in the FUSE group at the Department of Computer and Systems Sciences of the IT-University in Kista. Cristian Norlin holds an M.A. in interaction design from the Royal College of Art in London. He also holds a B.Sc. in multimedia education and technology from Stockholm University. Based in Stockholm, he is working as a consultant focusing on human-computer interaction in areas of concept development, interface design for digital technologies and products, and user-centered development processes. Jonas Lind is a researcher at the center for Information and Communications Research (CIC) at Stockholm School of Economics, where his research focus is structural changes during the life cycle of the IT and telecom industry. Before rejoining academia, he was a strategy consultant in an internet consulting firm and a senior advisor at Telia headquarters. Lind holds an M.Sc. in engineering and an Econ. Lic. Degree in business administration.

Preface xiii

1 Introduction 1

The Wireless Industry at a Crossroads 1

Be Prepared for 2015 4

Scenarios of the Wireless World in 2015 4

Challenges for the Future 6

Creating Scenarios 6

Guide to the Book 7

Part I Scenarios 9

2 Wireless Explosion—Creative Destruction 11

A Sunny Berlin Day in 2015 14

The Wireless Scene in 2015 16

Rapidly Growing Industry 16

Industry Fragmentation—Market Leaders Losing Hegemony 17

Debt-Burdened Operators Losing Market Dominance 18

Telco Equipment Vendors Lose to Datacom Attackers 19

Terminal Vendors Attacked from NICs and Datacom

Industry Vendors 20

Active Users Driving Development and Undermining Copyright 21

A Mobile Lifestyle with Increasing Travel 22

An Explosion of Services and Applications 22

Spectrum—Abundant Release for Unlicensed Bands 24

No Real Problems with Integrity, Privacy, and Security 24

Fast Development in China and Other NICs 25

Batteries and Complexity Management No Showstoppers 25

Wireless Technology in 2015 26

A World with Many Different Wireless Systems 26

An Abundance of Services with Various QoS 28

Standardization Has Increased 28

3 Slow Motion 29

Ordinary Life in Stockholm and Business Life in Shanghai 32

A Day in the Life of an Ordinary Swede 32

A Business Day of a Mobile Professional in 2015 33

The Wireless Scene in 2015 35

Economic Recession and 3G Fiasco 35

Health Problems from Radiation 36

Security a Problem Still Waiting to Be Solved 37

The Mobile Lifestyle Loses Ground 38

No Service Explosion 39

Wireless Telecommunication Is a Mature Industry 40

The Big NICs Catching up after a Slow Start 42

Spectrum Shortage Not a Big Problem 43

Power Consumption and Complexity Management as Technical Limitations 44

Wireless Technology in 2015 45

Still Mostly Second-Generation Wireless Networks 45

Simple and Low-Radiating Terminals 46

Few and Basic Services 47

4 Rediscovering Harmony 49

A Weekday Morning in a Small Scandinavian Village 52

The Wireless Scene in 2015 54

A Sustainable Society in Balance with Itself 54

The Backlash for Marketing and Commercial Media 56

Market Segments Driving the Development 57

Less but More Travel 59

A Few Clouds in the Sky 60

The Industry Dilemma: Refocus or Die! 60

Peer-to-Peer Applications and Services a Hit 62

Content IPR Still Unresolved 64

Wireless Technology in 2015 64

Many Local and Few Global Wireless Systems 64

Simple Services 65

Standards 65

5 Big Moguls and Snoopy Governments 67

Early April Morning, Green Haven Gated Community, New York, US 70

The Wireless Scene in 2015 73

Moguls and Governments 73

Security Problems of the 2000s Solved 74

Moguls in Control 76

Slow Development in the NICs 77

Incumbent Telecom Players Keep Control of the Market 77

3G According to Plan 80

Applications and Services Focus on Convenience for the User 80

No Free Airwaves 81

Somewhat of a Complex World 81

Wireless Technology in 2015 82

Few Different Systems 82

Global Networks 82

Wireless and Wired Terminals 83

Quality of Service 83

Few Services but Sophisticated and Popular Services 83

Part II Drivers of Development and Technological Implications 85

6 Trends and Fundamental Drivers 87

Fourteen Trends Shaping the Scenarios 88

Scenario Abbreviations 88

Trend 1: Development Will Be More User Driven 88

Trend 2: User Mobility Will Increase 89

Trend 3: The Service and Application Market Will Grow 90

Trend 4: User Security, Integrity, and Privacy Will Become More Important 91

Trend 5: Real or Perceived Health Problems Due to Radiation Will Become More Important 92

Trend 6: Environmental Issues Will Become More Important 93

Trend 7: Spectrum Will Become an Increasingly Scarce Resource 94

Trend 8: The Wireless Industry Will Grow 95

Trend 9: The Big NICs Will Continue Their Positive Development 96

Trend 10: Market Concentration in the Wireless Industry Will Change 96

Trend 11: The Fight for Market Dominance in the Wireless Industry Will Intensify 97

Trend 12: Short Terminal Usage Time and Complexity Management Will Become Increasingly Important Problems 98

Trend 13: 3G Will Be Implemented 99

Trend 14: Protecting IPR on Content Will Become Increasingly Difficult 100

Fundamental Drivers 101

Technology Drivers 101

Socioeconomic and Political Drivers 104

Business and Industry Drivers 105

Users, Values, and Attitude Drivers 107

Theories Supporting Fundamental Drivers 108

Exponential Growth 108

Microprocessor and Other Growth Paths 109

Exponentially Falling Prices and the Experience Curve 110

Network Effects I (Metcalfe’s Law) 110

Network Effects II (Reed’s Law) 110

The S-curve and the Product Life Cycle 111

Technology and Market Forces Driving Industry Life Cycles 111

Disruptive Innovations 112

Architectural Shifts in IT and Other Industries 113

Empirical Support for Postmaterialistic Value Shift 114

7 Technological Conclusions from Scenarios 117

System Technology in 2015 118

The Wireless Infrastructure Will Be Heterogeneous 118

Efficient and Very High Rate Air Interfaces Will Exist 118

Traffic Will Be IP Based and Networks Will Be Transparent 119

Much of the Access Infrastructure Will Be Ad Hoc Deployed 119

Cost per Transmitted Bit Will Be Very Small 119

No Harmful Radiation from Base Stations 120

Decreased Power Consumption in the Wireless Systems 120

Mobile Terminals in 2015 120

Terminals Will Have a Wide Range of Shapes and Capabilities 120

Wireless Terminals Will Be Cheap, Very Small, and Modularized 121

Usage Time without Charging Batteries Will Be Very Long 121

User Interfaces Will Be Highly Developed and Advanced 121

M2M Will Be Everywhere 122

Wireless Devices Will Be Harmless to People and the Environment 122

Mobile Services in 2015 122

Wireless Services Will Become a Commodity 123

Services Will Be Independent of Infrastructure and Terminals 123

Telepresence and Emotional Communication Will Be Available 123

Content Will Be Personalized According to User Demand and Location 124

Global Roaming and Seamless Services Will Be Possible 124

Broadband Services Will Be Available for All Transportation Systems 124

The End User Will Be Always Best Connected 124

Powerful Computers Will Be Everywhere 125

Very High Levels of Security Will Be Provided 125

Part III Challenges for the Future 127

8 Challenges for Technical Research 129

Low-Cost Infrastructure and Services 129

Seamless Mobility 132

New and Advanced Services 134

Usability and Human–Machine Interface 135

Health and Environment 136

A Need for Cross-Disciplinary Research 137

9 Challenges for the Wireless Industry 139

Introduction 139

The Challenges 139

Threat from Disruptive Market Change 139

Speed up the Process of Spectrum Release 140

3G and the Telco Debt Threat 141

Complexity Management 141

Radiation a Problem, Real or Perceived 142

Better Batteries in Wireless Devices 142

Usability and the User in Focus 142

Cheaper Infrastructure and Viable Business Models 143

A Phone for Everyone 143

All Industries Mature 143

10 Challenges for Key Regions 145

US 146

An Immature Market for Mobile Services Waiting to Catch Up 146

Fragmented Operator Industry Being Consolidated 147

Multiple Cellular Network Standards 148

WLAN: A Market Growing Rapidly 148

Rather Weak Telco Vendor Industry 149

Poor Coverage 150

Lack of Spectrum Leading to Limited Capacity 150

The Threat of Terrorism and Crime 151

Europe 152

The GSM World Leader 152

Problems with Seamless Mobile Access 153

Telecom Debt Crisis 153

Strong in Telecom, Weak in Datacom 154

Health and the Environment Taken Seriously 154

Stagnation and Overregulated Economies 154

China 155

An Opaque and Overregulated Economy 156

Political Instability 156

Risks of Complacency 156

Challenges for the Chinese Wireless Industry 157

Risks and Opportunities with Chinese 3G Standard Wars 158

Japan and South Korea 158

Leading the Way into the Wireless Future 159

Oligopoly in the Operator Industry 160

Multiple Standards for 2.5G and 3G 160

A Slow Start for 3G 161

A Saturated Voice Market 161

3G Terminals Expensive to Subsidize 162

4G Already 162

No Major Infrastructure Vendors from Japan and Korea 162

The Japanese Recession 163

Political Uncertainty on the Korean Peninsula 163

Part IV Moving into the Future with Scenarios 165

11 Scenario Thinking and Scenario Making 167

Logics of Scenario Creation 167

Our Approach: Trends 168

Driving Forces: What Do We Care About? 169

Fundamental Drivers: What Do We Know? 169

Critical Uncertainties: What Do We Not Know? 170

Making Our Scenarios 170

Creating the Scenarios and Key Research Issues 171

Weak Signals and Provocative Questions 172

Information and Feedback 173

Commissioned Studies 174

Other Studies about the Future 174

The PCC Research Program 174

The WWRF Book of Visions 175

Swedish Technology Foresight 176

Beyond Mobile 177

Other Scenarios 177

12 Summary and Concluding Remarks 179

The Book in Brief 179

Wireless Explosion—Creative Destruction 180

Slow Motion 182

Rediscovering Harmony 184

Big Moguls and Snoopy Governments 187

Trends and Fundamental Drivers 189

Technological Conclusions from the Scenarios 191

Challenges for Research, Industry, and Key Regions 192

Moving into the Future 199

Dear Reader in 2015 201

Appendixes 203

Appendix A User Segments 205

Moklofs 205

Yupplots 206

Elders 207

Mobile Professionals 207

Industrial Users 208

Appendix B Wireless Foresight at Wireless@KTH 209

The Wireless Foresight Project 209

Wireless@KTH and the Vision-Driven Research Approach 210

Glossary 211

References 215

Author Biographies 219

Index 221