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Mobile World Congress: The final analysis

Mobile World Congress 2008 was short on jaw-dropping announcements, but provided a fascinating glimpse into an industry on the brink of turmoil
Written by David Meyer, Contributor

According to the organisers, this year's Mobile World Congress was the most successful so far, with more than 55,000 visitors.

But there was a general consensus that no announcements or devices really made the jaw drop. The real story of Mobile World Congress 2008 was the politics of a mobile industry standing on the brink of a probable recession.

The industry is in a tough enough position without the added economic fears that have so far defined this year. At the core of the stress is the reality of shrinking margins and uncertain business plans. The mobile market is saturated and the devices themselves are starting to become commoditised, as happened in the PC industry.

Soon, it will no longer matter what handset you have if you want to use a certain application.

It is likely that mobile Linux will play a major role in this shift. The goal of organisations like the LiMo Foundation is to standardise application development; operators want this because it means they can sell more services more quickly, and developers want it because it makes it more worthwhile to develop an application in the first place.

It is not so clear, however, why manufacturers have been so enthusiastically joining groups like LiMo; once everyone is using the same platform, the only way manufacturers will be able to differentiate their products will be through industrial design and user interfaces. It almost seems as though they have signed up because playing along represents the only possible defence against an unstoppable, radical change in the way the entire industry works.

This change is happening at an alarming pace. Just one year ago, the idea of mobile Linux raised eyebrows, but companies have suddenly started showing off how they can run Linux apps on Windows Mobile handsets and Nokia apps on Linux phones. You could call it "cuckoo syndrome".

But, even once applications can be run on any handset, the question remains: where is the money going to come from? Nokia and others have made much out of shifting their focus from hardware to services and apps but, outside of niche markets, there has been no clear indication of what services users will pay to use. As on the wired internet, most people will gravitate towards free applications, and it remains hard to see what could convince them to do otherwise when a broadband-enabled PC is usually close by.

Add to this the spectre of recession — a spectre that already seems to be having an effect in that operators are choosing to sign network-sharing agreements rather than invest in new infrastructure — and the picture becomes bleak not only for the industry, but also for the user.

It is likely that consolidation will take hold in both the manufacturing and operator segments of the industry, and this will ultimately result in less competition and less innovation. Once operators have become bit-pipe providers — as ISPs are now — and all handsets are just standardised terminals, perhaps the only hope for continued progress will be the introduction of competing technologies like mobile WiMax and the long-term evolution (LTE) of 3G.

However, in the current economic climate, companies are understandably loath to invest in new infrastructure. The elements of the next generation of mobile technology are all lined up, but we will have to wait and see how fast and in what way they come together.

Only one thing is for certain: next year's Mobile World Congress will continue to reveal an industry in flux.

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