Considerations On Mobile World Congress 2023
Mobile World Congress (MWC) returned to Barcelona in full force this week. While I write this on my flight home, I have not seen the final number, but I had heard we had around 90 thousand people. It certainly felt like we were back to a pre-pandemic show with a fair amount of cautious optimism on the show floor. Yet, on stage, most of the presentations seemed more negative, possibly reflecting a submission schedule that requires material way ahead of the conference rather than signaling a disconnect between attendees and speakers. This timing might also explain why the hottest tech topic of the past couple of months, generative AI, was not dominating the stage or the booths’ demos except for Qualcomm’s Stable Diffusion, an on-device generative AI that creates pictures based on a user’s request.
Part of the doom and gloom coming from the stage was also easily linked to yet another identity crisis many carriers are going through. Over the years, first with the arrival of apps and then with streaming services, carriers have felt they were relegated to providing the plumbing with no value add they could further monetize. Now, as we move into AI, cloud computing, and a more and more connected world, carriers face the same issue. Of course, we all know that this is only possible thanks to the networks, but that does not mean they should charge proportionally to what others make on them. During a keynote, Netflix co-CEO Greg Peters addressed this contentious point head-on: “I believe in a clear and direct symbiotic relationship between a thriving creative industry and a thriving network ecosystem. It shouldn’t be a binary choice between big telco and entertainment companies.” Adding that Netflix’s operating margins are significantly lower than BT or Deutsche Telekom and arguing: “We could argue that they should pay entertainment companies for the cost of our content which is what happened under the old pay-tv model.”
I was asked a few times whether these kinds of shows will continue to be relevant in the future, and I am still deciding. Similarly to CES, most of the excitement at MWC came from seeing people in real life after not seeing them for three years. This is probably even more important for MWC, a show that has historically been more about customers’ and partners’ meetings. But I do wonder if the three-year gap and the longer technology cycles might mean that people will learn to attend these shows less religiously than in the past, either by rotating the attendees or simply deciding to attend every other year or so.
As I was commenting on the show, I pointed out that the show felt very different from 2019, the last year I attended. No more cars, much fewer consumer-focused devices, the absence of some big brands like Sony, the dominance of Chinese brands and 5G as a given. In reality, though, is not that the show has changed but that the market has, the show is a mere reflection of that.
In the smartphone world, Chinese brands like Honor, Oppo, Xiaomi and OnePlus hold share and drive innovation into mass-market price points as they do with foldables. For an analyst like me, based in the US, MWC was a great opportunity to touch some of these new products, and, more often than not, it was easy to see some of the shortcuts taken to reach that price point. Despite the current economic environment, the size of these brands’ booths and the marketing investment they are making speaks to the real challenge that a brand like Motorola faces. Build quality and software for Motorola and, of course, Samsung remain way ahead. While Samsung has a large enough business to justify its marketing investments, Motorola remains a small piece of the big Lenovo pie. Yet, if the buzz about the Motorola RIZR concept device is something to go by, there is plenty Lenovo should enable Motorola to capitalize on from a marketing perspective. Over the past couple of years, Motorola has also mastered storytelling, and Samsung has dramatically improved it. As factors such as sustainability grow as a purchase driver, but more importantly, as a focus of regulators’ scrutiny in Europe, Chinese brands will have to integrate it into their storytelling and abide by the reporting rules to remain compliant in certain markets. It was interesting to see early attempts at that alignment on the Honor booth, where there was a QR code to download its sustainability report.
VR and AR had a stronger present at MWC than at CES. Walking the booths, you could see many different iterations of glasses, visors, and headsets, all attempting to provide value to businesses. B2B solutions are where the use cases are obvious, and more importantly, the return on investment is clear compared to the consumer market. As it was the case for the early PC market, adoption in enterprise will help adoption in consumers because it will positively impact price points. But also, the higher the penetration, the more interesting the market becomes for developers. The more applications and use cases, the easier to justify the investment. An investment that today for consumers does not seem proportional to the return. What is interesting in this space is that Qualcomm is the SoC of choice for all the MR headsets currently on the market making them the only option brands have to compete against Apple.
MWC has always been more about business than consumer, but it was even more so this year—a reflection of where many brands see opportunity. With COVID, digital transformation did more than accelerate. It became a tool not just to transform processes but to transform the business, do better, do more, and do different. Despite the economic downturn, that desire to continue to drive the business into the future versus fighting the future to stay tied to the past is still there. While investment might slow in certain areas, it still offer opportunities to many brands that focus on networks, edge and cloud computing and security to capitalize on further growth.
Lastly, I can’t write about Mobile World Congress, or anything else in tech for that matter, without commenting on diversity and inclusion. It was great for somebody like me, who’s been attending Mobile World Congress since the early 2000s, to see more women and representation from Africa, the Middle East and South America. But it still felt that the audience remained disproportionally men. I was encouraged by the diverse panels I saw on stage and not just as part of the D4T (Diversity for Tech) summit. These were technology panels and business panels where you saw much more diverse participation than in previous years. It is easy to be thoughtful. It is not about having the right person to tick the diversity box. It is about not defaulting to inviting who has come before or reaching out to the same brands from the same countries.
See you next year, Barcelona!