iPhone 5’s missed opportunities and how mobile is driving culture change in Latin America


At the INMA Seminario Latinoamericano in Buenos Aires – right before the launch of Apple’s iPhone 5 – we were discussing the possible effects of the much-rumoured device on mobile innovation. 

Among new features already on the market — like a built-in projector that can extend the mobile screen to any surface with an image as big as 50 inches or revolutionary technologies around the corner, like flexible screens and projectors that make any surface a touchscreen — what would Apple’s new smartphone bring to the table?

Well, in my humble opinion, not much. Yes, it’s leaner, meaner, lighter — and yet bigger — but does it take a giant leap?

Absolutely not.

A small step?

I’m not even sure about that. In fact, iPhone 5 might stall the mobile revolution, at least for a while.

Had Apple chosen to make the new iPhone NFC-enabled, it would probably have had a positive impact on the development of mobile payments in the next year. Now the effect might be reversed. (NFC is short for Near Field Communication, an embedded chip in the phone that will enable secure transactions by just holding the device near a receiver.)

The absence of that feature in Apple products — projected to gain significant market share — creates uncertainty. What plans for mobile payments are drawn in Cupertino? Will Tim Cook cook up something different? Many in the mobile ecosystem will now lean toward a wait-and-see-attitude. Maybe Apple is doing just that, as well. Who knows?

But an iPhone5 with NFC would have meant a giant leap, at least for mobi sapiens and their “alter egos” (as Google’s Eric Schmidt baptised the smartphone a couple of years ago). Now Apple is the one holding back progress — who would have guessed that?

But, of course, we didn’t go all the way to Buenos Aires, Argentina, to scrutinise what would be presented a day later in San Francisco, California. The issues for INMA’s Latin American Seminar were much bigger: cultural change and transition to multi-media. Reflecting on those challenges, I see mobile media as the great opportunity for newsmedia companies in many Latin American countries.

It might appear naïve to draw general conclusions for such a vast and diverse continent: almost 600 million people in 47 countries and territories, from Brazil, which is the 80% the size of all of Europe, to Bermuda, the third smallest territory in the world with 54 square kilometres. From Brazil, with 200 million people, to Anguilla with less than 20,000.

But mobile is the common denominator and is driving cultural change and economic growth all over the huge continent. Some facts and figures from the first edition of the Latin American Mobile Observatory from GSMA:

  • Today’s Latin America is already the third-largest mobile market in the world, with more than 630 million mobile connections. (Asia is much bigger and Africa slightly, and you would have to put together all of western Europe and eastern Europe to surpass Latin America.)

  • The largest markets — Brazil, Mexico, Argentina, and Colombia — each have more than 40 million mobile connections.

  • Growth has been rapid, a 65% increase from 2007-2011.

  • Mobile penetration reached 106% in 2011 (up from 44% in 2005), but variations are still big within the region. Panama tops penetration with 151%, whereas Haiti only connects 52% of its population. A factor that twists the numbers is the widespread use of multiple SIM-cards in many countries.

  • In 2011, mobile broadband surpassed fixed broadband as the primary Internet access. We’ve seen a 127% growth of mobile broadband in the last five years — and it is expected to continue to grow 50% annually in the coming five years.

  • Smartphone penetration is the next big leap. From a mere 9% penetration in 2010, smartphones are expected to be used by more than one-third of the people in 2014. Next year, Latin America will be on par with the global average of smartphone penetration.

  • By 2015, Latin America is expected to have 330 million mobile broadband connections and 750 million mobile connections.

Some thoughts and conclusions from these fascinating numbers:

What started out as a shortage in the infrastructure — fixed line penetration is still only 19% compared to 41% in Europe — has skyrocketed growth in mobile.

And it will accelerate with mobile broadband; no need for complicated and time-consuming installation of fixed broadband.

Add to that the fact that many countries have competitive mobile markets with an average of four operators who generate further access and services.  

The growth potential is still huge. According to GSMA, there are more than 210 million Internet users in Latin America, but only 83 million broadband subscriptions, mobile and fixed combined. Thus mobile is connecting the unconnected, further driving development and innovation across the continent.

A 10% increase in broadband penetration raises GDP with 3.2% and boosts productivity by 2.6% in Latin American markets, according to Inter-American Development Bank, IDB.

Combine that with economic performance and social structures outside of the mobile ecosystem. Latin America is one of three regions leading the world in economic growth, the others being Asia and Africa. But Latin America has also reached a critical level of development with a GDP per capita of US$13,000. In comparison, sub-Saharan Africa averages about US$2,000 and developing Asia some US$7,000 (all figures from IMF).

The social structure adds another dimension. A growing middle class, relatively young and better educated, living in some of the world’s largest metropolises — Mexico City, São Paolo, Buenos Aires, Lima, etc. — will strive for change and new opportunities.

At Mobile World Congress this year, Santiago Fernández Valbuena, CEO of Telefónica Latin America, said he is convinced that emerging markets will shape the future of the mobile industry.

He accentuated the statement with a graph that was quite interesting: In 2011, developed countries accounted for 71% of all smartphones in the world and developing countries for a mere 29%. In 2016 — less than four years away — developing countries will have 60% of the world’s smartphones and developed countries 40%.

Sunil Mittal, chairman and managing director of Bharti Airtel, which operates in 19 countries across Asia and Africa, added a memorable sentiment: “In developed countries, mobile is a game changer. In developing countries, it’s a life changer.”

The great opportunity for newsmedia companies in Latin America is to be the connective tissue in that life-changing process.

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