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Thursday, June 15, 2006

IMS Devices - industry ignoring handsets at their peril

"Naked SIP" phones will create new, disruptive business threats to carriers

In a previous post I previewed a new report by Dean Bubley of Disruptive Analysis. Below are more details.

I'm delighted that Dean will be participating as 'Analyst-in-Residence' at our IMS Services Brainstorm on 4-5 Oct, in London (www.imsservicesforum.com). He'll also be presenting his latest analysis of his work on Devices in the session on 'IMS Devices - How to get round the problems'. (NB: We have a special offer on the event for those that book before end July. See event website).

A new research study from Disruptive Analysis has examined the evolution of IMS- and SIP-capable mobile handsets.

While much attention has focused on deployments of IMS network infrastructure and applications, the need for a new class of phones has been largely forgotten.

In theory, the much-hyped deployment of IMS networks extends carriers’ abilities to deliver new services like push-to-talk, instant messaging and future innovative "combinational services". Many service providers are investing in the IMS blueprint for building out new IP core networks, and a flexible "application layer" which, they hope, will simultaneously enable them to lower operating costs and drive revenues from myriad new services.

But while infrastructure standards are quite well-established, only the most basic technological enablers of the phones have been agreed. There is no consensus on how to create the "user experience" for IMS phones, nor the ways in which applications interact each other, or other functions, on the device itself.

Many widely-envisioned usage models for IMS actually require the phones to be capable of "multi-tasking" – something only achievable by top-end smartphones today. These issues will lead to delayed development of the handsets, and an early focus on carrier-specific proprietary implementations. IMS phone rollout and uptake will be much slower than expected, with negative impacts for service providers and their suppliers.

The report finds that it will be 2009 before massmarket 20%+ penetration of IMS functionality onto handsets is attained, and in most cases this will still only be through "partial IMS" implementations. Nevertheless, the problems should be overcome eventually. In 2011, it is forecast that there will be almost 500m IMS-capable phones shipped globally.

In the short term, however, carriers face another set of challenges. The comparatively "easy bit" of IMS handset software is putting SIP in the phone. That is standardised. And there are various other good reasons to put SIP in the phone anyway, irrespective of implementing IMS.
So, well before we get true IMS handsets, we will have SIP-enabled ones – which are in fact already shipping. And in many cases, 3rd party software developers or competitive service providers can access SIP with their own applications installed on the phone. Examples include disruptive VoIP, competitive IM services, IP-PBX or conferencing tools, or even SMS-bypass mechanisms.

These are "Off-portal SIP applications", using mobile devices equipped with "Naked SIP".
48m "Naked SIP" phones will ship in 2006, growing to more than 220m in 2008 and 500m+ in 2011. Between now and the end of 2011, there will be, cumulatively, 980m more "Naked SIP" cellphones sold than "Closed IMS" handsets which restrict the user to the operator's billable IMS services. That's a billion extra mobile devices capable of supporting disruptive non-operator SIP applications, developed by 3rd parties such as Internet brands, over the next 5 years.

Dean Bubley, author of the report and founder of Disruptive Analysis, says:

"Once again, the telecom industry seems to have under-estimated the complexity and time involved in getting the phones right, before investing billions on new infrastructure. Not only that, but the gap is likely to be filled by ‘open’ or ‘naked’ SIP-enabled mobile phones, which will enable 3rd-party providers - such as Internet VoIP and IM specialists - to exploit a huge mobile user base with their own on-handset software applications.

The mobile industry needs to address the IMS phone issue as a matter of urgency, as well as looking at ways to short-circuit the inevitable delays by exploiting the abilities of ‘Naked SIP’ devices themselves."

The report, "The evolution of SIP- and IMS-capable mobile handsets", is available from Disruptive Analysis from today. It is based on a huge research effort spanning 300+ interviews and meetings, and contains extensive market forecasts, industry commentary & analysis and company profiles. Please see www.disruptive-analysis.com for a table of contents and summary, or contact sales@disruptive-analysis.com for more details.

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