The document discusses the shift of internet traffic towards mobile devices and apps, driven by growing smartphone adoption. It argues that current mobile platforms are creating closed ecosystems that control the hardware, software, and app distribution. However, HTML5 promises to fix issues with the mobile web and provide an open standard for universal web apps and content across devices. The author's company is working with Mozilla to create Firefox OS, a fully open web-based mobile operating system built on HTML5, unlocking the potential of the mobile web. They aim to bring affordable smartphones to emerging markets where internet and smartphone penetration is still low.

1. Carlos Domingo
CEO – Telefónica I+D
Product Development and Innovation Director - Telefonica Digital
24th April 2013
The Web is dead
Long live the Web

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Internet traffic is moving towards “mobile”
Global mobile traffic as % of Total Internet Traffic, 12/08 – 5/12
Sources: StatCounter Global Stats
Mary Meeker - KPBC
1% in 12/09
4% in 12/10
10% in 5/12

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Internet will be is already mobile
100M
150M
200M
2010
YOUTUBE REACHED 2OO MILLION MOBILE
VIEWS A DAY, A 3X INCREASE DURING 2010

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Driven by smartphone adoption worldwide

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Where two companies are capturing a very large
portion of the market …
Source: Gartner, Feb 2012
Android + iOS
74.7% of the smarpthone OS Market
50,9%
23,8% 11,7% 8,8% 4,8%Android
iOS Symbian RIM Others

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Creating new closed ecosystems
Internet

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… controlling…
THE HARDWARE
THE BROWSERS
THE OPERATING
SYSTEMS
THE APPS
ECOSYSTEM

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And people use Internet in a very different way than
in the desktop, using apps and not the Web

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PROTECT THEIR
CORE
BUSINESSES
Back to the walled gardens

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… while preventing others competing
NOFLASH, NO OTHER
BROWSERS, NOEBOOK STORES, etc.

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Source: http://www-958.ibm.com/software/data/cognos/manyeyes/datasets/browser-browser-2/versions/1
IEXPLORER OPERA MOSAIC NETSCAPE OTHERS

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And then the situation changed
Web browser market share (Q1 2003 to Q2 2012)
Sources:
IEXPLORER FIREFOX CHROME SAFARI OPERA OTHERS
http://www-958.ibm.com/software/data/cognos/manyeyes/datasets/browser-browser-2/versions/1
StatCounter.com

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Creating a thriving and open Web ecosystem
Internet

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And not everyone agrees with the conclusions

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At Telefónica we strongly believe that the openess
of the Web is the way forward on mobile

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So we started looking at what was needed to fix
the issues with the mobile Web
Web Apps Monetization Mechanism
Web Apps Discovery Mechanism
Richer Mobile Web APIs
True cross Platform Support
Mobile Web technologies Performance

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HTML5 promises to fix most of these issues

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Bringing lost of new improvements
• Native audio and video support
• Offline storage support
• Plays nice with batteries
• Nice transitions, animations and transfomations via improved CSS
• 3G graphics support via WebGL
• Lots of devices APIs
• WebRTC for real time communications
• Canvas to read, write and convert pixels (The browser fountain)

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Providing a common framework for development of
universal web pages and applications across
desktop and mobile
Apps will be portable across devices
HTML5 mitigates fragmentations issues and is truly cross
platform for mobile, desktop and tablets
There are more developers in the world familiar with Web
technologies than any other programming language
Some key Web players are already developing entirely in
HTML5 (Twitter, Amazon, Financial Times, etc.)
Lots of native mobile apps are in fact HTML5 based

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With developers very interested in HTML5
Web developers are the
largest developer
community of the world

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Some examples… not sharing revenue with apple
SUBSCRIPTIONS DO
NOT GO THROUGH
THE APP STORE

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… or offering a full alternative to the app store
ANOTHER WAY TO
DISCOVER AND
INSTALL HTML5
APPS

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… or alternative cross-platform development
HTML5 GAMES DEVELOPED BY
ZYNGA FOR FACEBOOK

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However, HTML5 standards and browser support
needs to improve to reach full potential …

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And at Telefónica we created a project to fix this

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And in the other side of the world, Mozilla was
having the same idea

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So we joint forces to create Firefox OS, a true Web
OS entirely based on HTML5 from the ground up

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Firefox OS allows the creation of HTML5 only devices

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Unleashing the true potential of the mobile Web
unlike other platforms
Fastest and most complete performance of
HTML5 and mobile Web apps at low cost
Mobile phones where everything running is a
mobile web application.
Truly open mobile OS and ecosystem, any
one can participate

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Hardware access is one key feature

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Many key industry players already on board
The year of Firefox OS
TELCOS
OEM
Key
InternetCompanies

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Biggest number of units sold
during launching year by OS
And we already are creating good market
expectations
Firefox OS 7-8 MM
iOS 3.7MM
Windows phone 6.9MM
Android 1.3MM
“Firefox OS to Capture 1
Percent Share of Global
Smartphone Market in 2013”
(Strategy Analytics)

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COMPETITION WILL MAKE
OTHER PLATFORMS EVOLVE
Which ultimately should push other players to
follow the same path

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Making the most of the Open Web
A NEW WORLD OF OPORTUNITIES
TO EVERYONE

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There is just ONE WEB

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QUESTIONS?

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At the beginnings of the Internet, the web was a mix
between open and closed ecosystems around the PC
Source: http://evolutionofweb.appspot.com/
Wikipedia
OPEN
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002199019891988
MOSAIC
NETSCAPE
OPERA
IEXPLORER
OPEN
CLOSED
MSN
Prodigy
CompuServe
AOL

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How to market a new OS? Competing with
incumbents does not seem a smart movement…

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Better UX for the same
price than alternative
smartphone OS
…therefore we are going to address cost driven
customers following the disruptive innovation model
Optimized to run hardware
not suitable for latest
smartphones OS
Bringing an affordable
smartphone for the masses
with a good UX and best
mobile Web support

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Cheaper devices as there will be only one environment:
the web
BY REMOVING SUPERFLUOUS
SOFTWARE AND HARDWARE

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Specially in emerging markets
INTERNET PENETRATION IN
LATAMIS JUST 37%

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Where smartphone penetration is still low
83%
17%
2011: SMARTPHONE
PENETRATION IN LATAM
FEATURE PHONES
SMARTPHONES

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Which means there is NO INCUMBENT as in the
smartphone segment
OPPORTUNITY FOR
BEING LEADERS