It was not a good year for BlackBerry and maker RIM, whose stock price plunged in 2011 and shows no signs of rebounding.
STORY HIGHLIGHTS
- This summer, Verizon -- the largest U.S. carrier -- stopped offering unlimited data plans
- All major U.S. carriers were busy rolling out their faster 4G networks
- As of October 2011 the Android operating system was used on over 46% of U.S. smartphones
Editor's note: Amy Gahran writes about mobile tech for CNN.com. She is a San Francisco Bay Area writer and media consultant whose blog, Contentious.com, explores how people communicate in the online age.
Some of the year's top mobile stories were mostly hype (QR codes and cell phone radiation) or vaporware (those persistent iPhone 5 rumors). But other developments were genuinely important to the U.S. mobile landscape.
Here's a quick -- and entirely subjective -- list of my picks for the 10 most important stories and trends for 2011 in U.S. mobile news:
1. Goodbye (mostly) to unlimited data plans; hello throttling. The digital divide between those with high-speed Internet access and those without remains a huge problem in the United States and elsewhere, leading to significant inequities of opportunities and services.
Good mobile devices and networks can help bridge this gap -- if you can afford them. For smartphones, the biggest part of the total cost of ownership is the data plan, which in the United States typically requires a pricey two-year contract with a steep early termination fee. When smartphones first came out, unlimited data plans were the norm. But wireless networks couldn't keep pace with skyrocketing demand for data, so most carriers took down their "all you can eat" signs.
This summer Verizon, the largest U.S. carrier, stopped offering unlimited data plans, following AT&T's move from 2010. T-Mobile still offers what it calls "unlimited" data plans, but it caps high-speed data access -- and if you hit your cap, your data speeds may slow to a crawl until the next billing period.
As of now, Sprint is the only remaining major U.S. carrier that still offers an unlimited, uncapped, no-throttling data plan for a flat monthly fee. If you happen to live in a city where Sprint's network is fast, that may be a good deal; but according to Rootmetrics, Sprint's data speeds vary widely by location. Also, Sprint is reportedly testing throttling on its Virgin Mobile brand.
2. Growth of mobile streaming media. It seemed to be the year when streaming media for mobile really took off. According to The Nielsen Company, 14% of U.S. mobile users (about 31 million people) now watch videos on their smartphones and feature phones, a 35% increase over last year. Also, 29% of U.S. smartphone users stream music or Internet radio to their phones, up 66% from 2010.
This year's U.S. debut of Spotify -- along with new and updated mobile streaming music and video services from Facebook, Amazon, Google, Apple, Netflix, Hulu and video chat/calling services like Google Plus hangouts -- are helping to fuel the demand for streaming mobile media. And behind the scenes, technology from companies like MobiTV are helping streaming video consumers seamlessly shift their viewing experience from one device to another.
The catch: Streaming media uses a lot of data bandwidth, which puts a heavy burden on carrier networks. This is probably a key reason why carriers have mostly abandoned unlimited data plans, which brings us to the next big trend, 4G.
3. 4G network rollouts. This year, all major U.S. carriers and several of the discount regional ones were busy rolling out their faster 4G networks. This label comprises three major technologies: long-term evolution (LTE, used by Sprint, Verizon and MetroPCS), HSPA+ (used by AT&T and T-Mobile), and WiMAX (provided by Clearwire and resold by Sprint in some cities). These technologies offer different speeds, strengths and weaknesses -- so what the 4G experience means to consumers will vary widely by carrier and location.
Over time, the move to 4G networks should relieve the growing burden on existing 3G carrier networks. They'll also enable new services, such as better and more sophisticated voice calling. But consumers must purchase new 4G-compatible phones to use these networks -- and those will mostly be hitting the U.S. market in 2012. For instance, the new iPhone 4S is only 4G-capable on AT&T's HSPA+ network; Verizon and Sprint users have to settle for 3G speeds, for now.
4. BlackBerry outage and continuing RIM decline. For several years, even after the first iPhone launched, Research in Motion's BlackBerry line of phones was the 800-pound gorilla of the U.S. smartphone market. This was driven mainly by business users, who were attracted to the phone's advanced messaging and encryption features.
But BlackBerries also grew popular with U.S. consumers as a lower-end "smart-ish" phone that generally was more affordable than iPhones and higher-end Android phones, and widely available on no-contract plans.
Then, on October 10, 2011, RIM experienced its longest and widest outage. Users lost access to their e-mail and BlackBerry Messenger, and some lost Internet access, too. It began in Europe but soon spread elsewhere, eventually affecting the United States.
The company had already fallen on hard times, and was struggling to retain its market share and increase its relevance by attempting to update its technology. But as Imperial Entrepreneurs notes, this particular outage has probably cost RIM several large corporate accounts. Also, RIM may have to pay back some fees to carriers as its users jump ship to other platforms. RIM's stock price dropped severely in 2011 and shows no signs of rebounding.
5. Android commands half the U.S. mobile market. According to ComScore, as of October 2011 the Android operating system was used on more than 46% of U.S. smartphones. If this growth continues, then by now Google's open mobile platform may already be on about half of all U.S. smartphones in use. This leaves Apple's iOS in second place with nearly a third of all smartphones, and all other platforms (Windows Mobile, BlackBerry, etc.) occupying far smaller market segments.
However, there is intense and growing fragmentation in the Android market. In November, tech blogger Michael Degusta noted a sad legacy of Android orphans, Android users who lag far behind on operating system updates. In March the Electronic Frontier Foundation criticized carriers for blocking some mobile OS updates.
Granted, many older iPhones that cannot be updated to the latest iOS are still in use. But Apple's centralized distribution of updates means more Apple users are running the latest software, which increases security as well as compatibility with apps and services.
6. Mobile payment infrastructure begins. There were predictions, as by Forrester Research, that 2011 might be the year when using your phone to pay for stuff in stores would become commonplace. That hasn't quite happened yet -- except at Starbucks, whose mobile app has processed 26 million transactions since its January launch.
But this year several major U.S. banks, credit card processors, wireless carriers, online and brick-and-mortar retailers, and online service providers did make considerable progress on putting together the infrastructure to allow U.S. consumers to "tap or wave to pay" at many stores in the coming years. Much of this will be enabled by near field communications technology, such as the Isis network (a joint venture of AT&T, Verizon and T-Mobile), which plans to launch in the test markets of Salt Lake City, Utah, and Austin, Texas, in 2012.
Expect this trend to take quite a while to unfold, with lots of bumps along the way. Deploying mobile payments requires collaboration between huge companies, all of which are trying to stake out and protect transactional "turf." For instance, Verizon was recently accused of blocking the Google Wallet app on the new Samsung Galaxy Nexus phone, a charge Verizon denies. The FCC is investigating.
7. The debut of smaller, cheaper e-reader tablets. This new category of mobile devices actually began in 2010 with the launch of the Nook Color, which costs about $250. But in October, the launch of the Kobo Vox and Kindle Fire -- both of which cost about $200, and even less with some holiday deals -- signaled a watershed moment for affordable tablets.
These devices aren't really intended to replace Apple's iPad. They're smaller, more limited in functionality and they're reported to have some problems with usability and build quality. But the Kindle Fire, at least, is selling quite well; by some estimates it's already the world's No. 2 tablet.
Meanwhile, the least expensive iPad model costs about $500, and it's only available as a full-size tablet. There have been rumors of an iPad Mini, but so far they're just rumors.
8. Mobile privacy concerns increase. Most people consider their cell phones to be personal and private devices, and they react strongly when that privacy is threatened.
From the Carrier IQ flap to California allowing warrantless cell phone searches by law enforcement to the geolocational privacy and security bill making its way through Congress, 2011 was a year when mobile-device privacy became a big issue.
Most significantly, as campaigns heat up for the 2012 presidential election, Congress this month decided to abandon a bill that would have allowed telemarketers to "robocall" mobile phone numbers. Last week Rep. Lee Terry, R-Nebraska, co-sponsor of the contentious Mobile Informational Call Act, withdrew the bill.
9. Voice interface progress continues. Android phones have long had pretty useful and popular voice control options, as well as turn-by-turn voice navigation. But this year Apple made a big splash in the field of mobile voice interface with "Siri," a much-publicized new feature of the latest version of the iOS mobile operating system. It allows you to ask questions, get directions or execute certain tasks (such as setting a reminder) with simple natural-language voice commands.
So far Siri only works on the iPhone 4S, though -- and many reviewers question how useful Siri really is. But just this week Nuance (the company that powers Siri) acquired Vlingo, its top rival. This move may lead to substantial improvements in Siri's interface.
In the long run, better voice-interface technology will probably revolutionize how we deal with all sorts of devices -- computers, phones, cars and home-automation systems. But for now, it seems we're still a long way from really being able to talk to our phones.
10. Steve Jobs' mobile legacy. There was a lot of hyperbole after the death of Apple's founder -- perhaps only rivaled by North Korea's public grief this week over the death of dictator Kim Jong Il. But Jobs was a brilliant visionary who revolutionized the very concept of what mobile devices can do and the roles they can play in our lives.
In 2008 I had a brief, torrid affair with a Nokia N-95, one of the first true smartphones on the U.S. market. It ended swiftly and very badly. My $600 smartphone turned into a useless brick two days after I bought it when I attempted to update the firmware. It ran the clunky Symbian operating system, which Nokia finally abandoned this year for the North American market. When I got my first iPhone later that year, it was an eye-opener -- and a relief.
Had Jobs lived longer, I've no doubt he would have continued to push the envelope of mobile devices, expanding their vision and scope. I would love to see what he would have done with augmented reality, near field communications, flexible displays and other emerging technologies making their way onto cell phones and tablets.
It's quite possible Jobs stashed away a long list of future designs in a vault at Apple, a legacy of technological Easter eggs for the future. His continuing impact on mobile technology will probably be felt for several years. Mobile technology moves so rapidly that not even Jobs could possibly foresee all its emerging opportunities and pitfalls. But a mobile world without his vision is definitely a bit less rich and exciting.
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