The UK has hit a major milestone in mobile. For the first time, there are more smartphones than feature phones. So, this time next year, more than 50 per cent of the UK will have a computer in their pocket; a mobile computer that can surf the web at lightening speeds, is touch-sensitive, voice-activated, location-aware, socially enabled, takes high-resolution digitised photos or videos, and can process a payment.
This milestone means the stakes in mobile are now staggeringly high; for many publishers, networks and device manufacturers (not to mention agencies), 2012 will be the year of reckoning. There will be big winners, but some almighty losers too. This year will be a mobile battleground.
One of the key battlegrounds will be the operating systems. If you control these, then you have access to eyeballs, and eyeballs translate to revenue.
Apple has its own operating system, which sits across all its devices exclusively. Google has Android, which runs across a plethora of devices from a number of manufacturers. Although Apple had early success, Android has established itself as the dominant operating system in just four years, sewing up half of the smartphone market and likely to hit 60 per cent by the end of 2012. This aggressive reach strategy from Google is critical to its business. If it can be the dominant operating system on mobile, it effectively puts a moat around its search business.
So the battle for the dominant operating system is already won, in my view. The interesting bit is what happens below Google, particularly with Microsoft's new operating system, WP7, which will be distributed on all new Nokia phones. Both Microsoft and Nokia need this to work. Early signs are positive: the operating system is slick and the new Nokia WP7 phone has received good reviews. But pace will determine success: if Nokia and Microsoft don't move quickly enough to push out new phones that do something different, they may find themselves as "also-rans".
Another core area of the mobile ecosystem that will be hard-fought in 2012 is mobile payments. This year will be the one that mobile starts to replace your wallet. While this won't become mainstream in 2012, the momentum will start and those who do invest will certainly reap rewards in following years. Starbucks has pioneered in this area with its basic mobile payment app in the US. Users preload the app with cash and use it to generate a scannable barcode at point of sale. It speeds up queuing times and generates valuable loyalty data - so far, Starbucks has processed three million mobile transactions with its app.
Closer to home on the payment front, there are going to be many brands in the UK promoting their near field communication payment efforts. The NFC partnership between Barclaycard and Orange, called Quick Tap, will no doubt gain some coverage but the likely winners for share of mind will be those pushing NFC on the back of the London Olympics. Samsung, for example, will be releasing its Visa-supported NFC phone for the Olympics, which will be capable of making payments at 60,000 locations around London.
So we are all going to hear a lot more about NFC this year, priming us for adoption of the incoming NFC-enabled phones.
But while the tech and finance giants battle it out to dominate control of the ecosystem foundations, what of advertisers that operate within it?
This year will be a year of unprecedented creativity in mobile as new devices change the very foundations of human-computer interaction (HCI). HCI in the 80s was all about text; the next 20 years introduced graphics, video and social; but HCI, going forward, will be defined by the sensory capabilities that mobile devices add to computer interaction, including touch, location, movement and voice. Apple's voice-controlled assistant, Siri, is a great example of what is now possible. In 2012, we will see executions that integrate voice, motion and touch to connect with audiences in new, more impactful ways. If you want a glimpse of what lies ahead creatively, download the Inception movie app. What you will get is a four-week mobile audio experience that takes music samples from the film and augments them using your motion, voice and time of day as inputs; it even uses lunar cycle information to help build your personalised music soundscape.
While you will need to build an app to execute an experience as complex or deep as the Inception one, for the more casual mobile experiences, apps will not be necessary. In fact, this year, we will start to see brands moving money out of apps and into rich media experiences delivered via the browser. The benefits of this change in strategy for many brands will be reduced cost (building once) and increased distribution (placed on any mobile website). These experiences are made possible by the emerging HTML5 programming language, which is pushing mobile browser experiences to new, richer levels.
And it's not just mobile advertising that will benefit from the HTML5 developments. Established traditional publishers with content-driven sites looking to bypass the app stores' 30 per cent fees will take a leaf out of the Financial Times' book and simply build HTML5 web apps, thus removing the need to be in an app store. So, for many advertisers and traditional publishers, 2012 will be the year that HTML5 starts to impact brands' mobile strategies.
Other traditional media making strategic moves into mobile will be outdoor and TV, but for very different reasons. For outdoor media owners, the focus will be on driving mobile "opportunities to interact or pay via NFC" to prove value of the media, while broadcasters will start to exploit services such as Miso, Zeebox and Yahoo!'s newly acquired IntoNow to drive content engagement and build loyalty beyond the programmes.
And here's a scary thought to finish on. Facebook accounts for more than 50 per cent of all mobile web traffic in the UK. But it doesn't carry any ads on its mobile platforms. That's right: not a single one. At some point, possibly this year, this will change and, when it does, you can guarantee that Facebook will combine all the profile- targeting of its web ads, overlayed with some geo-targeting that takes personalised ad creative (and privacy concerns) to a new level.
Stefan Bardega is the head of mobile and innovation at MediaCom.