Network Security and Device Differentiation Will Emerge as Leading US Smartphone Battlegrounds in 2014

By Tony Rizzo September 10, 2012

A new report from ABI Research suggests that the wireless carriers, especially in the United States, are perhaps becoming overly concerned with what ABI refers to as the "search for the next hero smartphone." These hero phones are possibly becoming a distraction for US-based wireless carriers, especially as they seek to juggle top line subscriber and revenue growth, churn rates, and bottom line profit (or potential loss). Over the next two years, operators will also need to address the issues of mobile OS choice, device OEM relationships and new consumer applications.

Meanwhile, the unceasing and rapid adoption rate for smartphones will also have some potentially negative side-effects, namely in the guise of hundreds of millions of points of network vulnerability. As a result of these market dynamics (smartphone growth vs. network vulnerability) -- which essentially fight against each other -- ABI Research concludes that mobile device choice and network security will top the list of carrier issues and strategies in 2014.

Non-intrusive and effective policies are necessary for carriers to mitigate network security threats. Most importantly, the network needs multiple levels of security. Embedded hardware security and end-user applications represent the majority of today’s implementations. “Every smartphone subscriber end-point is a potential threat to the mobile network,” notes senior practice director Jeff Orr. “Beyond device-specific implementations of hardware and software security, ABI Research cannot emphasize enough the need for a contextual approach: who, where and what is being done.” Adds Orr, "This methodology is not significantly different than the trust policies being formed within enterprise markets that encompass the user, the device, and location awareness."

Beyond securing the network, mobile network operators are caught up in a "beauty contest" to select the next handset that every subscriber desires. ABI notes that it is interesting to see that Samsung and Apple are having significant success in the smartphone market compared to the plight of other device OEMs. The court battles waged by these two leading companies are only the first volley in a much larger industry struggle for technology ownership. “Expect additional players with intellectual property to get involved and use the world’s courts as a stage for a war between integrated versus discrete components,” advises research director Philip Solis.

A potentially larger issue that ABI's report does not cover is whether or not wireless carriers will be able to provide the wireless data bandwidth that smartphone and tablet users will demand in ever-increasing levels heading into 2013-2014. Users, for the most part, will dictate which smartphones the carriers will have the best chances of selling, and we are not convinced that the wireless networks will be all that vulnerable from a security perspective. However, wireless data capacity will absolutely make or break a carrier's business. Even Verizon and AT&T are vulnerable here if they cannot meet demand.

The ABI report, “US Carrier Smartphone Trends,” provides a high-level summary of smartphone trends assembled from the analysis, market data, and vendor matrix development across multiple ABI disciplines. It forms part of ABI Research’s Mobile Device Enabling Technologies Research Service, which comprehensively analyzes the technology segments affecting growth in the global mobile devices marketplace.

Edited by Rich Steeves

TechZone360 Senior Editor

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