Carlos DomingoCEO – Telefónica I+DProduct Development and Innovation Director - Telefonica Digital

24th April 2013

The Web is deadLong 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 StatsMary 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 + iOS74.7% of the smarpthone OS Market

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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

NO FLASH, NO OTHER BROWSERS,

NO EBOOK 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/1StatCounter.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 boardThe year of Firefox OS

TELCOS

OEM

Key InternetCompanie

s

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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

LATAM IS JUST 37%

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Where smartphone penetration is still low

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