“Creating What’s Next” is the theme of the Mobile World Congress, and analysts at global research firm offer their views on three developments Monday: PalPal and Samsung’s biometric pay feature; Samsung’s new flagship phone; and Mark Zuckerberg’s keynote speech about how Facebook connects to the next billion.
(Be sure to check out WRALTechWire coverage of Lenovo’s new phones and updated Yoga tablet as well as new software apps introduced in Madrid.)
The tradeshow opened Monday in Madrid.
- Ovum on PayPal-Samsung:
PayPal and Samsung introduced with a new biometric feature that will allow users of the new Galaxy S5 smartphone to use fingerprint authentication for mobile payments with PayPal merchants. PayPal argues that this is a major innovation in m-payment, introducing a new level of convenience for consumers compared to the familiar login-and-password authentication model.
Eden Zoller, principal analyst at Ovum:
“We think consumers will be wary and need some convincing due to security concerns. In Ovum’s 2013 Consumer Insights Survey, almost half the survey respondents (49%) ranked lack of security as their priority concern with mobile payments. Consumers already worried about the security of established m-payment mechanisms are likely to view a new technology and process with suspicion.
“On the positive side, Samsung is a hugely popular smartphone brand with global reach, while PayPal is a trusted payments service provider. This is a powerful combination. PayPal stresses that fingerprint authentication is a secure feature based on a FIDO-ready software implementation with all credentials stored remotely in the cloud. PayPal is the first member of the FIDO Alliance to produce a solution of this kind; other members include Google and Microsoft.
“The PayPal fingerprint authentication feature will go live on the Samsung Galaxy S5 in 26 markets this April. PayPal expects more device manufacturers to adopt the technology going forward.”
- Samsung’s New Phone:
Samsung unveiled the Galaxy S5.
Nick Dillon, senior analyst at Ovum, offers his analysis:
“Samsung is betting big on wellness, fingerprint reading and camera autofocus, while keeping a very similar look and feel for its hardware and software. The updates are so minor that on first glance most consumers would be hard pressed to notice that it has changed from the previous version. Still, this should come as no great surprise, given the maturity of the smartphone market and the pressure on the Samsung not to mess with its winning formula. Samsung reminded us quite how successful this formula has been, noting that it has sold 200 million Galaxy S devices since launching the franchise in 2010.
“In contrast to the Galaxy S4 which was packed with gimmicky features, Samsung has focused instead on a small number of enhancements with the S5. The challenge for Samsung will be to convince users to upgrade to a handset that offers little more than its predecessor.
“What perhaps is the most interesting aspect of the device is what Samsung did not announce, effectively putting to bed a number of rumors. These included suggestions at both ends of the scale that that the device would be running Tizen OS and that it would be using a “pure” Google version of Android. That it has neither tells us both that Tizen is unlikely to see a major handset launch this year and that Google and Samsung are still operating at arm’s length.”
- Zuckerberg’s Next Billion:
In his conference keynote, Zuckerberg focused on how the social network will lead the charge to connect the next billion.
Eden Zoller, principal analyst at Ovum, analyzes his speech:
“Zuckerberg argues that the outstanding barrier in connecting people to the Internet in emerging markets is no longer the cost of phones, but expensive data plans. The only way this will change is if more operators introduce unlimited bundles with free access to basic Internet services like Facebook Messenger and WhatsApp, along the lines of the bundle Globe Telecom offers in the Philippines. Messaging services, social networking, and search will in turn be the key platforms for offering access to a wider range of Internet services. Zuckerberg says Facebook wants to enable direct access to basic Internet services the way that 911 does for emergency services.
“Facebook wants other operators to adopt a model like Globe Telecom’s – which offers all the major global OTT messaging services for free as part of its core call and text bundle – and is looking to work with three to five operator partners over the next year. But whether operators will buy into Facebook’s vision remains to be seen. Zuckerberg’s proposal is Facebook-centric, with the social network and OTT players reaping the immediate benefits. The direct monetization prospects for telcos are thin, a point Zuckerberg admitted by conceding the model needs fine tuning to strengthen the business case for operators. There are of course indirect benefits to carriers, such as the increased mobile Internet usage and subscriber gains experienced by Globe Telecom, but the question remains as to whether this will be enough to counter the negative impact OTT services are having on operators.”