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Predicts 2016: Mobile and Wireless Published: 13 October 2015

Analyst(s): Ken Dulaney, Terrence Cosgrove, Jon Erensen, Nick Jones, Angela McIntyre, Martin Reynolds

In this new phase of mobility, wireless and mobile technologies expand our real world beyond simple smart devices, creating new digital worlds. IT leaders and vendors are challenged by new privacy and security threats from new technology sources.

Key Findings ■ By 2018, the number of organizations managing a portion of their PCs/Macs with an enterprise

mobility management (EMM) system will rise from less than 1% today to 40%.

■ By 2018, 5 million people will have enterprise-confidential information on their smartwatches.

■ By 2020, the impact of interruptions on human effectiveness will cause 40% of enterprises to restrict notifications on wearables and smartphones.

■ By year-end 2020, the largest smartphone brand will be Chinese.

Recommendations ■ Use EMM tools to manage selected PCs today — especially to address the new management

challenges introduced by mobility, such as certificate management — and to deal with uncontrolled OS and app releases.

■ Update enterprise policy on the use of personal mobile devices for work to include smartwatches and other wearables. Clearly describe what types of data can be collected, stored or transmitted from the smartphone.

■ Engage employees in voluntary studies of their use of mobile devices and services that cause interruptions in order to quantify the impact to worker effectiveness. Use the results and evidence from psychological research to gain evidence to support future action.

■ Use low-cost smartphones to mobilize employees where you cannot justify the cost of a premium device.

Table of Contents

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Strategic Planning Assumptions............................................................................................................. 2

Analysis.................................................................................................................................................. 2

What You Need to Know.................................................................................................................. 2

Strategic Planning Assumptions....................................................................................................... 3

A Look Back...................................................................................................................................10

Gartner Recommended Reading.......................................................................................................... 11

Strategic Planning Assumptions By 2018, the number of organizations managing a portion of their PCs/Macs with an EMM system will rise from less than 1% today to 40%.

By 2018, 5 million people will have enterprise-confidential information on their smartwatches.

By 2020, the impact of interruptions on human effectiveness will cause 40% of enterprises to restrict notifications on wearables and smartphones.

By year-end 2020, the largest smartphone brand will be Chinese.

Analysis

What You Need to Know

As mobility moves into its maturity phase, its impact becomes less self-contained under the banner of mobility, and instead spreads across the computing infrastructure. Security, manageability and productivity are the key themes presented in this Predicts note, where both IT leader excellence and vendor differentiation can be attained:

■ IT managers will need to support smartphones and wearables having a wider range of variation in OSs. As Chinese brands become more dominant by leveraging declining application service providers (ASPs) and lack of differentiation, incumbents will not succeed by bundling more consumer software and superfluous features on devices.

■ IT planners must recognize that EMM technology can only survive if its offerings are broadened to both the PC market and other endpoint markets, such as wearables. This permits IT organizations to both consolidate the products in use, and leverage consistency in how they secure and manage their entire endpoint portfolio.

■ Security continues to be a threat that emerges with each device option the market offers to employees. This threat increases as each application expands its cloud footprint, creating multiple points of exposure. Helping IT address the movement of data to unprotected devices and storage locations is becoming a major concern. We highlight this concern by listing smartwatches as a new target.

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■ Dealing with productivity is a new frontier, where employers begin to balance the freedom of work they have given employees through programs such as bring your own device (BYOD) and bring your own application (BYOA), with the need for that freedom to be targeted at clear business objectives while maintaining the ability of different employees to retain their own style in pursuing those objectives.

Together, our predictions support the concept that mobility is becoming more invisible as it pushes its challenges into every traditional area of IT, forcing those areas to become more robust. It is important that IT continually use mobility as the ultimate test of the viability and completeness of all strategies that become part of any IT or vendor's overall plans.

Strategic Planning Assumptions

Strategic Planning Assumption: By 2018, the number of organizations managing a portion of their PCs/Macs with an EMM system will rise from less than 1% today to 40%.

Analysis by: Terrence Cosgrove

Key Findings:

The management of PCs in enterprises today is mostly done through client management tools (CMTs), but scenarios where EMM becomes feasible to manage both mobile devices and PCs are starting to emerge. EMM products have gradually started to include features to manage PCs. The management framework for mobile devices and PCs is set to converge into a unified endpoint management model over the next five years. Microsoft and Apple are unifying aspects of the PC, tablet and smartphone platforms. Both vendors have added the ability to use EMM tools to manage their PC platforms. Starting with Windows 8.1 and now with Windows 10, Microsoft added the over- the-air device management (OMA-DM) agent, a number of mobile device management (MDM) settings and the app store delivery model to deliver universal apps. Three years ago, Apple switched its OS X settings and configuration management framework from "Managed Preferences" to "Configuration Profiles." Configuration Profiles is the iOS setting and configuration management framework. The EMM architecture provides a lighter-touch style of management than CMTs. On both Windows 10 and Mac OS X, the EMM agent performs only the management functions allowed by the OS, which makes it well-suited to devices in which the enterprise wants to limit its span of control. CMTs have proprietary agents that are permitted full control of the system image and have few limitations in the tasks they can perform. PC management, however, remains complex and labor-intensive, and endpoint computing leaders should explore the opportunity to move to a lighter PC management paradigm in at least some scenarios. On Mac OS X, organizations can use EMM tools and CMTs together. EMM tools are suited for scenarios in which the enterprise wants a light- touch management approach, and users need only Web and native mobile apps. Administrators can manage OS X and iOS configurations together using a single EMM tool.

Market Implications:

Microsoft and Apple continue to enhance the ability to manage PCs with EMM tools. However, CMTs and processes to manage images, patches and desktop applications will be necessary as

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long as enterprises have desktop applications in their environments. CMTs provide greater system control and more capability for traditional native desktop applications, but are not appropriate on user-owned PCs, where full image management is not needed or desired. EMM tools do not provide complete life cycle management capability, but are suitable for specific scenarios where users require only Web and native mobile apps. Over the long term, the mobile and PC management frameworks will converge into a unified endpoint management model (see "Managing PCs, Smartphones and Tablets and the Future Ahead"). End-user computing leaders can start preparing now for the transition.

Recommendations:

EMM are suitable to manage PC in a limited number of scenarios today:

■ Use EMM tools to manage bring your own PC (BYOPC), particularly when users want access to native, touch-based applications.

■ Consider EMM tools for "somewhat managed" endpoint management scenarios, when no local Win32 applications are required.

■ Manage only selected PCs with EMM tools today, especially when there is a requirement to address the new management challenges introduced by mobility, such as certificate management, and to deal with uncontrolled OS and app releases.

Related Research:

"The Top 10 Mobile and Endpoint Strategic Imperatives to Apply to Your IT Strategy Document"

"Managing PCs, Smartphones and Tablets and the Future Ahead"

"Managing PCs as Mobile Devices Is the Future, but Do So Selectively Today"

"The Decline of Windows Applications in Organizations Will Present Changes and Opportunities"

"Making the Right Choices for End-User Computing Investments Over the Next Five Years"

Strategic Planning Assumption: By 2018, 5 million people will have enterprise-confidential information on their smartwatches.

Analysis by: Angela McIntyre, Ken Dulaney

Key Findings:

As consumers adopt smartwatches, they will expect not only to wear them to the workplace, but also to use them for various tasks, such as the following:

■ Viewing work-related text messages, meeting reminders, project dashboards

■ Logging the number of hours worked and generating invoices

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■ Messaging colleagues and customers with enterprise contact information

■ Recording notes through voice

■ Taking and storing photos

■ Creating lists of tasks, sharing them with colleagues and updating the status of tasks

Apps for Apple Watch that perform these functions are already available on the Apple App Store. Today, these functions are mostly delivered through the watch as a terminal, with no local storage of content. However, Apple Watch stores data locally on the smartwatch, such as images, calendars, contacts and passbook data, such as plane tickets. Smartwatches with the Android OS and Pebble smartwatches have less information stored locally, and rely more on data from the smartphone. Starting in 2016, smartwatch brands are likely to differentiate themselves with more local storage, which will facilitate enterprise-confidential information residing on smartwatches. Storage on smartwatches today is typically 4 GB. However, the ReVault smartwatch that exceeded its $100,000 funding target on Indiegogo in June 2015 is touting 32 GB of onboard storage. It is likely that future apps will store enterprise-confidential information on smartwatches — intentionally or otherwise.

Smartwatch manufacturers overall seem to be taking security seriously today, but did not fully flesh out security needs of users during the design phase. At this stage, platform architecture has been set, and smartwatches cannot be trusted as a repository for sensitive information.

Salesforce is one of the first enterprise platforms that is enabling developers to use smartwatches as endpoint devices for customer relationship management (CRM) tasks. The software development kit (SDK) Salesforce Wear enables integration with smartwatches from Apple, Motorola, Pebble and Samsung. Salesforce Authenticator enables two-step authentication for a more secure login with codes generated on the smartwatch. Apple Watch enables a PIN access code to be set, which authenticates the wearer of the watch each time it is put on. If a person enters the PIN incorrectly six times within several minutes, the storage needs to be erased before the wearer can pair it with a smartphone.

If a modest 4% of smartwatch wearers have enterprise-confidential information on their smartwatches in 2018, that would be 5 million people, according to Gartner unit forecasts for smartwatches. Gartner consumer survey data indicates that one-third of early adopters of smartwatches in the U.S. and the U.K. are employed in professional occupations. It follows that 10% to 15% of smartwatch wearers in professional roles are likely to have confidential information on their smartwatches in 2018, a relatively low percentage that will continue to increase at least through 2022.

As more vendors tout support for the movement of applications and data seamlessly across multiple device form factors and OSs, the ease with which information can be moved to those devices is drastically reduced. Furthermore, most devices are linked to a source — essentially permanently — in autosynchronization mode, something the user eventually forgets is invoked. Good technology has taken a first step toward restricting confidential information on the smartwatch by enabling changeable settings on the smartphone for restricting data transfer from smartphone to smartwatch.

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Many organizations have containerized enterprise information on their smartphones, though mature containerization is somewhat elusive on smartwatches and other Internet of Things (IoT) devices, due to their limited resource profiles. While that may change as technology progresses, smartwatches will always remain behind smartphones, which in turn remain behind the PC in management and security. Even when security is implemented, it always relies on the user to classify content.

More smartwatches will gain the ability to connect directly to enterprise servers and download key information via Wi-Fi or cellular connectivity. Most smartwatches rely on Bluetooth connectivity, and the smartphone needs to be paired with the smartwatch to access enterprise information. Apple Watch already has Wi-Fi capability, which enables it to connect to the cloud independently of the smartphone, and is a bellwether for smartwatches being more directly connected going forward. However, Google will continue to highlight uses for Android Wear smartwatches that enable them to work independently of the smartphone via Wi-Fi. Similarly, smartwatches such as the LG Watch Urbane have cellular connectivity. Account harvesting — that is, determining someone's PIN through iterative attempts — will enable hackers to access enterprise information on remote servers directly through the smartwatches.

The small screen makes detailed transactions more difficult, increasing the likelihood that the user may simply store a confidential meeting or identify their whereabouts in unsecured applications. But most of all, as experience will tell all IT staff responsible for security, stuff just leaks out to places of exposure, mostly though actions by the user. The smartwatch is yet another place where confidential information leaks will appear, despite precautions taken to prevent it.

Market Implications:

The major OS vendors — including Microsoft, Apple and Google — have now or are implementing platforms that consolidate the management and security model across the devices they support. However, they have not implemented full digital rights management, logging of content movement nor the requirement to assign a security level at the time of content creation.

■ Users will have to upgrade to the latest operating system level and, in most cases, download new versions of applications.

■ Application vendors will have to quickly upgrade their features and conform to requirements of improved operating systems to leverage the benefit of new security features in the OS.

■ Platform vendors must decide whether they will only support devices built on their platform or, in the more likely case, support all popular versions of operating systems used by their customers. They may have to wait until the platforms they do not control are improved to the point where the functionality implemented for their own OS can be spread across the other platforms.

EMM providers will include features for controlling data flow to and from smartwatches. Early approaches will be through settings in the smartphone app that permit or block data from being sent to or received from the smartwatch. More advanced techniques will include geofencing, containerizing enterprise confidential information on the smart watch and providing customizable settings in native apps on the smartwatch that do not allow specific data to be sent from it.

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Recommendations:

■ Select EMM vendors that have marketed their support for smartwatch management and security.

■ Ensure that proper EMM technology is deployed for smartwatches of workers in certain roles through Gartner's managed diversity framework.

■ Gain written permission from users in selected roles that IT can deploy EMM technology to their smartwatches. Specify whether IT will manage the entire smartwatch, and warn users that they need to back up personal content in case the smartwatch is lost and erased.

■ Block the deployment of enterprise content on smartwatches for devices that are noncompliant or where the user has not agreed to policy.

■ Caution employees against loading apps that unnecessarily store enterprise-confidential information on the smartwatch.

■ Educate users on their responsibility to properly protect enterprise information. Request HR and legal support to enforce employee sanctions for noncompliance with enterprise policies.

Strategic Planning Assumption: By 2020, the impact of interruptions on human effectiveness will cause 40% of enterprises to restrict notifications on wearables and smartphones.

Analysis by: Nick Jones

Key Findings:

The number of devices and channels that can interrupt a worker will continue to increase through 2020. These include email, social networks, messaging systems, proximity messages, business process alerts and virtual assistants communicating through a wide range of PCs, mobile devices and wearables. By 2020, the average knowledge worker will spend the day in close proximity to between three and five devices capable of interrupting him or her in some way. A growing body of psychological research shows that the mental context switching caused by such interruptions adversely impacts an information worker's ability to perform complex tasks, because human brains are not designed to multitask. For example, Glenn Wilson of Gresham College, London, showed that merely knowing you have an unread email in your inbox can reduce your effective IQ by 10 points when concentrating on a task (see Note 1). Some psychologists believe that responding to interruptions is akin to a form of addiction that generates chemical "rewards" in the brain, so responses are difficult to voluntarily control. We expect the evidence for the undesirable intellectual impact of interruptions will continue to grow through 2020, as will the number and frequency of potential interruptions. As a consequence, organizations will become increasingly concerned about the adverse impact on knowledge worker effectiveness and productivity, so will be forced to look for ways to limit interruptions such as notifications from wearables and smartphones.

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Market Implications:

Organizations will use a wide range of technologies and tactics to reduce the number and frequency of interruptions. This will create new product and service opportunities and drive demand for interruption management features in existing products. These will include:

■ Training and awareness — Encouraging employees to voluntarily limit the use of devices and services that can cause excessive interruptions.

■ Smart filtering — Tools such as virtual assistants and future intelligent messaging systems will attempt to categorize the importance of messages to deliver only those that matter. Some messaging systems or message types may be disabled in certain contexts.

■ Biometric monitoring integrated with smart messaging — Researchers have demonstrated systems that monitor brain activity to identify when a worker is concentrating and determine when interruptions might be inappropriate. Such research will result in features embedded in wearable products before 2020.

■ Disabling enterprise messaging systems — In certain contexts or at certain times. For example, employees performing critical tasks (such as a doctor diagnosing a patient or an engineer performing safety-critical maintenance) may be required to disable personal as well as enterprise messaging systems during certain tasks as a condition of employment.

Such measures will cause significant tension between personal and enterprise goals of workers, especially when they impact BYO devices, such as smartphones and wearables. Education on why such policies are being implemented and better business supervisory control over worker objectives are also important.

Recommendations:

■ Employers should monitor both psychological research and employee's use of devices and services that can cause interruptions to attempt to quantify the risks to worker productivity and effectiveness and to gain evidence to support future action.

■ Educate employees about the costs and risks of interruptions and encourage them to voluntarily control them, but realize that voluntary controls will not be fully effective because of the addictive nature of interruptions.

■ Look for new products and technologies that can automatically manage the number and type of interruptions.

■ Focus interruption management efforts on high-risk job roles, such as safety-critical workers.

Related Research:

"Wearables: New Interactions and New Opportunities"

"Market Guide for Enterprise Mobile Messaging"

Strategic Planning Assumption: By year-end 2020, the largest smartphone brand will be Chinese.

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Analysis by: Jon Erensen

Key Findings:

■ Chinese vendors have steadily increased their market share and overall position in the global smartphone market, accounting for three of the top five positions in 1H15, compared with zero in 2012.

■ The emergence of standardized Android images combined with direct security and update patches from Google will open the professional market to low-cost smartphone brands.

■ Rapid mobile phone adoption and smartphone penetration in emerging markets, combined with complete turnkey designs backed by leading smartphone chipset vendors, has resulted in dynamic shifts in market share.

Market Implications:

There are few markets that have seen as much change as smartphones in terms of market share for leading vendors and ecosystems. The market continues to consolidate around Android and iOS, with alternative ecosystems struggling to gain traction. With most vendors committed to Android, it has become difficult to differentiate among competitors in the Android device marketplace. Traditional mobile phone players, including HTC, Microsoft (formerly Nokia), Sony, LG and BlackBerry, have been squeezed in the middle of the market, unable to compete with Apple and Samsung at the high end, and struggling to differentiate from aggressive new vendors from China using the same Android platform — most notably, Huawei, Xiaomi, Lenovo and ZTE. The Chinese vendors have increased their market share, driven by growth of the market in China, and are beginning to expand to other fast-growing, emerging markets outside of China — most notably Brazil and India. These vendors are also moving upmarket by offering phones with high-end specifications for as low as 40% the cost of comparable models from Tier 1 vendors. We expect this trend to be very disruptive moving forward. Carriers are also shifting from subsidy models to equipment installment plans that isolate the cost of the hardware — a change that is expected to benefit lower-cost, high-value models.

Android phones today suffer from slow rollouts of upgrades, security updates and patches, stemming from traditional carrier practices and lack of standard Android images. Google is actively addressing this fragmentation through its Nexus products and Android One. We expect that by 2018, Google will have standard images and have increased its ability to deliver updates directly to the smartphone. Along with these standard images will come the ability to provide standard management and security practices that are critical for enterprise adoption.

We expect that Chinese smartphone vendors will continue to gain share. In the first half of 2015, three of the top five smartphone vendors worldwide were Chinese, compared with zero in 2012. Apple and Samsung still have a significant lead over Huawei, Lenovo and Xiaomi; however, the high-end smartphone opportunity is becoming a replacement market. Apple has outperformed the market, driven by the strong demand for the iPhone 6 and 6 Plus, but this has mostly come at the expense of high-end Android models, most notably Samsung. In order for this prediction to come

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true, we would expect Apple to remain in the mid- to high teens in terms of market share, and we would expect Samsung to drop below 20%. We also expect some level of consolidation in the Chinese vendors, and share gains driven by expansion into additional emerging markets, and some penetration in developed markets as an alternative to Apple and other Tier 1 high-end Android solutions. Leading Chinese handset vendors are well-positioned to take advantage of the shift to equipment installment plans with their aggressive pricing and increasing brand awareness. There are two potential roadblocks that would threaten the realization of this prediction — Apple entering lower-cost segments of the market and local OEMs growing in prominence in India, Brazil and other critical emerging markets. We have seen some evidence of the latter, with Micromax in India as an example. Entry-level smartphones for the late majority will be the next battleground for smartphone vendors. Vendors based in China have the opportunity to leverage their strong position in the domestic Chinese market, expand to other regions and continue to take share.

Recommendations:

■ Use low-cost smartphones to mobilize employees where you cannot justify the cost of a premium device.

■ Prepare for low-cost smartphones in 2018, with direct Google oversight providing premium security and management features.

■ Leverage a common Android image strategy to enable a diverse range of suppliers.

Related Research:

"Market Trends: China's Internet Giants Reveal Influential Investment in Hardware to Control the Ecosystem of Smartphones and IoT Devices"

"Competitive Landscape: Smartphone OEMs, China"

"SWOT: ZTE, Mobile Devices, Worldwide"

"SWOT: TCL Communication, Mobile Devices, Worldwide"

"Brand Strength Index Analysis: Huawei Mobile Devices, Worldwide"

"SWOT: Spreadtrum Communications, Semiconductor Business, Worldwide"

"Market Trends: Smartphone OEM Semiconductor Spending Is Driven by Apple, Samsung and China"

A Look Back

In response to your requests, we are taking a look back at some key predictions from previous years. We have intentionally selected predictions from opposite ends of the scale — one where we were wholly or largely on target, as well as one we missed.

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On Target: 2015 Prediction — By 2018, 40% of enterprises will specify Wi-Fi as the default connection for nonmobile devices, such as desktops, desk phones, projectors, conference room TVs and video systems.

Wi-Fi has continued to expand in all venues covered by Gartner research. The tremendous expansion of devices that support only Wi-Fi connections has fueled the increased expansion and has combined with a more mobile workforce to ensure this prediction will come true.

Missed: 2012 Prediction — By 2016, face recognition will become an enterprise-class authentication option for smartphones.

While progress has been made, especially since Windows 10 will support such types of authentication, enterprise class adoption requires time and testing in market and that hasn't yet begun en masse. Face recognition may not ever become the single method of authentication, replaced by multifactor authentication that uses several authentication methods combined with context-based authentication.

Gartner Recommended Reading Some documents may not be available as part of your current Gartner subscription.

"The Top 10 Mobile and Endpoint Strategic Imperatives to Apply to Your IT Strategy Document"

"Managing PCs, Smartphones and Tablets and the Future Ahead"

"Managing PCs as Mobile Devices Is the Future, but Do So Selectively Today"

"The Decline of Windows Applications in Organizations Will Present Changes and Opportunities"

"Making the Right Choices for End-User Computing Investments Over the Next Five Years"

"Wearables: New Interactions and New Opportunities"

"Market Guide for Enterprise Mobile Messaging"

"Market Trends: China's Internet Giants Reveal Influential Investment in Hardware to Control the Ecosystem of Smartphones and IoT Devices"

"Competitive Landscape: Smartphone OEMs, China"

"SWOT: ZTE, Mobile Devices, Worldwide"

"SWOT: TCL Communication, Mobile Devices, Worldwide"

"Brand Strength Index Analysis: Huawei Mobile Devices, Worldwide"

"SWOT: Spreadtrum Communications, Semiconductor Business, Worldwide"

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"Market Trends: Smartphone OEM Semiconductor Spending Is Driven by Apple, Samsung and China"

Note 1 The Impact of Information Overload

A book which discusses Glenn Wilson's research among many more examples of the impact of interruptions is "The Organized Mind" by Daniel J. Levitin (Plume, 2015, ISBN 978-0-670-92310-6).