You’d think at least some people gathered in Barcelona this week for the Mobile World Congress would be in a bad mood. After all, for the first time since Steve Jobs introduced the iPhone nearly a decade ago, smartphone sales growth has dipped beneath double digits, slowing to just 9.5 percent, according to IDC. It’s expected to drop even more, according to Gartner’s predictions. Even mighty Apple faces new pressure amid projections iPhone sales could be flat or even drop for the first time.

Oh, and did I mention Barcelona’s metro workers are on strike? The subways are running at 50 percent capacity, just as the city opens its hotels and Airbnbs to 100,000 guests.

Yet, as the world’s annual confab for mobile industry operators, developers, and Internet companies kicks off today in a couple of massive exhibition halls on the edge of the city, the walls can’t contain the enthusiasm. Sure, smartphones are becoming commodities—many of them look pretty much the same, and many of us who own them aren’t feeling the compulsive drive to replace them every 12 months like we used to. But the “mobile” in Mobile World Congress isn’t just about phones anymore. The Internet is becoming an invisible fabric—like air—that enables all the services we’ve come to depend on—from communications to banking to driving in the right direction.

The more our world becomes connected, the more we stop noticing it altogether. Things just work. This morning, I called a cab (Halo), transferred money to my partner (Venmo), read up on trends (Twitter), and checked in with my editor (Slack)—all in about ten minutes. Those services work seamlessly together because of what happens here: the gadgets on the showroom floor; the licensing and partnership deals happening behind closed doors; the excessive competition over improving network infrastructure; the new entrants from different countries. If you want to look under the hood of your mobile life—and understand something about how it is about to evolve—come to Barcelona. Here are a few of the trends that have come to define this year’s show:

Here comes virtual reality! I just tried out the HTC Vive, a virtual reality headset that you can get in the US for $799 starting in April. Last night, Facebook founder Mark Zuckerberg made a surprise appearance at a Samsung event to tout the Korean company’s Gear VR headset, which is based on Oculus technology made by Facebook; he revealed that a new Facebook team that will build social apps for Oculus Rift. Everywhere you look on the showroom floor, someone is wearing a headset while gesturing or jostling or standing agog, jaw dropped. Right now, VR remains pretty imperfect. Most headsets will make you queasy if you wear them too long, and the resolution isn’t great. But Zuckerberg, at least, says virtual reality could be social platform of the future.

We need 5G networks. We really do, particularly if we want virtual reality to be mainstream. Sure, 4G lets us stream our YouTube videos. The fifth-generation mobile network technology on the horizon will amp up that speed considerably, with very low latency. This makes shoot-em-up games on your Oculus Rift more fun, sure. But 5G will be a necessity for virtual reality to be useful in professional settings. If your heart surgeon is conducting a bypass on you using a virtual reality headset, you want to be 110 percent certain the Internet is not going to lag by even a second. The new 5G technology, which won’t be widely available for several years, will also allow for more sensors, embedded in everything from watches to cars, to work together more seamlessly. Both Ericsson and Huawei will be vying for large and profitable contracts to upgrade existing operator networks, while the Internet companies will tout the promise of these networks for the services they’re developing.

Connecting everyone. Nearly two-thirds of the global population—four billion people—still aren’t online. There’ll be much discussion this week about how to connect them—both because Internet access can offer a path out of poverty, and because it’s a great market opportunity. Among the biggest—and most controversial—efforts is Facebook’s effort, which includes both the Free Basics program that was just banned in India and the drones and lasers that Facebook is currently testing as well as number of other initiatives. Many of the other companies at the show are vying to reach the unconnected as smartphone prices continue to drop—there are rumors one Indian phonemaker has announced plans to sell a device for less than $4 (with a heavy subsidy).

Regulating everyone. The operators that have long dominated Mobile World Congress continue to gripe that the Internet companies should be regulated just as they are regulated because the Internet companies—especially Facebook, with its Messenger and Whatsapp chat apps—are providing a communications product. The Internet companies, as you might imagine, disagree.

Trust is the key to making the mobile future work.
Period. As Apple CEO Tim Cook wages a public war with the FBI over whether to develop software that would help the government break into the phone of the San Bernardino killer, people are watching warily for the argument’s outcome—especially everyone here in Barcelona. Few would argue that the government shouldn’t try to gaze into the phone’s history, but not if it means that Apple would need to develop a software to enable this. That software would then likely become broadly available, and the question becomes, who else would then use it—and under what circumstances. The outcome of this row will inform the direction in which many of the digital businesses here evolve. As Box CEO Aaron Levie wrote, “It should become evidently clear that more security, not less, is the key to maintaining the trust that sits at the center of our digital age.”

Of course, despite all that’s on exhibition at this year’s Mobile World Congress, it’s relatively impossible to predict exactly how the Internet will evolve. It would be easy to believe that things are working pretty good today, because hell, they are! But as Andreessen Horowitz partner Benedict Evans pointed out, before the iPhone came out, “it didn’t really feel like we were desperately in need of some catalytic event.” The next iPhone-like catalyst is coming. It’s impossible to even guess where’ll it’ll come from–but it’s possible that the entire world will have changed by the time we gather here in Barcelona next year. Hopefully, though, the metro will be working.

Originally posted here: 

Phones Don’t Rule Mobile World Congress. The Internet Does