Spotlight: The Silicon Valley Mobile Industry Cluster

11th August 2013


Quick, what location has the highest number of mobile operators (‘carriers’) anywhere in the world?

Silicon Valley.


There are now 25 mobile operators with a permanent strategic presence in Silicon Valley. An astounding 25.  With more on the way we hear.  Who knew?

But the 25 mobile operators in the Valley are only part of the story.  The real story is the 400+ companies that comprise the Silicon Valley mobile industry cluster.  It’s a formidable mobile ecosystem, not only in its size and breadth of expertise, but for the fact how mobile is at the center of transforming (disrupting?) so many industries worldwide; financial services, retail, automotive/transportation, media & entertainment, education, healthcare and many others.

Silicon Valley’s  ‘5 Layer Mobile Cake’ as we like to describe it includes:

  1. 300+ mobile startups: there are approximately 300 mobile startups in Silicon Valley across a myriad of mobile sub-sectors; mobile commerce, mobile advertising, mobile payments, mobile gaming, mobile personal services, mobile entertainment services, etc.
  2. 50+ ‘traditional’ Valley companies with mobile-centric strategies: Cisco, Intel, HP, Oracle, eBay, Facebook, Twitter and every other ‘traditional’ Valley company have all thought long and hard about their mobile strategies.  They view mobile simply as the next compute platform, something that for all of them is a ‘top three’ strategic priority, and all have all created viable mobile offerings.  A few examples: eBay’s mobile growth continues unabated, while Cisco aims to be the end-to-end mobile infrastructure leader, and Facebook’s ‘mobile first’ strategy is definitely working.
  3. 25+ non-Valley multinationals with a strategic presence in the Valley: Samsung, Ericsson, Amazon, SAP, Alcatel-Lucent, Motorola, BlackBerry, Nokia, Foxconn, Siemens, LG, Qualcomm, Huawei and many others.  Samsung can’t do it all from Seoul as it dramatically increases it’s footprint in Silicon Valley.  Likewise, Ericsson can’t do it all from Kista, as they acknowledge the growing importance of Silicon Valley for them as well.  Even juggernaut Amazon is approaching 5,000 employees in Silicon Valley, where it’s in the process of significantly expanding its Valley footprint as well.  SAP indicated they could be bigger than Apple in mobile,
  4. 25+ mobile operators:    Singtel Innov8, Vodafone Xone, Orange Labs, AT&T Foundry, Deutsche Telekom Innovation Laboratories, NTT DoCoMo Innovations, SK Telecom Americas, Telefonica Digital, Sprint Labs, Verizon Innovation Center, Rogers Ventures Partners, Swisscom Ventures, Bouygues Telecom Winnovation, KDDI Labs, China Mobile, Telstra, Telenor and other mobile operators have all set up strategic beachheads in Silicon Valley.
  5. Apple & Google: (enough said)

As recently as five years ago, conventional wisdom said Silicon Valley was not the epicenter of the mobile ecosystem globally.  Now anyone is hard-pressed to make a case that another location somewhere in the world comes in a remote second place to the Valley in terms of a robust mobile ecosystem.

Proximity matters.

Physicality matters.

Co-locating in a vibrant ecosystem matters.

Open & rapid innovation in a very large cluster of like-minded companies matters.

Otherwise, why are all these companies sitting together in the Valley and not simply working ‘virtually’ from wherever they desire?

One thing to remember is Silicon Valley itself doesn’t invent per se, but rather takes others inventions and mashes those inventions and new business models together in new ways to create billions of dollars in shareholder value.  The first GSM mobile phone was released in 1991.  Apple came along 16 years later and entered the market in 2007, followed a year later by Google in 2008.  Fast forward the tape to the present, and its fair to say iOS and Android together have revitalized a previous unimaginative mobile industry.

In fact it’s not a mobile phone in your hand; It’s actually a computer that happens to make lousy phone calls.  Mobile truly changes everything, no industry will look the same.

Does the Valley have all the answers vis-a-vis mobile?  Certainly not.  Does it have some monopoly or exclusivity on innovation in mobile?  Nope.

What the Valley does have is an incredibly robust and diverse mobile industry cluster unrivaled anywhere in the world; and mobile is transforming industries globally at an increasingly unabated pace.

Caveat Emptor.

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