What do you think could be the effect of using spatial modulation for next generation large / massive MIMO systems? By large MIMO i mean 100s of antenna elements at Base Station and a few antennas at the the ME.
If you go with "reductio ad absurdum" approach, you'd find that antenna system's gain is related to the number of dipoles, regardless of their configuration. Large scale MIMO is the only way of increasing system gain without going for beam-forming and keeping the system relatively simple and scalable.
However, massive number of dipoles will result in a monstrous antenna box unless you speak of mm waves.
Well you are absolutely right that large antenna arrays have the potential mainly for mm waves so that they could fit in a small form factor. But why do you think that for example orientation of individual antenna elements wont make an effect on overall performance.
Because it is a game of you win some - you lose some.
Imagine a system of simple yagis, 9dB each, directed at the same azimuth, used to form a MIMO. Each consists of 3 dipoles. Now decompose it into a 3 times more complex MIMO comprising simple dipoles, and you'll reach roughly the same system gain as with the yagis.
Perhaps the best solution would be combining the two approaches, where you use sectored antenna systems of small gain as building blocks simply to limit energy within a designed cell (assuming it is sectored) and beefing up the system by adding such building blocks by MIMO approach.
Extremes are multitude of omni antennas connected in MIMO that do not contain energy within a sector on one side, and a sharp high gain antenna covering only a narrow degree and no MIMO on the other side. Advantage of gain antennas is frequency reuse, while advantage of omnis is active adaptability by means of MIMO. For mobile devices or self-healing networks such MIMO is very advantageous, while for a sectored base station a somewhat balanced approach could do better.
Indeed, I agree with you that SM, large-scale MIMOs and mm-wave scenarios go hand in hand, especially, because you can use a single RF-chain! We have some bed-time-reading-style easy-reading philosophical thoughts in this paper
few implementation issue i find in spatial modulation are following
1) Antenna switching at the symbol time. Higher the data rate higher the switching time. Do we have such high rate switches. Even if we have then what would be the switching loss
2) Efficient channel estimation with single-RF transmitters.
You perhaps forgot about the orthogonality of polarisations that may double your capacity.
ad 1) you are directly modulating your Tx-es, so yes, it is their function
ad 2) both narrowband (OFDM) and wideband (CDMA) approaches also distil into a same outcome which depends only upon your system processing power. However the fading mechanisms are somewhat different, in a well designed system the channel capacity turns out the same.
I'm personally fond of CDMA approach as it makes for energy efficient transmission and primitive processing - a brute force approach. Ideal for mm wave solutions and primitive modulations at chip rate.
You may, of course, drastically improve efficiency of OFDM Tx by porting smaller number of carriers to MIMO Tx antennas, thus improving the power efficiency, sort of air combining. There is little point in fast switching those as each carrier runs at slow transfer rate, and it is prone to Rayleigh fading.