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Platform Wars

On a handset a long time ago...

... all consumers could hope for was a monochrome interface and a sluggish user experience. Forward to the present and a fierce battle is raging between vendors who seek to offer consumers a new hope of sleek graphics, smart interfaces and on-the-fly content. 

It's a battle that has captured the imagination of not only the industry but the consumer too. So much so that by 2010, Gartner predicts that global worldwide smartphone sales will top one billion from the 300 million today.

The past year has arguably been one of the most dynamic in mobile, and the most intense debate centering on operating systems. While, understandably, the principal focus has been on the relatively new entrants - Google's Android and the Apple iPhone (OS X) - those at Symbian can point to the 226 million handsets already shipped with their OS to date. Indeed, the continuing support of parent company, Nokia, will ensure a dominant market position in smartphones for some time to come for the UK-based developer. Meanwhile, Microsoft, Palm and RIM continue to fight for market share in an increasingly dynamic sector. 

The fundamental shifts that have been taking place in the mobile OS market over the past year will take further shape in the months to come, with the growth in smartphones set to accelerate as more consumers opt for handsets that can access content and download applications. If the iPhone's user-friendly interface has been a game-changer for consumers, then many believe that the launch of Android will shake-up the economics of the mass market mobile to an even more fundamental extent.

The much discussed iPhone's legacy is an upgrading of consumer expectations when it comes to their user experience. Not only must devices now be intuitive to use, with sleek graphics, but a touchscreen-friendly OS has become increasingly important too. Moreover, the launch of the AppStore as part of Apple's vertically-integrated business model, has helped cement in the minds of consumers that mobile user interfaces, content, advertising and applications are interlinked. It's a shift in outlook, from a view where the phone is for voice and text, to a world where the handset is the hub of all consumers' digital worlds.

At the industry level the iPhone has forced many OS vendors and handset OEMs to rethink the ideas of the past. Proof: the many so-called 'iPhone killer' devices that have launched over the past 12 months, including the Blackberry Bold and Storm by RIM, who previously concentrated on the business market. While the iPhone represents a tiny fraction of total global handset penetration, and just one percent in the smartphone segment, the 3G iPhone is reported to be taking a four to six percent share of new UK handset sales. That's an overwhelming challenge to the industry and further proof, in any were needed, that great handset design alone does not guarantee success.

It is interesting to note that much of the media coverage of Linux-based Android - and in particular the G1 phone - has been to compare the device (unfavourably) with the iPhone. There is merit in this approach because the bar has been set high. However, commentators have also noted that the launch of Android should be scrutinised not only in terms of user experience but the changing economics of the OS market. As an open ecosystem, supported through the Open Handset Alliance, Android is set to encourage the development of a plethora of consumer and business facing applications. Moreover, the absolute cost to handset OEMs - and ultimately consumers - of an opensource OS could be lower, encouraging a trickle down of 'high end' handset technology into the mid-range market.

Openness continues to be a theme in the mobile community and the decision by Nokia to buy out its partners in Symbian and launch the open source Symbian Foundation to promote the development of the ecosystem follows this trend. The move, while underpinning the 60% market penetration of Symbian in smartphones, is a clear recognition that an open-source Android could take significant market share in non-Nokia devices in the coming years. It's also a direct challenge to those supporting the development of Linux-based handsets. 

Not all vendors are following an open source path however. Microsoft, RIM, Palm and the aforementioned Apple continue to tread a proprietary road. While many consider the Redmond giant to be the dark side of the mobile industry, it has increased it's market share (see table) relative to Symbian by cementing already strong relationships with white-label handset OEMs such as HTC. The purchase of Danger Inc, further increases the company's hand in the market. Meanwhile, as previously noted, RIM has made a strong play for the consumer smartphone market by relying solely on its own device portfolio. Expect the Canadian firm to take further share from Symbian over the next year as it reinvents itself as a consumer-facing hanset and OS OEM.

Much of the debate at Mobile World Congress 2009 will of course surround the machinations of Microsoft, RIM and Symbian. But so conspicuous was their absence in 2008, perhaps the biggest question should be: will Google and Apple even be there? Too busy playing with their lightsabres no doubt...

Posted by Ed Barker on October 14, 2008 at 7:20 AM