At the Mobile World Congress in Barcelona 2010 it was clear that handset vendors and network operators are trying to position themselves in the application market value chain.
Handset vendors and network operators agree on the importance of the rapidly growing smartphone market and there was a great number of news at the MWC 2010 reflecting this. Samsung, HTC and ST-Ericsson showed solutions and presented strategies for low-cost smartphones. Nokia and Intel announced the merger between Nokia’s Maemo operating system and Intels Moblin platform into the new OS platform MeeGo. Nokia also showcased the upcoming Symbian iteration called Symbian ^3. Microsoft was on site and introduced their brand new smartphone OS Windows Phone 7 Series and Samsung presented Wave, their first phone with their own smartphone OS Bada. Android, the open source smartphone OS initiated by Google, was for the first time very prominent at the MWC. Several models of Android phones were on display from vendors such as HTC, Sony Ericsson, Motorola, Garmin and Samsung, not to forget all of the proof of concept products such as tablets and smartbooks from which a vast majority was powered by Android. Eric Schmidt, CEO of Google said at the MWC that they’re now shipping 60 000 Android devices per day which translates to 5.4 million devices per quarter. He also explained that this number has doubled over the last three months.
Since Apple opened up the gate to the developing community and introduced their successful App Store where the user can purchase and download applications for their phone, many industry players have tried to mimic this success. The App Store concept makes it intuitive to the consumer to do more things with their phones and motivates them to spend more money on applications, services and data plans. This enables application developers, service providers and mobile network operators to profit from the application market. The player controlling the application store is however the one with the most to gain. This is a strong driver to position oneself in the application market value chain. To have your own OS platform is one way to accomplish this. Another way of trying to achieve this is the Wholesale Applications Community presented at the MWC. Twenty four telecom operators formed an alliance to build a platform that delivers applications to mobile phone users.
Besides the revenue streams directly from the application market, available applications and content is an increasingly important factor for consumers when choosing a handset. It is therefore of great significance for handset vendors to present products that have a connection to an attractive application store. The strategy of accomplishing this differs between handset vendors.
|Vendor/OS || Bada|| Android||Symbian|| MeeGo|| iPhone OS|| WebOS|| Windows|| Brew|| Blackberry OS|
| Nokia|| || || X|| X|| || || || || |
| Samsung|| X|| X|| X|| || || || X|| || |
| LG|| || X|| || x|| || || X|| || |
| Motorola|| || X|| || || || || X|| || |
| Sony Ericsson|| || X|| X|| || || || X|| || |
| RIM|| || || || || || || || || X|
| HTC|| || X|| || || || || X|| X|| |
| Apple|| || || || || X|| || || || |
| Palm|| || || || || || X|| || || |
Samsung, Apple, RIM and Palm have their own proprietary OS (Samsung also uses other OS platforms) while HTC, Sony Ericsson and Motorola use licensed or open source platforms. Nokia uses Symbian and MeeGo, both are open source platforms but with close connections to Nokia. For an operating system platform to succeed it is crucial to have a large user base and an active developing community that can produce applications for the platform. Becoming a more attractive platform for hardware vendors, software devolopers and end-users was one of the key drivers for the MeeGo merger between Nokia and Intel.
With the focus on smartphones, OS platforms and the Wholesale Applications Community at the MWC 2010, it is obvious that a vast majority of the industry believes that it is important to position themselves in the application market value chain. It is also becoming clear that the diversity of OS platforms is a hurdle. If you can’t overcome the problems with cross platform application development there are unlikely enough developers and end-users for all of these platforms to succeed. The solutions to cross platform application development are ironically at the moment as diversified as the OS platform market. In a couple of years from now there will probably be a large move to Apples original plan with the iphone OS, i.e. web based applications. The infrastructure and the tools available back in 2007 wasn’t powerful enough to fulfill the level of user experience the public called for but as the handsets and the mobile networks are getting more powerful this will no longer be an issue. In a not so distant future there will be a new set of strategies needed to get the consumers' attention and the importance of closed garden application stores will decline significantly. The ongoing success of the application market will however postpone the development towards web based applications longer than necessary.
Johan Svanberg, Berg Insight