A new set of releases of phones and a new world is opening up in the smart phone world. This is a recap of what the devices are, where they are heading and what you can expect from each and every one of them. The key players in the market today are Apple with its iPhone, Google with its Android and RIM with their Blackberry. Here is some interesting statistics about them
iPhone currently has 58% of the market
- iPhone is losing market share rapidly to Android
- Android based phones are showing the largest growth on a monthly basis while RIM etc., are showing a very low growth pattern.
Coming to understanding this market. Here are some key aspects.
The general principles
There are three parts to a smart device today namely the hardware, the platform and the eco-system surrounding the platform. Let me explain what each one means
Hardware: By far the easiest to understand. The hardware available in the market today is really a general purpose computer in that small form factor. It is capable of running pretty much any operating system on top. Some companies keep their hardware closed (a.k.a Apple) thereby not allowing this capabilities while others (a.k.a Motorola) keep it open for allowing tinkerers to play with it.
The platform: It is the underlying operating system on the device. Given the power of the underlying hardware, the capabilites of the platform really brings the best out of the device. Current crop of must have capabilities include multi touch screens, GPS support, Networking, accelerometer support (ability to sense the movement of the device), support for larger displays (aka iPad).
The eco-system: Apple has shown the way that the money is made in the “apps” as long as you are able to control the apps that go on the phone. Thus the word eco-system was born! This the set of services that is available “out there” which allows the platform owner to determine what is available for the phone and how it can be consumed by the end customer and the cost of the consumption.
How is the competition brewing?
As in every industry, every layer here attempts to make the other layer a commodity thereby they want to enrich their offering and monetize it. In fact there are companies who are trying to make the device a commodity while focusing on the platform and the eco-system surrounding the platform.
The forerunners in the smartphone world, Apple obviously has a distinctive advantage as they have a many year heads up ahead of their competition. Unfortunately they are still living in its 80’s business model mindset where it tries to keep the hardware, platform and eco-system completely closed, legacy of fighting in the 80’s with Microsoft where Apple’s only differentiator was that if they made everything custom and closed, they could prevent competition from entering their space. So Apple requires that all applications be routed through their iStore. This means that Apple can never support any interpreted languages on all their devices. These languages include Java, Perl, Python and also the recent news buzz – Adobe’s Flex.
Such an approach has trigged the the cracked version of the phone – essentially a software hack to break apple’s lock-in and also cracked version of the ecosystem to support the cracked version of the phone as apple wont support a cracked phone anymore in their ecosystem.
In a world that is used to the open source model, Google has pulled off a coup where they strategically make parts of the platform and ecosystem open while keeping control of other parts of it.
At the hardware level, Google has decided not to venture into the market for now and has allowed other manufacturers and OEMs to actively incorporate their platform.
At the platform level, Google has built android on top of the Linux kernel thereby leveraging a very high class open source kernel. On top of which they have built a layer which provides more of the platform capabilities and encourages contribution by the open source community. The catch being that any contribution should be transferred to Google thereby the contributor loses his ownership and Google, while currently making all of it open source, need not continue to do so in the future.
The second big coup that Google pulled off is the fact that Java is the primary language for Android development. While Sun has made java open, that is true only for the desktops. The Java platform, which is the JVM, is not open for mobile phones. Instead of using the Sun JVM, Google has used new Java virtual machine called Dalvik and essentially has rewritten some of the core java itself and does not use the Sun’s binary format (class files) thereby breaking Sun’s license stronghold on the mobile platform. This is a superior approach as this will encourage the mainstream developers who are familiar with Java to write applications.
RIM is left behind in all this with a custom hardware and a poor platform with no real eco-system around it. Their current hold on the corporate market is the only reason why they are still alive. Very soon the mainstream rivals will displace them by providing for corporate needs (push email, corporate policy etc.,).
So what is new?
Apple has recently released iPhone 4 : With the recent “antennagate” on their iPhone4, Apple is in a bit of spot for – surprisingly not a technical issue but the way they have handled the problem itself. Their famous CEO, Steve Jobs, known for his prowess in presenting new ideas / concepts etc., made one of the biggest snafus of his career by attempting to pull competition into the mess instead of addressing their problems.
Microsoft has the new Windows Phone 7 as available for “technical preview” and plans to give away the phone to its employees for free with the caveat that they need to produce good applications on it in their spare time.
Google’s current version of Android OS is called Froyo and the next version is called Gingerbread. By far the most promising in terms of openness and capability and also it is built on the Linux kernel so there is a very large open-source following
Samsung’s Bada OS (not the hindi word but Korean to mean the ocean) seems to be too little too late in the market.
So where is the future going to be?
Apple has shown the way that the money is made in the “apps” as long as you are able to control the apps that go on the phone.
All the players will focus on the Apps market since they know that money can be made there in the short to medium term. Google by far could be the only exception where they are making all the aspects open. There are a few big reasons for this in my opinion.
First could be that they are both feeling threatened by the App model where people don’t start at the Google search engine to access information and they instead use an “app”.
Secondly by opening the app market and fragmenting it so that everybody has an app landscape, in a few years we will need a search engine to search and find the right apps for the phone.
Mobile internet traffic will far outstrip the desktop traffic in the next five years. Google being the quintessential internet company has to have a playing field in this market today so that they can capitalize on all new revenue models for the future