A recent Gartner report showed the latest state of the Smartphone market worldwide. As the chart below shows, there is a clear divide starting to show in the market. Symbian, BlackBerry OS, iPhone OS and Android are becoming the clear leaders. Palm’s Web OS and Microsoft’s Windows Mobile should not be discounted yet, as I’ll explain later, but the lines are starting to show.
The real question is, can the market sustain this many different platforms or will they be forced to converge? The most common view is that the platforms with the most applications will survive. Although, I tend to agree with that view, I think there will be another factor.
The Application Factor
From a consumer perspective, people are buying platforms and not phones. Most think they are buying a phone, but in reality when consumers decide on a phone, the do so for one of two reasons: (1) Brand Appeal or (2) How much they can do with it. Brand Appeal is a whole different discussion but typically the top players here (Nokia, RIM, Apple and Google) all have high brand value and appeal. So in reality the main driver of Smartphone brand decision is item #2. Consumers look at what they can do with the phone. So in a sense they are looking at what applications they can get for it. This is really defined by what applications exist for it which in turn is defined by which platform developers decided to build applications for. In a long roundabout way, what I’m saying is that people will buy phones that developers decide to develop for.
As you can see here, the future of the Smartphone platform war will be decided by the decisions of the application developers. If this sounds all too familiar to you, it’s because it’s the exact same driver that decided the PC platform war. Funny, you’d think Microsoft would be higher in the list just due to that. Except this is really the same game except with different players and different rules. The Smartphone is different than the PC. It has a different purpose, a different user, a different user expectation and is defined by it’s connectivity and usability more than it’s expandability and customization.
What can the platform vendors do to stay in the game? They need to cater to the needs of the development community. They need to build an ecosystem for the developer community that encourages them to build and support their respective platform. The main factors to driving the development community to your platform is a combination of large device sales, a powerful and easy to use development environment and a simple application deployment model. Some see this as a Chicken & Egg problem: You need to sell devices to convince application developers to build for your platform, but you need those applications to sell devices.However, the truth of the matter is, if you device has sufficient functionality, it will get some level of high sales. Also, if your development environment is easy, simple and universally available (i.e. on all PC platforms) then the barrier cost to develop for your mobile platform significantly drops resulting in adoption of the development community. As such, some in-house application building to get the sales rolling combined with some great tools to get the 3rd party applications rolling can kick start the system resulting in the applications -> sales -> more applications -> more sales cycle. Basically, in summary, “if you build it, they will come”!
The Content Factor
But there is another play here. And this is where Microsoft’s Windows Mobile and Palm’s Web OS (which is soon to be HP’s Web OS) come into play. The second driver of the mobile platform will be universal content access and distribution. What do I mean by that?
Well, in the past, I’ve written a blog about how Apple is positioning themselves to becoming a content distribution company with their devices (iPod, iPhone, iPad, etc) being conduits to consuming that content. Since then, RIM, Apple and Google have all announced or purchased mobile advertising capabilities, which is a strong indicator of the devices being content distribution conduits. Then Microsofts introduces Windows 7 Mobile and explains how well it ties into Zune and the Xbox. Recently HP acquired Palm (approval pending) and made it extremely clear that they will focus on WebOS and expand it’s usage beyond Smartphones and leverage the platform for content distribution (they refer to it as being the “access” provider). Finally let’s not forget Google’s Chrome OS and how well Chrome, Chrome OS and Android tie in together.
As you can see, all the players, including the new ones (i.e. HP), realize the value of content distribution capabilities (or content access as HP called it) combined with user experience ubiquity. Both of these are enabled by platforms that can span different types of devices (i.e. not just Smartphones) and that have user experience and content distribution / access in mind.
Applications vs. Content
So which one is more important. Well the answer is both are equally important. Even though platforms are going to enable content access and application development, it’ll be up to the developer ecosystem, in conjunction with the content providers, to enable access to the content on the platforms.
Each of the big players have their own advantages that they can leverage to leap forward. In the case of Apple, they have an advantage since they are also a content re-distributer via iTunes. HP may have an advantage due to their deep pockets and large hardware portfolio. Google’s advantage will be advertising expertise combined with leveraging advertising to subsidize the platform cost. Microsoft’s advantage will be the fact that they are the only one that actually has a tie in to a gaming platform. RIM’s advantage will be it’s security, communications advantage (BBM, push), network infrastructure and data compression.
What will really drive these platforms to the forefront is the degree of capabilities they provide to their developer ecosystem so that they can allow them to leverage the platforms capabilities to drive content distribution and consumption.
When it’s all said and done, regardless of how the Smartphone market ends up being partitioned, after this platform war is over, these Smartphone platforms will be a lot more than just “smart”-phone operating systems and the market itself will be transformed.