What factors will have the greatest influence in determining the relative success of the mobile platform? Ultimately, the key to success will be the ability of the operating system and its core applications and services to facilitate integration and interoperation with other applications and services. Here, Knowledge Center mobile and wireless analyst Pete Dailey explains why.
are several major players in the mobile platform wars, which includes
the mobile operating system and core applications and services. Those
major platform players include Research in Motion (RIM), Google,
Microsoft, Symbian, Palm (and various Linux platforms under LiMo) and
Apple, among others. It is forecasted that global sales of smartphones
will reach nearly half a billion units in 2009, rising to approximately
1.3 billion units in 2014.
T-Mobile USA began selling the G1 in October 2008. The G1,
manufactured by HTC, was the first commercially-available phone powered
by Google's Android operating system. The T-Mobile G1 was made
available in the UK in November, and will be in Germany, Austria, Czech
Republic and the Netherlands some time in this first quarter of 2009.
In October 2008, Symbian was the global smartphone market share leader,
with 62 percent of the smartphone platform market.
But, due to Nokia's less-than-stellar penetration of the United
States market, Symbian is a distant fourth: RIM (34 percent), Microsoft
(29 percent), Apple (9 percent) and Symbian (8 percent). While Palm had
approximately 13 percent share of the smartphone device market, Palm
licenses both Windows Mobile and Access, so the share for the
Palm operating system is lower than the Palm device market share.
Apple has approximately tripled market share in the United States
With all these major smartphone platform players jockeying for
position, and with the geometric growth of the smartphone market, ample
opportunity remains for existing competitors as well as new entrants
such as Google to gain market share.
What factors will have the greatest influence in determining the
relative success of the mobile platform? I am persuaded that,
ultimately, the key to success will be the ability of
the operating system and its core applications and services
to facilitate integration and interoperation with other applications
In the case of the iPhone, the elegant design, the introduction of a
powerful new man-machine-interface (multi-touch), the full-HTML
browser, and the iconic brand helped spur such feverish adoption
initially. But I believe that the most important factor in the success
of the iPhone has been the ability of iTunes to sync applications such
as e-mail, contacts, calendar, music and video content. It is estimated
that there have been 600 million downloads of iTunes, thus making it
one of the most successful applications in history. And with MobileMe,
Apple extends syncing to both the Internet and to the iPhone wirelessly.
Subsequently, when Apple added support for Microsoft ActiveSync, it
built a bridge to tens of millions of enterprise users so they could
receive their Exchange e-mail. The launch of the App Store and the
cultivation of the developer community reinforce the role that the
iPhone fills as hub of users' digital lifestyle. The proof is in the
numbers: Apple recently reported that over 100 million applications
have been downloaded from the AppStore site.
If my thesis holds true, then Microsoft should exploit the installed
base of Office users, which should enable Windows Mobile to gain market
share globally. Microsoft has other assets including Windows Media
Player, Xbox and the assets from acquiring Danger. Microsoft should
leverage the interoperation and integration with those assets. The
promise of Windows Mobile-based smartphones should be seamless
interoperation with the Office desktop environment and the Xbox gaming
Apple's competitive advantage gives the firm a uniquely addressable
market about digital lifestyles. Office and other Microsoft assets give
Microsoft a competitive advantage in enterprise and gaming markets.
What should be the basis of Google's competitive advantage with the
Android platform? The answer is providing a unique and positive mobile
Internet experience. Here's why.
Clearly, Google is assembling assets to create a superior Internet
experience, including Maps, YouTube and Chrome. For example, Google
should add mobile resources into Chrome and integrate it into Android.
The browser needs to be incorporated throughout the Android platform to
include tight integration with the Android address book, calendar and
other applications. Users should be able to perform application, device
and Web search in one integrated operation. The nexus of Chrome and
Android is where Google can build unique value relative to the mobile
Internet experience. Google needs to build and sustain their
competitive advantage around the mobile Internet experience.
The G1 is designed to be a consumer device in the low-mid price
tier. This low end of the smartphone market is precisely where Android
should gain traction, where "free" is a compelling price for the
operating system. Because of the power of the Android operating
system and the attraction to third-party application developers,
consumers will get good value with low-end products.
The T-Mobile G1 offers a "sneak preview" of the kind of value that
consumers will get in this low-mid price tier. G1 users can sync
e-mail, calendar and contacts from Gmail, as well as most other POP3 or
IMAP e-mail services. In essence, Google has built in and made free
services that Apple provides separately via MobileMe for $99 per year.
The G1 will include a full HTML-capable Internet browser. Glu Mobile
and Namco Networks have announced games for the platform. EA Mobile may
support Android but The Sims and other popular EA titles won't be made
available without a better content billing solution. The Amazon digital
music store will come preloaded on the G1, offering DRM-free MP3s
compatible with virtually all devices.
Google management has declared that mobile is critically important
to the future of the company. Again, the numbers explain why: Google
monetizes search on approximately 200 million desktop PCs and Macs.
Since there are close to two billion phones sold each year, Google has
an opportunity to monetize search in a market that is 10 times greater
than their current market. They will continue to promote their
cross-platform resources such as mobile search and maps.
But, Google contends that Android is important to lead the charge in
providing a truly open, mobile Internet experience that approximates
the desktop Internet experience. Google hosts MarketPlace where Android
application developers can distribute applications-which is similar to
Apple's AppStore but is completely open so anyone can develop an
Android application and have it operate on any Android device and on
any wireless network. You don't have to go to Google to get them to
approve your application.
Within two or three years, Android should become one of the top four
mobile operating environments. Fortunately for Google and for all
mobile users, independent of Google's ultimate market penetration or
longevity in the market, Google's impact will certainly be to move the
market more toward openness, and to greatly enhance the mobile Internet
As the mobile Internet experience becomes open so that mobile users
can search and browse the same Internet that desktop users currently
browse and search (thus shifting away from mobile walled gardens and
WAP sites), Google's addressable market will explode.
Pete Dailey is an Integrated Program Manager in the Consumer Communications Practice of Stratecast
(a division of Frost & Sullivan). He is also a Senior Strategy
Analyst there. Pete contributes frequently to the Multichannel Video
Programming and Distribution research module, and to the Mobility and
Wireless research module. Pete brings 20 years of experience in
telecommunications finance, market research, and consulting and
operations management to the table. Pete initially worked for Frost
& Sullivan from 1993 to 2001, making Partner in 1998. During this
time, Pete held roles in sales, consulting and research management. In
2001, Pete co-founded Broadband Solutions, Inc., a wholesale digital
cable television operation in Seoul, Korea. Pete exited Broadband
Solutions through a sale to Dacom in 2004.
During Pete's hiatus from Frost & Sullivan, he was also a
General Partner in Startup Venture Group, a private equity firm. There,
Pete managed early-stage investments in the consumer media and telecom
sector. He rejoined Frost & Sullivan in 2007. Pete has been widely
cited in the press and has been a frequent public speaker. In addition
to domain knowledge in media and telecommunications, Pete has a strong
international profile, and academic concentrations in economics and
finance. Pete has a B.A. from the University of California at Berkeley,
and an MBA from Pepperdine University. He can be reached at
Disclosure Statement: Pete Dailey has a direct beneficial ownership position in Apple (AAPL).