Alec Saunders SquawkBox

One of the most common debates among smart phone cognoscenti is which platform will prevail — BlackBerry, Symbian, iPhone, Microsoft, or the latest entrant Android? Common thought is that the platform with the most developers will win, and currently that’s iPhone.  Many folks, however, having drunk the “open” kool-aid, believe that ultimately Android must win. Others point to the dominant market share already garnered by RIM in North America, and Symbian in other parts of the world, and say that developers will flock to those platforms by virtue of the fact that they represent the largest monetizable market.

So who’s right?

Commercial developers are looking for three things when they choose a platform.  These are:

1. A large and well defined market.
2. An efficient channel to reach that market.
3. A low cost to develop products for that market.

If you look at the history of the PC market, Microsoft’s Windows had all of those characteristics.  The PC market was large and well defined, Microsoft and it’s partners created retail channels to deliver products, the Windows SDK’s were cheap, and Windows was sufficiently well developed that it made the job of develop for the platform efficient, fast, and inexpensive.

In the world of mobile operating systems, although SDK’s were cheap, until now the channel to market was the carrier, and a multitude of platforms and form factors drove costs up.  Things have been changing, but the lessons haven’t been internalized by all the vendors yet.

Let’s look at the top players in the market today – BlackBerry, Android and iPhone.

BlackBerry

• The largest market. 
• The channel to reach the market is unclear, however.  BlackBerry AppWorld is a good thing, but developers can still choose to go with the carrier store, or distribute directly.  Choice is good, isn’t it?  Unfortunately no.  From a customer perspective having to search for an application in multiple locations is a poor experience.
• The cost to develop for the BlackBerry market is driven up substantially by the plethora of form factors, and the differing versions of the operating systems on the handset.  It’s common for BlackBerry’s sold to AT&T to have a different version of the OS than BlackBerry’s sold to Rogers or Orange, despite the fact that the model number may be the same.  The test matrix for BlackBerry is daunting except for the largest commercial developers.

Android

• A nascent market, but potentially very large.
• Like BlackBerry, Android has multiple stores available to it.  Again, paradoxically, channel choice does not necessarily make for a good customer experience or an efficient way for a developer to get to market.
• Like BlackBerry, Android devices are anything but uniform.  As open source, vendors can choose any form factor, and combination of features.  All of this makes for a headache for software developers.

iPhone

• A large market, although not the largest.
• A single store, making for a very well defined and efficient way to market, as well as an easy experience for the customer.  Developers products have a better change of being found by the customer on the AppStore.
• Low cost to develop. iPhone and iPod touch have essentially the same operating system, and most users upgrade to the latest version quickly via iTunes. Platform homogeneity means that developers can count on a given set of features being available, and execute against a single test platform.  Costs are dramatically lower as a result.

The homogeneity of the iPhone platform and channel is a huge advantage from a developers perspective.  As a result of the low cost associated with developing for iPhone, we should expect that developers will target iPhone first with new products.   If products are successful there, then expect to see them ported to other leading platforms.

And if you’re RIM or Google, perhaps it’s time to rethink elements of your strategy that drive costs for developers up.  Otherwise, innovation will flourish on the iPhone platform, and Apple will garner dominant share as a result.

The Progress Project is a joint venture between Nokia and Lonely Planet designed to highlight the amazing and diverse ways that mobile technology can impact ordinary people’s lives. It’s a grand vision of mobility, ranging from the ways that mobile devices can be used in urban settings to predict traffic flows or environmental impact, to the impact of mobile devices in rural Brazil and India.

The star of the Progress Project is Lonely Planet writer Frances Linzee Gordon.  A seasoned travel writer, she draws out the best from each of the people, projects and places she visits.  In addition, Nokia brought bloggers in to provide other angles and viewpoints on the project, adding a real social media flavour to the project. 

The first of the Progress Project Videos are online, as well as commentary from bloggers like Alan Reiter and Dina Mehta who participated in the shoot.  Check them out. 

Disclosure: I participated in documenting one of the Progress Project shoots in San Francisco.  Nokia paid for my accommodations and travel expenses to do so.

I was feeling my oats yesterday when I twittered a CBC piece on the high cost of mobile service in Canada.  The CBC piece struck a nerve, as I had just read Andy Abramson’s comparison of US and European mobile operators approach to service.  I have to say, I had no experience like Andy’s last year trying to buy voice and data SIMs throughout Europe.  It was easy in Germany and Spain, horrid in Austria, the Czech Republic and Denmark, and I had given up by the time I reached the Netherlands. Voice service wasn’t hard to get in those places, but prepaid data?  Fuhgeddabout it!  Nevertheless, I’ve not had great experiences with our local carriers ability to service the customer either. 

In any case, Mark Goldberg swiftly missiled off a piece of email to me this morning saying:

The CBC story you linked to is 2 weeks old.
I have written 5 blog posts that discredit the OECD study… according to the OECD, US rates are the worst – worse than Canada in all categories… do you really believe that?
Check out:
http://mhgoldberg.com/blog/2009/08/unravelling-oecd-flaws.html
http://mhgoldberg.com/blog/2009/08/ctia-letter-refutes-oecd.html
http://mhgoldberg.com/blog/2009/08/cost-of-free.html
http://mhgoldberg.com/blog/2009/08/canadian-wireless-data-leadership.html
http://mhgoldberg.com/blog/2009/08/oecd-study-needs-reality-check.html

Oops.

It’s actually true, in my opinion, that Canadian rates have fallen and become very competitive.  Two years ago I spent $500 to $700 per month on  mobile service with Rogers, with one phone.  Today I buy service for 4 phones and a USB data stick, all with generous 3G data plans plus 16Mb/s home internet for about the same price as I paid two years ago for a single phone.

I don’t believe the OECD study any more than Mark does.

The Boy Genius has published an angst filled missive directed at RIM on the future of BlackBerry OS.  Here are a few choice quotes:

“RIM’s OS is more than antiquated, it’s borderline laughable.”

“There’s so many limitations to RIM’s OS, and even RIM’s data network that it offsets all the wonderful things they’ve managed to accomplish.”

“RIM delivers the same tired package in new hardware and people are starting to catch on. App World? Seriously? From every single developer I’ve spoke to, it’s a non-starter.”

“I’m just frustrated that RIM is going through hardware like it’s nobody’s business yet fails to deliver on the things that everyone wants. Screw business people, screw consumers, everyone wants a WebKit-based browser. It’s inexcusable RIM doesn’t get it.”

To be fair, you should read the whole piece.  I’ve quoted some of the most negative things Boy Genius has to say to make a point. The point is that the business of mobile telephony is a software business now, and no longer a hardware business. 

I’ve spent the last couple of days as a guest of Nokia learning about a tremendously exciting project they have under way in San Francisco which I’ll write about in the future. It’s obvious in conversation with the Nokia team here that the company has a tremendous and far reaching vision of what mobile can be about. However, Nokia suffers from a similar affliction to RIM.  Symbian OS is different from BlackBerry OS.  The same as BlackBerry OS, however, it is a maturing design that is now behind the state of the art. 

Both companies are known and respected as innovators.  RIM primarily gets credit for email, while Nokia introduced the world’s first GPS enabled phones, and the best camera phones in the market.  Both are being perceptually eclipsed because others have shifted the basis of competition from handset innovation to applications and the overall integrated user experience.  The basis of competition has shifted to the operating system and a war for developer mindshare.

RIM and Nokia have a challenge ahead of them.  As early smartphone innovators, they created this market.  They are undisputed leaders.   Others, however, are poised to steal the market away from them.  RIM co-CEO Mike Lazaridis and Nokia CEO Olli-Pekka Kallasvuo ought to have an internal “Manhattan project” under way to counter the threat from Apple, Google/Android and Palm.  Perhaps more than any other aspect of that effort they should consider stealing a page from Apple, focusing their efforts on fewer new phones, operating system innovation, and more new software.

Truphone’s announcement last week of Truphone Local Anywhere was the formal unveiling of their strategy to become a force in the mobile operator world.  Truphone Local Anywhere will not launch for some months yet, but the essence of it is that Truphone will deliver customers a GSM SIM that can operate locally in multiple countries.  As a customer, you might have a UK phone number, a US phone number, a Canadian phone number, and a Mexican phone number, for example, and pay local calling rates in all those countries.  Roaming becomes a thing of the past. 

This is a direct assault on one of the most profitable sources of operator income in the mobile world.  Roaming charges are the surest way for an operator to make huge profits.  Example: here in Canada Rogers charges users $0.90 per minute to roam in the United States.  Presumably there’s a revenue split with the American carrier hosting the call, but the charges are huge nevertheless.  This, in a world where it costs under a penny per minute to terminate a call anywhere in North America.

Truphone claims that with Truphone Anywhere Local, users will pay a rate competitive with local mobile rates.  Mobile travellers will no longer require a case full of local SIMs when travelling.  Truphone will provide local data, voice and text rates as if you were a resident of the country.

Truphone’s James Tagg told me that there are practically no limits on the SIM itself.  One could conceivably have over 100 countries on a single SIM.  Truphone, however, has not yet released the subscription model, which means that it’s still unclear what the cost will be (if any) to add additional countries and numbers. 

According to Truphone CEO Geraldine Wilson, the product will be targeted at frequent international travellers – pilots, business travellers, expat families, people who own multiple homes, and so on.  When asked how large the market was, Ms. Wilson pointed out that there are 300 million roamers today, and another 700 million travellers. 

The product won’t ship for many months yet.  The reason Truphone announced Truphone Local Anywhere at last week’s Mobile World Congress was to attract distribution partners in different countries.  In some cases, they expect to work directly with the incumbent mobile operator, in others to partner with an MVNO, and in others they will work with “non-traditional channels that operators don’t necessarily have access to”, according to Ms. Wilson.

Here in Canada, Bell and Telus are busy deploying new GSM networks in advance of the Vancouver Winter Olympics in 2010. Not wanting to be left out of the roaming “gusher” that the games will trigger, they’ve accelerated plans to replace their CDMA networks. Inevitably, though, roaming prices must fall here. Partnering with Truphone Local Anywhere would be a gutsy move that would differentiate them from market leader Rogers / Fido in a very identifiable way. Anybody in Toronto or Scarborough listening?