Monday, 2 January 2006

Does the mobile OS matter?

Yes and no.

But mostly no. It doesn't matter the way the OS companies want it to.

Recently two telecom analysts in Europe published essays saying that there isn't going to be a winner in the mobile OS wars. The UK research firm ARC Chart wrote, "far from the market consolidating around one or two of major OS platforms, the number of middleware systems for which applications can be developed for is actually increasing.... The mobile OS story is no longer simply about a war between Microsoft and Nokia."

(Actually, the story was never simply between Microsoft and Nokia, even if you're watching only the European market. But that doesn't invalidate their main point.)

Then analyst Dean Bubley chimed in: "Let's face it, heterogeneity in mobile phone OS is permanent. At the bare minimum, Nokia will continue to champion Symbian, Motorola will push Linux, HTC is making a good living with Windows Mobile, and assorted proprietary OS's continue to make traction because consumers don't care.... OS diversity is a baseline. Most manufacturers recognise this, and most mobile operators as well."

Unfortunately, ARC Chart went on to theorize that middleware software platforms are going to take on the standard-setting role that the OS was supposed to play. They cite products like Brew, Savaje, and Action Engine as examples.

I don't think so, not if they behave the way the mobile OS vendors have behaved. I think the most important words were Dean's: consumers don't care. I wouldn't make the statement so categorically, but I think it is true that most customers don't care. Here's why.

The PC fallacy

As I mentioned in my post on the Myth of the Smartphone Market, one of the most common mistakes made by people in the mobile industry is assuming that their market will work like the PC market does. More often than not, it doesn't. If you use PC assumptions and PC reflexes to run a mobile company, chances are you'll lose your shirt.

This is why people who've worked a long time in the few really successful mobile data companies, like RIM and Palm, sometimes come off as smug and dismissive when they get advice from outsiders. If you approach them from a PC perspective, they'll tune you out faster than I tune out country music when I run into it on the radio.

One of the most basic assumptions of the PC world is that one OS eventually wins. Even if two operating systems start out even, one of them eventually gets a little better sales. Seeing a better chance of selling applications on that platform, more developers concentrate on it. The higher number of apps brings in more customers, who draw more developers, who attract even more customers. The process feeds off itself, and pretty soon one OS has 90% of the market and the other is called Macintosh.

For years almost everyone (including me) assumed the same effect would operate in mobile devices. But does it? Let's look at the evidence.

At the end of the century, the Palm OS took a commanding lead in mobile application development. The company's developer base grew from about 3,000 registered developers in 1998 to 23,000 in 1999 to 130,000 in 2000. The application base grew at the same rate, vastly outstripping everything else on the market. By all the rules of the PC market, this should have been the end of the game. As licensing increased the base of Palm OS devices, every other mobile platform should have been wiped out of existence.

But it didn't happen.

There are a lot of reasons why. Microsoft and Nokia were both willing to endlessly subsidize competing platforms, for example. But another key factor was that the "network effect," the bandwagon process in which a leading platform sucks up all the customers, simply didn't work. The users didn't behave the way they were supposed to.

It's the solution, stupid

What are the two most successful smart mobile devices on the market today? iPod and RIM Blackberry. What operating systems do they run?

Uh, well...

Last I heard, the iPod runs a mashup of software from Portal Player and Pixo. RIM runs its own embedded OS (I don't know if it's proprietary or derived from an outside product), plus Java. Neither of them have fully mature software platforms with a large range of third party applications, and yet they outsell the products that do.

"Wait," someone might object. "Those products just sell the best because they work best. If someone had a really good product on an open operating system, it might sell the best." And that's exactly my point. In PCs, the industry-standard operating system can propel even inferior hardware designs to leading sales (ask any Mac owner). The PC OS generates demand. In mobile devices, the "solution" – the device's main functionality – is usually what generates demand. The mobile OS doesn't matter. Or a more accurate statement would be, something else matters a lot more.

This wouldn't be as much of a problem if the mobile device companies were good at creating mobile data solutions on their own. Then they'd pick the OS with the best plumbing and build a great product on top of it. The OS still wouldn't matter to most users (it would be equivalent to a no-name embedded RTOS, something like TTPCom's Ajar or OpenWave's client software), but at least you could count on it to be an element in the best mobile devices.

Symbian has tried to follow this route. It's owned by mobile phone companies, and they generally don't want it to have anything to do with creating end-user value – the phone companies, particularly Nokia, view that as their turf. The restrictions are so tight that Colly Myers, former head of Symbian, says the company shouldn't have even tried to create a user interface for its product.

But most mobile device companies, especially the big ones, are terrible at creating integrated hardware-software solutions. They're hardware companies, not software companies. The mobile operators are little better; they generally understand voice but not data. So you get a three-way traffic jam of OS vendor, hardware company, and operator (if the device is a phone), none of whom are in a position to architect the whole solution and make mobile data sing.

I do think there's hope for an application platform to establish itself as a standard in the mobile world, but it needs to be structured and managed differently from anything that's on the market today. I'll write about that later this month. In the meantime, the industry needs to understand that smart mobile devices today are basically appliances. Most people buy them to solve one major problem in their lives, and they'll favor the device that is the best solution to that particular problem. Blackberry is the best solution for mobile e-mail, so people buy it even though it sucks at almost every other function. iPod is the best solution for mobile music, so people buy it even though it can't do much of anything else.

There are a relatively small number of users, like me, who care so much about having a multifunction mobile device that we'll pay more and compromise on other features (such as weight and simplicity) to get it. The Palm OS ones are very loyal to Palm OS, and the Windows Mobile ones are very loyal to Windows Mobile. Although we're very noisy on the web, we're actually a relatively small percentage of the population. There aren't enough of us to create the sort of mass horizontal market the consumer electronics and phone companies are looking for.

Does that mean mobile operating systems are dead? Nah, but if the OS companies want to have a major impact on the market, they need to step up to providing full solutions to major user problems, rather than just plumbing. Picture a version of Windows Mobile that includes a well integrated system for downloading and playing music. Or a version of Palm OS that comes bundled with a great corporate e-mail solution and software to handle attachments. Those mobile software products could sell well. What's dead (or at least uninteresting and low value) is mobile operating systems that try to succeed by just being great infrastructure. That worked in PCs, but it won't work in mobility.

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