Sunday, August 30, 2009

Confussion over the Handset market

I know that we are in a quite period as the holiday season starts to end with one last public holiday before the children return to school but if you take both the Observer and The Sunday Times you might be a little confused as to the progress of Android.

The Observer reports that the iPhone faces a threat, whilst the Times tells us that Google is failing in the smartphone market.

This week I have been talking to a number of clients about the OS battle that is taking place in the mobile phones space. In preparation for a workshop on Smartphones OS I decided that I would put aside my opinion formed by being a user for the last twenty plus years and get one of everything and use them for a few weeks. So I have started carrying a small gadget bag with something others than Nikons in. As well as the Nokia E71 I have a G1, Apple 3G, Blackberry Storm and I still carry my Sony Ericsson C905i.

I do not think that the mobile industry is in a battle for one single OS but rather the current EIGHT competing OS will be consolidated down to just three.

Talking with others who use Smartphones has been interesting. One current iPhone users told me that he was going to pass on an upgrade of his iPhone to the 3GS but rather he was moving to an Android handset and upgrading to Paid Google Apps so that he could work on the Cloud. Another told me that he keeps being surprised by RIM and has noticed how many women are using one to surf and network with rather than an iPhone. The Nokia users cannot see why they should jump ship and are hopeful that the divergence into Linux and Windows devices are little more than a distraction.

I have noticed that my iPhone seems to prefer WiFi to the poor O2 network when ever I want to use facebook, twitter, Yahoo, Shozu. The experience is no different from my iPod Touch and thus if I have an iPod why do I need the Phone element because I'm not using the phone network and payment is taken via my iTunes account. I am now using pictures in Twitter but is that worth the expense?

I seem to be having problems with the Android App Store and Installing software like Opera. The mail client seems good but the browser needs work. For me the mixture of touch and QWERTY keyboard is a pain. Might be a better experience on Vodafone than it is on T-Mobile but I am underwhelmed at present.

The Storm is an interesting experience. The device has attracted a lot of attention from my teenage twins who would both love to find in their bag for the new school year. The messaging is excellent especially BB to BB user and Facebook and Twitter are as good as on the iPhone.

I am starting to get the hang of the E71 and Ovi alongside Google Apps does make it a productive device. The battery life is far better than that of the other smartphones however I still find that I need to switch to Opera to work as quickly as I can with either my PC or MacBook. In switching to Opera a number of sites ask we to "use the browser installed by the phone manufacturer" what is this 1999 all over again?

When I am off out for a walk with my camera what do I put in my pocket? It is still the C905i it has a better camera and the battery does not die on me. Should I need it I have GPS and Opera takes care of the browsing.

From conversations and observation I feel that RIM and Linux will be two of the three that are left standing the other one is any ones guess. Mr Jobs has been at the phone thing for two years now and he still has not hit the target he set himself for sales outside of the US. If he were to launch the tablet / iPod Touch MAX and it was a success would he kill the iPhone? Most people I observe when I travel seem to have two mobile phones and they carry these in a bag rather than in a pocket and so a larger form factor will not be an issue providing that it is A5 in size rather than A4.

What ever handset OS wins the distribution model will have to change. Two year contracts will see handsets looking like they have been cared for by Vandals if my Twins handsets are anything to go by. One friend has changed his iPhone five times in the last year as it was starting to look used and the Apple Store guys let him. What is need is more Handset Vendor stores so that some may buy a handset and then buy connectivity separately. After all we know that the guy in Carphone Warehouse is not going to give us the best deal.

2 comments:

Unknown said...

I'm interested in the logic behind your conjecture that smartphone OSes will consolidate to Linux, RIM and something else.

The only Linux out there is Maemo which though fab is very early days, and will only be on very high end devices, at least initially, which are both over specced and too pricey for the average consumer.

RIM has arguably a nothing too special OS and more importantly a market share that does nothing to suggest it winning any sort of OS war.

And what could the third thing be? I am interested in why Symbian is not explicitly in your short list of winners and how you explain that given it's market share is greater than the next 5 smartphone OS contenders combined, plus Nokia's stated long term commitment to it, not to mention it's technical excellence and maturity.

Thanks for the post.

Alex Kerr
CEO
PhoneThing.com

Ian Wood. Principal Wireless Foundry LLP said...

Thanks for the question Alex.

Work that I have undertaken for Mobile Networks has been aimed at the handset costs being lowered not just in terms of ASP but also in support. Vodafone told handset vendors two years ago that they were looking to standardise on three operating systems; at the time they said they were looking at Symbian, Windows Mobile and Linux.

Talking to others in the industry the cost of running an OS is something north of $100m per year. As the market matures and users hold onto handsets for longer the cost of support will become an issue.

Given that the costs become out of line from the revenue stream the handset vendors may decide to transition an OS to Linux.

Only one OS will work in the Enterprise space and at this moment that is RIM. I would not be surprised to see the company bought by Microsoft if Windows 7 and the upgrade of Windows Mobile do not hit targets.

In the end of the day it is not only the consumer but also the Networks that will drive OS success. Looking at Symbian I do not see the commitment of those senior executives at Nokia needed to drive forward. Whilst the base is secure the size of the software is too large and the API library not complete. This can be seen by the number of Operators who are having issues with the N97 and have stopped selling new devices until the software issues are resolved. At this moment in time I think that Google and Symbian will be subsets of Linux by the time we get to 2013.

Hope that explains my assumptions if not happy to expand things for you.