[Growing competition and price pressures push handset makers to seek new ways to differentiate. This increasingly means services. VisionMobile Research Partner Michael Vakulenko compares service offerings of leading handset makers, explaining why OEMs will struggle to create meaningful differentiation through services.] Remember the Motorola RAZR or the Nokia N95? Long gone are the days when handset hardware was fertile ground for innovation and differentiation. Convergence of device form-factors and equal access to advanced chipset technology pushes the handset market to the brink of deep commoditization. Focus on smartphones can only provide short-term life support for deteriorating margins. Android opened the floodgates to low-cost assemblers to compete in the smartphone market. Aggressive new-comers, like ZTE, Huawei, Acer and Dell, along with a growing list of previously unknown handset manufacturers, push incumbents deeper and deeper into the commoditisation corner. Differentiation based on services increasingly looks like an attractive solution for many handset OEMs. Services, services, services Let’s look at how service offerings of leading handset OEMs stack up against each other. Nokia, Samsung, Apple, RIM, HTC, Motorola and Sony Ericsson (in no particular order) all have service ambitions and will be the subjects of the comparison. State-of-the-art service offerings go far beyond much-hyped application stores. We ‘ll dig into the following service categories: – Content retailing services: App stores, music, premium video and billing. – Cloud services: Cloud-based contact book, cloud synchronization/backup, and device management (i.e. location tracking and remote lock). – Communication services: Email services (e.g. gmail.com, me.com or nokia.com), instant messaging and video conferencing services – Location-based services: Maps and navigation – Advertising: Ownership of an ad network, display ads, multimedia ads and location-based ads. Since many of the OEMs use Google Android and Windows Phone 7 platforms, we ‘ll also compare OEM service offerings with the ‘native’ services of the platforms. The table below compares service offerings of different OEMs, as well as smartphone platforms across the above service categories. The Leader: Apple Apple, as usual, is in a league of its own. Apple has an extensive set of services anchored in the well-oiled iTunes content machine and MobileMe cloud services. One glaring omission is location-based services. For now, Apple has to rely on an uncomfortable partnership with Google Maps. There are persistent rumors that Apple develops its own location and mapping services (here and here). We can expect that sooner or later Apple will find its way out of its dependency on Google Maps, launching its own location-based services. Challengers: Nokia, RIM The next group of companies are the challengers – Nokia and RIM. Both use integrated models similar to Apple’s, combining proprietary software platforms with proprietary hardware (for now I will ignore the big unknowns of the partnership between Nokia and Microsoft). Nokia has a comprehensive service portfolio, even compared to Apple. It ranges from the quintessential app store and music service all the way to location-based services and its own ad network. However, Nokia’s execution was weak and the future of Nokia’s services is up in the air following announced the partnership with Microsoft. In contrast, RIM has a sketchy service portfolio, focused on its best-in-class messaging services. These include push-email, the BlackBerry Enterprise Server (BES) and the BlackBerry Messenger (BBM), in addition to the mandatory app store. It looks like RIM continues to focus on hardware and its new QNX operating system. For now, service-based innovation outside messaging takes a back seat for the BlackBerry platform. Wannabes: Samsung, HTC, Sony-Ericsson and Motorola Finally, Samsung, HTC, Sony-Ericsson and Motorola are OEMs building smartphones based on the Android and, in some cases, Windows Phone software platforms (Samsung also owns the bada software platform). While Motorola is strong in cloud services with its MOTOBLUR service, Samsung leads the way in content. The Samsung offer includes music downloads and movie services, bundled with the popular line of Galaxy smartphones and tablets. Due to the licensing terms of content owners, content services have a limited geographical footprint, being available only in North America and Europe. Overall, the services offering is very mixed for these vendors with piecemeal solutions mostly focused on content and cloud sync services. Platforms: Android and Windows Phone Unsurprisingly, Android and Windows Phone offer a comprehensive set of ‘native’ services across all service categories. Google Android is weak in content services compared to Apple and even Windows Phone, but compensates with leading-edge location-based services and a comprehensive ad offering. Windows Phone ‘native’ services leverage Microsoft’s Bing, Live, Zune and Xbox assets having millions of active users. These ‘native’ services form the basis for platform differentiation and user value proposition for both platforms. OEMs will struggle to make impact with services Out of these handset OEMs, only Apple and Nokia come close to the breadth and scale of service offerings provided by platform vendors. It’s really difficult to see how Samsung, HTC, Sony Ericsson and Motorola can create highly differentiating services on the Android or Windows Phone platforms. For them, services will not become a solution for the upcoming wave of commoditization. Dependency on 3rd party software platforms, lack of scale for making meaningful content deals, conflict of interests with operators and incompatible company DNA will make it extremely difficult for handset OEMs to make an impact with services. In the words of Nokia’s CEO “Devices are not enough anymore”. No, this quote was not one of Stephen Elop’s, taken from the recent “burning platform” memo – it comes from a speechmadebackin 2007, by then NokiaCEO,Olli–PekkaKallasvuo. Nokia realized early that services will play a critical role in handset value proposition. The Finnish OEM has tried hard to reinvent itself and become a hardware+services company. The rest is history. Nokia found it nearly impossible to reconcile the DNA of a hardware company, which “lives” by device release cycles, with the DNA of a service company that “lives” by developing long term relationships with users, developers and partner ecosystems. If Nokia failed to do so with their vast resources and enviable volume leadership, what are the chances that Samsung, HTC, Sony Ericsson or Motorola will manage it? – Michael Connect with us on Twitter for more updates [Michael Vakulenko is a Research Partner at VisionMobile. He has been working in the mobile industry for over 16 years, starting his career in wireless in Qualcomm. Michael has a broad experience across many aspects of the mobile industry, including smartphone ecosystems, mobile services, handset software, wireless chipsets and network infrastructure. He can be reached at michael [/at/] visionmobile.com] #htc #location #rim #nokia #Apple #softwareplatforms #motorola #sonyericsson #Android #Blackberry #handsetmanufacturers #samsung

[2010 was a year of upsets in the mobile industry, as the league of top 5 handset manufacturers saw the inclusion of pure smartphone vendors (Apple and RIM) for the first time. As the rate of smartphone penetration accelerates, Marketing Manager Matos Kapetanakis takes a closer look at the winners and losers of 2010 as part of the latest 100 Million Club]. Welcome to the H2 2010 edition of the 100 Million Club, our semi-annual watchlist tracking mobile software embedded on more than 100 million devices. Click here to download the full watchlist. Key Highlights – WebKit continues to grow, fueled by the accelerated rate of smartphone penetration. Up to the end of 2010, WebKit-based browsers had been shipped in more than half a billion handsets – While smartphone penetration has increased to more than 20% in 2010 globally, featurephones continue to dominate the industry. Indicatively, S40 shipments were almost equal to total smartphone shipments. –  In 2010, Android raced past iPhone’s iOS and BlackBerry, almost reaching Symbian’s shipments despite Nokia’s smartphone woes. While Nokia will undoubtedly push up Microsoft’s mobile market share in the future, we’ll continue seeing Symbian in the smartphone OS top-5 for another year. – Total handset shipments for the second half of 2010 were 780 million, a 25% increase over the first half. A handful of software products, like vRapid Mobile by Red Bend and CAPS by Scalado, managed to tap a sizable portion of this figure, having more than 500 million shipments in H2 2010 alone. – Myriad Group is now the only company to have 3 products with more than 100 million shipments, after Nuance merged two products into one, with T9/XT9/T9Trace. With the products combined, cumulative shipments have reached a staggering 10.5B shipments. Winners and losers: changes in the OEM landscape Who were the winners and losers in 2010? In terms of handset OEMs, we have two clear losers – Sony Ericsson and Motorola have been seeing declining market share for some time now, but 2010 marks the first time that these two traditionally dominant players were toppled from the top 5 leaderboard by pure-smartphone players RIM and Apple (see our latest infographic for more details). At the same time, LG just managed to stave off competition, but without achieving a growth in shipments. Samsung, on the other hand, has effortlessly held its position as the number two handset OEM, having been the most aggressive incumbent OEM in ramping up smartphone shipments. ZTE is the one piece of the OEM puzzle that doesn’t fit. Some estimates place the Chinese company near the bottom of the barrel, while others feature ZTE in a prominent position in the top 5 OEM leaderboard. These upsets in the OEM landscape form the foundation for the OS race in 2011 in both feature phones and smartphones. Feature phones made up nearly 80% of all mobile shipments during 2010. While it’s true that smartphone penetration has accelerated this past year, the days where every phone will be a smartphone are still far. The next chart clearly shows that feature phones are still the driving force for the mobile industry in terms of shipments. However, revenues and profits are an altogether different matter (see slides 8-9 in our Mobile Megatrends 2011 report). If combined, media-favorites iOS and Android barely account for 10% of the total shipments for 2010, which are roughly half the shipments of the lowly S40 OS. Samsung’s strong sales through 2010 have helped the company maintain a sizable piece of both the handset and OS pie. The OS Arena – Smartphones But what about smartphones? Which were the dominant OEMs and OSs in 2010? As always, Nokia has the lion’s share. As a smartphone vendor Nokia claimed more than 34% of shipments for 2010, while RIM and Apple, managed to get around 16% each. The above diagram also shows how Samsung has maintained its lead over immediate competitors, with their smartphone shipments equaling those of Motorola, Sony Ericsson and LG combined. Samsung’s lead in this race of the ‘old OEM generation’ is thanks to reacting very fast to ramping market demand and delivering a highly sought after product; Samsung sold more than 10 million Galaxy S smartphones in 2010 in just 7 months, a figure that exceeds the total smartphone shipments of some of Samsung’s competitors. So, what does it all mean for our favourite smartphone OSs? Symbian. Dead, you say? That might be the case in terms of developer interest and Nokia’s R&D expenditure, but the current smartphone leader has yet a lot of shipments left in it. Perhaps not 150M shipments, as stated by Nokia CEO Stephen Elop, but a committed handset roadmap can’t change overnight which means that Nokia will continue shipping Symbian smartphones well into 2012, well after their much-discussed WP7 devices start coming out. While the Verizon deal has not boosted iPhone sales as much as expected, the operator has the potential to tip the balance of the smartphone scales in the US. The question remains whether the Verizon handsets will cannibalise iPhone sales from AT&T, rather than generating new ones, but that should be little cause for concern. Apple has enjoyed a steady growth in shipments over the past couple of years and that, coupled with an accelerated smartphone penetration rate, should ensure that iPhone sales continue to enjoy a healthy increase. Furthermore, there are indications that the iPhone is starting to replace BlackBerry phones as the ‘executive handset’ and could start growing in that segment as well. This is Apple’s ‘blitzkrieg’ tactics at work, advancing on a market segment not just with a platform, but a thriving ecosystem of app developers and content publishers. The realization of this might be one of the driving factors behind RIM’s sudden adoption of Java and Android apps for its admittedly hurried Playbook release. The biggest smartphone OS surprise has of course been Android. Growing by 100% QoQ for the first three quarters of 2010, the Google operating system shows no signs of slowing down. The biggest contributors to Android’s success have been HTC and Samsung, with Sony Ericsson, Motorola and, to a lesser extent, completing the top 5 contributors. HTC has enjoyed steady growth in smartphone shipments, mainly concentrating on their Android vs. the Windows line. With 60M smartphone shipments forecasted in 2011, HTC seems poised to drive Android sales once again. Samsung will also continue to grow in terms of smartphone shipments, capitalizing on their Galaxy series success. But what of Sony Ericsson, Motorola and LG? These vendors are losing market share, with the latter two having already lost their prestigious position in the top 5 leaderboard. With more OEMs adopting Android (ZTE announced 3 new Android phones at MWC), the Android map still has a lot of surprises in store. The battle of ecosystems and BOMs The demand for smartphones continues to rise, driven by mobile operators and handset manufacturers both of which need to remain competitive and differentiate. In 2011 the share of smartphones and the OEM competitive landscape will be determined by 3 fundamental factors: ecosystems, services and price points. – Price points. Firstly, hardware BOM (bill of material, including screen, chipsets and memory) is the key factor limiting how low smartphones can go in terms of price points and therefore how quickly they will be replacing feature phone projects within OEM roadmaps. Qualcomm has confirmed fears of a price war that is going to be taking place amongst chipsets in 2011 which will should allow Samsung or LG to deliver unsubsidized $100 retail price smartphones this year. – Ecosystems. Secondly, as Stephen Elop eloquently said in his burning platform memo, “our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem”. The three horse race of iOS, Android and Windows Phone is a race of developer adoption. Any new horses (including Qt, MeeGo, BREW and SmarterPhone) will have to show sizeable ecosystem support in terms of 10,000s of applications and 10s of millions of downloads in order to join the race as worthy contenders. – Services. Thirdly, smartphone growth is driven by western markets where mobile operators are dominant. With subsidies and marketing boost for smartphones coming from operators, a key determinant of device sales will be how well OEMs can drive operator services revenues; both in terms of supporting ‘hero’ operator services across regions on day 1 of launch and in terms of offering out-of-the-box white label services with a revenue contribution going towards the operator. This third services battlefront is heating up, too, with HTC buying up service companies, Samsung growing its global services deployments (more about OEM services landscape in a next article). How do you see the future of smartphones in 2011? -Matos #100millionclub #operatingsystem #symbian #windowsmobile #Android #windowsphone #Blackberry #handsetmanufacturers #iphone

In the past 10 years, the handset OEMs landscape has changed dramatically. Companies that seemed unshakable have lost ground and are gradually being replaced by new and agile contenders, borne from the PC industry. The ‘old OEM guard’ is still being driven by momentum, but as one-by-one these giants fall and smartphone adoption continues to accelerate, the battle for a spot in the top 5 leaderboard is getting more and more heated. How has the landscape changed, you ask? Well, just take a look at our latest infographic: Feel free to copy the infographic and embed it in your website. 600 pixels wide version 760 pixels wide version 1000 pixels wide version [sociable_code] #handsetmanufacturers #mobile #mobiledevices

[Open source has been in the limelight for the last few years, but its legal implications have been in the dark. Research Partner Ã…se Stiller sheds some light into the legal precedents of open source, from Cisco to Skype] For those meddling in open source software affairs, compliance with licenses is a very hot topic. In the last 2 years we have witnessed the licensing FUD (Fear, Uncertainty & Doubt) giving way to legal clarity with more and more relevant cases proving the acceptance of open source licenses by legal systems around  the world. The secrets of Copyright Open source software licenses are based on copyright law. The notion of copyright has a long history; some hundred years ago copying was hard to come by and a threat only to a few.  In contrast, in today’s digital world copyright is much more important as communications move around the world not in 80 days but in 8 seconds; and copying is as easy as pressing a button. The story of international copyright starts with the Bern Convention in 1880, while the most prominent copyright law is probably the US Copyright Act from 1978. The Bern Convention was initiated by the French Author Victor Hugo in order to protect the rights of European writers against the illegal copying of books which was taking place on the other side of the Atlantic at that time. In copyright law, the original creator has the exclusive right to reproduce a work by default, subject to certain conditions; firstly the work must reach a threshold of originality, and secondly if the work is created under commission, the person with the chequebook often becomes the copyright holder. The Fair Use doctrine also sets aside some good reasons to copy a work – for example for commenting, news reporting or research – without infringing on copyright. Only the owner of a copyright can license or sell the right to copy the work to others, under terms and conditions of their choice. Violating these terms and conditions is in principle infringing on the copyright. Copyright is also sticky. It will survive the creator by some 50-100 years depending on the application law at a country level. Once the copyright expires, the work enters the public domain and is no longer protected by copyright laws. Whilst open source software is by definition publicly available, this does not mean that it is freely available in the public domain as it is still under a license, be that a copyleft or copyright license. Copyleft vs Copyright Copyleft – one of the main innovations of open source licensing – is a word play on copyright. Copyright law is used by an author to prohibit others from reproducing, adapting, or distributing copies of the author’s work. In contrast, Copyleft allows an author to give out copies of a work with permission to reproduce, adapt or distribute, but requires any resulting copies or adaptations to also be bound by the same license agreement. Copyleft is in reality enforced by copyright. which has been clearly demonstrated by a number of interesting legal disputes, e.g. in the New York District court case of BusyBox v. Westinghouse in July 2010 and by the US Court of Appeals for the Federal Circuit.in Aug 2008 in the Artistic License case of Jacobsen v. Katzer (more on this below). Likewise the German and French courts have provided some good examples that they do accept copyleft licenses as valid and binding for anyone who chooses to make use of the work. Open Source and Legal precedents In researching the legal precedents for Open Source licenses we find that most open source license disputes are with regard to the GNU GPL v2, which was written in 1991 by the Free Software Foundation. It took more 10 years before the license was actually tried by any legal system, but since then there has been a number of highly relevant cases of open source license infringement, brought to court in Europe and in USA. By the end of 2010 a long list of court cases have surfaced which test the validity and legality of open source licensing – the table provides a (partial) list:CaseagainstYearPlaceLicenseaboutRulingImportanceMySQLProgress Software2002District Court  MassachusettsGPLv2TrademarksSettled 2002GPL accepted by courtHarald  WelteDlink2001Frankfurt AMGPLv2GPL Binding?ruled to Welteusing code = accepting GLPFortinet UK Ltd2005MunichGPLv2complianceruled to WelteEarly test of GPLGigabyte Technology Co. Ltd, TomTom2004–GPLv2complianceSettledIliad2007MunichGPLv2complianceruled to WelteFSF France First case outside of GermanySitecom2004District Court of Munich,GPLv2complianceruled to WelteFist case in EurSkype2008District Court of MunichGPLv2Compliance/source code accessruled to WelteGPL must be followed strictlySCOAutoZone, Daimler Chrysler, IBM, RedHatIncl. countersuits2003-2004District Courts in  Utah, Delaware, Nevada,  Circuit Court OaklandGPLv2IP infringements Trade secrets contact breachSettled, dismissed and referred to Novell caseOwnership over UNIX code in LinuxNovell2004US Court of Appealruled to Novel 2010SUSE Linux2003ICC International Court of Arbitrationruled to SuSeAFPAEdu42009Paris Court of AppealGPLv2complianceruled to AFPADownstream rightsBusyBoxAstak Inc, BellMicroproducts, Best Buy, Comtrend, Dobbs-Stanford, Extreme Networks, GCI Technologies, High-Gain Antennas, Humax USA, JVC U, Monsoon, Phoebe Micro, Robert Bosch, Samsung Electronics US, Super Micro Computer, Verizon, Versa Technology, Western Digital Technologies, Xtrasys, ZyXEL Communications.2007-2009NY District CourtGPLv2complianceSettled/undisclosed still open (?)Monsoon was the first case for  GPL in USWestinghouse Digital Electronics, LLC2010ruled to BusyBoxDamages awardedFSFCisco2008NY District CourtGPLv2, LGPL 2 and 2.1complianceSettledCompliance officerJacobsenKatzer2008Federal USThe Artistic Licensecomplianceruled to JacobsenOpen source licenses are for real The most typical violation of GNU GPL arises when consumer electronics vendors, or distributors of embedded devices using Linux (which is licensed under the GNU GPL v2.1), fail to supply the source code, copyright notice or to attach a copy of the license – all of which are required by the GPL license. It´s difficult to identify if this is caused by lack of knowledge, poor version control process, or disregard for compliance due to the perceived high cost for compliance procedures, paired with a low risk for detection. Interestingly, in many cases, it’s not the copyright holder who sues, but a representative like Mr. Harald Welte in Germany or the Software Freedom Law center in USA. The GPLviolations.org project, set-up in 2004 by Mr. Welte in Germany, is one such enforcer of the Open Source adherence. GPLviolations.org has brought more than 100 cases to court (including D-Link, Skype, TomTom, Motorola and Acer), all of which were successfully settled out of court. Additionally the GPLviolations and Harold Welte have won several victories in Europe over large companies such as Sitecom and Fortinet. In the Sitecom case (2004) Welte identified his own source code in the binaries for Sitecom´s Network routers, which Welte had licensed under the GNU GPL v2.0 but Sitecom had not made the source code available or referenced the GNU GPL v2.0, both of which are a requirements of the License.  The District Court of Munich granted Welte an injunction against Sitecom Deutschland GmbH whereby Sitecom was prohibited to distribute the products, until they were compliant with the GPL terms. Sitecom appealed but lost and posted the terms for GPL on their Web FAQ for the router. LikewiseFortinet Ltd UK was banned from distributing their Firewall and Antivirus products by the Munich district court in 2005, until they were in compliance with GPL. GPL-violations.org had found evidence that Fortinet used Linux kernel and other GPL licensed software in its FortiOS product. The Munich court granted a temporary injunction against the company for selling the products, and Fortinet was forced to make their OS available free. Fortinet had been warned by the GPLviolations.org about the violation but attempts to reach an out-of-court settlement failed. The case of Skype Similarly, Skype Technologies SA (a Luxemburg company) was accused of violating GPL in 2008 in the course of selling a Linux-based VoIP phone, through the Skype website. Harald Welte took Skype to a Munich court for failing to provide the source code and the license together with the phone. Skype claimed that a URL to where both license and code could be downloaded was provided in the documentation – however the German court found this insufficient under GPL v2. The license states that offering source code for downloading, is only applicable if and when the binaries are downloadable from the same place, which was not the case here. Skype Technologies eventually settled out of court. D-Link The2006 case of Welte vs D-Link GermanyGmbH, started much like any other open source legal dispute; D-Link failed to provide the source code for Linux Kernel modifications that were used in a network storage device, and failed to provide a copy of the GPL license. D-Link rectified this error but refused to cover the disbursements for Mr. Welte for the trial, claiming that the GPL license was not  binding for the company. The case then became more interesting as the focus thereby shifted from the usual GPL compliance to become a test of the binding mechanism for the license: Was using the software to be considered equivalent to accepting the terms in the license? The Frankfurt-am-Main’s District Court clarified that D-Link was indeed bound by the terms in GPL v2, solely by enjoying the benefits of the free software and therefore also must cover the lawsuit costs for the plaintiff, Mr. Welte. Free Software Foundation; on the tail of license infringements Free Software Foundation (FSF) is another non-for-profit organization that monitors GPL compliance. The FSF was founded in 1985 by Richard Stallman to promote free software, and has since set up regional entities in Europe (2001), India (2003) and Latin America (2005). The organization is dedicated to promoting users’ rights to the four freedoms of Open Source: To Use, Study, Modify, and Redistribute software. The FSF sponsors the GNU project and maintains the GPL licenses as well as the Free Software Definition. FSF’s is known to enforce GPL compliance through closed-door discussions rather than lawsuits, with the aim being compliance rather than monetary damages. Aiding the FSF is the Software Freedom Law Center (SFLC), a US-based law firm founded in 2005 providing free legal services, to nonprofit open source developers. The SFLC has also published a guide on how to comply with GPL and advice on how to act if caught violating GPL. Cisco – a case for the Supply chain manager Assisted by The Software Freedom Law Center, the FSF initiated a case against Cisco for copyright violation under GPL and LGPL in 2008. Like many others, the case was settled out of court in 2009 resulting in a donation to the FSF, a pledge of commitment to the GPL and the appointment of a compliance director reporting to the FSF. Cisco never disputed GPL as such but “bought themselves a lawsuit” through the acquisition of Linksys in 2003. Shortly after the acquisition, complaints started showing up on the Linux Kernel Mailing List and Slashdot on how Linksys was not providing source code for GPL licensed software used in the router firmware (Linksys had bought the chipset from Broadcom who in its turn had outsourced the driver development). FSF took action on behalf of several copyright holders against Linksys/Cisco and other companies using the same 802.11g router chipset from Broadcom, where the issue had originated. BusyBox –  when no one is too big Among the more interesting cases for general acceptance of Open Source licenses are the BusyBox cases which involved major corporations, including Verizon, Samsung and Westinghouse. BusyBox is a set of common Unix/Linux utilities, all packaged in a small executable and typically used in embedded systems. The software is licensed under GNU GPL v2. The BusyBox legal saga started with 4 different cases of copyright infringements, as a result of the distributors failing to provide source code. The first action was against Monsoon Multimedia which became the first GPL copyright lawsuit in US history. The case was settled in October 2007 with Monsoon agreeing to appoint an open-source compliance officer besides publishing the source code. There was also a monetary part of the settlement but the amount was never disclosed. The Monsoon case was followed by High-Gain Antennas and Xterasys in 2007 and Verizon in 2008. Picking up speed and size, since 2009 14 new companies (including BestBuy, Samsung, Westinghouse, JVC) were sued by SFSC for violating the GPL license of BusyBox software. Much like Monsson, Verizon settled in 2008 while it appears that four more defendants (Samsung, Comtrend, Dobbs-Stanford, and GCI Technologies) have also settled with the plaintiffs. The only exception was Westinghouse where a District Court in NY ruled in favor of BusyBox in August 2010. The infringement was considered willful and the damages were tripled by the judge. MySQL, a near-test for open source derivatives One of the reasons for uncertainty around Open source licenses and especially the GPL v2 is the often-discussed question about how to define derivative work, and how to link software to GPL-code without having to license that software under GPL too, a requirement of the GPL. This is often described as the ‘viral’ nature of the GPL and remains a core concern for many companies is the linking of proprietary software libraries to GPL licensed code.  It is generally accepted that if the linking is static then the proprietary code must also be included under the GPL license whereas if the linking is dynamic the linked software is not necessarily a derivative of the GPL and as such not bound to the GPL redistribution terms. Now given that the definition of a derivative work in GPL v2 is unclear, this issue remains a concern, albeit slightly clarified in GPL v3.  For an analysis on the differences between GPL v2 and GPL v3, VisionMobile has published a free paper: The GPLv2 vs. GPLv3: The Two Seminal Licenses, Their Roots, Consequences and Repercussions. In the context of derivative work and legal precedents, it is also worth discussing the case of NuSphere in 2002.  NuSphere produced a database add-on component (called Gemini) to the MySQL engine. As NuSphere’s Gemini component was statically linked with MySQL’s GPL-licensed database, MySQL sued NuSphere for non-compliance with the license terms. The judge however refused to allow the arguments in the case to expand beyond a mere trademark dispute and urged for an out-of-court settlement between the parties, leaving the definition of derivative work still in the dark and unclarified. The Jacobsen case and the Artistic license The now-famous Jacobsen vs Katzer case revolves around a Java software interface for model railroads, made available under the Artistic License (an approved Open Source license) by the developer Mr. Robert Jacobsen. The software was used by Mr Katzer´s company, in a competing solution, but they failed to provide information about the origin of the software – in violation of the licensing terms. The case was first tried in a US District court and the ruling then was that the license was to be regarded as a contract – not a license. However the case was appealed in 2008 to the US federal court, when the judgment was reversed in favor of the Artistic License and Mr Jacobsen, thereby providing a legal precedent for Open Source licenses as valid and legally binding. The SCO Group opera isn’t over yet This is a story about copyright of Linux code, featuring celebrities such as IBM, Novel, RedHat and SGI. In 2003, the SCO Group based in Utah, claimed that Linux infringed their copyright and trade secrets, and subsequently demanded that Linux users needed a license from them, for parts of the Linux code. The SCO Group sued a number of companies for donating UNIX code to Linux. The software donations included code that SCO claimed ownership of and thus the accused companies had violated SCO´s copyright. SCO also argued that GPL would not be enforceable in this case because it was preempted by the copyright law, protecting SCOs rights. (see detailed story on Groklaw). The SCO soap opera of legal precedents has no less than five acts: SCO v. IBM, Red Hat v. SCO, SCO v. Novell, SCO v. DaimlerChrysler and SCO v. AutoZone. It includes ingredients like lawsuits, countersuits, appeals and bankruptcy protection. In 2007 a US federal court ruled Novel to be the owner of UNIX, invalidating the claims from SCO but there is a new appeal from SCO, and a Novel has filed a petition for certiorari* with the US Supreme Court. Meanwhile the final episode in this saga is yet to come. Edu4 and downstream rights In 2009 Paris Court of Appeals set a French legal precedent in favour of GPL, in a typical case of binaries but no source. In this case the lawsuit was not filed by the copyright owner, but by the end-user, which makes it all the more noteworthy. The story goes all the way back to 2000, when Edu4 had distributed a GPL licensed VNC remote access software, for PCs, to a French education organization (AFPA),but refused to provide the source code for its modified version of the program when AFPA, assisted by the French FSF, requested that. Open source licensing gaining legal maturity The number of law suits, rulings and discussions above indicate that Open Source licenses are indeed enforceable under Copyright law, and that the enforcers will not hesitate to take large corporations to court for violations. Giving software away for no monetary charge does not invalidate copyright, and damages will be awarded for infringements even though the price for the code was zero. There is no longer a need to question the legality of Open source licenses.There are enough legal precedents demonstrating that Open source licenses are valid legal documents and binding for anyone who uses the code. Knowing that the Open Source licenses are in fact tested, tried and fully accepted by the legal system may deal with the U (uncertainty) and the D (doubt) in FUD, but for the remaining F (fear) the best remedy is information. The only good way to mitigate the risk of infringements is to ensure that everybody involved in the development process, has a good understanding of the obligations and restrictions of Open Source licenses, and that the an organisation’s Open Source policy is appropriate – assuming of course that there is one.  Many engineers already know a lot about Open Source software and the licensing models, but do their managers know? Keeping track of Open Source software that maybe included in the next software release is crucial for any company, and the best way to start is of course with a thorough review of existing codebase, establishing a solid process and of course a comprehensive training program for developers to CxOs. There is obviously much to discuss besides the narrow focus of this article on court cases. Do you have more examples and experiences to share on open source licensing? – Ase * The U.S. Supreme Court uses the Latin term Certiorari for appeals. [Ã…se is a Research Partner at VisionMobile specializing in software sourcing, policies and training. Ã…se co-delivers VisionMobile’s Open Source Chessboard, a full-day training course on the economics and competitive landscape of mobile open source, covering business models, licenses & patents, governance models, control points, community cultures, plus 10+ case studies on the who’s who of open source.] #opensource

In a surprising move, Nokia and Microsoft decided to enter a strategic relationship for the OEM’s smartphone business. While the marriage appears promising at the outset, Research Director Andreas Constantinou argues that the only way for that marriage to succeed is for Microsoft to acquire Nokia’s smartphone business. The Elop and Ballmer duo on stage on February 11th was the main topic of discussion at this year’s Mobile World Congress. The reverberations of the Microsoft-Nokia announcement were felt even by the huge green robot tucked away at Google’s stand in Hall 8. Following the news of the Nokia and Microsoft tie-up, Stephen Elop’s appointment to the helm of Nokia seems like an arranged marriage – and one whose best men were the carriers who wanted to avoid an all-out Android coup. It was also a marriage of desperation, which Elop memorably described in his memo as ‘jumping into the unknown’ from the ‘burning platform’ that is Symbian. A marriage of desperation Microsoft has been desperate to see its mobile business succeed. After a decade of lacklustre efforts at mobile device sales and severe product delays, Microsoft was getting desperate; it needed to stop the churn of Microsoft users to the Apple ecosystem and plug its $1 billion-a-year operational costs for its mobile phone business. Even having spent most of its $500M marketing budget for WP7 it had only got breadcrumbs in terms of sales, with Microsoft reporting 2 million shipments but no comment on sell-throughs (which leads us to suspect this was not more than 1 million of actual end-user sales). Nokia has been desperate seeing its platform play fail spectacularly in comparison to its newfound competitors; Apple who had amassed a developer ecosystem and operator demand which was second to none, and Android who in 2 short years matched Nokia’s smartphone sales in Q4 2010. MeeGo was trumpeted as the big guns in Nokia’s arsenal in February 2010, but once again Nokia’s software R&D failed to deliver on the promise. More importantly, despite the 10+ acquisitions during 2007-2010, Nokia failed to amass a strong-enough developer and services ecosystem on Symbian, Java or Qt that could compete with Apple or Google. Like Elop said in his now-famous burning platform memo, “our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem”. It was in an act of desperation that led Nokia to befriend the lesser of two evils in the shape of Microsoft. It is ironic how in mobile the least enemy is a friend, much like how carriers backed Android in 2008-9 to fend off Apple, and backed Microsoft in 2003-5 to fend off Nokia. The courtship Despite the surface-level coverage of the Microsoft and Nokia news, not much has been said about the two giants’ courtship and even less on the prenuptial agreement. According to our sources, Nokia asked both Microsoft and Google to bid for its smartphone business, with the help of a small army of McKinsey suits. Following a long negotiation cycle with both parties, Nokia came to a straightforward conclusion; it would back Microsoft who’s total bid equalled more than $1 billion (including patents, licensing fees, marketing support and revenue shares) and not Google who’s bid was about half that. Funny how cash-rich platform vendors are buying their way into the market these days. Nokia announced its decision to Microsoft and Google on February 9th , only 2 short days before the Ballmer/Elop press conference – which prompted Vic Gundotra to pen the tongue-in-cheek tweet “#feb11 “Two turkeys do not make an Eagle”, scornful of both Nokia and Microsoft. #feb11 "Two turkeys do not make an Eagle". — vicgundotra (@vicgundotra) February 9, 2011 The last-minute decision meant that Intel heard the news at the very last minute, and in turn had to ask its MeeGo partners on Friday night (Feb 11th) to remove the mention of Nokia from the MeeGo PR quotes going out on the following week at MWC. This is the stuff industry disruptions are made of. A chemistry mismatch What Nokia announced was not just a marriage; it was a radical change in its business model, from a vertical powerhouse to an assembler – which is what prompted us to question the motivations and the end goal for Elop. We already knew that Symbian had been demoted to an internal-only OS (see earlier analysis – Symbian is dead, long live Symbian). However we were expecting to see Nokia take a more measured stance; for example using Windows Phone 7 in certain markets (especially in North America where carrier handset subsidies are OS-led) or taking a classic dual-supplier strategy by inking deals with both Microsoft and Google. Instead Elop presented a terminal picture for Symbian which would be destined to ship on only another 150 million devices until being completely replaced by WP7.  Elop knew that an all-out replacement of Symbian with WP7 would mean haemorrhaging valuable brainpower as the 7,000+ Symbian staff had spent 15 years on the anti-Microsoft camp. These are the decisions made by boards with long-term strategy agendas, who see organisations made up of ‘assets’ and not ‘people’. Besides the death blow to Symbian, Elop relegated MeeGo to an R&D project with just a single device launch in the horizon, if any at all (which carrier is going to subsidise a platform that’s dead on arrival?). Moreover Qt’s future seems uncertain as it has no place on Windows Phone (Microsoft wouldn’t allow copyleft software to be used with Windows Phone), plus it is too heavy for S40 class devices and MeeGo is too small an addressable market to justify the Qt ongoing investment. Qt (and its 400 thousand developers) need a new home. What appears somewhat suspicious is that Nokia went not for a tactical, but a deep partnership with Microsoft, solidified by the multiple revenue streams exchanged between the two companies, a kind of revenue ‘keiretsu’ that ties the two giants in a longer commitment. More importantly, the marriage to Nokia’s smartphone business seems like it’s lacking in chemistry. For the last decade, Nokia has operated as a vertical silo, owning and integrating all value elements, from software, UI, industrial design, services, app store and developer ecosystem. That silo has now huge holes punched through so that it can accommodate Microsoft’s horizontal software-licensing business model. This situation is somewhat like trying to fit a square peg in a round hole. There are fundamental conflicts here, as both Microsoft and Nokia want to own the developer experience (think APIs, support, tools, developer marketplace, conferences, marketing), and the application discovery and delivery process (think Windows Marketplace vs Ovi Store). This is a chemically unstable mix that won’t survive the test of time. It would be like having Nokia owning Office while Microsoft still runs the Windows business. Yet at the same time Nokia has little value to offer other than design, development, manufacturing and sales of handsets in the picture Elop and Ballmer painted. Something’s not right. Moreover, Microsoft faces a fundamental customer imbalance on its mobile platform. With such a strong endorsement of Nokia, Microsoft has placed too much favour and device sales expectations on a single vendor. Microsoft did not only hurt the feelings of HTC, Samsung and LG (previously committed to launching 50! Windows Mobile handsets) with such an imbalanced endorsement. More importantly, with Nokia volumes likely to ramp up fast, Microsoft will have to deal with a single-customer monopoly and end up financing Samsung, LG or HTC towards ramping up Windows Phone production to balance it up. Windows Phone may quickly end up looking like a platform of unbalanced OEM interests – much like Symbian Ltd or Symbian Foundation were – and we know how these panned out. There are two more troubling clues in the way this ceremony was setup. Despite fundamental changes to the handset business, Elop made no reorganization in the NSN business which is performing at marginal profit (operating margin at only 3.7% vs 11.3% for handsets). As Tomi Ahonen points out, Elop seems to be ready to get rid of NSN. Plus there was no announcement of Ovi plans or clear strategic guidance with regards to the Nokia services business. The acquisition scenario There have been earlier rumours of acquisition discussions between the two companies. We now believe that the only scenario for the Nokia and Microsoft partnership to succeed is an acquisition scenario; Microsoft buys Nokia’s smartphone business, while Nokia gets more resource to play with what it does best – that is creating mass-market phones at unbeatable levels of supply chain efficiency, unmatched supplier bargaining power and customisation to 100s of variants per handset model for distribution to diverse global regions, channels, carriers and retailers. From a financial standpoint, Microsoft capitalisation stands at $220B, more than six times Nokia’s market cap of $33B at the time of writing. Microsoft would also acquire a high-profit margin business that would go a long way in helping the Redmond giant push its Entertainment and Devices division at high profitability levels for the first time. Despite Microsoft being a software business, it has experience in running hardware products, with the Xbox business doing well recently on strong Kinect sales. For Nokia, a joint venture would make more sense than a pure sale of its smartphone business, given that the hardware giant is an important component of the Finnish economy. It would allow Nokia to focus on what it does best and substantially increase its S40 R&D budget (as Elop already announced it would) to rework its aging feature-phone OS. A joint venture would also allow Nokia to make a comeback when they are ready to take on the high-end phone market again. Besides, with shares recently hitting a 13-year low and Nokia being owned by American institutional investors, the Nokia board has little they can do in the face of potential suitors. This makes Nokia a very interesting acquisition target, not just for Microsoft but for anyone with cash at hand and mobile ambitions, including Chinese, Korean and Japanese suitors. The acquisition scenario would allow Microsoft to leverage on Nokia’s accounts with carriers across the world to woo them into moving subsidy budgets from Android into WP7. This is all too important, as the Microsoft brand enjoys little consumer awareness compared to Apple and Android, meaning that Microsoft is more dependent on carrier subsidy and marketing budgets than its nearest competitors. Fundamentally, we believe there is no place for Nokia, an all-in-one integrated handset OEM and services company, in the new telecoms value chain. The old guard of top-5 OEMs are squeezed between leaders (Apple, RIM) who lead in terms of performance & profits, and assemblers (Huawei, ZTE, Dell, Acer) who lead in terms of me-too designs & razor-thin margins (see our earlier analysis on the evolution of the handset value pyramid). Nokia’s business needs to break-up into independent, self-sustained entities, particularly the smartphone business (within Microsoft’s new home) and the mobile phone business as an independent entity that can focus on competing with PC-borne assemblers. The Microsoft-Nokia acquisition might not have been planned from the outset, but it is a scenario whose viability has been ensured from the outset. There are no conspiracy theories here, except that Elop (as the 7th biggest shareholder of Microsoft) would benefit greatly from trading Microsoft shares with Nokia ones, only to see them boost in value after being repatriated. Let the debate begin! – Andreas you should follow me on Twitter: @andreascon Andreas Constantinou is Research Director at VisionMobile and has been working in the mobile software industry since 2001, when he fondly recalls being a member of the team behind the very first Orange-Microsoft handsets which set the world of telecoms software in motion. #meego #comicstrip #nokia #qt #symbian #windowsmobile #windowsphone #microsoft

[How do Nokia’s options look in a post-Microsoft and Google world? Why does Google’s strategy with Android resemble a cuckoo’s routine practice of planting its eggs on other birds’ nests? Guest author Delius Observer examines the similes and shows just how much nature has to teach us] Vic Goduntra, a vice president of engineering at Google, recently tweeted that “two turkeys don’t make an eagle”, echoing an earlier comment made several years ago by a Nokia executive about Siemens and BenQ merging their mobile units. His snipe, was a cheep, premature call as Nokia gets rescued from those icy Atlantic waters by the rich, (white) knight in shining armour. However, in chirping away, Vic would also have known that Nokia’s only other choice to escape from the burning platform would have meant succumbing to Google’s Androidian Cuckoo Strategy, and that would have been a lot worse. What just happened between Nokia and Microsoft should be a wake-up call for the mobile industry. Google’s Androidian Cuckoo Strategy The cuckoo, which at first glance has the appearance of a glamorous, aspiring bird of prey, is in fact a brood parasite – a cunning species that lays its egg in another bird’s nest and, in doing so, tricks the host to raise the chick as their own. In one fell swoop, the cuckoo will turf out one of the host’s own eggs and slyly lay one of its own. Sitting cosily under the warm breast of the host, the parasitic cuckoo egg incubates and then hatches – a little earlier than the rest, naturally. With the egg’s kernel breaking through the shell, its natural reflex is then to immediately dislodge the other eggs from the nest – a well-designed, dominant, first mover advantage. In doing so, it quickly becomes the only chick left resident. Now at the exclusive beck and call of its foster parents, it has the sole monopoly on food supply and attention. The young cuckoo quickly fledges, and rapidly leaves the foster nest in record time. And so it continues, with the cuckoo returning again the next season. This story should be a familiar one, as it is a story that is playing out across the globe where the poor unknowing parents think they are delivering their own beautiful offspring, but are instead just acting as surrogate hosts to a far grander plan. Cuckoos are, as the BBC’s ‘countryfile’ website states: “nature’s hustlers, cheats that have perfected the ultimate long con”. This is the story of Google’s Androidian Cuckoo Strategy and the handset manufacturers who play surrogate host in order to raise Google’s young Andricks. Google started this strategy by designing an ecosystem that it cunningly called “open”. Of course, because the offspring’s eggs are delivered out in the open air, many have drunk the deceptively refreshing ‘Kool Aid’ of “open”. The real story, however, is a far subtler affair. Whilst the egg and bird may be open and free, the point of conception is still very much done on a private branch, with the DNA of the next egg always a closely guarded secret – even to those inside the fuzzy ecosystem. “Run, run as fast as you can! You can’t catch me”, says one new Gingerbread fledgling, as the other birds look on, green with envy, wondering why their offspring have been Froyo’d. The many handset manufacturers that have joined the Google flock are hoodwinked – and they’re all now singing the same repetitive, robot-like call. Now the birds are just the servants of the dominant master cuckoo. Of course, Androidian Cuckoos have ruthlessly quick development cycles and the Andricks are out of the door in no time, but in doing so, the process sucks most of the energy out of each foster parent. Meanwhile, danger lurks in the grasses as the mighty Oracle hisses over the heart of the cuckoo’s Harmonious virtual machine. Whilst a few birds are today flying high, others are bewildered and disoriented, trying to work out what exactly is going on. For some it will end in pathetic, dismal fatality. But, a few will no doubt adapt their defenses to overcome the parasite in more imaginative pathways to survival. For, as Dr Nicholas Davies of the University of Cambridge states, with cuckoos “over evolutionary time, the hosts fight back so that the poor cuckoo has to work incredibly hard to be lazy, simply because it has to overcome all of these defences. What we witness is a fantastic arms race between parasite and host.” And what of Google’s proverbial ‘don’t be evil’? Nicolas continues: “So, we know how the cuckoo pulls off its dastardly plan, but still haven’t answered the question of why. Is it a cruel or evil bird? Of course not; this is just nature at work, and perhaps one of the best examples of Darwin’s survival of the fittest. The arms race will continue with both sides evolving to protect themselves or deceive the other, but our fascination with the cuckoo will remain. After all, everyone loves a rogue.” Indeed we do, and the rogue’s quip about turkeys was typical of its scheming behaviour. From a mountain view they look down and think one should aspire to be eagles, when what they should really be doing is taking a long, hard look in the mirror and owning up to the mobile industry that they are in fact nothing but a conniving cuckoo – albeit a successful one. Microsoft + Nokia: running with four legs In the past few months Nokia realised that in order to halt its slide towards irrelevance, it had to take its head out of the sand and instead take a leap of faith. The brave gamble that Nokia has now chosen is perhaps not the ideal one, but it was the only strategy available for long-term survival and is a bold rejection of the short-termism demanded by short-sighted investors in accepting the call of the cuckoo. In tying Nokia and Microsoft together they have created a rather old-fashioned type of partnership but it will be a partnership of bones not a collection of feathers. Have no doubt about it, Nokia is “all in” with Microsoft and, yes Vic, four legs are indeed better than two to compete in this race. The trick will be to rapidly get those legs working together, and come up with a pedigree that can run the course. Can they do it? The jury is currently out and they need to move exceptionally fast. They need to accomplish two feats rapidly; prove the financials and fix the developer message. Step one is to actually sign the agreement and rapidly prove to both the investment community and the wider ecosystem that they can make the financials work. Indeed, it seems that perhaps one of the reasons why the Capital Markets Day felt like a damp squid, was not because Mr. Elop couldn’t sell the story to investors, but because the guy he’s negotiating the finer details with was sitting right next to him. A complex partnership like this will take time to put together with details of licensing costs, patent portfolios, split revenue shares on search, advertising and mapping as well as marketing contributions, let alone Nokia’s own complex reduction in costs associated with substantial redundancies and the reductions in OPEX that are needed. The other thing to fix is the confused developer message. One thing that I had expected to hear on Friday was that Qt would run on Windows Phone. In hindsight, however, perhaps this doesn’t make sense. Qt is a fantastic technology but, like many others, it hasn’t reached critical mass. What is needed in this battle of ecosystems is a huge ‘network of externalities’, with a wide range of designer and developer tools. Only with Microsoft do you get that. It is all the more puzzling that Nokia didn’t go ‘all in’ from a developer perspective and instead chose to play coy. In choosing Microsoft tools for Windows Phones and Qt for Symbian and MeeGo, it has created yet another confused message for developers. Developers cannot get economies of scope by using Qt for some dying platforms and Microsoft for others. Nokia must be more courageous. Dust off the old Microsoft Silverlight agreement and get that environment up and running again on Symbian and Series 40 as a stopgap over the long harvest season. This will create the bold message developers urgently need. In this battle of ecosystems Nokia’s strategy cannot afford to be half-cocked. What lies ahead As we look ahead to the coming weeks and months, here are a few predictions:- • Nokia is able to get Windows Phones out the door in record time, taking advantage of Microsoft’s Chassis Specification, a strategy which follows the tight, vertical integration of Apple’s iPhone without the overheads. Whatever the perception, it’s faster to build a Windows Phone from scratch than a cuckoo because of the chassis design. • There will be an increase in the use of patents to fight the cuckoo club and the almighty Apple. However, Nokia’s earlier Symbian and MeeGo open source strategies may well come home to roost, as they gave away core assets which many vultures will circle around. • Nokia competes well in the next billion market by using the lower cost base of an enhanced Series 40 platform and creating a smartphone-like experience in the sub $75 market. • In the long-term, Nokia will realise that there is no division between smartphones and mass-market phones, and will combine those two groups together. • Members of the cuckoo club finally realise their long-term future only lies in commoditisation and they seek to either combine with other cuckoos for short term economy of scale, or search for the assets that enable them to co-exist profitably with the parasite. • Someone writes a loving obituary for the truly open, benevolent and well-meaning MeeGo; bless it. RIP. No doubt a resurrection under a different name will happen at a later date. A three-horse race Nokia emphasised during its Capital Market Day that the smartphone business is now a three horse race. As things stand, that looks like wishful thinking. But if Nokia and Microsoft can execute with incredible speed and agility in the coming months (and it’s only months they have), then they’ve a shot at getting a thoroughbred in the running. So which horses do Google, Nokia and Apple have in the line up? Seabiscuit – the real Trojan horse of the race, full of cuckoos. This one’s been leaving fragmented crumbs all over the place but is currently the bookies’ favourite. This is a wild one for sure! It’s been a fast sprinter but will need to be careful it doesn’t split in two or get strained on the third furlong by its supporters pulling out. Northern Dancer – the dark horse in the race with the odds currently against it. It will use the Seattle based white knight to give it the extra feet needed and use a range of betting operators to increase its odds. With thoroughbred development tools, attached to a large existing ecosystem, it now has the combined power for survival. It will need to ensure that its more old-fashioned, deep partnership style has the staying power and agility. They have a lot of catching up to do, but don’t write this horse off just yet! Pegasus – the last horse is not just easy on the eye but is also nothing short of magical. Not only does this white horse have a vertically integrated set of four legs, but it also has wings too and is riding high. This one can’t put a foot wrong. But the dynamics are changing, and how long it can remain so high and mighty remains to be seen. How the mobile race plays out in the months and years to come depends upon how the various parts of each ecosystem and the punters place their bets. But, whatever happens, just beware of the cuckoo. – Delius [Delius Observer is a pseudonym and can be reached at deliusobserver@gmail.com] #Android #microsoft #nokia

[Behind Android’s stellar success is a love and hate relationship with handset vendors. Android is a critical launchpad for PC-borne OEMs like Dell and Acer, but a short-term life support for mobile vendor incumbents like Sony Ericsson and Motorola. Research Director Andreas Constantinou looks at how OEMs can leverage on virtualisation to get the best of both worlds with Android; the burgeoning app ecosystem, but without Google’s lock down of experience differentiation] From an underdog to ubiquitous manufacturer support, the Android platform has come a long way since its introduction in 2008. Almost every single device vendor (except for Apple and Nokia) has launched Android devices, while Sony Ericsson and Motorola are betting their margins and future on it.  The phenomenal rally behind Android is – in a nutshell – due to 4 factors: the operator demand for a cheaper iPhone, the burgeoning Android developer community, Android’s market readiness (3 months to launch a new handset) and the ability to differentiate on top of the platform. A monopolist on the rise? Year after year, Android keeps on surprising industry pundits. Google’s software platform saw 100% quarter-on-quarter increase in the first 3 quarters of 2010. The last quarter of 2010 saw Android go chest-to-chest with Nokia in terms of smartphone shipments, in what CEO Stephen Elop called ‘unbelievable’. With such meteoric rise, analysts are beginning to talk about a potential Android monopoly in the future market of smartphones, contested only by the Nokia-backed Windows Phone. The Google commoditization endgame Is Google the biggest benefactor the industry has seen? Not by a long way. Google runs a hugely successful advertising business and needs to bring as many eyeballs as it can onto its ad network. To this end, Google’s agenda is to commoditise handsets by forcing smartphone prices down (see our analysis on the $100 Android phone) and having its ad network deployed on the broadest possible number of smartphones (via closed apps like GMaps and Gmail). Moreover, Google’s agenda is to commoditise mobile networks by flattening the mobile termination barriers and removing volume-based price plans that telcos have traditionally built. At a 10,000 ft level, Google’s strategy is based on deceptively simple microeconomics principle; to drive up the value of its core business (ad network) it needs to commoditise the complements (devices, networks and browsers). Naturally Google is hermetically closed in all aspects of its core business. The Android Market, GMaps, Gmail, GTalk are ‘closed source’ and the Android trademark is commercially licensed. This means that while Android is open source, Google uses the Android Market and trademark to enforce strict compliance of Android handsets to Google’s CDD and CTS specifications. See our earlier analysis on Android’s hidden control points for how Google runs the show. So Google is by no means a benevolent benefactor. Like any other company out there, it’s in it for the money; a rationally-driven business of the platform era, out to commoditise the mobile handset business with a free-for-all carrot. Winners and losers of the Android game For handset manufacturers, Android is both a blessing and a curse. A blessing because it offers OEMs a low-cost-base, rapid time-to-market platform from which to build differentiated designs. This is manna from heaven for PC-borne assemblers who use Android as the pier from where they can gain firstly a foothold in mobile and secondly global reach. At the same time it’s a curse; Google’s control of Android compliance means that it deprives OEMs of all points of differentiation: user interface, hardware features and industrial design – except for (you guessed it!) price. Which means that with Google defining the Android experience, there’s little differentiating a Sony Ericsson handset from an Acer handset. With Acer happily operating at 3% profit margins, Android is to Motorola and Sony Ericsson just a short-term life support. Nokia too evaluated Android before hoping on an strategic partnership with Microsoft on Windows Phone 7. As Stephen Elop said during the press conference with Steve Ballmer, “we assessed Android […] but the commoditisation risk is very high”. In sight a potential Android monopoly threat operators, too and getting wary of over-supporting Android. Best of both worlds Confronted with Android’s two-faced agenda, major handset vendors have been apparently plotting how can they get the best of both worlds; the burgeoning apps ecosystem but without the Google’s control of the user experience. Three approaches have emerged. 1. The Do-it-yourself approach: By virtue of the open source (APL2) license, any handset vendor can take the public Android codebase, branch it, tweak it and deploy it on handsets. China Mobile has commissioned Borqs to develop the oPhone spin-off while Sharp has released handsets based on the Tapas spin-off also for the Chinese market. However, branching Android means that you miss out on the 130,000+ Android apps as Google won’t give you access to their app distribution system – which is ok if you ‘re targeting China, but unacceptable if you ‘re targeting any other region. Moreover, the Google Android codebase moves faster than any other platform (5 new versions within the space of 12 months) meaning that it’s near impossible to maintain feature parity in Android spin-offs – the same reason why Nokia publically regretted forking WebKit in the past. Lack of feature parity means that an Android spin-off would breaks the developer story and stays behind the competition of Android Experience and Partner phones. 2. The virtual machine approach: Myriad announced Alien Dalvik , a solution it claims can run Android apps on non-Android handsets, including on Maemo.  Alien Dalvik is a Java SE virtual machine designed in Zurich and China by the same ex-Esmertec guys who started off the OHA consortium. Myriad has released a demo of Alien which however hides the real issues behind a pure virtual machine approach: the lack of 100% API compatibility and most importantly access to the distribution of 130,000 apps available through Google’s Android Market. 3. The Virtualisation approach: the third and most promising approach is to run a complete replica of the Android platform within an isolated, ‘virtual’ container using mobile virtualisation technology (from Red Bend, OK Labs or VMWare – see our earlier analysis of virtualisation technologies). The virtualisation approach offers a sandboxed, complete version of Android (including the apps ecosystem) which co-habits the same handset as the OEM-specific core UI and applications. Virtualisation technology is mainstream in cloud and enterprise, but applied only in a limited context in mobile to reduce hardware costs or run enterprise micro-environments (the type Barack Obama enjoys in his virtualized BlackBerry cellphone). The real opportunity with virtualisation is to deliver the best of both worlds for handset OEMs who want to leverage the 130,000+ apps ecosystem, but maintain their own apps experience and signature user interface. A virtualized Android co-inhabiting with the native app experience (think S40, Symbian, QNX, BlackBerry OS 6, Web OS, or Bada) would allow OEMs to resist commoditization while having ample degrees of freedom to differentiate. The question is: will Google allow OEMs access to the Android Market and the Android trademark when the platform is run within a virtualized shell? Such an approach would allow Sony Ericsson, Motorola, RIM, HP and the others not to compete against Android and neither to surrender to Android – but to leverage Google’s network effects and harness the Android innovation wave. Comments welcome as always, – Andreas you should follow me on Twitter: @andreascon #nokia #lg #motorola #Android #handsetmanufacturers #samsung

[We ‘re excited to release our fourth annual Mobile Megatrends 2011 – themed around what else? how software is fundamentally changing the telecoms value chain. In this fourth annual research presentation we take a deep dive into the many facets of change in the mobile industry; the DELL-ification of mobile, the battle for experience ecosystems, apps as web 3.0, the use of open + closed strategies to commodise + protect and how telcos can compete in the age of software.] After many months in the making, we ‘ve released our annual Mobile Megatrends 2011. It’s our fourth and biggest Megatrends research we ‘ve published to date featuring 68 juicy slides with detailed analysis on the future of mobile. [slideshare id=6863232&doc=mobilemegatrends2011visionmobile-110209095522-phpapp01] (want more? Contact us to schedule an on-site Megatrends workshop) We take a deep dive into how software economics is fundamentally changing the telecoms value chain setting new rules for innovation. We ‘ve broken down the 2011 Megatrends into 8 core themes: [poll id=”12″] 1. The DELL-ification of mobile: The world of handset OEMs has been irreversibly changed by software and Internet players. All traditional top-5 OEMs (from Nokia to Motorola) that used to enjoy a combined 80% market share in 2008 are now reduced to below 60%, while Internet players are reaping the majority of industry profits and market growth. The OEM market now seems destined to match the shape of the PC manufacturer market, made up of price-led assemblers (Dell, Asus) and performance-led leaders (Apple). For the old guard of top-5 OEMs, the race is on to innovate or die. 2. Software: the new era for telecoms: Besides Android and iOS headline grabbers, more than 30 software platforms have risen and (mostly) fallen in the last decade; Lesson learned: big bucks and software DNA are critical success ingredients for software platforms. The 10 or so remaining software platforms are battling for mass-market smartphone reach below the $100 retail price barrier. At the same time, every major industry player – from telcos to facebook – are striving to grow their own ecosystem, spanning from UI to social networks. However, in the software era of telecoms, not everyone is born equal. Speed of innovation, addressable consumer income and access to a partner ecosystem are all home turf for Internet players, while telecoms incumbents (from Nokia to Vodafone) are taking small, naïve steps. The new rules are: if you can’t innovate in software, you will be replaced sooner than later. 3. The battle for Experience Ecosystems. Convergence between telecoms, PC and Internet has long been talked about. But it’s not about the all-in-one all-powerful smartphone. Convergence is proving to be not about technology, but about experience convergence; how the user experience can ‘roam’ from one screen to the next (phone, PC, TV, mp3 player, etc). Apple is the poster child of experience roaming by consistently integrating the key experience ingredients – from UI and industrial design to an apps ecosystem – across multiple screens. The next battle in mobile is to build experience ecosystems which create user lock-in and cross-sales – and therefore present a sustainable strategy for both handset vendors and telcos to survive commoditisation pressures. 4. Apps are the new web. Everyone wants to compete with their own app store these days, but only a handful of app stores are above the developer radar. Why is creating an app store so hard? Because a successful app store needs 5 unique ‘genes’ from 5 different ‘species’ across the value chain. And thanks to app stores, apps succeed where the web failed; in discovery, personalization and monetization. Apps are in fact a new information paradigm, which the web is adopting. Supported by web benefactors and technology commoditization, web is becoming mainstream application development platform, in what could be could termed the web 3.0. 5. Open + closed: two sides of the same coin. Android took the mobile world by surprise when it launched a free-for-all software platform. But like Qt, MeeGo, WebKit and many other open source projects, ‘open’ is only the tip of the iceberg, since Google et al are using closed governance models to control the direction of the product. Besides open source, ‘openness’ is used as a business strategy to commoditise product complements while closing off other products to protect core assets; in Google’s case commoditizing handset and networks while protecting its own ad network. 6. Developers, the engine behind telecoms innovation. Mobile software developers have come a long way, from back office engineers to front row success stories. However the mobile developer market is still in its infancy. We present a novel way of looking at the developer journey and reveal how most commercial products cater to just a narrow section of that journey, with opportunities abound for catering to the needs and wants of telecom’s innovation engine. 7. Communities: the new currency. Communities are the new frontier for differentiation in the mobile industry. Everyone has tried creating their own communities – from Nokia to Vodafone – but only companies with social DNA have succeeded. Why is that? while you can buy an audience (eyeballs or subscribers), you can’t buy a community (the user interactions). Building a community is a form of art where tools and techniques are being explored, from game mechanics to religion engineering. One thing is certain; that communities are now a core asset in customer attraction and are expanding into communication networks and handsets, with Facebook leading the way. 8. Telcos: stuck in the telecoms age. Telcos are in the midst of an identity crisis and losing control point after control point – location, discovery, billing and authentication – while having no innovation to show in their core voice and messaging business. Yet the real value of telcos is still untapped with micro-billing, customer insights and retailing channels gone largely unexplored. We present 8 novel strategies for telcos and argue why WAC (the telcos’ answer to competing in the software age) is repeating history mistakes and is ultimately misguided. Want to dive deeper into how software is fundamentally changing the mobile value chain? Contact us to schedule an on-site Megatrends workshop. Want to reuse the slides within your presentation? Feel free to remix, but please provide attribution to VisionMobile. Comments welcome! – Andreas follow me on twitter: @andreascon #ios #opensource #userexperience #Android #handsetmanufacturers

[Haptics, sensors, gesture tracking, intelligent texting and pico projectors; a taste of the technology soup headed our way. Guest author Peter Crocker discusses how sensor technologies offer handset differentiation, and the challenges ahead for OEMs.] Innovation is the name of the game for handset manufacturers. Not just for Apple who keeps expanding the envelope of hardware and UI capabilities, but all major OEMs who are looking to differentiate beyond software. Android and Windows Phone are now providing an end-to-end device recipe for device makers, from hardware to a developer ecosystem. As such, handset OEMs (Nokia, Samsung, LG, Motorola and Sony Ericsson) are finding themselves on the same playing field as PC assemblers (Acer, Dell, plus the likes of Huawei, ZTE and Visio). In the post-Android era, not only is the playing field leveling, but it’s also becoming more crowded. More importantly, unless handset OEMs can find ways to differentiate they’ll have to default to competing on price, which is exactly what they want to avoid; the OEM cost structure is not designed to withstand razor-thin margins. [poll id=”11″] One way to differentiate is with phone features – not GHz figures, but the type that would have a major impact to the user experience. Many OEMs would crave to break into the market with innovations such as what the Palm Graffiti handwriting recognition was at its time. Feature innovation comes today in many forms, as manufacturers try to evolve smartphones into smarter phones; haptics, predictive texting, gesture recognition technology, inertia sensors, digital compasses, and the emergence of pico projectors to name a few. A taste of feature innovation – Next Generation Haptics: Haptics, or the process of using motion or vibrations to create tactile feedback on a users hand or finger, has been around for quite a while, with solutions available from Immersion and Synaptics. As an alternative to using touch-sensitive screens, companies like eyeSight and GestureTek are using the built-in phone camera to analyse hand motions and recognize gestures. – Inertia and direction sensors: handset makers are following Apple’s lead with the integration of accelerometers, digital compasses and gyroscopes into the phone. These sensors can be leveraged to support for example improved location through dead reckoning and gesture recognition. Gyroscopes and compasses are also providing precise data on the location of a device in the three dimensional plane opening the door to augmented reality applications. Companies such as Layar and Wikitude are helping developers walk through that door with AR software platforms. – Predictive Text & Gesture Tracking: Predictive texting has seen limited innovation beyond plain-old T9; as such a range of vendors have emerged to provide significant improvements in prediction and correction accuracy, namely Keypoint, EXB, TouchType, Cootek, Keisense (now Nuance) and BlindType (acquired by Google). New forms of predictive texting combined with gesture recognition technology such as as Swype and ShapeWriter (acquired by Nuance) is enabling quicker text input on a touchscreen – for example tracking the movement of a finger on a touch screen, a phone moving in space with inertia sensors, or tracking hand movements with infrared technology hand gestures. – Pico Projectors: While the integration of pico projectors, or mini video projectors, into mainstream phones is still a ways off, the technology from the likes of TI and Micorvision claims to overcome one of the biggest UI challenges of mobile device, small screens. What’s more, combining such features can yield more than the sum of the parts. For example, gesture recognition technology combined with haptics could allow users to effectively navigate applications. Similarly, the combination of pico projectors, gesture recognition and image tracking technology could eventually enable interfaces that will resemble Sci-Fi movies. Integration challenges As easy as it may sound, innovative features are not just about shopping components off the shelf. Cost is an important consideration, especially for technologies that require specialized components that do not enjoy economies of scale. For example, the green laser required in a pico projector represents one third of the cost of the entire system due to the fact that the part has no use beyond a pico projector. Integrating new technologies into handsets is a further challenge for handset designers. Digital compasses are sensitive to electronic interference and need to be carefully positioned within the phone to avoid interacting with neighboring electronics. The design of haptics mechanisms also presents many problems. In a typical haptics system design, touch screens float in their frames and are held in place by flexible materials that allow the screen to vibrate creating haptics effects. These designs can fail letting dust inside the device or the screen can separate from the frame if the device is dropped. OEM’s are still learning how to effectively incorporate such features into their designs. A number of start-ups are working on overcoming these barriers in addition to creating new capabilities. Senseg in Helsinki is eliminating the need for moving parts in haptics systems and has created a system that it claims can pinpoint tactile feedback. InvenSense has brought to market a motions sensing MEMS chip that integrates a gyroscope and accelerometer in one chip, making it easier for OEMs to integrate and reduce cost. Light Blue Optics has developed a pico projector that creates a holographic image and infrared sensors to turn any surface into a virtual touch screen. The company also just raised $13 million to shrink the technology. Innovation of course requires risk-taking. OEMs are finding themselves in a chicken and egg scenario; design cutting edge features first, or wait for the apps to leverage the features? Samsung and HTC seem to be comfortable taking such risks. Samsung was the first to introduce a phone with an integrated pico projector in 2009 and the Galaxy S sports a gyroscope, Swipe technology and an Augmented Reality browser. HTC is also pushing the envelope having developed and launched devices with home grown haptics. Undoubtedly users will be the biggest winners as OEMs battle to wow new customers. A close second will be application developers who will stretch their imagination to build new applications and businesses around emerging features.  While these opportunities are compelling, progress will not happen overnight. Gyroscopes are still only available in high end smartphones and next generation haptics will only appear in niche devices next year. If you’re interested in building an app for a pico projector, you may be waiting a few more years. The question is: is this new roster of sensor technologies going to allow OEMs for once to out innovate Apple? -Peter [Peter Crocker is the founder and principal analyst at Smith’s Point Analytics (www.smithspointanalytics.com), a full service market research company helping innovators in the mobile and wireless market better understand emerging opportunities. Peter has been in the mobile and wireless industry since 2003 and holds an MBA from the College of William and Mary. Peter can be reached at peter@smithspointanalytics.com] #handsetmanufacturers #hardwaretrends #mobiledevices

[Developer Economics 2011 is here! As we launch our new survey on all things developer-related, Marketing Manager Matos Kapetanakis looks back at the 2010 report and examines the major events that have shaped mobile development in the past 6 months] The evolution of Developer Economics Last July we published the definitive mobile developer research report: Developer Economics 2010, dubbed by TechCruch as “one of the most profound…to date”. Our report delved into all aspects of mobile application development, across a sample of 400+ developers segmented into eight major platforms. We’ve just launched the follow-up to this research report: Developer Economics 2011, once again made possible thanks to BlueVia, the global developer platform from Telefonica that helps developers take apps, web services and ideas to market. Our goal is to see how the dynamics of the developer world have changed since early 2010 and to provide more insights into app marketing, monetization and many other factors. Join the survey or help spread the word! This year we ‘ve also secured a prize for each of the first 400 developers; 10 hours free testing time on DeviceAnywhere’s 2000+ handsets. UPDATE: Thanks to overwhelming support, all 400 free testing time prizes have been awarded by DeviceAnywhere. Of course, the $1,500 Amazon voucher is still up for grabs! Major shakeups of the mobile industry for H2 2010 So, what’s changed since our 2010 research? The mobile industry is an ever-evolving landcape. In the past 6 months we have seen the Symbian Foundation close shop, with Nokia hoping that the as-yet untested MeeGo project will carry their smartphone banner. We have also seen the stellar rise of Android, zooming past Apple’s iOS and BlackBerry and becoming the no2 smartphone platform behind Symbian. In the handset OEM arena, we have seen more shakeups in 2010 alone than in the 10 years preceding it. Apple and RIM have overtaken some of the traditional handset OEM powers (Sony Ericsson, Motorola, LG) and claimed a spot in the top 5. According to some estimates, ZTE could join them soon. Moving forward, Developer Economics 2011 is looking at how the key metrics of mobile development have changed in the last year. The migration of developer mindshare One of the major findings of our 2010 report was the migration of developer mindshare away from the ‘old guard’, i.e. Symbian, BlackBerry and Java, towards the new powers of the realm – iOS and Android. According to our research, nearly 60% of the 400+ respondents had developed apps on Android. Apple’s iOS took second place, with more than 50% of respondents having a go at it, with Java ME following third. In our Developer Economics 2011 research, we’ll be asking participants which platforms they’re currently targeting, which ones they plan on targeting and which ones they’re abandoning. So, what’s changed since then? Well, if anything, the gap between Android and iOS and the rest of the platforms has grown even larger. The Apple App Store carries more than 300 thousand apps, while recent estimates place the number of apps in Android Market at around 130 thousand. While Nokia has been spending considerable effort on the Ovi Store and increased its popularity with consumers and developers alike, they still have a long way to go to catch up with the two app-dispensing behemoths. Why do developers head towards iOS and Android? Our Developer Economics 2010 analysis showed that Apple offers a platform that is relatively easy to master and using which a developer can design great UIs. They also have the largest app store and although the certification problem is an issue for some,  porting and fragmentation are not a challenge;. Android, on the other hand, has been gaining momentum across all fields, storming its competitors’ key market – the US. Of course, Android’s many fragmentation issues are often overlooked in the face of many handset OEMs’ dependency on the platform. The disparity between handset sales and available apps Our Developer Economics 2010 research uncovered a disparity between the number of devices sold for each platform and the number of available apps. One would expect the platforms with the highest market penetration to dominate in terms of apps, but that couldn’t be further from the truth. Taking 3Q10 as a reference, it’s easy to see that the two platforms with the lowest penetration, iOS and Android, have the highest number of available apps. On the opposite side of the spectrum, while Java ME and Flash Lite have the greatest market penetration by far, they can scarcely measure up to the newer platforms when it comes to app volumes. In Q4, the contrast is even sharper. Both Android and iOS stores have grown by almost 100 thousand apps apiece. Windows Phone has shown an admirable growth, reaching 4 thousand apps in just two months, although it still has a long way to go before becoming truly a threat to incumbents. Monetization and revenue expectations In Developer Economics 2010, we asked developers how they felt about the revenues they’re receiving from selling their apps. Almost one in four respondents reported poor revenues, while only 5% reported revenues exceeding their expectations. While there has been a boom of app stores, that’s not necessarily a blessing for developers. Most developers face a discoverability issues, having their apps buried under thousands of other apps. Like one developer said in our previous research “It’s like going to a record store with 200,000 CDs. You ‘ll only look at the top-10″. What options are there for developers? One option is to adopt a multiple storefront strategy, as well as to tailor your monetization model to specific app stores. As the CEO of Rovio, creator of the prodigious Angry Birds app, noted: “Free is the way to go with Android. Nobody has been successful selling content on Android”. Developing apps in 2011 Care to see how the apps world has changed in the last year? Stay tuned for Developer Economics 2011, where we delve into app development, monetization, distribution, retailing, porting and fragmentation issues among many others. Mobile developer? Join the survey and have your say. #meego #ios #flashlite #javame #mobiledevelopers #mobiledeveloper #wac #symbian #windowsmobile #Android #windowsphone #Blackberry #flashdevelopers

[RIM’s acquisition of UI firm TAT marked the largest mobile software M&A of 2010. Research Director Andreas Constantinou explains why the acquisition places RIM a leap ahead of the top-10 OEMs in terms of UI capabilities and asks – can RIM execute on the promise?] In December, RIM surprised industry observers by buying TAT (The Astonishing Tribe), a 200-strong UI technology and design firm based out of Malmö, Sweden. At nearly $130 million, RIM’s move marked the largest mobile software M&A transaction of 2010 globally and an impressive 5.5x multiplier over TAT’s 2009 revenues of 170 million SEK. It follows a string of RIM acquisitions since 2009, namely QNX (operating system), Cellmania (content billing and distribution), Dash (two-way navigation), DataViz (document viewer), Torch Mobile (WebKit experts) and Viigo (software house). More importantly, TAT’s acquisition places RIM a leap ahead in the league of top-10 handset manufacturers in terms of own UI capabilities. Here’s why. A leap ahead of the competition TAT was founded in 2002 by 6 games engineers and designers out of university (here’s their story) but has come a very long way. TAT is not just another technology company. It has seen its Kastor 2D/3D graphics framework deployed in over 500 million phones across 5 out of the top-7 OEMs. More important to the RIM story is TAT’s Cascades product, a UI framework that allows OEMs to design their phones not in terms of applications, but in terms of screens, allowing what can be termed ‘rapid variant management’ (more about that later). TAT has also been clearly ahead of the UI technology vendor pack – vendors like Ikivo, Digital Aria, Acrodea, Bluestreak, YouILabs and Scalado – thanks to its design skills. When other vendors have banked on technology marketing, standards implementation or operator deals, TAT has used its design skills to get into the door of both OEMs and operators/carriers (check out this video on the ‘future of screens’). The marriage of design skills and technology licensing allowed TAT to build momentum and cash-flow when OEMs were cutting budgets post-2005. These same skills were what got TAT the deal to design Google’s Android 1.0 UI. TAT’s strength lies in the combination of UI framework technology and the first-class design skills – both of which are now with RIM. So what does RIM get? TAT’s acquisition is far more encompassing than many would have thought – it puts RIM a leap ahead of the pack in the league of top-10 handset manufacturers in six ways: 1. Match the iPhone With the Cascades technology, RIM can now match and even exceed the sophistication of the iPhone UI (see this and this video demos). Long term this means RIM has a chance to contain the exodues of enterprise customers opting for replacing their RIM with iPhones due to the outdated UI and usability on the Blackberry OS 6. Heck, it would be even easy for RIM to offer ‘deep skins’ for BlackBerry handsets where the navigation and core apps closely resemble the iPhone apps. 2. Rapid variant management TAT’s Cascades is a departure from how OEMs build handsets today, by allowing the UI to be designed in terms of screens and not applications. The downside is that Cascades-enabling an existing software stack means that legacy ‘spaghetti’ applications have to be ported one by one on top of TAT’s framework, which takes 9-12 months for the complete UI (it’s 10s of millions of lines of code that have to be ported). This is what has historically limited Cascades to only tactical wins for specific applications on Motorola, Samsung and Asus handsets. The upside is that with Cascades RIM gets rapid variant management; creating 100+ operator variants from a single vanilla UI is just a button (and an XML file) away. Designing in screens rather than apps means that RIM can keep its investment into messaging, graphics and enterprise middleware but radically change the UI look and feel. This allows RIM’s carrier customers more differentiation and exclusivity opportunities, all without delaying the time to market – and therefore securing the carrier multi-million subsidy and marketing carrier budgets. Rapid variant management is today one of the few domains where Android suffers and Nokia’s Symbian still excels, so a very important differentiator for RIM once the integration work is out of the way. 3. Consumer and enterprise personas We covered earlier how RIM needs to escape its dual personality disorder by designing separate consumer and enterprise product lines. However, designing a different set of apps for enterprise and consumers is complex – not to mention managing many more device models and variants in the field.  With TAT, RIM buys the ability to have enterprise AND consumer UI personas ship in the same phone – not only that, but in a way that can be easily switched by the user at the flick of a button. Switching between enterprise and consumer personas is also much cheaper to do at the UI level rather than the bare metal level with what’s called ‘mobile virtualization‘. This implies that with TAT’s technology, RIM can allow users to switch between consumer and enterprise UI personas; a consumer UI when you want to browse on Facebook and check out Flickr and an enterprise UI when you want to check the email attachment for your next meeting. Note that Nokia and HTC Sense have also implemented basic switching between work and personal skins. 4. Enterprise UI customization Besides the runtime technology, TAT develops Motion Lab, a tool that a designer can use to define UI screens and UI flows through a drag-n-drop environment. For RIM, this means that enterprises can customize the phone’s navigation to focus on the few key applications that are used most of the time. It also offers RIM a level of enterprise customization beyond what other OEMs can achieve out of the box. 5. UI personalities With the erosion of the market of downloadable ringtones and wallpapers, the industry has turned to apps as the next premium content market. Yet, there are still new revenue opportunities in downloadable content. In Japan, DoCoMo has led the market of downloadable UIs in the form of “standby screens” (programmable home screens), and which Acrodea has extended to the dialer and menu apps.  This has created a small market of downloadable UIs for both DoCoMo and KDDI. With TAT, RIM can extend that market to the world, and across more embedded applications – creating what can be called the market of downloadable UI personalities. Whether RIM can turn this capability into a new ‘market’ is questionable, but it certainly presents a unique point of differentiation and an opportunity for a new revenue stream for RIM. 6. Connected experiences With the acquisition of Dash, a 2-way car navigation company, RIM has its sights set beyond phones and tablets into the automotive segment. To deliver a consistent UI across these varied form factors a new OS (QNX) is far from adequate. It needs a portable UI technology that allows RIM to reuse its UI assets with minimum maintenance overhead across different form factors, from phones to cars. TAT’s Cascades is exactly this technology and as TAT has shown, it can be extended to connected screens in the living room, in the street, in the car, and in the hands. Filling in the gaps that TAT left With TAT out of the picture, how can other OEMs catch up to the level of UI technology sophistication and design skills? There’s a variety of UI technology vendors out there (see below for an extract from our Mobile Industry Atlas), but none really combine the UI ‘screens’ framework or the design skills of TAT. Many companies claim to have “UI frameworks”, but they all invariably mean a combination of SVG engines, 2D and 3D graphics toolkits or compositing engines – which address UI development as an application, not a screen paradigm. Historically there have only been three companies who have developed screen-based UI frameworks; TAT, Digital Airways and Next Device. Digital Airways was behind the UI of the Vodafone Simply series of five handsets launched between 2005 and 2007 and the Porsche P9522 handset introduced by Sagem in late 2008; the company has since transitioned into UI services in mobile, embedded, automotive and aerospace – however the company ceased trading sometime in 2010. Next Device was acquired by Mentor Graphics (makers of the Nucleus RTOS), who didn’t manage to leverage the technology asset as the licensing model was markedly different to Nucleus’ site-licensing. The gap that TAT left creates an opportunity for other UI middleware vendors (e.g. Ikivo, Acrodea, Digital Aria, Sasken,) to maneuver into this technology space. Another way to deliver ‘screen-based’ phone design and variant management is via development tools; much like how OpenPlug (now Alcatel Lucent) uses the Adobe Flash IDE to create mobile apps. However this is still virgin territory and we ‘re not aware of any sufficiently advanced UI tools vendors in the mobile domain. Can RIM execute? All in all, TAT can deliver Apple-class user experience that offers RIM a strategic advantage compared to OEMs leveraging 3rd party Windows Phone and Android platforms.  This all sounds great on paper of course, but it’s all a question of execution. Can RIM’s corporate monoculture adapt to the creative minds of TAT? Will the TATers get the mandate and budgets to innovate deep into RIM’s product lines? How long will RIM take to integrate the TAT technology on top of the QNX platform and where will the competition be at that point? Ladies and gentlemen, place your bets. – Andreas you should following me on Twitter: @andreascon [Andreas Constantinou is Research Director at VisionMobile, and oversees the research, strategy and industry mapping projects at VisionMobile. Andreas also served on TAT’s advisory board during 2008-9] #acquisition #qnx #rim #userinterface #tat #torchmobile #dash #userexperience #iphone

[Everyone – from carriers to OEMs – is busy building developer communities. But many have failed and more have seen disappointing results. Guest author Dave Neary looks at what lessons history can teach us on community building and the key DO’s and DON’Ts.] Community development in open source software is not just for geeks in sandals nor for niche Linux companies any more. It’s mainstream and it’s here to stay. The recent analysis of companies contributing code to the Linux kernel shows that large companies including Novell, IBM, Intel, Nokia and Texas Instruments are getting serious about engaging in community development. Organisations such as the LiMo Foundation are encouraging their members to work with community projects “upstream”, that is, with the community rather than in isolation,  to avoid missing out on millions of dollars worth of “unleveraged potential” (PDF link). A diverse developer community is critically important to the long term viability of free and open source projects. And yet companies often have difficulty growing communities around their projects, or have trouble influencing the direction of the maintainers of community projects like the Linux kernel or GNOME. Sun Microsystems and AOL are prominent examples of companies which went full speed into community development, but were challenged (to say the least) in cultivating a mutually beneficial relationship with community developers. There are many more examples – but often we never even hear about companies who tentatively engage in community development, and retreat with their tail between their legs, writing off substantial investments in community development. Xara, for example, released part of their flagship software Xara Xtreme for Linux as open source in 2005, before silently dropping all investment in the community project in late 2006. What can go wrong? What are the most common, and the most deadly errors which companies make in their community engagement strategies? And how can you avoid them? Avoiding these does not guarantee success, but failing to avoid them may be sufficient to guarantee failure. Where to begin? The easiest and gravest error that companies make is to sprint headlong into free/open source development with unrealistic expectations. The history of free & open source software development is filled with stories of companies who are disappointed with their first experiences in community development. The technical director who does not understand why community projects do not accept features his team has spent months developing, or the management team that expects substantial contributions from outside the company to arrive overnight when they release software they’ve developed. Chris Grams once described the Tom Sawyer model of community engagement – companies who expect other people to do their job for them. Make sure you don’t fall into that trap. Doing community software development well takes time, even when you get everything right. And there are a lot of things you can get wrong. So where to begin? Before you start community development, you should have thought about what you want to get out of it. Is Open Source a way to grow the brand and broaden distribution of your product, with the goal of generating leads? Do you need to grow an ecosystem of developers building on top of your platform? Do you want to include an existing project into your product to reduce costs, but customise it to fit your needs? Each of these goals, and any of the other reasons people develop software in the open, require specific strategies and tools tailored to the situation to succeed. Indeed, how you measure success will change depending on your goals. The two common situations company find themselves in are collaborating with an existing open source community, or growing a community around a piece of software that you are releasing. Joining a community When joining an existing community, building trust and reputation takes time. The first step to working productively with a community is to understand the structure of that community. Who are its leaders, what are its priorities? If the culture of a project does not align with your business objectives, that may affect your decision to engage with it in the first place. If you find that you can work with the project, and that the general goals are aligned (or at least, not misaligned) with yours, then the hard work can start. For example, Hewlett-Packard backed Linux early, at the expense of promoting its own proprietary Unix, HPUX. Ten years on, HP now ships close to 40% of all Linux servers. In contrast, Sun Microsystems decided to create an independent community around Solaris in 2005, releasing OpenSolaris under an Open Source approved licence which is incompatible with the GPL (the licence of the Linux kernel). The Sun sponsored project failed to create a substantial independent developer community from its launch until the acquisition of Sun by Oracle and subsequent closing of the OpenSolaris project in 2010. Once you make the decision to collaborate, and you have chosen the project you want to work with, the first and most important decision is who will work on the project. This consideration often does not get the attention it requires from top management. The engineers who will be working on the project on your behalf will be representing your company. It will be their job to build trust with project maintainers, navigate the project’s roadmap process to ensure that their work is accepted upstream, and ensure your business objectives are met. The choice of the people who will work with the community is particularly important; as Stormy Peters, former Executive Director of the GNOME Foundation, once wrote, companies are not people. In other words, companies can never be members of a software development community, although their employees may. Companies can be valuable institutional partners for projects, but to quote the Beatles and Karl Fogel, money can’t buy you love (or community support). So now you have some engineers working with the community. What next? Havoc Pennington wrote some excellent advice in 1999 for engineers working with community projects. The one-line summary might be: “when in Rome, do as the Romans do”. Often communities will have documented their norms – many projects, including the Linux kernel and modules in the GNOME project, have “HACKING” files under source control documenting expectations for contributions, and mailing list policies. For most communities, these can be summarised as “go with the flow, don’t rock the boat”. Miguel de Icaza, founder of the GNOME project and vice president of developer platforms at Novell, has written an article explaining the reasoning behind these policies. One temptation which you should avoid at all costs is to leverage the trust which one contributor has gained to channel contributions from others into the project. This will only promote Shy Developer Syndrome in your team. By all means, have your senior community guy mentor others in the team and help them through the process, but avoid making that mentor a gatekeeper, shielding the rest of your team from the community. Attempting this will always backfire when your gatekeeper moves on or when the community finds out that he’s committing the work of others and circumventing community norms. Growing a community Looking at the second scenario; growing a community. If you do decide to release software under a free software OSI approved licence, your first choice will be whether to set the project up as a community project or not, and to what level. Simon Phipps has written about the different types of communities which can grow around a free software project. He describes communities of core codevelopers, non-core developers who work on add-ons, integrators who distribute and configure the software, but don’t necessarily modify it, and finally users of the software. Each of these communities have different needs, and require different approaches. If you want to grow a community around your project, there are a few best practices you should follow: – Control: If you opt for rules ensuring that you decide what code will be added to your product’s core, you will lose many of the benefits of community projects. Some examples of rules which come from a desire to maintain control are a requirement to assign copyright for all contributions to the core product to you, or ensuring that only employees can commit directly to the main branch of your core product. There are many good reasons to maintain ownership of the core, but this decision will severely handicap community contributions. This does not prevent you from developing other types of community, however, such as a community of add-on developers or integrators. – Barriers to entry: Barriers that contributors have to overcome can come in different shapes: using unusual tools, requiring convoluted processes for bug reporting, feature requests  or patch acceptation, or legal forms you may ask people to sign before contributing. – Tools and infrastructure: Ensure that you provide your users with the opportunity to distribute their work and connect with other users – whether this be through a forge for modules, or through the use of Gitorious of Bazaar for source control. Contributing in your project should be seen as a social experience. – Community processes: Create a just environment – no-one likes to be considered a second class citizen. Document processes for gaining access to key resources like bug moderator permissions, commit access to the master branch, or editor access for the project website. – Budget appropriately: Commit the appropriate resources – building a community takes time and effort, and that means investment – primarily of human resources. Having one guy who is the community manager dealing with the community and a team of 10 developers behind the corporate walls isn’t going to cut it. As Josh Berkus of PostgreSQL said in his “How to Kill your community” presentation, if your nascent community feels neglected, it will just go away. Launching a new project is like launching a new product – except that acquiring a new community developer takes much longer, and is much more difficult and costly than acquiring a new user. In the same way that companies track SAC for new product launches, tracking the Developer Acquisition Cost (DAC) for your project is a key metric in evaluating whether you are doing the right things to grow your community. Developers have lots of projects to choose from, and they tend to gravitate towards projects where co-development is the norm. So you have to be thinking about the contributor experience, and the value proposition to external contributors, all the time. A clear and compelling vision, with lots of opportunities to contribute, and low barriers to collaboration, can help reduce the acquisition cost of community contributors, and similarly reduce the cost of acquiring new users and paying customers. Avoid common anti-patterns If Best Practices are behaviours that should be adopted, community anti-patterns are best practices gone wrong. If the reasons behind a “best practice” are misunderstood, you can end up imitating behaviour without getting the desired result, much like the Pacific cargo cults, building airstrips and hoping that planes land. Like seasoning, adding too much can ruin the dish. In general: when you see the following patterns happening, you should work to counter-act them, both in the communities you participate in, and in your corporate citizen behaviour within those projects. Each of these patterns are common and tempting, because they represent best practices applied in inappropriate circumstances. And each of them results in a net reduction of community health. Some common anti-patterns you should avoid are: 1. Command & Control – communities are partnerships. Companies are used to controlling the products they work on. Attempting to transfer this control to a project when you want to grow a developer community will result in a lukewarm response from people who don’t want to be second class citizens. Similarly, engaging with a community project where you will have no control over decisions is challenging. Exchange control for influence. 2. Water cooler – when your team gets too much work done in private, your community will not understand your motives and priorities. By working on mailing lists or other publicly readable and archived forums, you allow people outside your company to get up to speed on how you work. 3. Bikeshed – A “bikeshed” discussion is a very long discussion to make a relatively minor decision. When you feel like the community is dragging you down, know when to move from talking to doing. 4. Black hole – It can be tempting to hire developers who have already gained reputation and skills in projects you build on. Beware when hiring developers from the community – it may be that the community will be worse off. Ensure that working in the community is part of the job description. 5. Cookie licker – Picture a child who has had enough cookies, but wants to save the last one for later. So they take it off the plate and lick it, to ensure no-one else will eat it. The same phenomenon exists for community projects – prominent community members reserve key features on the roadmap for themselves, potentially depriving others of good opportunities to contribute. Beware of over-committing, and leave space for community contributions in project roadmaps. Be clear on what you will and will not do. Happy Community Gardening Community software development can be a powerful accelerator of adoption and development for your products, and can be a hugely rewarding experience. Working with existing community projects can save you time and money, allowing you to get to market faster, with a better product, than is otherwise possible. The old dilemma of “build or buy” has definitively changed, to “build, buy or share”. Whether you’re developing for Android, MeeGo , Linaro or Qt, understanding community development is important. After embracing open development practices, investing resources wisely, and growing your reputation over time, you can cultivate healthy give-and-take relationships, where everyone ends up a winner. The key to success is considering communities as partners in your product development. By avoiding the common pitfalls, and making the appropriate investment of time and effort, you will reap the rewards. Like the gardener tending his plants, with the right raw materials, tools and resources, a thousand flowers will bloom. – Dave [Dave Neary is the docmaster at maemo.org and a long-standing member of the GNOME Foundation. He has worked in the IT industry for more than 10 years, leading software projects and organising open source communities. He’s passionate about technology and free software in particular.] #ibm #intel #nokia #opensource

[As 2010 draws to a close, Marketing Manager Matos Kapetanakis reveals the 10 most influential articles in the VisionMobile blog for 2010, plus best quotes and reader comments. We also showcase our very best blog article for 2010, “Is Android Evil”, discussing Google’s control points and dispersing the illusion of the platform’s much vaunted openness]. During 2010, we have seen our blog reach new heights, having quadrupled our reader base over 2009, with more than 220 thousand unique visits, 4.4 thousand Tweets and 660 likes on Facebook. Moreover, our readers joined the conversation with over 550 comments across the 49 articles published this year. Another interesting factoid is that Twitter became the no 1 referring site for our blog during the past 12 months. So, a big thank you to our readers and all of you who helped spread the word! [poll id=”10″] Also, a big thanks to all 23 of our guest authors, whose contribution to the blog was paramount to its success. Some of our most successful articles this year, including “The Android UI dilemma: Unify or Differentiate”, “The Flash vs. HTML5 endgame” or “Waking the Dragon: The Rise of Android in China” were contributed by guest authors. The guest authors whose articles made it to the top 10 are Ben Hookway, Guilhem Ensuque, Dave Neary, Hong Wu and Thucydides Sigs. Trends Our blog hosted articles across a vast range of topics, from virtualization to app development and from the Cloud phone to Android. However, our readers’ interest was piqued by articles on Android and everything app-related. The Top 10+1: Best articles and quotes Here they are; this year’s 10 best articles, plus the undisputed champion. Apart from a brief description of each article, we’ve included the best quote by the author, but also one comment from the readers. In most cases, we’ve chosen to quote those readers whose viewpoints differed from our own, providing a more neutral perspective. Although our blog had over 20 thousand visits, a sizable chunk of these went to a single article; our clear winner for 2010, “Is Android Evil?” Our article on Android and the debate on its openness, was read by more than 45 thousand people, tweeted almost 950 times and generated an intense debate, with over 55 comments. This article sparked a heated debate, with readers’ reactions ranging from vehement agreement to zealous flaming and even name-calling. Is Android Evil? by Andreas Constantinou What we said “Android is the best example of how a company can use open source to build up interest and community participation, while running a very tight commercial model.” What you said “…Android may not be fully open like Linux. But it is dramatically more open than any other major cell phone OS…” (comment by Jim Philips) So, without further ado, here are our top 10 articles for 2010. No 10 – The many faces of Android fragmentation by Andreas Constantinou (5 thousand views, 105+ tweets) It’s common knowledge that Google and Android users alike have suffered from the platform’s version fragmentation. But did you know about the codebase and profile fragmentation? Andreas breaks down the three major fragmentation dimensions and discusses their impact on the platform’s success. What we said “For Google’s Android team, fragmentation is what keeps them up at night. Fragmentation reduces the addressable market of applications, increases the cost of development and could ultimately break the developer story around Android as we ‘ll see.” What you said “…Unless an OEM puts their hands around Android and creates their own software platform structured and controlled the way Apple controls iOS, the Android world will look exactly like the J2ME world in two years time…” (comment by Mike Grant) No 9 – How to save Nokia (from itself) by Thucydides Sigs (5 thousand views, 85+ tweets) For many years now, Nokia has been sitting comfortably in the no1 position of both the feature and smart phone markets. But times are changing and Nokia’s share is shrinking. Thucydides examines Nokia’s position and raises the issue of business culture. Also, don’t miss our readers’ weeklong debate on Nokia’s future, in the article’s comment section. What we said “Nokia has known where it wanted and needed to go. But the problem has been and still is the execution. The Finnish giant just fails to move and adapt fast enough to the chaotic, rapidly evolving software and internet market.What is holding the execution back? More than anything, it’s the company’s culture” What you said “…The new key to market share is the couple Platform-Ecosystem, not the handset portfolio diversity, the design or the platform quality by itself (WebOs is here to demonstrate). The Nokia mobile application/developer ecosystem is suffering (on one hand is too tricky to develop on Symbian, and the OVI store is not as good and commercially mature as Android and IPhone Markets)…” (comment by Simone Cicero) No 8 – Apps is the new Web: sowing the seeds for Web 3.0 by Andreas Constantinou (6 thousand views, 280 tweets) With the phenomenal success of mobile apps, the world of content is migrating from web 2.0 to apps as the new format for creating, packaging, discovering, paying and interacting with information. Andreas analyses how apps are the evolution of Web 2.0 and where this phenomenon will lead us next. What we said “Once web technologies are consistently adopted in 3-5 years we should see web move from today’s lowest common denominator to powering the next-generation of apps across connected devices, from toys to TVs and from web pages to apps – and the browsing (exploratory, lowest-common-denominator) experience moving to resemble an app (getting things done, immersive) experience.” What you said “..The web is accessible from any internet-connected device, regardless of brand of the device, of opinion the app-store owner has of you and your app, and of the device and (mostly) location of the device. The web would never be what is is today if it was controlled by one company or government (like apps are in the apple app store)…” (comment by Yves) No 7 – Windows Phone 7: Tipping the Scales of the Smartphone Market by Michael Vakulenko (6.5 thousand views, 130 tweets) Although Symbian still has the biggest market share in the smartphone market, it’s being pressed hard by Android and iPhone. Windows Mobile had all but faded into irrelevance, but it’s back with an all-new platform. Is it enough to tip the scales and claim its piece of the pie? What we said “If successful, Windows Phone 7 will catalyze further shifts in the mobile industry bringing PC-style commoditization and increasing distance between operators and their subscribers. Microsoft and low-cost, PC style ‘assemblers’ will be the main winners driving smartphone price declines.” What you said “…This is a chicken-and-egg scenario, since the success of WP7 actually depends on being able to commoditize the market. Microsoft’s strength really lies in coming from behind and comoditizing somebody else’s innovation…” (comment by Jay) No 6 – Waking the Dragon: The Rise of Android in China by Hong Wu (8 thousand views, 155+ tweets) There’s no question that Android has a stellar rise in shipments and developer mindshare. But what about China, the country with the biggest mobile user base? What we said “The Android ecosystem in China is still a sleeping dragon, but is waking up day by day. There will be more ad networks, more app stores, and more payment gateways coming out in the foreseeable future before consolidation moves in.” What you said “…I do believe strongly that if you’re right in terms of the way Android is picking up in China, there would be no reason for them to expand out to other markets at all, even India and other developing countries…” (comment by Krshna) No 5 – [Infographic] The Mobile Developer Journey by Matos Kapetanakis (9 thousand views, 260 tweets) Although not an article, we’ve included our infographic, as it’s become a reader favorite. The “Mobile Developer Journey” infographic is based on our Developer Economics report, tracking the developer experience, from app design and platform selection to market delivery and monetization. What you said “Nice representation of some of the key points for mobile dev>” Tweet by @DavidBod “Awesome infografic on mobile platforms & development” Tweet by @Marcovena “If you want to see what it takes to build a mobile app” Tweet by @MarksPhone “Great new infographic from VisionMobile for mobile app development” Tweet by @AppsArabia No 4 – The MeeGo Progress Report: A+ or D-? by Dave Neary (9.5 thousand views, 85+ tweets) MeeGo has been in the pipeline for quite some time now, but we’ve yet to see any devices. Dave takes a look at the project’s progress and reports on MeeGo’s chances against smartphone OS giants, like iPhone and Android. What we said “…to succeed as a platform, the application developer story and the user experience are vital. There is a lot of work to be done in these areas for MeeGo to gain serious traction outside of the small community of Finnish handset designers. Nokia still has a long way to go” What you said “…MeeGo looks like a fig leaf for failed software strategy of two hardware giants – Nokia and Intel. Moreover, it was conceived to solve yesterday problems. By the time it will reach consumers, the market will advance two phases and pose very different challenges…” (comment by Michael Vakulenko) No 3 – The Flash vs. HTML5 endgame by Guilhem Ensuque (11 thousand views, 170+ tweets) Adobe’s Flash platform is feeling the pressure, as more vendors choose HTML5 over it. But is there really a war going on? Guilhem makes an in-depth analysis into the history of each contender to the throne and looks at the pros and cons of each. What we said “Flash is far from dead today. There are many cases in which Flash will continue to offer a better alternative (worst case a very useful fallback) to “HTML5” technologies due to the fragmentation in new web standards browser support.” What you said “…I think both technologies can coexist. And more than that, they should join, mix. Why not integrate Flash into the HTML5 specification? I’ve always thought that the best way is to add a tag called ‘flash’ or ‘ria’ where there is SWF content. It would be like the canvas tag, but would also be able to resize…” (comment by Manuel Ignacio López Quintero) No 2 – The Android UI dilemma: Unify or Differentiate? by Ben Hookway (12 thousand views, 230+ tweets) Android’s fast becoming a handset manufacturer and operator/carrier favorite, largely due to its custom ROMs and customised UI. But Google is sure to pay a price, as user experience becomes more and more fragmented. What should Google do? What we said “The economic model of handset OEMs necessitates UI differentiation and Google is taking that away. For Google to expect Apple-like control on a fundamentally different business model is just unrealistic” What you said “…I think Android should remain open, let OEM customize whatever they want, as long as there is a Vanilla Home Replacement available for free in the Google Marketplace, all users should easily be able to remove the custom UI on any Gingerbread phone and “reset” it exactly to the default Android UI designs.” (comment by Charbax) No 1 – Developer Economics 2010: The migration of developer mindshare by Andreas Constantinou (19 thousand views, 320+ Tweets) This article is the first of a 4-part series, analyzing the findings of our global research report, Developer Economics 2010 (free copy here), on all aspects of mobile development. The article examines the recent migration of developer mindshare from the ‘old guard’ platforms (Java and Symbian) to the ‘new guard’ (iPhone and Android. What we said “In terms of developer mindshare, our research shows that Symbian and Java ME, which dominated the developer mindshare pool until 2008, have been superceded by the Android and iPhone platforms.” What you said “…I don’t think any more proprietary platforms will be successful. Apple has taken that mantle. I think only open platforms have any chance of competing. MeeGo, for example, is starting to get a good amount of momentum…” (comment by Francis Sepparton) Happy Holiday Season! There you have it, these were the top articles in the VisionMobile blog for 2010, as determined by our readers. I hope you enjoyed this collection of articles. Is there an article you particularly enjoyed and feel should have been included? What would you like to see next? Leave a comment and let us know. You can also follow us on Twitter (@visionmobile) or send me an email directly (matos at visionmobile.com). Happy Holidays to all! Don’t forget to tune in on January 3, for the first article of 2011.

[As mobile operators compete with the over the top players (Skype, Google and Facebook), many question whether operators have a real value to add besides a pipe. This is the playbook of Martin Geddes, a recognized thought leader who has held positions at companies including U.S. mobile operator Sprint and UK incumbent operator BT. As Strategy Director at BT Innovate & Design Martin was influential in shaping the carrier’s view on Cloud Computing. Peggy Anne Salz caught up with Martin to discuss how mobile operators can prepare themselves to compete in this new world.] Philosopher and poet George Santayana tells us that “those who cannot learn from history are doomed to repeat it.” The history of telecommunications shows us that the evolution of communications systems is inextricably linked with the needs of commerce and enterprise. As requirements change, systems evolve. They ultimately disappear altogether when they cease to be useful. The telefax and the telegram, which triggered a revolution in communications, have long been replaced by email and text messages. Now new players and approaches – such as Skype, Facebook and FourSquare – have stepped up to take their place. As telecoms providers prepare to do battle against these over-the-top (OTT) players, Martin argues that the real power lies in neither scale nor scope. In his view the answer is innovation that allows telcos to solve ordinary, everyday interaction problems between businesses and their customers. “The money is in the space between the enterprise and the consumer – a space I call the ‘conversation gap.’” Martin explains. “Take a company that delivers white goods like fridges. You make outbound calls to your consumer customers to schedule deliveries as part of your service. If that customer happens to be roaming abroad in an inappropriate time zone, then you certainly won’t get the result you want.  Same is true if the customer is on the middle of an important call. Or if the customer is on a smartphone, they might just want the company to send them a link to a web page where they can set up an appointment for the delivery on their terms.” Martin’s point: no service provider does a good job of thinking about the needs of the enterprise and ways to help them connect, interact and transact with their customers. “There is a void and we’re starting to see companies like Facebook rise up to take that space – or at least try.” As he sees it: “The fear that the Facebooks of the world are displacing the telecom industry’s core products — is real. But we shouldn’t overestimate it since Facebook are showing they are pretty inept at business model design.” Connect, Interact, Transact After thinking this through carefully – and for nearly a decade — Martin has developed a new business model for telecom service providers determined to defend their turf from OTT players. He calls this approach, aimed squarely at enabling commerce and connecting enterprises with their customers, Connect, Interact, Transact. So where will the Connect, Interact, Transact companies come from? Don’t limit your view to developed countries. To the contrary, Martin is convinced this new breed of company will rise from the emerging markets. A good bet is Africa. “That’s where we’ll see clever cloud communications companies that build products that target what’s known as ‘bottom of the pyramid’ consumers,” Martin says. “Not those living at subsistence level, but those who have a small disposable income. New business models evolve fastest where enterprises, NGOs and governments want to interact with these people – who are tomorrow’s consumers.” Whether from developed or emerging markets, companies determined to compete against the likes of Google and Amazon should integrate with platforms these companies already provide. After all, Google and Amazon have correctly focused their strategies on enabling commerce (Google dominates advertising and Amazon’s sphere of influence covers ecommerce and order fulfilment), and it makes little sense to reinvent the wheel. “If you are a small company, then you have to rethink your business to integrate with these companies and platforms to make communications with customers better and improve commerce. Put simply, you have to think about how to either use their APIs to improve business, or connect with those capabilities in some way to make your business more efficient and effective.” Communications gap Martin also urges companies to open up to business models and focus their efforts on bridging ‘gaps’ – places where there is a disconnect or mismatch between how people and enterprises communicate and how processes function. So who stands to win in this new world where it’s all about closing gaps in communication? Martin in convinced that having the connection to the customer is more important than owning the billing relationship. “It’s whoever holds the final interface to the user that has the power. That’s where we’re seeing a massive battle because the operating system, the browser, the unified communications app — all of these have real estate on your smartphone. So now owning the container in which the final experience is being presented to the customer is where the power is.” Where does the mobile operator fit in? While many industry observers staunchly believe telecoms operators are doomed to be dumb-pipes, Martin vehemently disagrees with this blanket assumption. “It’s a gross mistake to underestimate the telcos. There are a lot of dead companies and business models that tried a direct full-on assault against the telecom industry and lost. Telcos also have an extraordinary range of customer data and relationship assets that, in principle, position them well to launch new ubiquitous communication products.” However, operators also need to understand that competitive advantage does not lie in the offer; it lies in the size and breadth of the audience they can reach. “Telcos need to understand that they need to be able to have relationships with people whether or not they are customers,” Martin explains. “That’s particularly true in cases where telcos are trying to monetise services by offering business process efficiency effectiveness and security to third parties.  You don’t necessarily have to be able to bill the consumer at all; you want to just have millions of consumers who have relationship with you.” Put another way, operators have a central position – one they can cement if they build an over-the-top experience that serves customers that aren’t necessarily their customers. One operator that understands this model is France Telecom with its ‘On’ product. As Martin points out: “I can download On for my Android phone the Android marketplace and the mobile operator is in the middle of this experience, trying to capture that container experience for my address book dialler and other functions on my phone.” Futureshock Clearly, the operator has the capabilities to compete and win against OTT players. But winning may require them to transform more than their business model. In fact, Martin believes that the words ‘mobile operator’ might not have any meaning by 2015.  “It might be that there is a marketing organisation, that has a relationship with the customer and potentially controls various storefronts. But there will also be an infrastructure company. So, you might buy the Apple iDevice in 2015 and it’s a device that comes with content and connectivity bundled in. You don’t need to go and buy a separate service from somebody else; you just pay your service money to Apple. But, of course, Apple’s buying wholesale data from telcos in vast quantities.” So where will Apple – today’s OEM role model – be in 2015? “The Apple business has a nasty flaw in it. It targets the top 15 percent of the market to get 50 percent of the profits. Yet in a communications market, the revenues are in selling to the new consumers in emerging markets.” If Apple’s model isn’t about achieving volume, then can it survive in a market where the winners will likely be a mix of communications giants and companies that make commerce more effective? It’s a tough one to call but Martin believes Apple’s model has some mileage left. “Let’s say that there is enough life in the model to last until 2015, so Apple does have five years left.  Looking further out, the grand growth opportunities around machine to machine, communications as a service and communication-enabled business processes – everything we’ve been speaking about – are not where Apple is.” So is the future for mobile operators bright? “Telcos simply got sidetracked by the media business and mobile advertising, areas outside their main focus, forgetting they’re in the business of communications and making communications simple and effective,” Martin observes. “The first thing telcos have to do is undergo corporate psychotherapy. They have to look at themselves in the mirror and accept that they are a phone company. They sell conveniently packaged communications.  If they do this, then they have a good answer to Facebook and Google.  If they stray from that path, then they deserve the awful fate that will become them.” – Peggy Martin Geddes is a thought leader sharply focused on what is right (and wrong) with business models in the telecommunications industry. His most recent white paper, Connect, Interact, Transact: A paradigm shift in the business model of communication service providers (www.martingeddes.com/papers), warns service providers of developments that could potentially wreck their current model and suggests new offerings that could secure them a new and even more lucrative position in the value chain. Peggy Anne Salz is chief analyst and publisher of MSearchGroove, a top 50 influential technology site providing analysis and commentary on all things mobile. #carriers #mobileoperators #networkoperators