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European Operators contemplate own OS. Why not just fork Android?

France Telecom-Orange CEO Stephane Richard has invited the heads of Vodafone, Telefonica and Deutsche Telekom (T-Mobile) to Paris on 8 October to discuss the development of a common operating system for mobile devices. He told Le Figaro that mobile operating systems were the Trojan horse used by Google and Apple to establish relationships with mobile customers. The four operators have nearly 1 billion customers combined and the capacity to influce industry. The initiative could take several forms including a joint venture or a common apps development unit. He added that the operators aim to retake the reigns of innovation, rather than be followers.

In the interview Richard also stated that carriers have decided not to advertise the iPhone any more.

Phone carriers want to team up against Apple and Google. – HardMac Forum

This attempt at operator cooperation in software has been tried before, but it predictably failed (does anyone remember Savaje?) Symbian itself was an attempt at mobile phone vendor cooperation on systems software. There are various consortiums for “open mobile OS” based on Linux (e.g. LiMO which started as a Japanese effort). Even the Open Software Alliance is a rubber stamp body rather than an attempt at development.

Although one can safely dismiss the potential of this effort on the basis of a lack of competence, the arrogance reminds one of the rigidity in response to the disruption under way. The fact that high-speed data networks allow operator disintermediation cannot be changed by “innovation” on systems software.

But the odd thing is why even bother. The solution to taking control over the user experience and services platform is straight-forward: each operator could fork a version of Android as their own and hire a team to integrate white label services. It’s much more straight-forward than coordinating a joint effort. China Mobile have already done their own non-Google Android.

  • Rhadamanthys

    Oracle – Google lawsuit: this alone is a very good reason not to build something on Android. At this point in time, Dalvik is a legal minefield. Something based on Mono however…

  • Shaun

    Also there's the Skyhook v Google thing.

    It seems Android isn't quite the open platform it's made out to be. I can't imagine the operators wanting to be tied to Google services in order to have whatever fork of Android that might come out of this. They've got no chance of changing Apple though – take it or leave it.

    Develop an OS from scratch? Not going to happen.

    That leaves Symbian and MeeGo, both of which are open source. Symbian is so tied to Nokia that it may as well not be open. MeeGo, managed by the Linux Foundation – now there's your ticket. Add on Qt for development.

    But as you say, that's leaving aside their lack of competence. I imagine at best they'd come up with a common white-label app store and set of services that nobody wants but suspect it'll end up a set of press releases and forgotten after a year.

  • http://acswift.com Andrew Swift

    For me the most noteworty phrase in this article is that the operators are no longer going to advertise the iPhone. One could interpret this as disinterest — we don't care if it's on our network or not.

    This jibes with my own experiences living in France. Orange originally had a monopoly on the iPhone, then following a complaint by Bouygues Télécom, the Conseil de la concurrence declared in December 2008 that the iPhone had to be made available to the other operators, mainly Bouygues and SFR.

    At the Orange complained loudly.

    And, while you would expect that the "winners" (Bouygues and SFR) would profit from the decision by pushing the iPhone, two years later it's become obvious that they don't care at all. They have very few calling plans for the iPhone, do no promotion whatsoever.

    Another, smaller operator, Virgin Mobile (piggybacked on the Orange network) doesn't even mention the iPhone in their calling plans, although the plans are iPhone compatible.

    While I was reading this article, I started laughing (grimly) at the following scenario — what if the various mobile operators simultaneously refused to allow the iPhone to go forward? Obviously it would have to be a death by slow strangulation, not an outright murder…

    All this leads up to: Apple has had power over the cell carriers up to this point because they had a product that the cell operators really wanted to carry. They were willing to do whatever it took to offer the iPhone.

    If the carriers (as described in this post) lose interest in carrying the iPhone, Apple loses all power to offer their personalized vision of what a cell phone can be.

    So here's my question: to what extent are cell providers losing interest in the iPhone, and how will this impact Apple's ability to decide what the iPhone will look like?

    Thanks for another great post.

    • Adam

      "For me the most noteworty phrase in this article is that the operators are no longer going to advertise the iPhone."

      At first glance I can't find anything about this in the interview.

      http://www.lefigaro.fr/societes/2010/09/15/04015-

      • Iphoned

        Funny, I put the interview French article through the Google translate, and the first introductory statement by the interviewer said this:

        "LE FIGARO .- Suicide resume at France Telecom. What will you do? "

        Does Google know already something about this operator-vs-iPhone strategy that we don't?

    • http://www.asymco.com asymco

      It seems to be incorrect.
      Here's Vodafone in Germany (T-Mobile has had exclusive there since launch)
      http://www.mobypicture.com/user/udovetter/view/75

    • http://acswift.com Andrew Swift

      I have re-read the article in detail, and there is no mention of a refusal to advertise the iPhone. I should have done that before posting in the first place.

      • Stu

        Also, the suspicion of why the won't advertise could be just the opposite.

        Apple advertises it, and it's in very high demand so no reason to spend the extra money advertising a product that already has marketing & demand.

      • famousringo

        As I understand it, Apple has a requirement that any carrier advertising for the iPhone not mention any other competing handsets in the same ad. So in my part of the world, you get a carrier that has one poster with a giant iphone on it, and another poster with every other device plastered onto it.

        It helps give the iPhone more prominence when carriers do decide to advertise it, but it's easy to see why many would choose to advertise all their other gadgets instead of just one, especially if the iPhone isn't an exclusive advantage.

  • Travis

    You would have to have 100% unanimity to truly kill it off, and I can't see that ever happening. If 99 out of 100 carriers stop pushing it, won't that 100th have a huge opportunity to win new customers who have become attached and loyal to iOS, by being the maverick?

    You don't need more than one carrier to be a success. Just look at the iPhone in the US market. Still AT&T exclusive and still growing rapidly. For all the bashing AT&T (rightfully) gets, they took a big gamble going all-in with Apple and are now reaping huge rewards from that decision.

  • http://vlujunbaga.blogspot.com/ Ariel

    "…the arrogance reminds one of the rigidity in response to the disruption under way."

    Yup. It's amazing how industry incumbents can be so thick headed.

    It's like watching a youtube video of some stupid kid doing something really stupid and getting hurt. And then watching someone go out and actually do the same thing. But you'll always find a dozen more people on youtube getting hurt the same exact stupid way. It's like all these businesses facing disruption want to get hurt.

  • Ted Crambers

    What is behind the striking out of the comment about not advertising iPhone? Has there been a problem with the source?

    It has been interesting to watch in Canada how iPhone advertising by Rogers changed once they were no longer exclusive. Most web pictures and flyers showing an array of smartphones would always have the iPhone missing. During this launch of iPhone 4, iPhone pages do exist, but they are usually 2nd fiddle behind the 'array of smartphone ads'. On Rogers.ca, the iPHone is 4th in the list of 5 advergraphics, and on Bell it is 4th of 4. It does seems even the carriers here would rather you buy another brand if they could influence you that way.

    • http://www.asymco.com asymco

      A previous comment with the original article linked. See also link to Vodafone ad for iPhone in Germany.

    • http://www.asymco.com asymco

      There is another reason iPhone ads may or may not appear from operators. The ads are often paid for by the device vendor, or even the OS vendor. Microsoft used to co-spend hundreds of millions on advertising for its licensee's models. Much of the benefit Apple got from exclusivity was in the promotion and placement of the iPhone, not in the price.

      • Tom

        So, as Android phones sweep thru Europe, and the telcos begin to manipulate it the way we see in the us, the iPhone won't get much advertising on their web sites. What's our favorite fruit company to do?

    • yowsers

      I wouldn’t worry too much about the state of carrier ads. It’s not like they make or break it for Apple like they might for other handsets. 2 points why:

      1. Compare a carrier’s typical ad with the visually and aurally stimulating, emotion-laden commercials Apple puts out. There’s quite a gap in quality.

      2. What’s the best advertisement for the iPhone? Seeing it on the street, checking it out from a friend, going into an Apple Store and playing with it. Carriers can’t c*ckblock that.

      As to point #1 — just an anecdote — back in 2006 I was with a company that was being bought out by Nokia as they were attempting to address some shortcomings in their services lineup. Their acquisition of us was related to music services they wanted to build. One day during this period one of our VPs pointed out those colorful ads that cover the whole of a bus (not just a panel on the side). We’d watch Apple iPod full-bus ads go by, followed by Nokia full-bus ads for their phones. He was shocked how one was vibrant and compelling, the other was…there. His gut level implication was that we’d be better off taking the Nokia exit package and find another industry. He made quite the intuitive leap based on that.

  • Xavier

    "But the odd thing is why even bother."

    That's your cue that these Euro CEOs don't understand what's going on.

    Also, anyone remember Jacques Chirac and Gerhard Schröder putting €100 million in taxpayer money behind Quaero back in 2005, to fight off Google search with a State-sponsored search alternative?

    If it weren't because of the tragic waste of money, these old Euro farts/CEOs/Prime Ministers would be funny.

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  • Tom

    Here's one very good reason not mentioned so far why carriers might not just fork Android:
    The following quote comes from the article in wikipedia about the ophone, a fork of Google's Android:
    Another report [13] also discloses that the large manufacturers had dumped the plan of developing devices using the OPhone SDK for its low performance, bad compatibility, and incapable supports.

    • http://www.asymco.com asymco

      I read the same thing. On one hand this shows that operators are not the best at designing and building device software. On the other hand it could be that a capable third party (a company like Opera for example) could step in and offer white label Android variants for operators.

  • ScottJ

    Here even Horace misses the point.

    What Apple has done is redefine "the product." Sure, the iPhone-format color touchscreen mini-tablet smartphone hardware+OS was a marvel three years ago, but it didn't really explode until the App Store was introduced and opened to developers a year later, both professional and dilettante (like me). I'd argue that that is when the iDevices crossed the line from nicely-feature-setted smartphones to ultra-personal computers. Voila: a new personal computing paradigm, now extended to tablets, with enforced consistency between applications, an unparalleled degree of integration, elimination of all layers of abstraction between the user and the software (one now physically touches the software!), and an entirely new combination of instant gratification and decent value with a curated sense of security when purchasing software, movies, videos, songs, books…

    People liked that.

    And forking an already-fragmented Android isn't going to duplicate it, not the whole mix. Not "the product."

    • Tom

      The issue here is the rigid push back by the telcos against innovation. Never mind they are selling more devices than ever before. It's not THEIR devices. Somebody else designed it and they just sell it.
      Android, being open to restructuring by those same rigid telcos, is the more likely candidate for their "innovations" that will solve their problems.
      It won't work well.

      • ScottJ

        We don't disagree.

        The innovation is that the product people want to buy has changed. The carriers are resisting that, as you note. They can fuss with OSes as much as they want, but unless they deliver the whole package consumers want, it isn't going to happen for them. Even as Europe attempts to impede iPhone sales through bureaucratic micromanagement, such as by mandating mini-USB connectors (as is coming), and other such typische rot.

      • Tom

        @Scott
        The telcos are just as bad as the music labels: Apple's iTunes let the labels sell more tracks than ever before, but they demand a price hike; the eu telcos sell more devices than ever before, but they must have the control over it.

    • http://www.asymco.com Horace Dediu

      I don't disagree with your take on what Apple has done. Whatever operators come up with will not be comparable to what Apple offers, but the point is that operators are more likely to do a fragmented Android than to start with a consortium.

  • Kevin

    I think Apple also disallows carriers from advertising the iPhone on TV (but not print except restricted per famousringo's comment). I know it's true in US with AT&T; can anyone comment on rest of world?

    Thru this, Apple controls the branding and product message; allowing primarily Apple to get closer to the customer.

    Simply put: Apple is confident that it get design iPhones that enough people really value and want, without marketing help or manipulation from anyone else. Apple is sure that only collusion or monopolistic manipulation of a market can stop it.

  • Iphoned

    I find this quote from the interview even more interesting.

    >>We will release the tablet Galaxy Samsung siglée Orange, Huawei and a tablet Android for less than 200 euros before the end of the year.

    It is shaping up not only as Adroid vs iPAD battle but carrier-subbed-sold tablets vs. full-priced tablets. I can't help but think that even half-brain-dead Android tablets (first ones likely to be comatose) will outsell iPADs simply because more factors will be offered through more channels…

    • Jim

      The reason they are carrier subsidized is because the full price is not competitive with the iPad. While some people may be stupid to think that he $300 discount is a deal (as opposed to the lock-in for another monthly fee that will cost them 4 times that), this will be a hard sell. People are used to paying for unlocked devices in europe but the Samsung Tab is simply not competitive. Having more dross available at more outlets is not a substitute for solid sales. People get disenchanted. Unlike Apple having to prove itself in the phone market against multiple, long term incumbents, it has owned the tablet space for 9 months already. Everything will be compared to the standard set by the iPad.

  • Iphoned

    Another interesting quote from the “suicide resume” Telecom CEO

    “We advocate for the world as open as possible”

    I guess they mean “open as long as we have the lock on the customers”?

    • Adam

      Yes, that's doublespeak for “open to telcos”. The iPhone is a big hit in Europe but Orange is annoyed with Apple because, when people buy an iPhone app, or a song from iTunes, etc, Apple will split the money with the publishers. The carrier is left out of the loop (as it should be).

      They need to find a way to avoid being relegated to 'dumb-pipe' status. That's what he means when he says: “We don't want to be followers, we want to take up the reins of innovation.”

      Orange would like to earn money on add-on services and Richard will invite his colleagues to devise a way to get back in the loop. Like, some sort of joint venture, errr, to develop, huh, an OS, or at least their own app store, if Orange, Vodafone, Telefonica and Deutsche Telekom can manage to agree and execute on a shared vision (of hell).

  • http://www.opineapple.com Mark Newton

    Will at least one of these carriers come away from Paris alive to the fact that investing in their network might provide more advantage than diverting resources toward fruitless attempts to develop a "me too" OS with their competitors?

    Probably not.

  • David Chu

    No worries. They won't get anything relevant done.

    Sure, they may come up with something, but as soon as things are going well the will start bickering with each other again.

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