Smartphone parochialism: How operator policies prevent or promote platform adoption

When comparing smartphone platforms it’s tempting to consider the global market as unified and commonly addressable. However, when you look at individual countries some strange patterns of behavior emerge:

  • Indonesia, the fourth most populous country in the world (230 million people) loves Nokia’s Communicator. It’s the ultimate mobile status symbol.
  • Japan had one of the largest installed bases of Symbian phones. The version running in Japan is not compatible with versions elsewhere. Famous for its Galapagos mobile culture, the iPhone is changing what the Japanese consider the basis of phone performance.
  • The iPhone just became Korea’s favorite smartphone even though hegemonic Samsung and LG are doing a roaring trade selling Android phones elsewhere.
  • The US has four incompatible 3G network technologies in widespread use. No widely distributed smartphone phone works with any two. Blackberry ruled supreme until AT&T started promoting the iPhone and Verizon started promoting Android.
  • Latin America loves BlackBerry. BBM is wildly popular as an SMS alternative.
  • Saudi Arabia loves BlackBerry. When face-to-face conversations are taboo, the BlackBerry is a social lubricant.
  • Australia loves the iPhone. Android is almost non-existent.
  • Italy has more smartphones per capita than the US. The majority are made by Nokia.
  • China uses two incompatible 3G technologies. The most popular (TDSCDMA) is not available anywhere else. WiFi was illegal in phones until this year.
  • Germany has a disproportionally large installed base of Windows Mobile
  • There are no Blackberries in Finland.

Although some of these idiosyncrasies may be cultural (like the Indonesian penchant for large devices) most of them are due to operator decisions. In some cases operators choose incompatible network technologies to protect from competition. In others they promote local vendors or price certain products out of reach.

Sometimes big bangs take place and demand explodes for “banned” technologies or vendors. However, it’s just as easy to see how the pendulum can swing against free market choice.

Ultimately users and device vendors are at the mercy of operator decisions. In the long term operator control over platforms might diminish but it will take many years.

  • android is now 21% of AUS smart phone sales. they tripled market share in 3 months.

    • Iosweekly

      Have you seen the sort of devices included in the Australian market are classified as android smart phones? I have, and some of them I would not categorize as anything else other than a feature phone.

      even at 21%, that's of new sales, installed iphone user base is massive, and every person who upgrades from a iPhone 3G or 3GS to a iPhone 4 as far as I can tell sells/gives the old phone to another user (because millions are happy for a 2nd hand iPhone, but hardly anyone is gagging for a 2nd hand droid).

      I think 2nd hand sales of iPhones must be huge – it could be a big competitor to new iPhone sales for apple. I can see apple restricting it's future OS updates to the previous 2 models only, just to try and prevent the old phones from remaining so attractive (and with the build quality they last longer than a normal phone).

      • really? android feature phone? I didn't expect that "onslaught" for another year or so. can you provide a link to one of these phones?

      • Iosweekly

        Google "Vodafone 845".

        Sold globally. Under $100 USD. UNSUBSIDISED.

        Pretends to be a smartphone, used one for 2 hours. It's not a smartphone.

        But it is a dynamite feature phone.

  • Joe_Winfield_IL


    How much of the carrier decision making do you attribute to their desire to level the playing field among OEMs/platforms, as opposed to radio compatibility or simply price considerations? I can't seem to reconcile how differently the carriers are evolving around the world. Even with the new 4G networks (or at least what the carriers are referring to as 4G), it feels like proprietary signals will rule the day.

    • asymco

      It's a complex, intractable mix of motivations. There will always be an internal struggle between greed and fear.

  • "Ultimately users and device vendors are at the mercy of operator decisions" …. this is why the prospects for a strong Nokia comeback are good.
    The really big growth in smartphones will come from Asia, Eastern Europe and Latin America. Places where Apple's iPhone ecosystem is solidly established.
    MS and RIMM can also do well.

  • From your Big Bang:

    “In the next two or three years, Samsung’s position in smartphones will be quite similar to or better than Apple,” said Stan Jung, a Seoul-based analyst at Woori Investment & Securities.

    Analysts seem to have such widely divergent opinions about the ultimate merits of Apple's market strategy compared to the traditional manufacturers. This one is interesting, as it is local, and seems very confident in Samsung's approach — the cons of which have already been discussed in depth on this blog.

    • I can't see how you could be bearish on Samsung wireless. they make the processor, the memory, the camera, the screen. and they do it well. they also think real big and do things in a big big way. see galaxy s. then they also leverage economies of scale by offering bada. as long as goog takes care of the software I see samsung being formidable fore years.

      • asymco

        I am extremely bearish on Samsung. ZTE and Huawei have a no obstacles to taking all of Samsung's business. As long as Google takes care of the software, the lowest cost assembler wins.

      • I see there two hurting rimm and nokia the most…but we will find out soon enough.

      • asymco

        I believe that in the smartphone market software is an important indicator of sustainable margins. Samsung has not invested sufficiently in software. LG is in the same predicament.

        Nokia and RIMM have significant software assets and have historically been able to gain above-average margins. To the extent that they have lost that advantage it's been due to new market disruption from Apple and low end disruption from Google. That does not imply however that value will accrue to those who license software (as Samsung and Dell did). Value accrues to those who establish platform standards (as Google, Apple and Microsoft did).

      • I think the new data showing Android vanquishing rimm at verizon in 2010 is testimony that it doesn't matter what rimm did in the past with their "software assets". rimm don't have the software that people want now. Same thing for nokia. they missed the shift and are stuck with an antiquated software stack. I don't think either one has software assets that remotely competitive with Apple Android and soon WP7.

      • I thing Samsung will be #1 by volume and revenue before end 2011. Long term the dumbphone market goes to China.

      • asymco

        Long term there will be no dumbphone market. Companies will stop making them in two years.

      • Now that has to be the seed of a great post!

      • Sorry, *article*

      • asymco

        The basis of this is that an Android phone bill of materials might drop low enough to make it comparable to a dumb phone. Major vendors will abandon the low end to unbranded entrants and sell only "smartphones". There is so little profit to be made in the low end…

      • Iosweekly

        Vodafone 845.

        Sold globally. Under $100USD. UNSUBSIDISED.

  • dcb

    Despite the "dumb pipe/plumbing" bias working Telecom, at the end of the day OS product differentiation for 85% of the population is minimal and where it exists, its ephemeral. The more cloud-based dependent the user experience becomes, any latency in data transmission more than offsets tertiary apps that are proprietary to a platform, despite what John Gruber thinks about fragmentation and timing.
    Compare an iPhone 3gs with an HTC droid incredible. They're close enough, and the HTC running on VZ far supersedes the 2009 Apple experience. While iOS4 is a large improvement over Android 2.2, 2.3 is "good enough" whereas an iOS4 running on bad pipes is a poor user experience.

    Pipes matter, so the carriers will "carry on", and hedge platform providers against each other, with incremental pricing.

    • kizedek

      Yeah, but is it really bad pipes, or, is it the fact that much more bandwidth is typically consumed by iOS devices (both browsing and in-app experiences)? A case can be made that the poor user experience is down to a high concentration of iOS devices in particular areas.

      As iPhone moves to Verizon, it is considered likely that the Verizon pipes will experience pressure they have not had to deal with so far. And as more and more people find newer, non-Apple mobile devices worth using to browse more (largely due to Apple's Webkit), then the playing field is only going to level out. And if people have stuck with Verizon due to a superior pipe argument, then they will choose iPhone come the New Year precisely because of the OS product differentiation.

      Because, at that point, the inherently superior user-experience of the iOS device is going to shine brighter than ever once again. Also, Apple will find ways to innovate further on exactly this issue — they never stand still. For example, their new billion dollar server farm is likely to be used for something interesting. If Apple's new server farm can in any way move data/notifications/syncing faster to and from the point where it moves to a cell tower for the last part of the journey to your phone, then at least some of the latency issue may be alleviated. This can only improve its edge against other platform providers even when offered on the same network, however good or bad the pipes of that network prove to be all around.

      As far as carriers carrying on hedging platform providers against each other, it will be interesting to see what data plans Verizon offers for the iPhone — will it be the same as for other phones they sell? Did Apple get them to offer special plans for the privilege of carrying the iPhone? At the moment, Apple seems to be the only manufacturer able to get carriers to budge at all.

      And, as far as your contention about cloud-dependent services vs the "tertiary apps that are proprietary to the platform" is concerned — in most cases they are one and the same: Blackberry uses the BES servers, Google uses its servers, and Apple will use its servers for MobileMe, etc. All platforms use Google Maps, Google Docs, etc.; I think I'd rather use the iOS app for these third-party services than any other platform's app. And with Steve Jobs saying there are some MobileMe improvements around the corner, who knows how much the user experiences of BOTH the cloud-dependent services AND the "proprietary, tertiary apps" (iCal, Mail, iBooks, Contacts, etc.) will improve on iOS.

      Anyway, I am not sure on what you are basing this contention that data transmission trumps OS user experience and makes OS user experience differentiation "minimal or ephemeral to 85% of the population". People may choose Android over iOS because they "believe Android is more 'open'" and allows them to differentiate their proprietary user experience even further — by changing skins or keyboards or installing whatever they want, or some such. I don't think anyone chooses a phone for the way it delivers cloud dependent services, nor do they know how any of the phones differ in this area. Personally, no matter what the pipes are like on the service I choose to use or must use — I am going to choose to use iCal and Mail on iOS, rather than choose a different platform just because the lower latency gets me my data a couple of milliseconds faster.

    • WaltFrench

      @dcb sez, “… OS product differentiation for 85% of the population is minimal and where it exists, its ephemeral.”
      And yet, even within the US, one sees dramatically different mixes of OS/network mixes. Most Android sales go to Verizon; I interpret that as a combo of
      – Verizon being a better competitor than Sprint or T-Mo, and realizing that in 5 years, supersmartphones would rule the roost, so they got behind Android BigTime: Grand ReOpening 75% off pricing on data, tethering, etc; marketing so hard that most people now think of Droid as being the OS. Likewise, people think carrier-controlled features such as tethering are actually Android features. This is Horace's point, exactly.
      – BlackBerrys were designed to be very low-cost smartphones, with minimal RAM, CPU, etc (causing by necessity a very low data budget) and also with push networking that ameliorates quality issues within the net; these work about as well on any network and seem to have similar penetration. This does not conflict with, but rather is orthogonal to Horace's point.

      I think Horace's point would agree with your "ephemeral" claim; the carriers have a strong interest in having multiple, not-to-big-for-their-britches manufacturers on their nets so the carriers set the rules about features, who owns the customer, branding, etc.; it's also good business to have something NEW and EXCITING rather than the free and ho-hum upgrade of your 2.1 Android to 2.2. Still, even under a "random walk," the shares for any OEM ought to be significantly the same from year to year and contracts, habituation etc promote this until there is a game changer.

      Apple threatens this MO, which is why Verizon showed them the door in 2006, but the carriers will mostly find a way to keep themselves in the spotlight and in control (more or less) of the customer experience, and not get turned into commodity dumb pipes.

      • dcb

        Operators will play phones off each other, and at the end of the day, there will always be a market for different form factors, something Apple neglects (wisely). Just as people don't buy the same clothes or listen to the same music, Google (and potentially RIM/HP-PALM/Meego/WP7) will own a large % of the future market. Not Apple.

        To @WaltFrench, well said. You're going to get a pure OS horse race in tablets, because where voice interruption can ruin a call, a blip in data transmission won't negate the user experience. I'm not sure whether iPad will 'ipodize' the tablet market I'm betting that the low cost churn of scaling android will create a 75-100mm tablet market next year with Apple seeing 25mm units. White brands will create a dizzying amount of devices in all form factors… So measuring Apple's marketshare is a pointless exercise… Apples to Oranges…

        1) "Yeah, but is it really bad pipes, or, is it the fact that much more bandwidth is typically consumed by iOS devices (both browsing and in-app experiences)?"

        That's a moot point, as most iPhone users have unlimited data plans in the US vs metered plans on Android. I'm not sure about the rest of the world. Even then, its not clear in the US:
        I live in a city. My iP4 regularly can't get emails or pull a signal. Yes, its severely compromising.

        " I think I'd rather use the iOS app for these third-party services than any other platform's app."

        Sure, but you're not the target market, judging by your post. Google has and will continue to optimize their prime user experience (any @gmail persona) so that it is far superior on Android than on any other platform. For example, witness the new google map optimization that uses vector-based mapping to create a differentiated product vs. an iOS4 map. I've been using google maps for 3 years on iOS and it is just as bad today on the iPhone as it was 2 years ago. Ask yourself—Apple's fault, or Google's? Obviously Google purposely does this. All google programs work much better on google phones, by design.

        Both companies do different things very well, and just as Google will get better in its soft spots (Android Market is terrible vs iTunes), Apple will improve theirs (Mobile me is horrendous, as is the search in the mail client).

        I use iOS4, I like it. But is Apple gapping Google? No. Google won't close—-but they are closer, inching in. Yes, that's Apple's fault, but they have corrected. Too late. At the end of business day, Google has one goal: gain a larger % of the user's daily eyeball so that they can monetize via Ad impressions. So now they have a mobile skeleton, and in the next 2 years they'll capture the fresh eyeballs of 1B new people coming online for the first time ever. That's it. Nothing more, nothing less.

      • WaltFrench

        “I've been using google maps for 3 years on iOS and it is just as bad today … Apple's fault, or Google's?”

        Apple's. Unbeknownst to many, the iOS Maps app was *originated by* Apple, using Google maps API's. Are the new, vector-based capabilities available to Apple? Maybe not, in which case, “Google's.”

        Anyway, this is a tumultuous period. I wish I understood all your comments. (Boy, that martini went to the brain quickly.)

      • dcb

        Thanks for the map clarification, Walt. I did not know that.
        I've ordered a Nexus S to temp for a month for research purposes, but will return to my iP4. My best guess is, Nexus S prob has 80% of iP4 functionality *net*.

        I do believe tethering is a killer (physical) app, and I think we can all agree that we are eagerly awaiting it as a standard option.

      • Jmd

        ” Google has and will continue to optimize their prime user experience (any @gmail persona) so that it is far superior on Android than on any other platform.”

        Nope. They’re getting bitten by fragmentation as well. They just updated googledocs to enable editing in a smartphone browser, problem is it doesn’t support android 2.1, only 2.2. Funny thing is that it works perfectly in iOS 3 and 4. So a 2 year iPhone works better than a 6 month old android phone. I wonder how many android phones will support vector maps?

        Like asymco says, google’s customers are the device sellers, who just love fragmentation because they can sell a new phone rather than upgrade the OS. The carriers can also limit features and force install their own apps and stores ( hello VCast). Apple customers are the iPhone users so they concentrate more on the user experience. In fact google can make a really horrible user experience cos all they are interested in is you viewing a ad, and Apple made that happen with webkit. Or promise the next version will be much better, just buy a new phone with the new version. Another reason for the carriers to limit OS upgrades.

        Then they can abandon the whole lot when all their IP infringement and Java ME ripping off finally comes home to roost. Seen google valiantly defending Android and their licensees in court recently? 😉

  • dcb

    That being said, as Horace pointed out in previous pieces, ecosystem management will creep in and provide long-lasting loyalists as they get "designed in" to a particular service tree. In the same way I now depend on MSFT for excel access from years of spreadsheets, future customers will have spent enough coin in the aapl/goog value chain to have built a nice moat against platform abandonment.

    And the piping will be 'good enough', though not a differentiator as it currently stands.

  • Wilhelm Reuch

    As a developer I cannot wait forever for a dominant platform. Going with iOS was simply a no-brainer as long as Apple support paid-apps in a market that is "large enough".

  • Sanmoy

    I was in Indonesia for four years and only moved out this June. While it is true that in 2005, I used to only see communiators in board rooms, things have changed completely in the last 1-2 years. Now it is Blackberry all the way – from the secretary to the CEO.

    • asymco

      Thanks for the input. It makes for a good anecdote however as even in 2006 or so the Communicator was very rare in most places while it was quite popular in Indonesia.

  • There are some Blackberries in Finland. Although there is no operator providing BB in Finland, there are plenty of corporations (especially from US and in banking/consulting) who provide their employees with BB devices as they are the corporate email standard.

    Blackberry compression is so efficient It is possible for these corporations to arrange a deal with an overseas operator (e.g. T-Mobile in Germany) for all employees in Europe to use BB with a flat per seat data roaming charge, just as long as all they use only email, no voice. I am currently based in Finland and in the last 4 yrs have had 2 jobs, both with the employer supplying a BB. Of course I have a phone with a Finnish SIM too…

  • Andrew

    "Japan had one of the largest installed bases of Symbian phones. The version running in Japan is not compatible with versions elsewhere. Famous for its Galapagos mobile culture, the iPhone is changing what the Japanese consider the basis of phone performance."

    I would re-phrase the last part to "the iPhone is delivering what the Japanese consumers consider the basis of phone performance." Symbian did not deliver that. Android is struggling to deliver that, in part because Linux is not yet as multi-language capable as Unix-based OS, especially compared to iOS on mobile devices.

    By "multi-language capable" I don't refer to differences in European languages, I refer to different writing systems known collectively as "CJK" or Chinese-Japanese-Korean which use some shared and some disparate pictograms and phonograms, requiring two-byte character sets or Unicode. The Mac OS X on desktops, and iOS on mobile devices, are significantly superior to the alternatives in language and writing systems.

    As a result, almost half of websites viewed from mobile devices in Japan are on iPhones. Almost half of the people you see in public places in Japan are using iPhones. This is all over Softbank, which has sucked all these users over from DoCoMo.

    The only way DoCoMo will get these users back is when SIM compatibility is mandated, something that will be coming soon. Then it has to offer a better service at lower prices. Ringo! Apple and consumers win!

  • The point you make about Symbian in Japan is misleading. Symbian isn't a smartphone platform in Japan. It's only used in feature phones.

    • asymco

      It is a smartphone platform insofar as everyone who counts smartphones assumes it is, and that includes Symbian org.

      It's not a smartphone platform if we look at how it's used, but then we'd have to throw out most BlackBerries as well.

      But I don't see your point. I don't even refer to Symbian in Japan as a smartphone platform. I'm just pointing out that iPhone changed what was the default concept of a powerful phone. The leading products were all feature phones and they were all considered to be "better" than the iPhone when it arrived.

      • I think you should make that clear in the article that Symbian in Japan is only used in feature phones otherwise to the ill informed it appears that Symbian as it is known as a smartphone OS in the west is what is used in Japan. It's like saying Android is used in the west with it's Linux core and Linux is used in China too but it's incompatible with Android. Your article is about smartphone platforms and that one misleading point is at odds with the piece.

        Back a year or so ago there was a media scrum over the iPhone gaining 72% of the smartphone market in Japan. Rarely did the journalists write that that was only because there was no smartphones in Japan outside a few weird Windows phones. Apple captured 72% of about 1% of the entire market. It's very strange to think of Japan just not doing smartphones.

        There's definitely more iPhone growth now but it's not been the massive success that some have made it out to be. I think it's very early days yet for Japan's emerging smartphone market.

      • asymco

        A metric for skeptics who predicted the iPhone would fail in Japan: Apple’s handset is now the fifth-best-selling phone in the country, with 12.2 percent of the market, according to IDC.

        This is the first time Apple’s cracked 10 percent in the Japanese market since the iPhone debuted there, so this is something of a milestone. More so when you consider that the company is now in spitting distance of incumbent Kyocera (12.7 percent) and not too far away from market leaders Sharp and Panasonic, which hold about 18.8 percent and 16.6 percent of the market, respectively.

    • Andrew

      Sorry, the article as it related to Japan referred to the Symbian OS and iPhones, not "smartphones" versus "feature phones". Until recently, smartphone in Japan meant Windows Mobile, while many "feature phones", including the two Symbian phones I owned, were very much smarter than many phones sold in the US.

      The point I was trying to make is that, rather than the iPhone changing what people in Japan want from a mobile phone, the reverse is true. Many other phones running Windows Mobile, Symbian or Android have tried but were not able to deliver this. Part of the reason for their failure was related to the reduced capabilities of these OS's with the Japanese writing system.

      Conversely, part of the reason for the iPhone's success is that using the base of OS X it not only has fully-integrated Japanese capability, but can actually provide this more effectively than most Japan-only phones.

      • I would imagine Apple would have had to entirely re-write the Japanese input methods for iOS so I wouldn't put the plaudits on OSX particularly. Then it's just decent UTF/Shift-JIS support.

      • Andrew

        Aegis Sama,

        Perhaps you could let me know just how much of this subject you understand. Then I would be better able to explain to you how much Apple did and didn't do WRT Japanese language input and display on the desktop and on mobile, and why I know from experience that that background is a solid basis for the iPhone's current success in Japan.

      • I used to write compiler tools in the 80s and 90s for UNIX, DOS, Windows and OS/2 on Japanese computers (PC-9800, IBM 5550, OKI, Fujitsu FMR etc) including writing text editors so I'm quite familiar with Japanese input methods from then including some of the 3rd party ones rather than the manufacturer supplied ones. Also wrote EBCDIC – ShiftJIS conversion utilities for Japanese mainframes. Wrote a text mode windowing system using keisen for DOS.

        Things are certainly easier now than the DOS days but I imagine the input methods and double byte character handling hasn't changed drastically.

        My point about iOS was more that a touch screen interface for say kana-kanji conversion would be quite different to a keyboard led or even mouse led interface so they'd have to significantly rewrite it. Core routines for handling multi-byte characters, translation of text, button resizing for internationalisation etc are pretty standard on any OS and should be dialled by now with the better ones adding vector based UI elements and declarative UI languages for layout around variably sized text strings or LtoR/RtoL UI.

        It would seem unlikely that Apple would cram a desktop UI input method into the iPhone but please educate me if that's what they've done. Still, it's probably way better than a T9 pad!

      • Andrew

        Aegis, you are certainly hugely tech smarter than me. But things have changed. In some ways, more than you could imagine, partly because you have not had to.

        From the bottom up, the OS X that runs on an iPhone is the same OS X as runs on a Mac desktop, but with all the stuff needed on a big desktop removed. In my experience, which is limited to Mac, Windows and Linux, the Mac is the only OS that allows you to switch between languages for apps without a re-boot and between OS languages with a simple re-log-in. Every phone that runs Android or Symbian or Windows Mobile in Japan has to have the entire OS translated, and if it wants to be bi-lingual then has to translate that back to English. The result is apps that work in Japanese but do not work in English or vice-versa. This is the Mac OS X's inherent advantage in bringing an international device to a non-European-language market.

        Regarding input method, the iPhone is not only the same as the desktop OS, it is more. You can also use a T9 pad if you want, and it works better than any hardware-based phone keypad, because uniquely, instead of repeat pushes, you can slide your finger from e.g. the ア key to イウエオ (up down left right) [if you can't read the script, pushing the "a" key gives you "i,e,o or u"]. On keyboard input, unlike the hardware keyboard, you can choose between a Romaji keyboard or a Kana input, and only see the key choices that actually work. Predictive text is better than on the desktop Mac.

        Regarding how a touch screen interface affects this, my previous mobile phone was a RAZR. Symbian OS, hardware numeric keypad. First, DoCoMo had to get Motorola to build different hardware with different keypad layout. Then they had to re-write the OS into Japanese. Then they had to re-write the Japanese OS to create an English version so they could offer a bilingual version. Then they dropped the RAZR from their lineup. Softbank got the iPhone. Same hardware. Same OS, works in Japanese the way the Mac OS X works in Japanese. Touch screen replaces keyboard, mouse, T9 phone numeric keypad, various other language inputs such as Korean, Chinese or Brazilian Portuguese if you need, which a sizable minority of phone users in Japan do. Everything they do to adapt to the Japanese market actually makes the iPhone better than all of the other phones on sale in Japan. Which might explain the sales numbers.

        Meanwhile, every other alternative, Symbian and Android among them, face the obstacle that their interfaces are not as universal as iOS, and need to be re-written for the Japanese market, in fact it seems they also need to be re-written for every different phone, and even then they don't work as well.

        So, even though it came later, you might think that this advantage has also helped the iPhone to make good sales numbers in Korea. Which brings me back to my original comment, when the Asymco said that "iPhone is changing what the Japanese consider the basis of phone performance", I thought that what the Japanese consider the basis of phone performance has not changed. What has changed is that Apple was able to deliver what consumers in Japan wanted when indigenous makers could not. The reason for that is partly that the iPhone's iOS base and its Mac OS X and Unix origins are able to deliver a better muti-language capability.

  • O.C.

    Why do people always call it a dumb-phone if is isn't used for all the smart things people expect smart-phones to be used for.

    That's like calling a Rolls Royce Phantom a peoples car if its only used to do the groceries.