Bad(a)

http://www.electronista.com/articles/09/11/09/samsung.may.deal.microsoft.severe.blow

This prediction says that WinMo and Symbian are out at Samsung. Not a big surprise there.

The real news is some new “proprietary” OS is to take a majority share of the portfolio moving Android out of the picture gradually after 2011.

You will infer from my previous comments that the reason any deep pocketed vendor would shun Android is the same as why they would shun WinMo: no “control” over the whole product and hence no differentiation vis-a-vis an integrated competitor.

The Android devotees would then have to depend on their platform reaching critical mass without Nokia, Samsung, Apple, Palm and RIM, all of which will be shipping integrated products. LG got bought off by Microsoft and they will wallow in the mire.

Where does that leave Android? Moto and SE? They barely make up 10% of all devices and negligible smartphone share today and both are borderline going concerns.

That just leaves HTC, which shipped 80% of all WinMo. My bet is that they will ship 80% of Android, but that still tops them out at 10% share WW.

Looking at the platform game top-down and bottom-up you get the same story.


One Hundred Million

On April 9th, 2007 Apple announced that the 100 millionth iPod had been sold, making the iPod the fastest selling music player in history. The first iPod was sold five and a half years earlier, in November 2001.

Three months after that 100 millionth iPod, Apple sold the first iPhone.

My prediction is that sometime next year Apple will announce the 100 millionth iPhone OS device sold, making the iPhone the fastest selling platform in history. The iPhone will have been on the market for three years.

As of now there are at least 57 million iPhone/iPod touch devices in the field. This season there are likely to be over 15 million more sold. The bar to clear is therefore 28 million next year which seems achievable by Q3.

It goes without saying that 100 million contiguously addressable devices makes it the largest such device platform, but it may make it so by an order of magnitude.


Maemo

Insipid and irrational politics are symptomatic to a company trapped by rigidity of response to asymmetric attack (and you can quote me on that.)

Nokia, the world’s leader in total mobile phone sales seems to be having new problems deciding on its OS strategy. There were some murmurings about embracing Android last summer, but Nokia seems to have decided against it. Stefan Constantinescu had this to say about the results of Nokia World 2009:

“The [new] software, Maemo 5, is a pain in the ass for developers since Nokia has admitted in public that Maemo 6 will come out in a year and it will break compatibility due to a switch from the GNOME environment to Qt. The browser, built on top of Mozilla technology, the same code that powers Firefox, is a step away from WebKit, the browser engine that powers Safari in the iPhone, the browser in Symbian, the browser in Nokia’s dumbphone OS known as S40, the browser in Android and soon the browser in RIM BlackBerry devices. Why is Nokia supporting something contrary to what the industry has already accepted as best in class? What’s the strategy?”

Technical mistakes and internal politics can sink a company in an intense competitive environment. Mr. Constantinescu didn’t perceive a coherent strategy. There may not be one.

http://www.macobserver.com/tmo/article/iphone_competitor_forecast_stormy_with_a_chance_of_fail/


Open Always Wins

That may be. Open only wins when the underlying service is a commodity for which improvements (other than price) will not be valued.

In my way of speaking, openness is semantically equivalent to “modular” and that is in contrast to “integrated”. Integrated is the only way to develop systems when they are not good enough. Modular is the only way to cheapen systems when they are more than good enough. Figure out where the technology is on the “good enough” trajectory and pick the winners and losers by the level of integration. It’s that simple.

There were hundreds of companies backing Windows Mobile for half a decade. And it made all the promises that Android is making now (non-phone devices, millions of developers, source code, Intel backing, contractors ready to build to order.)

The Android fan counter to this is (I’m guessing) that Microsoft could not execute! Google hired swathes of WinMo people into their mobile efforts. It’s the same crowd. Is execution some sort of magic pixie dust only available to Google?


The Symmetry of Google and Microsoft in Mobile

The question of Android viability goes deeper than the app ecosystem. In fact the ecosystem is itself dependent on the network effect of the platform. That effect is weak because the platform is not “tight” and is prone to fragmentation and its value cannot be communicated to end users. That is due to the lack of integration and consistency of purpose.

Bottom line, the problem with Android was always that it was a reaction to Windows Mobile. It was symmetric in its approach to the market with the added value of being free. In that sense it’s very successful. It might even gain all the share that WinMo used to have (about 14% of smartphones at its peak). But it will never rise above the nicheness of WinMo.

I’m always amazed at the technocrati babbling classes’ inability to spot causes. They go on and on about execution and never understand that execution is a resource not a strategy. Resources are fungible.

I for one do not “hope that Android succeeds”. It’s a foregone conclusion that it will not. It’s not a matter of hoping.


Serving the Needs of IT

An interesting note in the latest Canalys Smartphone quarterly summary (http://www.canalys.com/pr/2009/r2009112.htm):

“…in our October study of 600 European decision makers in medium and large enterprises, more than 20% said they expect the iPhone to be the dominant smart phone platform for running business applications in their organisation within the next 3 to 5 years. In France, the iPhone was ahead of Windows Mobile and RIM in this regard – a remarkable result.”

This short quote brought back to mind the recently formed partnership between Nokia and Microsoft to deal with RIM. One fruit of this relationship is a recent job posting atcareers.microsoft.com which seeks Symbian developers to work for Microsoft:

Job Category: Software Engineering: Development
Location: India, Hyderabad
Job ID: 702365
Division: Microsoft Business Division

The Office team is looking for a self-motivated and highly passionate Developers to contribute in building a new team and drive discipline excellence in the delivery of Office Mobile and Communication experiences for Nokia’s Symbian smartphones.

Microsoft and Nokia have formed a global alliance to design, develop and market mobile productivity, communications and collaboration solutions.

Under the terms of the agreement, the two companies will begin collaborating immediately on the design, development and marketing of productivity solutions for the mobile professional, bringing Microsoft Office Mobile and Microsoft business communications, collaboration and device management software to Nokia’s Symbian devices. These solutions will be available for a broad range of Nokia smartphones starting with the company’s business optimized range, Nokia Eseries. The two companies will also market these solutions to businesses, carriers and individuals.

This project builds on the existing relationship with Nokia who is optimizing access to email and other personal information with Exchange Activesync. Next year, Nokia intends to start shipping Microsoft Office Communicator Mobile on their smartphones, followed by other Office applications and related software and services in the future.

(related job description)

While the iPhone wins hearts and minds in IT through sheer brilliance Nokia tries to become a supplier to IT departments through a strategy deeply rooted in the 1980s: the manipulation and exertion of control over file formats. As IT has diminished in importance (to the point of ceasing to matter to some) it’s hard to understand this misplaced alliance with Microsoft over something so inconsequential.


Is Mobile Computing Good Enough?

This new “mobile computing” use case that smartphones try to serve is not going to be satisfied with solutions that are built from modular components.

The reason is simple: as the solutions are not good enough (because it’s early days), they need to be improved. If they are to be improved, competitive pressure will compel those who try to do so as rapidly as possible. The fastest climb up the trajectory of performance will get the bulk of the benefits. Modular implementations are simply not fast enough in cycle time of iteration in comparison to the integrated approaches.

This is why Apple will grow faster than Google, Nokia and Windows Mobile.

How does this relate to the ecosystem?

Many have been commenting that Google’s (or Nokia’s or Microsoft’s) ecosystems are more “open” or “flexible” with respect to Apple’s. And that in the long run that is the right architecture. That may be, however implementing loose ecosystems coupled loosely to modular devices and operating systems and services as a whole will not be competitive. They will be too late, too slow and too hard to use. They will be awkward to position and the benefits will be impossible to explain to end users. They will be sold through a distribution channel that is too long and with poor information feedback. Too many “vested” interests will dilute the product’s reason for being. The pricing of the integrated player will cause poor economies for the modular cohort. I could go on but it suffices to say that the modular approach will fail to be competitive.

Footnote: the arguments for the imminent explosion of Android are all based on a forecast from Ken Dulaney at Gartner. It was also Ken who in 2004 forecast that Windows Mobile will dominate business devices and that RIM would never gain share leadership. Here is why he is wrong now as he was wrong then:

Ken and his peer group are implicitly and explicitly owned by the customers he tries to serve. What I mean is that Ken is hired by those who have the money but not the competence to think by themselves. His clients are the incumbent device vendors who are signaling to him that they will increasingly license Android (as they signaled that they will license WinMo before). He adds up all the signals he gets and multiples by random numbers to get a forecast. It’s a supply-side forecast assuming “Porter’s five forces” is still at work. In that sense, he is selling back to his clients what they’ve already told him. He is hired to validate their assumptions and that’s what he delivers. Rinse, repeat.


Apple: It’s all about the “marketing”

“In fact, as a percentage of revenue, Apple has actually been decreasing its ad spending every year for the past eight, from nearly 5% in 2001 to 1.37% today. That’s about half the 3.6% Research in Motion’s spends advertising BlackBerries.”

http://brainstormtech.blogs.fortune.cnn.com/2009/10/28/apples-2009-ad-budget-half-a-billion/