Vodfone's OS Strategy: Impact To Handset Makers

Vodafone (VOD) announced Monday morning that it's cut a deal with Microsoft (MSFT) on handset software. Leaving aside the fact that the company still uses the appallingly anachronistic word "terminal" in its PR headline, this is actually a pretty interesting strategy.

The Windows Mobile deal is part of a Voda's three-platform appoach to future devices, also embracing Symbian/S60 and - interestingly and up-till-now hardly mentioned - Linux. This makes Vodafone look similar to NTT DoCoMo's approach to handsets, which is based on its own flavour of Symbian OS, plus Linux and recently also Windows Mobile.

The press release has an interesting paragraph:

"Over the next five years, Vodafone expects to focus on supporting three standard terminal platforms across its portfolio of mobile phones: Microsoft Windows Mobile, Symbian/S60 and Linux. The first device to use the software produced under the agreement is planned to be with Samsung and is expected to launch in the first half of 2007."

The first thing to note is the realistic 5-year view, which clearly shows awareness of the need for Moore's Law to catch up and bring up low-end devices towards the level needed to host a proper OS. The second thing is the qualifiers "expect" and "focus"... ie a get-out clause which enables Voda to add additional platforms as well if things change. The third thing is which "Linux"? (or is it actually several variants?)

And the fourth thing is to try and map how any of this fits to the major device vendors, and how this could fit around their own software roadmaps.

Nokia (NOK) - OK, no surprises with S60 for high-end devices, but what happens to S40, its massmarket platform? Does it (a) disappear as S60 and Symbian moves downmarket? or (b) maybe it turns into a layer on top of a Linux OS like the 770 Internet tablet? or it it (c) Nokia ignores this & persuades Voda it needs special dispensation as it's market leader?

Motorola (MOT) - over a 5-year period, most of its high/mid devices should migrate to its inhouse Linux platform. May still have some low-end embedded ones, though, and if it continues to create "must have" phones like the RAZR, then again Voda might need to be flexible. Plus there's probably going to be a few MS-powered phones for enterprise, especially since the Symbol acquisition.

Samsung - seems to still be promiscuous, supporting Linux, Symbian and Microsoft. Still lots of inhouse embedded OS use, though....

SonyEricsson (ERICY) - Hmm, this is a tricky one given how popular some of its recent phones have been. It's going to be narked at having to change its embedded (and very good) featurephone platform, and also possibly ditch its UIQ smartphone platform. I wonder if S-E is also going to have a good reason to be on Voda's "exception" list.... although maybe it's got a Linux card up its sleeve....

HTC - no problem, clearly.

LG - again, like Samsung, pretty promiscous with OS's so should be able to fit into Voda's vision

Research in Motion (RIMM) -- oh dear.

The other interesting question is what sits on the top of all these OS's. Will it be a proprietary Vodafone IMS+other stuff client? Will it be a third-party layer like Flash? Or will it vary between targeted customer segments?

And lastly.... I wonder if all this means Java's days are numbered?