The technology market is a scramble with companies trying to join the swelling mobile revolution. The godfather of this market, Palm Inc., helped break the barriers between personal computing and mobile computing; where PALM left off, Research in Motion (RIMM) picked up and defined the connected mobile smartphone market, creating a multibillion dollar industry that the world did not know it needed. Microsoft (MSFT) has consistently tried to occupy this space but has suffered repeated failures, primarily due to poor device usability and tried to enforce the desktop paradigm on mobile devices.
Apple (AAPL), and to a lesser extent Google (GOOG), spawned a revolution in smartphones by creating an operating system built specifically for the mobile experience, breaking the paradigm that plagued Microsoft. Once the smartphone revolution found devices in teenager pockets, Apple introduced the concept of the App Store.
This was a fundamental shift in mobile computing. Instead of a smartphone, it was now a mobile computing platform complete with a highly accessible and affordable distribution channel for extensions. Developers, small and large, both grasped this new and expanding market.
In the mobile space, we now see two, arguably four, primary mobile operating systems:
- Google’s Android
- Apple iOS
- BlackBerry’s OS (BBOS)
- Microsoft Windows Mobile
In a sales and marketing sense, the customer value associated with a mobile device is the product of the devices:
- Technical specifications (hardware),
- Industrial design (beauty),
- Functionality (cameras, mp3 player, etc.)
- Usability (ease of use/adoption),
- Vanity/value (cost, 3rd party perception, etc.), and
- Extensibility (applications, accessories, etc.)
Technical specifications have become almost moot with the major developers (except RIM) being comparable with screen quality, processors, battery life, etc.
Industrial design was once sole property of Apple but other manufacturers, notably Motorola (MMI), Samsung (SSNLF.PK) and HTC, have adopted a design centric development methodology.
Functionality has also become somewhat of a moot point. There are a few minor innovations since Apple’s retina display, such as the addition of 3D displays and cameras but having seen how successful the 3D television redux was, I have considerable doubt that they are here to last.
Usability was again once the sole property of Apple but Google has made considerable steps in the Android, but even today, the iOS interface still dwarfs certain aspects of Android (momentum, interface design, etc.).
Vanity is always a key aspect in consumer goods. iPhones have started to lose their exclusive luster; with that being said, every iPhone launch still draws substantial line-ups, waiting lists, and an exclusive desire to have the new product before others.
The final value component has become the key factor between the different mobile platforms. The value of each smartphone or smartphone platform began to skew immediately after the launch of the application store.
iOS made the mobile application a mainstream component and important value proposition for their devices. Android was quick to follow suit and BBOS was a lengthy third.
The iOS App Store spun out of control to over 500,000 applications. The Android Marketplace, in the past year and half, has made considerable gains with approximately 380,000 apps. BlackBerry’s App World never gained traction. Today it sits with just over 20,000 applications and a failure to gain developer traction to the point that RIM was forced to compensate key application developers to port their applications to the BBOS platform.
RIM had to do this because each of the above mobile operating systems requires custom application build. This means if a small developer wants to release an application, for complete market coverage, they must release at least four mirror products with four times the expense, four times the skillset requirements, four times the maintenance cycles, four time the support streams, and so on.
This should be a key risk for others looking to break into the mobile space. Amazon (AMZN), Facebook, LinkedIn (LNKD), or any of the other dozen technology companies planning a smartphone should evaluate their product by the above criteria. If each of these companies releases a new mobile platform in an attempt to control the mobile market, they ostracize the development community. Without the development community, they have no extension value and therefore provide a lower product value to consumers.
This is history repeating itself from the desktop operating system market. Google’s Android is in position to become the Microsoft Windows of the mobile space due to its device agnosticism and usable interface. Apple iOS is in position to retain control of the niche market it currently controls with Mac OSX. BlackBerry OS is in position to follow the path of an operating system such as Novell’s (NOVL) NetWare.
I guess to summarize, my recommendation to any technology company looking to grab the reigns of the mobile computing space had better come with an value defining innovation as substantial as the App Store was or else they are destined for a hard road ahead.
References: Application counts for each platform were taken from their respective Wikipedia pages.
Disclosure: I am short RIMM.
