Symbian, iPhone & the New Mobile Reality

92 Comments

Nokia, already a stakeholder in mobile OS maker Symbian, has announced that it will buy the remainder of the company and throw all the assets into a new platform called the Symbian Foundation, which will unite all the flavors of Symbian into a single, common software platform that will go open source in two years. Major mobile players such as Motorola, NTT DoCoMo, AT&T, LG Electronics, Samsung Electronics, STMicroelectronics, Texas Instruments and Vodafone have all signed on.

The story is not that this happened but why — and what it means for the mobile industry. You can read my analysis below the fold.

Symbian to me is like a football, constantly being kicked around and forever finding new goal posts.

Its genesis can be traced back to Psion, a company that made handheld computers long before they became fashionable. Now those machines are called converged mobile devices, a market the Symbian Foundation is going to target. Ironic…isn’t it?

What is being sold today as the Symbian Foundation is actually what Symbian used to be, a for-profit company that made an operating system used by a diverse group of handset makers. That was before Nokia and Sony Ericsson got their corporate knickers in a twist and decided that they wanted to build their own version of Symbian (S60, UIQ, etc.).

That divergence might have made sense when the mobile world was less complicated, divvied up amongst a handful of players that worked hand-in-glove with the carriers to make a ton of money. Today anyone can make mobile phones using off-the-shelf components, factories in Asia and instead focusing almost entirely on design, user experience and software.

Here is a quick rundown of the realities of today’s mobile business:

  1. Handset makers need to accelerate the release of their phones much faster than the current 12-to-18 month production cycles or run the risk of getting RAZR-d into oblivion, like Motorola.
  2. Phones are now a fashion business in that you’re only as good as your last model. Phone makers need to release new models as quickly (if not faster) as Parisian couture makers if they want to remain hot and gain sizable share of the handset market.
  3. They subsequently can’t afford to muck around with proprietary software platforms that can take months to be approved by the mobile carriers.
  4. Carriers want standardization because they want to deploy applications quickly, without having to test them on different handsets — a slow and laborious process.
  5. Users want high-end, smartphone-like features on low-end phones.

Mobile makers can easily adapt to — and thrive in — these new realities by taking a platform approach to their software stack. Over the past year or so we’ve seen the emergence of many platforms. Here is a list of some (not all) of the platforms vying for a dominant position, including my personal odds, based on talks with mobile industry insiders.

The PC industry went through a similar gut-wrenching change in which cheap components, the rise of OS platforms and extreme competition gutted certain players while others earned billions of dollars. The biggest prize went, unsurprisingly, to platform owner Microsoft — which didn’t merely sell an OS, but relentlessly wooed developers to write applications for its platform to make it more useful.

Guess who’s doing exactly that these days? Steve Jobs, of course. Last week, when comparing Samsung’s Instinct with Apple’s iPhone, BusinessWeek columnist Stephen H. Wildstorm summed up his drubbing of Instinct with what is the single most important truism of today’s mobile world: “Yes, good hardware design is critical. But in the end, it’s the software that really makes the difference.”

Indeed, the mobile industry’s old guard is experiencing the business equivalent of heartburn as players like Apple prove that software platforms, and the innovation they foster, are the only way to withstand the whiplash-inducing forces of commoditization.

Apple’s iPhone might be a pipsqueak in terms of market share, but it is an agent of change. It has taken the mobile business by the scruff of its neck, given it a thorough shake and in the process, rearranged its entire business structure. A few months ago, I spoke with senior officials at Symbian, who quite bravely argued that they weren’t worried about Apple or anybody else. They pointed to their big market share, thanks to Nokia’s success with its N-Series and E-Series phones. They talked about getting adoption for their platform in Japan.

But it was false bravado, for Apple, LiMo and Google are forcing them to change their game — not the other way around. Symbian’s even going open source in order to compete with mobile Linux. (Read OStatic’s take on Symbian Going Open Source.)

In this platform game, the winner is going to be the one that can attract the most developers. Symbian has a lot of developers but as the chart shows, those developers also have options. (As an aside, does anyone else think that Palm blew an opportunity to leverage their developer network and apps into a bigger position in the market?)

Looking for outside help is a good thing, but I’m not counting on the Symbian Foundation’s ability to achieve its lofty goals. In terms of market share, Symbian has long been propped up by Nokia. The problem is, Nokia is backing a confusing array of platforms, including Linux. Same goes for the foundation’s other members.

And that makes me wonder how long their loyalty to this platform is going to last. Will they change their commitments once they’re faced with the needs of their own, individual businesses? Will this be enough to get developers to commit to the platform? Those are just some of the many questions facing Nokia and Symbian — the answers to which are not what these guys want to hear.

92 Comments

Bill Perry

Great article and really enjoyed the follow-up discussion in the comments. There are a lot of things to consider when it comes to consumer expectations of mobile phones and how the various OEMs and OS players will have to compete and do better than the best experiences out there today. Definitely good times for the industry.

Andy Hooper

Interesting comment from Mark Sigal and Steve Haney above. Very good post, Om. Difficult to argue against either side. My opinion crystallises as this:

– Apple will succeed in creating compelling mobile internet devices by controlling the entire device stack from hardware – OS – US – applications. This will reach a significant market share of users in a number of markets.

– However taking this approach in the ‘traditional mobile phone’ space doesn’t scale. It would break Apple apart to try and make a wide variety of devices in this manner. And there are a great many people in the world who will never want an iPhone-like device.

– Therefore the market trends that see the OS being farmed out into open source, foundation-led organisations will inevitably continue, and we will see an incredible level of competition and shrinking margins that shakes out the weaker players. Nonetheless, a lot of money will still be made by those who are the best assemblers of hardware, software, UI and apps for mass market devices.

Nonetheless, Apple will be the winner in their segment, I don’t doubt it.

funtomas

Since mobile gadgets will never have power of desktop counterparts, the apps they run are and will be mostly thin client of server apps, web apps in particular. Considering this fact and Google’s “Don’t be evil” mantra, platform doesn’t matter any more. What you need these days for your platform to succeed, it’s a small-footprint snappy standard-compliant browser. Heard about Maemo? Considering porting Maemo to Symbian, accompanied with mobile Prism (Mozilla’s extension) you end up with full-fledged platform qualified for corporate customers as well. Based on this I’d up the ante on Symbian as the platform’ success also depends on speed of flooding the market. Count on Nokia.

Prashant Singh

>>Guess who’s doing exactly that these days? Steve Jobs, of course
iPhone does stand a chance to change the game in a fundamental way but apple is not handelling it well till now . 30% of cut from Application sale through iTune Store , Data Plan Limitation,and only 4K developer got enrollment in iPhone developer program out of 25K who applied . not a good way to court developer community i guess .

C Nilson

We can debate past industry moves and analogies forever, but the devil is in the detail and execution. Nokia has won the handset market first through superior products, and in the past 5 years, largely through logistics and execution. Today, Nokia remains far stronger than other handset manufacturers at offering breadth and depth in their product portfolio including hardware, software and services. Symbian, a strong platform, has been be riding on Nokia’s S60 shirt tails.

Two points to be made about the creation of the Symbian Foundation: It is a important step in breaking up the grip of the telecom giants, and it remains to be seen what innovation can arise from a open foundation. Look at the Open Mobile Alliance where bureaucracy and in-fighting often slow innovation to a crawl. Just download the organisation chart at http://www.symbianfoundation.org to get a sense for the future debates.

Luis Alejandro Masanti

quote:
“1) That the game is all about software. What Apple is doing is proving out the goodness of deep integration between hardware, software and service layers when dealing with highly specialized, performance optimized devices. At some point, the best practices will get fully baked and commoditized but we have a long way to go to get to that point.”

You are right. The iPod/iTunes (soft)/iTunes Store was not “fully backed” yet as a user experience, iPod is from 2001. iTunes Store is from 2003.

Maybe in 2012/2015 they got it right. Althought it is a more fiercy market than music.

Steve Haney

Mark Sigal pretty much hits it on the head. But I would add one thought to his Point 1: The only reason Microsoft’s software-only play worked was because the PC was primarily an office productivity device, whose market was driven by MIS managers and CIOs of big companies. Flaky PCs were accepted because MS and the PC makers assumed they were going into an office and there was an MIS guy there to help users out when something inevitably broke.

But mobile phones are first and foremost consumer devices, bought by individuals driven by very different needs. So the development model for them needs to follow another successful consumer platform model: the videogame console. If anyone thinks Apple’s control over the iPhone is tight, they should try developing for Nintendo or Sony’s consoles. A consumer device has to “just work”. Apple knows this (and, frankly, the carriers with their own content programs do too). When you drop the software (a cartridge or disc) into a game console, it has to just work, period. Otherwise the support costs spiral out of control.

Windows machines working their way into homes in a mass market way in the mid-90’s (thanks to the Internet), was a weird market anomaly. And just bad business: consumers came to hate their desktop computers. It is like consumers going to CostCo and buying a restaurant size bucket of mayonnaise; that product was never meant for them. This is why the Mac is making such headway now on the consumer front; it “just works” much better than a Windows box.

Cobbling together a phone (especially on the software side) and expecting it to be a good consumer device isn’t going to happen. Alternately, Apple is doing everything right. By controlling everything in the stack from top to bottom, consumers are going to get the best mobile computing experience possible.

Petabro

Om,
It is entirely possible that Apple will have 15% of the cellphone market in 5 years. Motorola’s share will continue to decline as will Nokia’s and Samsung. Also, expect the Andriod devices to be priced at very attractive levels.

Mark Sigal

Om, good post. Two points that I would challenge here are:

1) That the game is all about software. What Apple is doing is proving out the goodness of deep integration between hardware, software and service layers when dealing with highly specialized, performance optimized devices. At some point, the best practices will get fully baked and commoditized but we have a long way to go to get to that point. By contrast, the PC was a more general-purpose platform so the path to commoditization and the related invisibility of the hardware was quicker and favored a software-only play like Microsoft.

2) I agree that this is a platform play and that he who wins the hearts and minds of developers wins the game, but we need to be clear that when we talk “platform stack” there is a tendency to think OS and networking stuff when the real differentiation lies in the APIs, libraries, toolset, marketplace/distribution functions. Its the distinction between saying Windows and Visual Studio. In this respect, Symbian value higher up the stack is limited.

Cheers,

Mark

Lava

Steve Haney is absolutely on the money. The single biggest reason many people dismiss Apple and the iPhone is they are wedded to an ideology that open = superior. Playstation, Xbox, and Wii prove that openness is not a requirement for massive success.

The thing is, when you put together the iPhone, SDK, consistent deployment, and the App Store, you get a multiplier effect that makes the whole much greater than the sum of its parts. There was a comment I saw that put it best – as long as the carriers are free to cripple these open source phones however they wish, you will never have a platform that can dominate because not many developers can navigate the obstacle course of a fractured platform.

Steve Haney

Great. Another open source OS to get fragmented by device makers and carriers, and therefore become useless to developers. The Symbian guys will end up in the same place Android is going to end up: nowhere.

What developers want in a platform is stability, consistency (from the UI, all the way down to the circuit board) and a support infrastructure to make money. Only one player is providing that: Apple.

Austin Chu

Great post. Speaking of iphone. I was reading the LA times and I blogged on savvywallet.com about women who are complaining they are unable to use the iphones because of their long nails. They are blaming Apple as being misogynistic because they didn’t design a stylus. Are you kidding? MAC OS, linus, not important. Able to support women with long fingernails is more important than the symbian foundation

charlie

it is China, china, china. Nokia doesn’t have a prayer in the US market for the next two years. But they are getting their asses kicked by Linux in China and Asia. By reducing cost for the generic chinese to come in, they can easily expand market share. Pretty stupid, if you ask me. they need to focus on profit share, where apple will eat them alive.

And Nokia is 90% committed to S60; the Linux is mostly in their internet devices which is a really small market.

ray

nokia is now a internet company. this is a BIG change of purpose. very telling.

forget mobile about mobile handsets. value has migrated to service innovation models. Mobile apps esp w/ Lbs.

With increased blurring between web and mobile web,
Nokia wants to do a google (advertising) with a small hint of Apple (hardware) – read as a multiplicity of business models.

Ryan

I wouldn’t read so much into this move. Its a defensive strategy to shore up their dev platform. Nokia is just responding to the changing tides of the industry.

gzino

Like the PC wars analogy but doesn’t the browser itself change the landscape? Won’t the browser itself be the dominant mobile *platform* for quite some time? Not that the power of a true platform won’t power awesome mobile apps, but seems like the browser itself is gonna lead this race for quite some time…

Om Malik

@ Mike Cane, I am with you on cloud love and the issues that go with it, but the trends are all in that direction. I disagree with you on Palm… which is dead man walking.

@ Curtis, you bring up good points, but as the speeds increase, devices get relatively open, I think the downloadable market might change for the better. call me too optimistic about this but for the first time I feel the stars are aligning for the mobile industry. It is for another post – today I am out writing out the script for Structure 08 which is in less than a day/

mikecane

>>>I think cloud based applications for mobile usage will be the ultimate winners

Yeah, I have some lovin’ for that Cloud whenever YahhoMail, WordPress, and Blogger go down. And let’s not forget that recent datacenter fire that blacked-out many, many sites.

Cloud computing? Hey, everyone still lives on *earth*.

mikecane

Your chart is very, very strange. And I doubt it will play out that way at all.

I notice Palm isn’t there. I’d bet on Palm before I’d ever bet on this last-gasp Symbian ploy from death-spiraling Nokia.

Curtis

Clarification – I meant to write that I’m not a big believer in downloadable mobile applications.

Apologies to all.

Curtis

Curtis

Om,

If I may play devil’s advocate, I’m not a big believer in the future success of mobile applications. Consumers don’t like downloading software to their cell phones, and I expect Apple will make the iPhone AppStore 1 click downloading like iTunes, yet I don’t expect iPhone market share to come anywhere close to 1.0. Hence, the common platform ALL of these operating systems have is the Internet. I think cloud based applications for mobile usage will be the ultimate winners when the handset manufacturers realize that Internet ease of access is the key to rapid and large handset sales.

Obviously, I think a “life cycle in the middle” of downloading applications to cell phones will be short lived.

My $.02.

Best,

Curtis

George Webb

Don’t look at unit numbers – look at bytes downloaded which is a measure of web usage. That’s what advertisers care about. Apple already leads in this category over ALL platforms. This is before iPhone 3G and international distribution! 24 countries next month, and 70 by the end of the year. Let’s face it – NEC is closing the barn door after most of the horses have taken off. The high end horses to boot.

Om Malik

@ ronald…. I guess you summed it up better in one line than my entire post :-) damn! Anyway I was writing without caffeine so I should be cut some slake.

Sridhar

You forgot to mention Maemo , I think it has a lot of potential, considering it already has cool handhelds in the market though the only major backer is Nokia..

ronald

You forgot to mention Unix and the Unix wars. All helped to establish MS as the platform provider.
I think we will see the same thing here, easy to use Developer tools for the platform will lead the way. Good enough applications will follow.
Iff DRM gets in the way, Symbian and Apple will loose. To much control can be a bad thing, just asked SUN and DEC. Let’s see if Apple has learned from past mistakes.

Dameon Welch-Abernathy

Based on some analysis I saw of Android, Symbian will be more open, though not immediately. Certainly joining the Symbian Foundation will be much cheaper.

Jason Harris

I believe Symbian’s open sourcing is not only aimed at Mobile Linux, as you suggested, but at Google’s Android as well.

In one move, Symbian has gained what Google hopes Android will be in a few years: a widely used open source OS that anyone handset maker can adopt easily and use paired with thousands of useful applications.

Google/Android will have an edge however, if they can wisely pair Android with Google’s mobile services that are presently here and coming down the pipe.

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