Former RealNetwork’s CEO Rob Glaser Says For Now Apple Has Won

RealNetworks' Rob Glaser

In Rob Glaser’s first public appearance since stepping down as CEO of RealNetworks (NSDQ: RNWK), he implored that it is incumbent upon companies to work together in order for the wireless sector to continue its break-neck pace of innovation.

Glaser did not hint at what he might do next, but instead, he stuck to his usual routine of talking fast and making as many points as possible in his time allotted. One theme in particular was exceedingly clear: he believes closed operating systems are a threat to the mobile industry. In the words of Ben Franklin, he said: “We must all hang together, or assuredly we shall all hang separately.”

Glaser, who remains the chairman of Real Networks, said the digital media and wireless industries are at an inflection point, and the greatest opportunity is still in front of us. By 2013, he said the install base of smartphones and so-called “superphones” is expected to exceed the install base of PCs. He provided eight ways a superphone is different than a smartphone, but essentially what you need to know is this: superphones run applications. (His slides are here.)

He said with those “super” abilities, mobile has a great potential, but if Apple (NSDQ: AAPL) gets its way, the wireless industry could end up like the MP3 industry. The other option is for things to go the way of the PC, which he considers more horizontal. “As of today, Apple is the clear winner. It’s incredible what they’ve been able to do in a vertical paradigm,” he said. “But if that’s the way the industry pans out, we’ll have a much slower pace of innovation, and there will be a tremendous loss in value creation. It’s incumbent for those who don’t want that — carriers, handset-makers, etc. — to work together. Otherwise verticals will stand.”

Of course, there’s plenty of challenges in making horizontal work. Verticals, where one company is responsible for making sure that all the services work on the phone, is easier. As an example, Glaser mentioned Google’s Nexus One, which the company is marketing and selling on its own without a ton of help from the handset-maker and no help from the carrier. Glaser said he couldn’t get the phone to work until he realized he was putting the SIM card in backwards. While that’s human error, he said: “The Nexus One Google (NSDQ: GOOG) experiment is a proof point of that….It’s a lot harder to make horizontal easier.”

In light of that, you see a lot of verticals developing in mobile. Microsoft’s Windows Phone 7 will integrate Xbox, Bing and Outlook. Google’s Android does a better job of integrating Gmail, Maps and Search, and Apple is the ultimate example. So, what is the solution to getting horizontal to work in mobile? Glaser suggests that the carriers might be able to play a role, but “it’s not preordained. The PC went horizontal and the MP3 player went vertical. It’s an open question.”

The Next Mobile Revolution


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