Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
When the internet.org news broke last week I realized that what was at stake here isn’t about social justice but was instead about global internet dominance. And it starts and ends in what we today perceive as the third world.
Led by Facebook, a group of Samsung, Nokia and several other giant tech-companies launched the internet.org initiative, which aims to bring internet access to the two-thirds of the global population who don’t have it. Hearing the news, a number of seemingly disparate developments fell into place: the Facebook Home smartphone system, Google’s internet-balloons and the sustained rumors that Apple will soon launch a discount iPhone.
It’s becoming clear that global tech brands are bringing the fight for dominance to places where technology so far hasn’t played a huge role.
Zuckerberg, Facebook Home and cracking the code for growth
At the yearly “all hands” meeting at Facebook in January, joined by all 5,000 employees of the social network, Mark Zuckerberg took the stage. In essence he said that Facebook runs the world’s most successful social network with more than a billion users. That it is a publicly traded company that has cracked the mobile nut, and it has the future of search in its hands. Next comes the rest of the world. That’s where Facebook’s future growth lies. From the five billion people who don’t use the web yet.
It makes sense. In the U.S. 179 million users – about 57 percent of the entire population – regularly checks status updates, likes and comments. In Europe the pattern is the same. The potential for new users is sparse in these parts of the world.
In April, Facebook launched its highly anticipated Facebook Home – its new mobile system. It didn’t fare too well, and hasn’t really gained traction yet. It doesn’t matter much to Facebook, however. Because Facebook Home isn’t really about the U.S. and Europe. It’s about Asia and Africa. Facebook Home is the first step in Zuckerberg’s plan for world dominance for his company.
The third world won’t turn to Facebook on desktops or laptops. People in developing nations will use mobile phones. Today one quarter of all internet access in Asia and Africa takes place through regular mobile (not tablet) devices. Tomorrow it will be many more. Billions of people will never own a regular computer. Mobile will be their portal to the web. And Facebook Home is meant to ensure that the phone they use will have Facebook on it.
Chips for feature phones
People in Mali or Haiti aren’t going to be flashing the newest Samsungs or HTCs. They’ll go with smaller, more modest phones, the so-called feature phones. Not quite as fancy as smartphones, but still perfectly suitable for connecting to the internet and to Facebook. At least if one uses a few tricks on the hardware.
That’s why Facebook in February partnered with Chinese chipmaker Spreadtrum with the aim of manufacturing chips for feature phones that are particularly suitable for Facebook-use. Although most of the functionality of the Facebook app and the Facebook Home-mobile system lies in the way the apps themselves are programmed, the right chip can improve speed and power consumption greatly.
At the time Facebook Home was launched, evidence that Facebook was ramping up its mobile venture to acquire world domination, was still a little sparse. With internet.org it isn’t anymore. Internet.org is precisely about broadening the Facebook-Spreadtrum partnership to embrace as much of the mobile industry as possible. Not only chip producers such as Qualcomm are part of the alliance, but Samsung, the world-leading smartphone-company (and themselves a major chip-producer), Ericsson, one of the world’s largest provider of wireless network equipment, Nokia and others as well.
Why Facebook didn’t make a phone of its own
In this light it easy to understand why Facebook didn’t produce a mobile phone of its own, when it had its chance. Instead it tweaked the Android operating system to accommodate its wishes. Why? Because with a phone of its own, Facebook would have had to compete head-to-head in a market crowded with smartphones. Sure it would have been able to get a few million to adopt the Facebook-phone. But not much more. Having made Facebook Home in a way that can run on potentially all Android-devices is simply the only logical way to reach critical mass, given that Android now accounts for nearly 80 percent of all smartphones sold on a global scale.
Balloons over Africa
That’s Facebook’s plan. Meanwhile, Google has balloons. Three month ago Google made headlines with rumors it was about to develop a fleet of blimps or balloons which should function as gigantic airborne hotspots, making wireless internet accessible to specific African territories. At the time the approach seemed to me to be yet another far-flung futuristic shot from the search giant – just like its driverless car and its Project Glass.
It wasn’t. Or perhaps the internet balloons themselves were. But they are only the tip of the iceberg, revealing a much more profound attempt by Google to win the world, not by smart applications like Facebook’s Home, but by colonizing the infrastructure on which the internet runs. Apart from balloons, the attempt also encompassed land-based white spaces networks, which might run on airwaves normally reserved for television broadcast.
Like Facebook, Google has been working on building an ecosystem of new microprocessors and low-cost smartphones, suited precisely to connect to the new wireless networks it is setting up, reports the Wall Street Journal. With internet.org Facebook however seems to have out-positioned Google as lead architect for the new the tech ecosystem. Google doesn’t even have a seat in this new super-alliance of internet and mobility. This is actually somewhat surprising, given that Android is Google’s operating system for smartphones, and Facebook is only a third-party trying to make good use of it.
Is your next iPhone made of plastic?
And what about the other big player in the smartphone war? Apple isn’t ignoring the developing world. In a few weeks’ time Apple is expected to introduce its next version of the iPhone, the iPhone 5S, as it will be called, if Apple sticks to its naming conventions. The high-end iPhone might not be the only iPhone to be introduced at the planned event. A cheaper plastic model, dubbed iPhone 5C, might also go on sale, the rumors suggest.
Such rumors have been around for years, and so far they haven’t come true. There’s a reason for that: the iPhone is a mythic brand, devoted to delivering a superior user experience. A discount phone runs counter a vital part of the Apple way of life. If you want a cheaper iPhone, Apple has always said, buy last year’s model.
Apple might stick to the same tune this time. But if they do, chances are they’ll have a hard time defending its 14 percent global smartphone market share, as more and more poor people buy into the mobile internet era. Not least due to the renewed pressure from Facebook and Internet.org.
With the internet.org alliance Facebook has created a unique position for themselves in the fight for the future markets of the internet – the third world. Google and Apple, two of the mightiest competitors in the space, have seemingly been caught on the wrong foot. But nothing’s determined yet. It’s one thing to start the battle. It’s another to win the war.
Jon Lund is COO and partner at memit, a knowledge sharing network startup. Follow him on Twitter @jonlund.