Friday, April 9, 2010

Phone Wars II - The Software

On Wednesday April 7, 2010, a distinguished panel of experts in the smartphone industry was convened to discuss the current state and future predicitions for the fast growing smartphone market.

Phone Wars II - The Software

As a cell phone user, have you noticed how your buying decision has changed from a few years ago? Before, the first decision might be the carrier and the calling plan. The phone itself might have been an afterthought. Today, some people begin to make their decision based on the platform. "Do I want an Android phone, an iPhone, or maybe a Palm Pre?" After that choice is made, you are more or less stuck with a carrier and plan. There is a new war going on in the cell phone industry - the software war.

We started the evening with a poll of the audience. The biggest smartphone share was for RIM (Blackberry), followed by iPhone, and Android. This does not represent the market as a whole - worldwide, Symbian (Nokia) is still the majority smartphone platform by far! However, it's clear from the marketing numbers we presented that Android is growing rapidly, iPhone is holding its share quite nicely, and the others (Palm, RIM, Nokia) are beginning to lose. The panelists agreed that the numbers shown seem to reflect the reality as they understand it.

The panelists acknowledged that iPhone does seem to deserve its high customer satisfaction ratings compared to other platforms - but they believed that Android's open architecture will create more opportunities for cooperation and innovation than iPhone. Google's own Android phone, Nexus One, is a flop when judged by sales numbers, but one panelist mentioned that Google may have created this phone more as a reference platform than as an end user device. Now the standard is set, and other handset makers will need to meet or beat this standard.

Android, as an open standard, is in danger of confusing consumers with its plethora of different OSes and functionalities across numerous handsets. Google seems to be working to bring this under control, and our audience didn't think that consumers cared about OS versions (from my
personal perspective though, I think they *will* care when the Android phone they just bought runs a different version of Google Maps without any of the cool functionality that their friend has on another Android phone).

Microsoft is about to introduce a new OS platform for smartphones, based on Windows 7. At least one panelist thought Microsoft would make a strong entry, eventually placing at #3, behind Android and iPhone on the marketshare side.

Wrapping up the other platforms - None of the panelists were very positive on Palm Pre's prospects. This platform seems to be on the wane. Symbian (Nokia) is a strong phone platform of course, but its current smartphone efforts do not impress - but we were warned not to count out Nokia - based on their market position in the overall phone sector, they can change the smartphone dynamics in an instant. Everyone seemed worried about RIM's prospects, since the future may very much depend on application developers, and not Blackberry's original strengths with email.

Phone Wars II - The Software

As expected, the "Open" vs. "Closed" discussion caused some mutterings among the audience and panelists, especially as I tried to draw comparisons with the PC industry. If you look at how the PC industry played out, it essentially became a battle between Microsoft and Apple. Microsoft was based on an "Open" platform (this is where I heard the muttering), while Apple is and stays closed. I was referring to the hardware, of course, not necessarily the software. But is there a similar battle brewing between Google and Apple? Will Android be the cheaper smartphone option, but with more "blue screens of death", since the eco system will not be as tightly controlled? Will iPhone be the more expensive, more exclusive option with better performance? I think I got at least one panelist to agree with me on this, but as you can expect, the mood in Silicon Valley strongly favors the "Open" contender. We all agreed that Android is and will remain a strong (if not the strongest) contender in the smartphone platform wars - note that eventually Microsoft (my so-called "open" solution) won the day on the PC and almost drove Apple out of business!

We briefly covered the "Fourth Screen" - i.e. in-between devices such as iPads and Ereaders. Nobody thought these would compete with the smartphone. People would continue to buy smartphones.

We also discussed international implications. One panelist made an excellent observation: "the world does not necessarily revolve around items designed in Cupertino", i.e. the international market may favor an open platform where developers sitting outside the USA can create innovations targeted to specific cultures.

This summer promises the introduction of a new class of Android smartphones, that can run on Sprint's 4G network, with rumored download speeds of 10Mbps. But the panel thought that there is plenty of room for other phones as well, since availability of the 4G network will be very limited. Nobody seemed to have any inside information on what new phone Apple will introduce this summer (not surprised), personally, I expect a game changer - Apple's platform hasn't changed in 3 years. Yesterday's SDK announcements from Apple were just the tip of the iceberg... One panelist noted that we should expect phones to do more with motion sensing - for example, a distinctive shake may dial a certain number, or just the act of turning the phone over might silence it.

That wrapped up the evening. Thank you to the panelists (Daniel Kellmereit, Angela Nicoara, Ray Milhem, Christof Wittig) and to a great audience!

You can download the presentation slides pdf from the GABA Website.

Steffen Bartschat - Co-chair, GABA Software IG

1 comment:

  1. Thank you Steffen and GABA for a wonderful event full of great discussions. I truly enjoyed the great & open discussions about various phones. The audience was amazing as well.


    Ray Milhem