Applications are reshaping mobile industry competition

Remember when consumers picked their network carrier first and their phone second? When mobile phone makers competed based on what functions they’d built into their devices — screen size, battery life, camera, and handy carrier-selected applications? Well, those days are all but gone. As independent developers continue to churn out increasing varieties of mobile applications, many consumers will choose a device not for the network it runs on or for what functions are built in but for what kinds of applications will run on it. That means developers will soon have more impact on what devices sell than the carriers or device makers.

Before, in a typical month, around 20 devices would have entered a market like the U.S. Applications weren’t important. They weren’t featured in marketing around the devices and were only downloaded in relatively small numbers. And device marketers I talked to usually considered applications unimportant to sales. For example, until recently, Blackberry email addicts were looked at as a strange sect by these folks. “Blackberry is different, it’s for business guys,” I’d often hear them say.

It really wasn’t until the iPhone became such a success that device marketers began to consider what a large effect applications can have on driving sales. Of course, what applications run on your device depends completely on what platform your device uses. So the big question among device makers right now is, which of the major mobile platforms — Android, iPhone, Microsoft’s Windows Mobile, BlackBerry or Symbian — will prove most popular among developers?

You can see that changed marketing attitude of “See my cool application? It’s on my Nokia/iPhone/G1/BlackBerry/Samsung” in the current network and device commercials.

Of course, profit-orientated mobile application companies continue to adapt their applications to run across a variety of platforms. For them, it’s about the number of users they can reach, and so the largest platforms — Symbian and Windows Mobile — still may be considered the most important. But for developers, it’s Android, the newest platform to hit the market, that’s starting to have a special appeal. Android appears to give developers more rights and, therefore, the ability to create more powerful and exciting apps than we’ve seen on other platforms. Sure, the iPhone platform has a more visible following, but I predict that in the coming months we’ll increasingly see blogs covering Android developers taking advantage of the platform’s freedom.

There are some interesting things that Android offers, which its rivals don’t. For example, a developer built an app where he can open his garage door using his Android G1, as StartupMeme covered. It’s just one glimpse of what Android’s “embedded device” strategy enables. Explanations on how to do that have sent the imaginations of other developers spinning.

There’s more to come, and I’ll update you as more developers come up with examples of what can be done on Android. One idea a developer recently suggested to me was making an open source Flash player even before Adobe releases anything official. Flash may be a stretch, but it would be doable by someone with good knowledge of existing open source Flash players and some knowledge of the Android platform within a week, they said.

It’s worth noting that, until update RC29, G1 users were able to gain administrator rights (aka “root” rights) to the platform. Root rights let developers write applications that run on the native Linux system and not necessarily on the sandboxed Dalvik/Android Market interface G1 users are accustomed to. Root rights means a lot of additional freedom for developers. Calling these root rights a “security leak,” Google tried to close up access to them with its RC30 update. Of course, there are ways to circumvent it and my understanding is that many developers will continue to have root access. Applying these rights is very intriguing for a variety of IT guys. I recently talked to system administrator who fantasized about being able to sit at the beach and do most of his work from an Android phone with root rights. I’ve also heard about developers using these rights to get online with a laptop via their G1 connection (also known as “tethering”). That’s an example why giving developers root rights is troubling for operators — they charge an extra $30 a month for that kind of service and want to continue to do so. Even if increased carrier pressure is forcing Google to clamp down on root access, it still will get short-term marketing benefits from developers showing off their inventions.

One developer has already enabled the well know Linux distribution Debian to coexist with Android - with all of its thousands of existing tools now available for the T-Mobile G1 Android phone.

While all that may be economically insignificant, it’s pretty cool to developers. (I’ll bet there’s a PowerPoint slide somewhere at Google that lists “Android root rights” under the header “developer marketing.”)

For device makers, getting developers to use their platform is going to be key to effective marketing, because the more cool apps that are available for their platform, and the more articles written about those apps, the more users will want to own that platform. As things stand today, forthcoming Android devices look like they’ll have a solid advantage with the developer community coming out of the gate.

[Photo via Wayne Dalton.]

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About the Author, Matthaus Krzykowski

Matthäus is a freelance writer for VentureBeat covering the mobile space. He is also a startup founder, consultant, conference organiser and regular speaker on the global circuit.

At VentureBeat, Matthaus writes many of the analysis and trend pieces on Mobile Social Networks, Mobile Content, Mobile Advertising, Google Android & Research Papers. In addition he is coordinating the MobileBeat conference in San Francisco for the second year running.

He is either to be found in San Francisco or Maastricht, the Netherlands. Visit www.mobile-facts.com for Matthaus’s personal blog and more information.

  • it is great job
  • Matthaus, in my view you are spot on that applications will drive the future of the mobility industry. From now on, and in large measure for the reason you identify – the iPhone and its App Store – smartphone purchases will be driven more by what devices can do for their users than by the company that sells them. In the consumer universe you’re 100 percent correct; the applications that appeal to the user will drive the purchase decision. But for that systems administrator who fantasizes about doing work on the beach, the applications that keep him productive are not GPS-enabled restaurant finders, garage door openers or games that use accelerometers. His applications are far more complex and have to function within his enterprise’s infrastructure. And if they are network-based (e.g. Salesforce.com), then his access to the network must be secure.

    That’s where a company like mine, Dexterra, comes in. Dexterra’s Concert is a mobile application development platform that mobilizes enterprise software to smartphones.
    To us, it’s largely unimportant whether the operating system is Linux, BlackBerry, Windows Mobile or Symbian. What’s more important is that the OS supports industry standards for running software and accessing networks. Today we can mobilize an application and quickly have it running on multiple operating systems and device platforms. Don’t get me wrong, in the enterprise, applications will still drive mobility. But the decision won’t be about which phone but more about which application is purchased, as a long list of phones and operating systems will support mobilized enterprise applications.

    At Dexterra we see an enterprise mobility market where enterprise software functions equally well on all devices where industry standards define the development environment. In the enterprise market, price and support will probably be the most important drivers of phone purchase decisions. But it’s equally possible that enterprises may elect to let employees make their own choices from a broad list of supported devices. In that scenario usability features that are uniquely important to the end user such as battery life, screen size, navigation, input and so on – even the ability to open garage doors –will drive smartphone choices.
  • Arent the devices and networks responsible for this reshaping? You give a lot of credit to apps but apps have been around for a very long time. Its the fact that the average consumer is starting to pick up smartphones with data plans, significant device storage and processing power, GPS, higher resolution camera's, etc. You can have the greatest app in the world but if the device doesnt provide the features for the app to take advantage of what is the point?

    "Android appears to give developers more rights and, therefore, the ability to create more powerful and exciting apps than we’ve seen on other platforms"

    Too many people are confusing the fact that Android is an open source OS for meaning it is completely open to developers. From the end developer standpoint there is little diference between Android and Windows Mobile. Each of these OS's are controlled by the carriers and handset providers by the time it gets into a consumers hands.

    Root access IS a security issue. People will always find ways to hack everything but this doesnt mean that its a valid/valuable solution for developers to rely on when trying to get their app out there. Also there is a good chance the user is in violation of their contract by hacking their phones to be used in manner not intended by the provider.
  • Ben
    "Root access IS a security issue." You took the words right out of my mouth. It's a bit odd to me that this presents it like a good thing...

    And I also agree with you that there is a big distinction between open source and open to developers.
  • Ben
    To echo kaizyen's thoughts -- its a fallacy to treat the cell phone market like one would the game console market or the PC market -- where applications truly are make-or-break for a platform. The reason is that the PC and the console need only compete on things like performance, support for industry standards, and application availability -- the cell phone market needs to deal with two extra things: form-factor constraints and the carrier.

    The carrier can drive or destroy an application or a feature (esp. in the US where they wield a disproportionate amount of power), as they need to deem it necessary and beneficial to their bottom line. The form-factor (e.g. battery life, UI, etc.) limits the types of applications that can be run. So if the phone hardware is poorly built or if the carrier happens to hate your application (think about the numerous complaints about the iPhone App Store's policies -- some of which are probably motivated by AT&T), your application will still suffer, regardless of the quality and openness of the underlying operating system.

    While I'm not willing to bet on the iPhone as the mobile device winner of the future, I am willing to put it out there that perhaps Apple has outdone itself this time on its business model -- its staked out the perfect space where its maniacal need to control every aspect of a device (carrier relation, form-factor, software) is beneficial to both users and developers.
  • matthaus
    @kayizen, BenjaminTseng
    The article does not so much express my attitude but my estimate of a factual matters. In the article I focus on marketing stuff. Have you seen how Samsung advertises their Omnia showing off Excel charts, for example ? How BlackBerry chooses to use all the application logos in their Storm advertising ? Nokia's Device Anywhere/ LBS advertising ? When you talk to marketing folks working at carriers and device makers you'll find that their work is heavily affected by the the sales of iPhone applications and devices.

    The article is not about giving anyone credit. The title of the piece is not "developers have more power" either but "applications are reshaping mobile industry competition". In the piece I explicitly say that all that has little effect on developers trying to earn their buck - "Of course, profit-orientated mobile application companies continue to adapt their applications to run across a variety of platforms. For them, it’s about the number of users they can reach, and so the largest platforms — Symbian and Windows Mobile — still may be considered the most important." What I see, though, is that Android's winning a lot of sympathy points in the developer community as developers start to toy around with the platform and find there is strong difference between it and other platforms, including the iPhone platform (and Windows Mobile, too). Search for some G1 developer mailing lists if you need further proof besides the links I included in the piece. If you need further info I wrote about why Android is powerful vis-a-vis the iPhone platform before: http://venturebeat.com/2008/09/10/carriers-begi...

    Where's my opinion in the piece ? In the piece I predict that we will see more favourable blog coverage of Android applications in the next weeks. I also try to indicate for non-developers why that it is so. Who will benefit from all that ? We'll see.
  • Excellent Article Mate... You have nailed the issue dead on. The reason Microsoft was able to beat Apple in the Desktop wars was because Microsoft's offering was open enabling other developers to create apps for windows. At the end of the day, people just buy windows because of the gazillions of apps that run on windows.

    Fortunately Apple learned its lesson and allowed developers to create apps for iPhone not limiting it to themselves to think about, develop and market apps on the platform. It is this platform effect that has made iPhone so much more valuable and this might be one reason why MSFT wont be able to catch up with Apple this time... By the time MSFT would come out with a phone, iPhone would be an established platform.
  • Shadowlayer
    Will all due respect, but do you guys know anyone who's not in tech? you know, a regular person?

    I agree with all this until I get to talk with the average iPhone owner, you know, that big 80% of all buyer that make the difference between a couple thousand sales and several millions sales.

    That big chunk of buyers, most of them don't even know they can install apps, and the rest don't care, or will install a couple out of a fad or something.

    In any case what will re-shape the market are the OS phones are running, like it happened with PCs.

    And the G1? I still have to meet someone who has one as his/her main phone...

    Seriously guys, I support apps, but let's not create a bubble here.