The mobile ecosystem has traditionally been a closed ecosystem unlike the PC industry where the open ecosystem has been in existence for a long time. In the mobile space, till date the operators control the customer experience and the application availability. It is the operators who decide which application a customer can download or which web site can he visit. This is in sharp contrast to the PC world where the customers are free to download the content of their choice from the website of their choice. The PC industry ecosystem has seen the marginalization of internet service providers. The service providers now get the revenue only from the access charges and have no control over the customers. The same is however not true in case of wireless world. The operators are cautious in ceding control to other players in the value chain due to their experience of fixed internet. The duplication of work in absence of an open ecosystem is hurting a lot of industry players and developers in particular.
Life of a mobile application developer could be quite challenging considering the efforts he has to put in to develop a simple application. The ticket size of a mobile application is small, e.g. for Apple iPhone, most of the applications were sold at 99 cents price-point. Considering that the application revenues are split three ways – Carrier, Platform owner and Application provider, the Application developer gets very little for every application sold in the market. The only silver lining is that the volumes for mobile applications are likely to sell many times more than the PC applications. There are many issues and challenges emerging from the structure of the industry and the consumer behavior for the developer community.
Java behaves differently on different devices. The major challenge is the multiplicity of mobile devices with different capabilities, features and restrictions. Devices may have different technical capabilities such as amount of available memory, screen resolution and size of the display, network connectivity options, support for different standards and interfaces, and different operating systems and their versions. The mobile applications need to be customized to the needs of each device to be able to work on a wide spectrum of devices. On top of this there can be a need for language and operator-specific device variants. The permutations and combinations can drive any developer crazy. This also means that there is high time to market as well as much higher development costs. According to industry estimates, a developer may need to spend similar amount on portability across devices and operators as he needs to spend on developing the application in the first place.
There are multiple operating systems that are prevalent in the mobile space like Symbian, Android, iPhone OS, Windows, Linux, Blackberry OS, palm OS, Brew, etc. Each of the operating systems can have further versions for different types of devices like Symbian has S30, S40 and S60 series for its low, mid and high end devices. Absence of any dominant operating system apart from Symbian means that the developers must have their applications ported on multiple operating systems. Therefore, there is a need to hire expensive employees who are conversant with different operating platforms. Recreating an application experience on multiple operating systems is a daunting task that becomes even more complicated and costly on the backend when supporting it on different code-trains for each OS.
The other challenge is that the developers need to focus on developing applications that are easy to use on a mobile and consume less power. There is a need to test the applications on multiple devices and different carriers. The carriers are spread across the world and the developers need to physically go to the carrier locations in many cases to test their applications and partner with them.
Miniscule revenue share for developers does not help their cause. Low revenue is constraining the innovation in the mobile application space. Moreover, the size of developer community is large but they are fragmented and hence they do not have capability of investing in quality controls, testing, etc.
I have tried to list down some of the solutions to the Developer problems but most of the solutions would require structural changes to the industry and hence beyond the control of the developers. However, the developers can focus on quality of their applications and continue to lobby for open mobile ecosystem.
Develop and nurture open platforms which should be adopted by device vendors, carriers and content providers. It is important for the Global companies like Nokia, Google, Yahoo, etc. to develop open platforms that make the applications more interoperable and reduce the variety in the operating system versions. I had discussed this “Platform Dominance Business Model” in my earlier post (Wireless Industry Business Models) and I intend to devote a full article on this topic in the coming weeks.
Set up independent test agencies that have able technical resource pool across the globe that can test the mobile applications with different device vendors and carriers for a fee. Mob4hire (through an open community of testers) is one such organization but we would need many more to be able to cater to the rising demand for these services.
Device vendors would do well by restricting the number of models they introduce every year. The device vendors would benefit from the increased focus behind every device and hence the marketing money available for each device. The application vendors would benefit as it would reduce the versions they would need to createof their applications for different devices.
Ensure better revenue share for the application developers so that they have an incentive to create better applications and have the necessary means to ensure that the applications work seamlessly across the different platforms. Apple Store and Ovi Store are a good initiatives in that direction as they have promised to standardize the platforms and promise up to 70% revenue share to the application providers.
Multi-country carriers like Vodafone, Telefonica, MTN, etc. should work towards standardization of their systems and processes so that the applications can be tested and approved centrally for each country.
Application developers should invest in consumer research and quality processes to be able to churn out more relevant applications that are more stable
The fragmented developer community needs to consolidate so that a few larger players can emerge which have a higher bargaining power with the platform owners
With the advent of 3G and 4G networks, there would be free bandwidth that would be available with the operators and at the same time they would be forced to cede to the customer demands of near PC experience on mobile phones. The carriers would be forced to part with control over customers as there are new payment mechanisms (mobile payments) and way of delivery evolving that may completely bypass the carriers. Changes in consumer preference and technology would lead to open mobile ecosystems.
Mohit is a telecom professional with rich experience over 15 years. His expertise is in the area of strategy and planning and his work experience includes stints with two of Big 5 consulting organizations, a telecom operator and a handset vendor. Mohit can be reached at firstname.lastname@example.org