Hi, my name is Peder Ulander. I'm the Vice President ofMarketing at MontaVista Software and today I'm going to tell you a little bitabout how Linux is dialing up the mobile phone market. At the end of 2008, allthe market research from actual estimates are to be somewhere in the neighborhoodof about a billion phones shipped, and a lot of the things driving thisincreased adoptions in mobile phones is the fact that operators and handsetmanufacturers are changing their services from traditional voice to moving moretowards rich content and rich applications actually being delivered down to themobile handset.
Now, as we shift from voice to data, there's a number ofthings that actually have to change in the overall design of mobile handsets.From the voice perspective, the hardware is actually what drives a lot of thethings. As we move over to a data based solution, the most important elementactually now comes in the form of software because at the end of the day, whatyou're doing is you're delivering a number of Rich Media Formats ranging fromaudio, video, voice on demand, even the push-to-talk capabilities.
The market is actually shaping up into three very distinctsegments. The first one is the traditional voice because there always will befolks that really all they need is a dial tone and a connection and thatactually represents about 25% of the total market in 2008. The other side whichis not entirely new to the market is the smart phone, the PDA, the web browser,the traditional phones that we've seen in the market today and that actuallyrepresents somewhere around 20% of the total market place. This is where you'regoing to see your Palm Treo, some of your Microsoft Smart Phones or some ofyour Symbian Smart Phones. The real opportunity, though, happens to be in thefeature phone segment. OM estimates this to actually be somewhere in theneighborhood of about 55%.
From a voice perspective, really the traditional operatingsystem that sits in the phone market is focused solely on the hardware, theoperating system and the telephony. What does that mean, that means that if youdo want to add new services, regardless of whether something as simple as ajava application to a robust calendar set, it's extremely ineffective from acost perspective and a quality perspective to bolt that stuff on to thetraditional voice service. Now, the flip side is, you can take a look at asmart phone. From the smart phone perspective, they actually have all otherstuff integrated into the phone.
The problem for hardware vendors or for phone vendors is thefact that first off there's limited functionality with respect to what hardwareyou get to use. There is no customization with regards to your ability to addyour own applications, your own brand, your own user experience; you'reessentially running something that is extremely costly and extremely limited ina brand functionality that costs a lot.
Now why does Linux make sense? The interesting thing aboutLinux is the fact that it is an open flexible architecture where developersactually have the opportunity to go in and have choice on the hardware. There'sa number of chipsets today that are delivered in mobile phones that actuallyrun Linux. You have choice with regards to what type of operating system yourun and in fact, you have access to all of the source code in Linux as well asaccess to a number of applications and components that you can build on top ofthat Linux. So what does that mean? Well, that means you may have the choice ofseven different types of browsers. You have the choice to actually customizethe middleware and the user interface to add your own brand. You have thechoice to actually deliver some of the new network services whether they bevoice or media or video down to that device and the number one thing that'sactually driving this is, whereas, the smart phone delivering a lot of the samefunctionality costs $900, customers have been known to deliver this type of asolution down in the $100 phone range.
So when you look at it, both cost and customization actuallyenables handset vendors to become more competitive in the overall solutionoffering. That's why many solution providers are choosing Linux today.
