New OS makers should target under-US$100 device market

Despite numerous mobile operating systems (OSes) available on the market today, the under-US$100 product segment continues to be underserved by existing OS makers and this presents new OS vendors the opportunity to gain a foothold in the industry, observed an analyst.

Malik Kamal-Saadi, principal analyst at Informa Telecoms and Media, said the mobile OS market is "already crowded" with more than 10 mobile OS platforms currently addressing different segments of the market. However, the majority of these platforms are currently slugging it out mainly in the high-end segment.

This leaves room for a new OS maker to come in and take advantage of the under-US$100 device market segment, which is "barely serviced" by existing OSes, he noted. "This is an area with great prospect of growth and if any new OS comes into the market, it should certainly target this market segment," added the analyst.

Fellow analyst Tony Cripps has a different perspective, though. The principal analyst of devices and platform for Ovum told ZDNet Asia in his e-mail that having more platforms is typically not a good thing as variety can cause market confusion among consumers, manufacturers and operators. The most affected demographic would be the app developers, as they have "finite resources" to invest in supporting their software for multiple platforms, he noted.

"Ovum's research suggests that the optimal number for developers to write apps for is three platforms, but with some six, seven or sometimes even more OSes competing in the market, any additional platform will have to fight for attention," Cripps said.

He did point out that for a new OS to successfully penetrate the mobile market, the software maker must be sufficiently familiar to developers and have access to a sufficiently large and addressable market.

Additionally, this company or group of companies must compete with the likes of Google and Apple in terms of investments in research and development (R&D) and marketing level in order to have a chance at success, the Ovum analyst stated.

"[That said,] my concern is that if the OS maker is a group of telecom operators, then precedence might suggest that they will find it extremely difficult to achieve their goals unless they change their approach," Cripps noted.

Both analysts' comments come after France Telecom-Orange CEO Stephane Richard was reported last month to have extended an invitation to the heads of other European telcos Vodafone, Deutsche Telekom and Telefonica to discuss the viability of creating an OS platform to compete against Google's Android OS and Apple's iOS.

Richard described both the Android and iOS platforms as a "Trojan horse" to get close to the operators' customers. To defend their customer base, a joint venture between the four telcos to create a common OS with an applications factory utilized by all parties could restore some parity in the high-end smartphone arena, the CEO said in the article by French newspaper Le Figaro.

"We do not want to be followers but [to] take the reins in innovation," he added.

Tom Wright, corporate press officer for Orange, the key brand for France Telecom-Orange, said in a separate e-mail interview that he had nothing more to add to Richard's statement.

"I can just say that in a world as diversified and competitive as telecommunications, there is certainly room for more than two actors [Apple and Google]. Others such as Nokia or Microsoft are also maneuvering," he stated. "As a telecoms operator, we [want] an open market that ultimately benefits the end-user."

He also stressed that the meetings between the four telcos' CEOs are preliminary discussions on areas of common interest between the operators and a means to define their roles in a rapidly evolving market.

Furthermore, their plans for a new OS should not be considered as a "fight against Apple and Google" because both companies are also very important partners for the telcos, noted Wright.

Similarly, Wright's counterpart at Deutsche Telekom, Hans-Martin Lichtenthaler, said the German operator is "strongly committed to open platforms and ecosystems".

To this end, the carrier is in favor of an open OS for smartphones to provide its customers maximum flexibility and choice for applications and services on their mobile devices. "Deutsche Telekom is open to discuss any approach that drives an open OS and, in turn, customer benefit," Lichtenthaler asserted in his e-mail.

However, Informa's Kamal-Saadi pointed to the examples of the Symbian and LiMO Foundations as cautionary tales for industry-wide joint ventures looking to bring an OS platform to the mobile market.

He described the Symbian OS as an "aging platform" that has an architecture which is increasing in complexity due to the number of upgrade cycles and addition of new coding layers. This, in turn, has made it "very hard" for the platform to keep up with innovation and bring out "champion smartphones" in a timely fashion, the analyst said.

"This situation has pushed a number of Foundation members, including Motorola, Samsung, LG Electronics and Sony Ericsson, to ditch this OS in order to focus on an alternative option, notably the Android OS," Kamal-Saadi stated.

The LiMo Foundation, similarly, is quickly losing its market position as a number of members are "distancing themselves" from the development of this platform, he observed. LiMo, a broad industry consortium of manufacturers, operators and software developers working to put Linux on the mobile phone, was founded in January 2007.

"Not only is LiMo losing key contributors, but the difficulty in steering the platform roadmap is making it difficult for the Foundation to keep up with innovation and release new versions in line with operators' expectations," the analyst said, adding that the platform's chances of survival are "very weak".

As Symbian and LiMo both continue to flounder, the European telcos' decision to create their own mobile OS could be seen as an indictment against the platforms' lack of competitive edge. 

After all, Vodafone is both a founding member of the LiMo Foundation and a board member of the Symbian Foundation, while France Telecom-Orange and Telefonica are core members of LiMo and members of the Symbian Foundation, according to both organizations' Web sites. Deutsche Telekom is a member of the Symbian organization, too.