If Microsoft can't break into this market with all its brand recognition and cash, then who can break in?
Well, it could be a Finnish startup consisting mostly of ex-Nokia employees, according to a feature in Quartz. The company, Jolla (pronounced Yah-la), produces a mobile platform called Sailfish. It will unveil its first phones running Sailfish in early 2013 and selling them by spring.
So, why does Quartz think the company has a chance to compete with iPhone and Android, which seem to have a lock on the market?
1. Sailfish's functionality is innovative
While a Sailfish-powered phone looks like iPhone/Android phones, it can do something the others can't: "The phone’s home screen can be filled with up to 9 concurrently running applications," says Quartz.
Even more interesting is that you can do something with an application without even opening it. The application's "cover" -- the rectangle that represents it on the home screen -- has buttons that allow you to control the app, so for instance, you can flip through contacts in your address book without actually opening it up, or forward a track on your music player without opening the app.
"The Jolla team seems to have asked itself: What does the user want to accomplish, and what’s the smallest number of taps required to accomplish it?" Quartz says.
2. It's going to enter the market through the back door
Great, so the phone is innovative. But how could a tiny startup get enough market infiltration against Apple and Android?
Well, Jolla doesn't actually plan to compete with them in markets where they already dominate. It is instead doing its first big deal in China, where phone sales grow 80%-100% every year, and where there are enough first-time buyers of phones to give a newcomer a foot in the door.
To do so, it's partnered with D.Phone, China's largest mobile chain retailer, which has 2,100 stores throughout the country.
But wait, is being in stores really that big a deal? Well, yes, as Quartz reports:
In China, things work a little differently than they do in rich countries. Retailers like D.Phone, for example, wield outsize influence over the rest of the mobile device market. In the West, cell-phone carriers generally pay the handset-makers part of the cost of a phone in return for being the exclusive carrier for that particular device. In such a market, a new phone based on an OS that nobody has heard of doesn’t stand a chance because the carriers won’t take a gamble on it; they might not recoup their outlay. In China, however, the retailers buy handsets and charge customers full price for them. The way carriers compete for exclusivity is to offer retailers and their customers the biggest possible amount of free airtime.
3. It already has an answer to one potential pitfall
People sometimes choose phones not because of the phone itself but because of the apps that are available on it, and developers make apps for operating systems with lots of users. And that is one downfall of Sailfish -- it has a chicken and egg problem: no apps to attract consumers, no users to attract developers.
But Jolla has thought of that as well, and is making the Sailfish operating system open source. This means that handset makers, software companies, and mobile carriers can all make suggestions or even alter the code themselves to make it more lucrative for them. Quartz explains:
"So, for example, if a company like Samsung offers an Android handset, it has to obey by rules laid down by Google so that it can include the Android app store, called Google Play, on its devices. It can’t use another app store. Revenue from Google Play goes to Google, not Samsung. By contrast, if a carrier wants to include, for example, its own app store or music service in Sailfish, that’s no problem."
This also means that Jolla offers a sweetener to carriers. Because its interface is so different and the OS was written specifically to avoid infringing existing patents, it could be free of the de-facto licensing fees that usually come with using Android on a phone.
4. It should be able to steer clear of the patent wars
The final reason that Jolla has a chance in this seemingly closed market is that it has created an operating system specifically designed to not infringe on existing patents. That saves it not only from costly lawsuits, but also from having to pay licensing fees for using another company's patented technology.
For all these reasons, Quartz concludes that Jolla's Sailfish phones could become the Red Bull to iPhone and Android's Coke and Pepsi. Only time will tell if that will come to pass.