Is There Really Room For Another Mobile OS?

I read an article this morning on Ars Technica that said that Lenovo was the last apparent suitor to buy Palm. What go me thinking was an assertion the author made toward the end of the piece that said “At some point, though, the me-too Android handset makers are going to want to differentiate themselves, and they’re going to wish they had a mobile OS that would let them do that.” The writer goes on to say that, if these handset makers don’t get Palm, they would have to “launch a brand new smartphone OS in the face of stiff competition from powerful incumbents.”

Does the author really think we need yet another mobile operating system? Is the operating system the only way to differentiate their products? PC makers seem to do just fine, being able to differentiate themselves in various ways while still selling machines that primarily run Windows. Car companies have been able to carve out different parts of the market, all of them using the same basic technology to move the machine. Electronics manufacturers have been able to differentiate with TVs, DVD players, etc. without requiring unique TV broadcast protocols or media formats just for their products.

Trying to build a new market for a new smart phone OS is an enormous undertaking. It isn’t the technical challenges of writing the software. Its the bigger challenge of attracting developers to build the apps, and obtaining the licences to provide content. The reality is that smart phones are about content (music, video) and applications. Its the same basic reason that Windows is so far out in front in terms of PC operating system marketshare. The operating system, by itself, doesn’t mean much without tools to make it useful. But, if the installed base for an operating system is too small, or the operating system itself doesn’t appear likely to survive, then attracting developers to build for your operating system becomes a difficult undertaking. Its the same reason why many developers stay away from the Mac: the market isn’t big enough yet for them to incur the cost and risk to build their applications for the system. As the Mac market continues to grow, it attracts existing Windows developers to include it in their plans. It has taken a long time and a lot of money from Apple to make this possible.

As a lesson in this, look at the iPhone. You’ll notice that Apple didn’t release an SDK for 3rd party apps at launch. Part of this may have been technical. However, it appears to me that Apple wanted to wait until the iPhone installed base was “big enough” to attract developers, particularly significant names like EA. The SDK didn’t come out until there were several million iPhones and iPod Touches out in the market. It also helped because it also meant a community of buyers who were clamouring for apps beyond the basic ones that came with the phone. It built demand and a market that justified the cost and risk associated with building apps. Apple also did this at a time when they only really had Symbian and Blackberry as competitors (Android wasn’t out yet, and both Palm and Windows Mobile were diminishing rapidly).

To try to repeat that now would be a very, very difficult undertaking, and one that requires far deeper pockets that most of the so-called “me-too” handset makers would have. Samsung could possible pull it off, given their available resources and their presence in the Asian market. I doubt that HTC could pull off something on its own, simply because it doesn’t have the financial resources to do it. I would even have my doubts about Lenovo making a go of it, even using Palm as the starting point.

The demise of Palm I think is inevitable, and I don’t see a new mobile OS coming up to be a major player in the market. People are starting to pick their sides. As they become more dependent on content that is locked to their device, and as they come to reply on the apps they have, it will be harder to get customers to switch from one handset family to another. The inconvenience, for most, will outweigh any benefits (real or perceived).

This isn’t to say people won’t switch at all. However, the drive to switch will have to be based on something very compelling. For example, people have abandoned VHS for movies, and moved to DVD, because the image quality was so much better, the form-factor of the media more convenient and you don’t have to worry about rewinding, tape jams or cleaning the drive heads. The jump from DVD to Bluray, however, is going much slower, simply because for most people, the difference isn’t enough to justify the higher price or replacing their video library again. The same goes for businesses running Windows: even if the software they need is available for the Macintosh or Linux, the cost of switching (software, hardware, IT training) and the risk is enough to deter them from doing it.

While we aren’t there yet, I can see a day soon where people won’t want to switch from one mobile OS to another, simply because it means re-purchasing all of their apps, and they may have to live without some apps, because they aren’t available on all operating systems. Right now, the barrier to trying to bring a new OS into the mobile space just seems to be too high, and is getting higher every day. To even consider or suggest it seems folly to me.

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