[2009 might be the year of Android..  Google claims around 20 devices will be in the market by the end of this year. It would give a long-awaited boost to the proliferation of Android, but not necessarily a boost for developers. Guest blogger Gabor Torok looks at what the appearance of Android variants could mean in terms of fragmentation.]

HTC Dream aka G1 was the first Android device offered by T-Mobile. It took quite a bit of time for the next Android-based mobile phone, HTC Magic, to appear and be available first in Europe by Vodafone, with Asia and North-America (MyTouch 3G or G2 from T-Mobile) to follow in H2 2009. Oddly enough, the third and last device to date will also be manufactured by HTC: it’s called Hero and unlike the previous two it is not Google-branded and can be purchased unlocked. Even if the number of models powered by this platform is relatively low, it’s worth discussing how developers may be affected by the differences between these variants.

There are lots of on-line reviews comparing the two officially available handsets, Dream and Magic - visit HTC’s web site, for example, to see for yourself. The hardware specs of these devices are very similar (though Magic has more memory and no physical keyboard) leaving the software as the main differentiator. The Magic is based on Android v1.5 (codename Cupcake) and includes such features as on-screen keyboard, Home screen widgets, Live folders, video recording, etc. These handy software features are available for owners of older devices, too, such as G1 or the Android Developer Phone 1 (ADP1 in short). Whilst the firmware update must be performed manually in case of ADP1, T-Mobile takes care of upgrading the firmware of existing devices themselves.

What does this mean for developers?
Android developers haven’t had to worry about differences between platform versions and various handsets thus far. It’s simply because T-Mobile G1 had been left alone for a very long period and it was enough to write applications for that single device only. This has changed with the introduction of Magic and will be complicated further with the other upcoming models.

First of all and most importantly, existing applications originally written for the first Android handset will run on new devices without any modifications, i.e. they’re binary forward compatible. At least in theory, since there are signs and reported difficulties indicating that some applications need to be re-built and build environments re-configured for a successful deployment with the new SDK. In any case, Google is trying to keep source compatibility between releases, too, however, one should not expect 100% accuracy in their attempt (see Android 1.5 Version Notes for removed APIs, for example).

Obviously, backward compatibility is a different question: special care must be taken in an application to handle the lack of some hardware/software components in an older handset. Thanks to the fact that Magic is from the same manufacturer as Dream (HTC), one should not be surprised about forward compatibility. Nevertheless, the announced 18 new handsets for this year will surely make it more challenging to write such applications that handle the differences in handsets’ characteristics properly.

Fortunately, the SDK already provides APIs that enable run-time query of device particulars, so API-wise it should not be a issue for applications to distinguish between different models and act accordingly. Without this support it would be nearly impossible to write a single program and design it to run on multiple models - however, even with this support it will put an extra burden on developers’ shoulders they will have to deal with. It would be great, too, if look-and-feel guidelines were available as well, and not just Google engineers’ guidance on how “your program should look and behave similarly to built-in system applications“.

A useful addition to the Android SDK (which contains multiple platforms in one package) is the ability to fine-tune the target platform that one would like to build applications for. Developers can create an Android Virtual Device (or AVD in short), where the most important characteristics of a device can be specified, such as the availability of camera/physical keyboard/etc., screen dimension, choosing the system image emulation runs on, etc. The introduction of AVDs gives developers the freedom of using a single SDK for multi-platform development (read: multiple versions of the same platform, Android).

End-users and the impact to UX
There’s not too much to mention about the user experience on HTC Dream and Magic - the UX is pretty similar across the devices. Hero is different, though: HTC Sense UI provides a different user experience that is a departure not just from the Android UX, but from HTC devices themselves whatever platform they’re powered by (e.g. Windows Mobile, Android). A logical question arises: can older & non-HTC Android devices be updated with this framework? The answer is NO: due to licensing issues, “Google branded” devices (both G1 and Magic) are not allowed to be upgraded. This will surely result in fragmentation not only in software development, but in user experience, too.

Network operators, app stores and firmware updates
Both T-Mobile and Vodafone rely on the same central distribution channel, Android Market (AM). Returning the favour, Google-hosted AM takes carriers’ T&Cs into account when determining which applications can be submitted to each ‘market’. For this reason, some applications doing tethering, VoIP, etc. simply cannot be sold on Android Market - hence their developers need to go and find other markets. In other words, fragmentation exists at the distribution-level.

As already mentioned, HTC Sense UI is not permitted on Google-branded devices. Consequently, network operators selling “with Google” and non-Google-branded handsets alike must be cautious which firmware can go to which phone so as to satisfy all legal restrictions. In Hero’s case, for example, the update process is two-level: UI layers (i.e. Sense) are updated by HTC, whereas the rest by Google. The situation can get more complicated as the update hierarchy grows in depth.

Conclusion
If we can believe in rumours, 2009 is the year when a massive number of Android-powered devices will hit the market. Big numbers and diversity, however, will not make it easy to develop for this platform and maintain software updated on existing devices. Fragmentation has inevitably come to Android.

Looking forward to your comments,

- Gabor

[Gabor works as a mobile software engineer and has been in the industry since 2000. You can read more about his thoughts about mobility at mobile-thoughts.blogspot.com]

[Research Director Andreas Constantinou, discusses the latest update to VisionMobile's 100 million club, and some surprising facts about the companies that dominate mobile software]

We ‘ve just released the latest version of our 100 million club: the watchlist of software companies whose products have been embedded on more than 100 million mobile handsets.

In this H2 2008 update we ‘ve identified 26 software products from 21 companies which have shipped on more than 100 million handsets cumulatively as of the end of 2008. We ‘ve had a few important changes in the who’s who of the 100 million club; the introduction of HI Corp’s MascotCapsule 3D, a graphics acceleration software that has shipped in 490 million mobile devices as of the end of 2008, and embedded in Japanese, but also European handsets. Other noteworthy changes are due to the consolidation that is underway in the mobile industry; Nokia completed the acquisition of Symbian in November 2009. Esmertec merged with Purple Labs to form the Myriad Group (with 2 products in the 100 million club; Esmertec’s JBed and the ex-Openwave browser). Nuance acquired Zi Corp (as part of its string of 15+ acquisitions in the last 4 years), making Nuance the only company with 3 products in the 100 million club.

(click to go to the download page)

Traditionally we have looked at the cumulative shipments of mobile software products (the orange-red bars on the chart) - and the sea of challenges that keep them constrained to a small portion of the one-billion-a-year handset market. In this update we have also compared the 26 products in terms of penetration in the mobile market as part of the devices sold (the blue bars on the chart).

What are some of the most popular software products in mobile? Looking at the headlines one might suggest the Symbian operating system, or the Opera Mobile browser. In reality Opera and Symbian/S60 are in only 2% and 6% respectively of the devices sold in 2H08. There’s far more successful companies in terms of penetration of the sales base:

- ENEA’s OSE: Founded in 1968, ENEA is a Swedish software & services company which offers network management software, development tools and real time operator systems. The OSE RTOS forms the basis for both radio stacks and application stacks for many handset models from Sony Ericsson, Samsung, Nokia and others. All in all, we estimate that OSE has been embedded in 32% of all handsets shipped in 2H08.

- Mentor Graphics’ Nucleus: Founded in 1981, Mentor Graphics is a US-based  hardware and software design solutions. Its Nucleus real-time operating system has powered both radio stacks and applications in billions of mobile handsets - we estimate that Nucleus is embedded in 34% of handsets that shipped in 2H08. The secret behind Nucleus’ success is its revenue model which is based on per project or site fees, rather than per-unit royalties.

- Adobe’ Flash Lite is another success story. Flash Lite has been embedded on over 950 million mobile devices as of the end 2008, hitting the 1 billion installed base in 2009. Unfortunately, a large percentage of Flash Lite installations is closed to third party developers, which Adobe is now trying to fix with the Open Screen Project. It’s interesting to note that under OSP, the Flash 10 runtime will be available for zero royalties for product implementations which meet 3 criteria: a) the Flash runtime has to be certified for compliance with Adobe’s test suite, b) the runtime is open to developers and third party content and c) the runtime is updateable over the air, so that the installed base can be continually brought up to the latest version.

There are many more notable software products with high penetration within devices sold which often shy the headlines: Myriad Group’s (ex-Openwave) browser (still at 24% of the sales base due to feature phone embeds), Beatnik’s MobileBAE audio codec (21%), BitFlash’s SVG engine (18%), NXP Software LifeVibes audio/video middleware (23% - which recently also broke into the ‘500 million club’), Red Bend’s vRapid Mobile firmware update technology (18%) and Nokia’s Series 40 operating system (19%). Last but certainly not least, Nuance’s (ex-Tegic) T9 predictive text engine is embedded within an impressive 56% of all devices sold.

We ‘ve analysed other noteworthy aspects and insights of the 100 million club in previous articles:

- Only 26 products have made the 100 million club, a tiny figure compared to the 250-300 companies that license embedded mobile software products - not to mention the circa 30,000 mobile software developers (see analysis in the earlier article mobile software is dead.. long live mobile software).

- The emergence of de facto software standards like Flash Lite and WebKit (see our analysis in the earlier article The 100 million club: the bigger picture of mobile software), compared to closed-door standards like the LiMo Foundation (see our critical analysis on Why the LiMo Foundation needs to go back to the drawing board)

- The challenges of pre-load mobile software vendors; long sales cycles, deteriorating per-unit royalties and costly product adaptation (as highlighted by Morten Grauballe’s original The inner secrets of the 100 million unit club which provided the inspiration for the launch of VisionMobile’s 100 million club)

Comments welcome as always.

- Andreas
twitter: @andreascon

[Intel buys embedded software company Wind River with a 40% premium. What is the hidden asset that silicon vendors value beyond standard metrics? Guest blogger Andy V. O' Lay believes there is no more point in differentiating hardware and software in the mobile arena. The race to SHW has started...]

It’s not the first time in the mobile industry that a silicon vendor acquires a software company. Let’s not forget that behind the success of Qualcomm uiOne, there was Trigenix. Some also see beyond the failure of TI the shadow of the missed acquisition of TTPcom. These moves often prove decisive a posteriori. Here is why Intel and Wind River have set an important milestone in our industry.

A previous post (Mobile software is dead… long live, mobile software) highlighted the shift of mobile software development to post-load applications, enabled by the sudden proliferation of App Stores. Among the roadblocks in the embedded, pre-load business, two major issues were stressed:

- For software vendors, it is difficult to fight commoditisation and the related price-erosion while scaling up shipments. Only those vendors who have some unique IP managed to go down this route.

- Beyond the first design-win, deploying software across a variety of platforms and customers is a logistical nightmare. Less than 10% of the 250 mobile software companies we know have made their way to VisionMobile 100 million club charts.

Since then tables have turned and the mobile embedded software landscape has been considerably modified. Intel acquired Wind River, one of the champions of mobile software deployment, pioneer alternative business models favouring professional services fees for software integration, customisation, certification and indemnification.

The Intel-Wind River transaction is worth considering, not only because Intel agreed to pay a 40% premium over the stock price, neither because of the $884 million price tag (quite a lucky number even outside of China). It is a meaningful acquisition because it values mobile software companies on a totally unusual scale: what if IP was not a software company’s main asset?

What Intel has bought and why
The press release claims that “the acquisition will deliver to Intel robust software capabilities in embedded systems and mobile devices”. Beyond such obvious statements, we must consider the fact that Wind River is all about delivery. The company brings enviable competence to ‘irrigate’ equipment manufacturers with new technology and more importantly, help with the painful integration process that will transform a collection of best-of-breed modules into a coherent product.

This type of competence is fundamental for an ambitious silicon vendor like Intel with PC-centric views on the mobile market. Indeed, it can take years to transform a design-win into a running line at the wafer fab (silicon speak for manufacturing line) and the key to hardware success is software.

We are not talking of specific software IP modules like a protocol stack, a midi engine, a browser or a codec. We are talking about system skills, and the capability to support large manufacturers on their own premises with outstanding engineers. We are talking about blurring the line between the system provider own workforce and the one of its customers. We are talking about permeable boundaries between supply and demand. And like Intel, I would argue that mobile software companies are instrumental in making silicon solutions pervasive, because they tick two major check boxes: reference design and support.

The hidden asset of mobile software companies
Mobile embedded software companies (e.g. Myriad, Access, Aplix, NXP software, Azingo) have a unique understanding of products as a hardware/software system. They understand how silicon can be leveraged, encapsulated and productised to fast-track device delivery. Beyond specific IP, these companies have the capability to build the very first product that will feature a new chipset. This is the reference design check box.

A reference design is not a half-baked breadboard; it is a scale 1:1 device, ready to ship.

The absence of such capability has drained Texas Instrument, once the mobile silicon leader. Alternatively, true reference design has been instrumental in the success of Qualcomm and Mediatek.

Mobile software companies have a structural asset: in order to promote the adoption of their modules, they have deployed local workforces to support each of the big handset OEMs. Their engineers are often working on the same premises as their customers, they eat at the same table, drink the same coffee (or tea) and solve issues together. On a P&L sheet, they call it Professional Services. On the Balance sheet, it should be called customer relationship. This is the support check box.

Support is not a way to charge more than just royalties, it is about making sure that the product will actually ship. Support is the last mile, the distribution channel that delivers a facility right into the customer premises. Support is what made Ericsson or ST successful; it is what was valued when NXP was acquired… and this is the rationale for Wind River’s acquisition.

What Intel has incidentally bought
The power to harm is seldom the main reasons for investing, rather the cherry on the cake. Whether used as dissuasion or tactical weapon, it should not be disregarded. There are a few nasty decisions that the “new” Wind River could be taking, which would seriously impact competing developments. Yet, it would be interesting to understand what is Intel’s competition: Qualcomm? Google? LiMo?

Along the same lines, it is interesting to note that although Wind River does not pretend to be an IP company, it has acquired almost accidentally an interesting patent from FSM Labs regarding virtualisation. I wouldn’t think this patent has a wide scope, but in the hands of Intel lawyers, it could scare some people off… and more about virtualisation in a future post.

Where does the industry stand today?
On the silicon side, we have an interesting situation with 3 big vendors.
- Intel has just acquired support capabilities, yet they miss a fully baked reference design.
- Qualcomm has a complete reference design, but they lack support capabilities, especially to address European markets.
- ST-Ericsson is difficult to read, they should have capabilities both in terms of reference design (from Ericsson) and support capabilities (from ST and NXP). Yet it is unclear whether such capabilities will survive the painful merger exercise.

On the software side, with Nokia acquiring Trolltech last year, and now Intel buying Wind River, the number of mobile software companies with a system-wide scope (capability to write/integrate modules at all levels of the software architecture) and Linux capabilities is reducing quickly: Access, Aplix, Myriad, NXP Software… who will be next?

The key point here is the hidden assets. Mobile software companies are bought for what they enable, not what they earn. Trolltech allowed the creation of a single application environment on top of Nokia S40, S60, and Maemo where Nokia can base both its Ovi *and* its ‘signature’ apps. Wind River equips Intel with a heavy-duty support channel. Access and Myriad both have an important hidden asset: operator-compliance. Two words that Apple and Google are slowly learning to spell.

The future is reunification
So Intel, who was already lining up hundreds of software engineers solely dedicated to Moblin (not counting the 5,000+ Moblin community), is now acquiring 1,600 software engineers who will “more tightly align their software expertise to Intel’s platforms”. This is a visionary move. Hardware (HW) and software (SW) guys realising that they need each other to grow.

So what does this mean?
- HW needs SW to sell.
- SW needs HW to scale.
- there is no longer HW and SW; there is SHW (read Systemware, pronounce chew, and remember you read it here first).
On the mobile racetracks, there is no room for two-seaters. Wintel has lost its initial, Qualcomm never got one… We all are Berliners.

- Andy

[Flashback. Three years ago. An influential venture capital firm gathers its telecom think tank off-site. During the wine-tasting session (wine-tasting is the venture-capitalist equivalent of engineers coffee machine) somebody asks: what is the only billion dollars mobile software company? Silence. More wine-tasting. No spit. Then comes the answer: Qualcomm. Hardware is also the future of mobile software.]

[The iPhone has ushered in a new era of user experience on mobile hardware. But the business model Amazon negotiated with Sprint set a precedent that could radically reshape the future of the industry, writes guest blogger Stefan Constantinescu]

When Apple CEO Steve Jobs got on stage in January 2007 and announced the iPhone, the world collectively paused, took a deep breathe, and then yelled at the top of their lungs with joy at a device that not only changed their perception of what can be done with something that fits in your pocket, but how one interacts with small screen gadgets in general.

In Europe people smirked; EDGE only, 2 megapixel camera, no MMS, is this a joke? Contrast that to America, which at the time was still known as the “Land of the Motorola RAZR,” the radical idea of having the full internet in your pocket was new and exciting. Nearly 10 months later, in November 2007, it would be Amazon’s CEO Jeff Bezos that would climb on stage to show off his device: the Amazon Kindle; expensive, single purpose, limited content, by some accounts it was quite difficult to look at as well.

Why is it then that the Kindle is more important to the mobile telecommunications industry than the iPhone?

The Kindle is the first device to be sold with lifetime cellular connectivity included in the purchase price and therefore it is the first device to carve out a path towards a new business model for operators.

Apple had the opportunity to change things. They could have sold the iPhone unlocked from day one and educated the American public about SIM cards and why buying a device from an operator on a two year contract is unwise. They could have launched the iPhone internationally, unlocked, without having to negotiate with operators due to the fact that many people in Europe and Asia are used to paying full price for their device and buying a SIM card + service separately. They could have prevented the large exodus of iPhones that were meant for the American market, but ended up on the international grey market, from ever happening, but they didn’t.

Apple launched a revolutionary device and to buy it you had to go through the traditional channels.

Amazon’s Kindle however, once you purchase the device and turn it on, it connects to Sprint’s network automatically without any user configuration. Unlike buying a subsidized netbook from an operator today, where you still have to pay a monthly fee, the Kindle is connected for life after you make that initial purchase.

Intel has already admitted that the speed-wars are over and now their future will be focused on high volume shipments of their Atom processor, they even licensed their Atom intellectualy property to TSMC; the goal being to connect more and more devices to the internet. With all of these new devices connecting to the network, be it our cars, our refrigerators, our power meters, our televisions, anything and everything, how exactly does one enter their WPA2 security key on a toilet which has a single button, flush?

This little convenience, connectivity out of the box, has huge ramifications for the mobile industry if operators choose to play their cards right. We’re entering an era defined by people’s expectations of being able to browse the internet and access their favorite services on most, if not all, of the new devices they purchase.

Today operators cry foul when people demand that they turn into dumb pipes. Operators today still believe that innovation occurs at the core of the network, versus the edge. Operators come up with poor reasons, even poorer attempts at new businesses, and some are beginning to adopt defensive tactics such as limiting what can be done on their network in order to protect the business models that have been allowing them to expand for nearly 3 decades.

The Kindle was the first step in a new direction. Sprint effectively became a pipe for Amazon’s customers to purchase books and read Wikipedia on an electronic ink display. These new devices that will soon connect to the network, the cars, the televisions, the toilets, can either depend on users being knowledgeable and willing to configure the correct settings for access, or the device manufactures themselves can negotiate with operators beforehand to allow said devices to have connectivity out of the box.

According to an interview with Glenn Lurie, President of Emerging Devices for AT&T Mobility, a unit that opened in December 2008, his goal is to “develop relationships in the ecosystems around […] devices and launch those devices wirelessly enabled.” Later he added “you can imagine we’re talking to every OEM on the planet, there are a lot of people that build devices.” I’m going to speculate here and say that this unit, Emerging Devices for AT&T Mobility, was launched as a direct result of the Amazon Kindle.

The revenues operators can expect to receive from device manufactures will start small. Roger Entner, SVP, Nielsen’s Head of Research and Insights for Telecom, estimates that Sprint is receiving only $2 per Kindle subscriber per month, but just as data traffic, and in turn data revenue, leapt passed voice on landlines, the same will happen sooner rather than later with mobile operators.

The question is: are operators ready to experiment with new business models, billing methods and dealing with new customers that are device makers versus the individual?

The modus operandi we’re used to today is operators buying hardware, attempting to create a unique software experience, and then selling the final product to the consumer. In a brave new world why can’t it be the device makers who go to the operator, buy network access in advance, and then sell their devices directly to the consumer?

People would not have to buy network access and therefore churn, meaning customers leaving your network to join a competitor’s network, would be reduced. People would not have to care about paying a monthly bill, since it is the device manufacture covering the expense. People would no longer be tied to 1 or 2 year contracts and be stuck with a device they dislike; they would simply use a gadget until they no longer fancy it and buy another.

The benefits for the operators are clear. One customer, paying one sum of money, for one month of access, for one device, one customer you have to compete for every 1 to 2 years due to their contract expiring, is a profitable business to be in, but it isn’t forward thinking since the size of that market is limited to the population of a city, state or country. Having device manufactures purchase network access, with the amount of devices a consumer has today and will probably own tomorrow, has the potential to push penetration numbers past 200%, even 300%. Less money will be spent on advertising the operator brand since it becomes irrelevant. Less money will be spent on hiring software engineers to create those unique software experiences on devices. Less risk of ending up with excess stock somewhere in a warehouse because the devices an operator purchased for the Christmas season were not as popular as predicted.

The benefits for device manufactures and the consumer are even more clear. A greater number of devices connecting to the network, more services being used, zero headache configuration, unlimited access. Additional revenue can be extracted by charging more for a device to maintain a small margin on the network access or by partnering with service providers to make their service the default option.

The Amazon Kindle carved out a new business model, time will tell whether or not it becomes the de facto revenue generator for operators. They are pipes after all, but why is that such a bad thing again?

[Stefan Constantinescu is a guest blogger, currently job hunting, a former Services Strategist part of Nokia's Corporate Strategy Team, and a former blogger with IntoMobile.]

[Mind the gap! Are mobile operators allowing Google to take over territory in customer (self) care? Guest blogger Wouter Deelman looks at the present situation and what mobile operators can do to regain lost territory.]

You might not have noticed, but behind the scenes mobile operators are quickly losing territory in customer (self) care to Google. Operators consider customer ownership one of their primary assets, and make great strides in reinforcing their brand at each and every customer touchpoint, from logos on the handset plastic, to on-device portals, branded retail stores and exclusive handsets. Such marketing moves are very visible and make industry news headlines. Yet, mobile operators don’t seem to be aware that Google is staking out territory in the field of customer self care.

Traditionally, customer support was provided by operators through call centers. But with costs of on average 10-15 EUR per phone call (source: Mobile Handset Analyst, November 2007) and decreasing ARPU levels, operators have been reducing call center resources in favour of web based customer self care. But most end-users don’t bother visiting the website of their mobile provider for support, let alone dialing its call center. Finding relevant information on a mobile operator website is is challenge, despite significant investments in staffing, content management systems and good looking website designs.

In response, consumers just apply the survival strategy they learned when dealing with a crashing program on their computer: just Google! So what is today’s situation, how are mobile operators faring when it comes to customer (self) care? Qelp conducted a small, simple test for six of the UK’s largest mobile operators.

Suppose you’d like to get email working on your Nokia N96. More and more consumers just Google the error message or for example “Nokia N96 email set-up”. The table below summarizes your experience when you are based in the UK: searching the operator’s website versus a search with Google.

The above results speak for themselves. For an end-user seeking help to get a service up and running on his mobile phone the answer is not just a few clicks away. Also the mobile operator seems ‘invisible’ for Google, unless it comes to commercial offers. If one looks somewhat closer at the Google results, result nr. 1 at page 1, lists a site called ‘Know Your Mobile’ with detailed instructions for email setup on a Nokia N96, almost exactly what we are looking for. (however the instructions are still generic and we still need to find the correct settings to access the mobile network).

Vodafone and O2 use forums, apparently in an attempt to let customers sort out their issues among themselves, facilitated by a moderator. But, is it good marketing for a mobile operator if a customer is overloaded with the frustrations of other customers while he is trying to hook up his shiny new smartphone to the network?

The stats behind the chaos
To appreciate why customer service is such a complex issue for mobile operators, it is worth looking at the following stats:

- For the first time in mobile history the handset market is shrinking. Yet smartphones, abundant with complex functionality, are still a growing segment which now represents 13.5% of the global market.

- A study by Mformation revealed that “Set-up issues prevented 45% of people from upgrading to new, more sophisticated phones” while “61% said phone set-up is as frustrating as changing a bank account.”

- The complexity of mobile internet set-up on a new mobile phone is illustrated by this top-10 device management challenges which Qelp put together based on experience with multiple operators.

- “Only 20% of a phone’s services and features are used regularly” found a study by WDS Global in September 2008.

- Already in 2005 a study by Olista reported that only “2% of end-users would seek assistance from their mobile provider” to get mobile internet working.

Recently Google has been rolling out a new search feature called Options, allowing users to filter results more quickly. Our test for the search “Nokia N96 email setup” now shows “Forums”, “Reviews” and “Videos” as filters. These options do not bring us any closer to a meaningful answer for our issue today, but one can expect web shops, forums and blogs to act upon this change and ensure that they rank even higher when applying these filters.

Can operators get their act together?
Is there anything mobile operators can do to stop Google’s invasion of their territory? Shouldn’t operators have the ambition to help customers get any service up and running at first attempt within 3 minutes? Smartphones represent only 13.5% of the market, what if this number grows to 20 or 30%? How are mobile operators going to stay “in touch” with customers and deal with the growing complexity of their questions?

There are still options, but operators will have to get their act together. Here’s a few suggestions:

1. Significantly improve the user experience of their websites. For example, by using better site search and helping visualise complex user instructions. End-users love YouTube, Maps, Streetview, Flickr and  know a how picture tells a thousand words. Operators already use such tools in marketing, so why not in customer self care as well?

2. Ensure that mobile operator websites are discoverable for Google by applying search engine optimization (SEO) techniques. Mobile operator KPN has been optimizing parts of their website for Google indexing. A recent experiment of KPN showed that some 30% of end-users try Google first to get their phone problems sorted out. (disclosure: KPN is a Qelp customer).

3. Be present in social networks, forums, blogs, even on an experimental basis - this would give give operators bonus points with early adopters. See for example how Comcast is using Twitter.

4. Provide on-device, mobile phone based, customer self care. Voice search and device based solutions are becoming available from companies like Nuance (SnapIn), Ydilo/Movidilo as well as Qelp. But also Google is entering the game with voice search for iPhone and of course Android phones.

Some of the above would even help operators obtain a first mover advantage rather than remaining in a defensive mode. A mobile operator is in the best position to know the user’s phone number, their device, voice/data usage and their location. Who would be in a better position to address the user’s need for support?

- Wouter

[Wouter Deelman is founder and CEO of Qelp. Qelp delivers mobile operators on-demand software to help increase revenues per user and reduce call center costs.]

[What makes up the mobile user experience and what are the mechanics behind it? Research Director Andreas Constantinou introduces several important concepts behind the mechanics of the user experience; the user journey, core vs downloadable apps and the future of power apps]

The user experience (UX) has been probably the most talked-about topic in the mobile industry, mostly because we all know that the UX suffers and we all have suggestions of how it can be improved, especially in the post-iPhone era. The (graphical) user interface has been the aspect of the UX which has garnered most attention historically, and countless software vendors have demonstrated solutions to improve the UI, from better text engines to gesture-based widget navigation.

However, few have actually suggested what the UI really is or how it works. What are its mechanics, or what makes the UI tick?. Here I ‘ll attempt to do just that.

User interface = user-facing applications
A fundamental fact is that the user interface is made of a series of software applications; the idle screen, the menu app, the inbox, the camera app, the browser, the music player, a games or other downloaded application, etc. The ‘user journey’ is comprised of navigating in and out of different applications all of which collectively make up our perception of the phone’s UI. The handset OEM integrates the applications horizontally into each other, so that the end result is a seamless flow that hides the application boundaries. The following diagram is a graphical illustration of the user journey in the form of a circle, with selected core apps shown as an example.

The diagram illustrates several important properties of the user journey across the UI:
- The idle screen forms the beginning and end of each usage ‘trip’
- The idle screen, dialer, menu and sms/inbox applications take up the lion’s share of the user journey. We ‘ve used arc lengths to illustrate the percentage of time each application is active, but it is by no means exact; in fact it is oversimplified in purpose. There are few published studies into the topic of application usage as a proportion of the user journey, with a notable one being Nokia’s 360 programme (see this presentation for example).
- The arc length is proportional to the commercial importance of each application; the more an application is used, the more is the ‘usage surface’ and the commercial value of the inventory which it exposes. Among other things, this explains why Google opted for an operating system (Android) and not a browser for mobile phones, since the browser only makes up circa 5% or less of the user journey (see our earlier analysis).

Core vs Downloadable applications
Another important notion in the mechanics of the user interface is the distinction between core (embedded) and downloadable apps. By core apps we refer to the set of applications which:
a) form the vast majority of the user journey and
b) are pre-loaded or embedded into the handset ROM at the point of manufacture.

Core applications are typically the idle screen, dialer, main menu, settings menu, browser, inbox, calendar, contacts, camera and multimedia player. Downloadable applications are all apps which can be downloaded post-sales, i.e. by the user. There are fundamental differences between core and downloadable apps, which impact the developer audience, commercial relationships, technical integration, accessibility and overal commercial importance of these applications. The next table summarises the fundamental differences between core and downloadable applications.

There is a lot that can be said about the above attributes, and each one is an article in its own merit. For example, widget-based navigation allows downloadable app usage to take up much more than 5% of the user journey; the limited accessibility of downloadable apps on mass-market phones is what justifies the tiny share of the user journey. Another notable point is that technically all operating systems enforce tight technical boundaries between core and downloadable apps, while Android and WebOS are the new OS generation that is breaking down these technical boundaries. Commercially though, no OEM or operator has yet allowed users to replace core apps with downloadable ones, due to the implied increase in support requirements and related liabilities.

Overall, the difference between pre-load and post-sales installation of applications has huge ramifications in terms of technical and commercial route to market and barriers to entry; for example, any one can write an addressbook application on S60, but only the OEM can make this the default addressbook application, or offer access to otherwise ‘hidden’ APIs for integrating the app horizontally into the other core apps.

Blurring boundaries and the future of power apps
One of the most interesting developments in the mobile handset industry is how the pre-load and post-load boundaries are starting to disappear. For example mobile software management solutions are allowing modular installation and updating of core apps during the post-load phase (see our earlier research report on mobile software management); platforms like BREW MP, Java (on S60), and S60 are featuring modular updating and/or dynamic module loading; Android and WebOS are offering a simplified application environment for core apps open to all 3rd parties; Core apps are increasingly integrated with the network and internet cloud, as is the case with H3G’s INQ1 mobile phone which integrates Facebook, MSN and contacts into the idle screen.

Moving forward we see the development of four ‘power apps’ which will deeply integrate into the service cloud, and will also take up an increasing share of the user journey:
- the idle screen app: idle screen apps are being productised by handset OEMs (see Nokia’s S60 and S40 latest Home screen product) and consolidate an ever increasing amount of local device info (e.g. contacts) as well as service alerts,  status messages and advertising inventory.
- the Phonebook 2.0 app; the addressbook will evolve into offering a people-centric view of the world, with Facebook, MSN, MySpace, Twitter, etc connectivity, but also contact-centric actions (select contact, then click to SMS, call, locate,invite, etc) - see for example Voxmobile’s pioneering work in this field.
- the Calendar 2.0 app; the calendar should evolve into offering a timeline view of your schedule, as well as a history of photos, texts, emails sent (ala Nokia Lifeblog), probably combined with events happening in your area, notices of which contacts happen to be in the same city (via Dopplr or Tripit), weather updates, etc.
- the Location 2.0 app;. currently location apps are map-based, in other words they offer a 2D map-view of the world around you, with related attractions or utlities which are nearby. We can argue that the location apps of the future will have maps as just one of the many views; event-based views are another interesting concept, which would show you what’s happening around you, alert you to promotions, who’s nearby etc.

Ultimately, tomorrow’s mobile applications will offer zillions of alternative mashups of information in the device, network and web; but I would argue that the phonebook, calendar and location apps will form long arcs or cardinal points within the user journey, simply because this is how we humans are used to conceptualise the physical world; by the people, time and space around us.

Comments welcome as always.

- Andreas
twitter: @andreascon

Did you miss our first free webinar on Mobile Open Source in March? We had to turn down lots of attendees, as the 50 places quickly filled up in the first 24 hours leaving many people on our waiting list.

We will be repeating this webinar on Tuesday 19th May at 16:00 CET, and our registration form is now open. The webinar is now closed.

This 30 minute webinar offers insights on open source economics, who’s who in mobile OS, licenses vs governance models and how to leverage open source in your strategy.

This webinar offers a 10,000ft view of mobile open source, including:

- How open source maps into the mobile industry
- Why does the industry use open source and what are the related business models
- The diversity of community cultures and governance models
- What are the four roles your company can play in OSS?
- When to use open source and when not to
- Why open source is a radical change to how you manage software

Click here to register for this event. The webinar is now closed.

Places are limited to the first 100 registrations and are on a first come, first served basis.

This is a ‘teaser’ webinar with selected extracts from our one day deep-dive 360° workshop on everything that is mobile open source, from economics and business models to license best practices, software management guidelines and 20+ case studies of real world lessons from open source use in the mobile industry.

-    Vanessa
twitter: @visionmobile

[Mobile widgets: hype or paradigm shift? Research Director Andreas Constantinou talks about the commercial reality behind widgets and compares and contrasts 8 widget platform solutions to shed more light into this new driver of mobile service adoption].

What’s in a widget? It’s amazing how such small pieces of cute graphics are managing to create such a hype wave in the mobile industry. What widgets lack in size, they gain in terms of market expectations; most European tier-1 operators have deployed or getting in proposals for widget-based solutions, while for handset manufacturers (e.g. N97) widgets are the latest must-have feature to drive up selling price in the footsteps of the iUserExperience.

The concept has come a long way; widgets as single-purpose, windowed, mini-applications, were introduced by Apple’s Dashboard, popularised by Yahoo’s Konfabulator and mass-adopted through Microsoft’s Vista. Yet while widgets are nice-to-have on PCs, they are a must-have on mobile; in a sense, mobile is the promised land for widgets,since their properties make them ideally suited for this domain; small screen space, limited memory requirements, quick to download due to small size, visually unobtrusive and condensing a diverse set of complex information onto a compact 4×4 grid.

There’s plenty of demand for widget-driven solutions; operator rationale for sourcing widget solutions varies, but generally revolves around three axes:
- a tool to increase mobile Internet usage on mass market handsets (like Opera Mini for everything beyond the web)
- a customer acquisition tool for attracting customers onto a data plan
- a tool to both discover AND deliver operator services

So what about technology supply? The hype wave has triggered the launch of a wide range of solution providers. Beyond the mainstream mobile software providers (ACCESS, Opera, Picsel, Sun, SurfKitchen and Yahoo), there are manufacturer-led solutions (Nokia WebRuntime, WidSets and Motorola WebUI) as well as numerous smaller mobile solution vendors (Insprit, FeedHenry, Streamezzo, Ulocate, ViaMobility, Webwag and Zumobi).

A fun part of what we do here at VisionMobile is vendor comparative analysis (e.g. see last year’s Mobile App Store analysis). We ‘ve spent quite a bit of time talking to widget solution vendors and comparing and contrasting their commercial attributes. For this analysis, we looked at 8 mobile widget products: Nokia WidSets, Nokia WRT, Opera, Access, Motorola WebUI, Yahoo Blueprint, Sun Java ODP and SurfKitchen Widgets. We selected major solution providers; Nokia with two widget solutions (with WidSets now being merged under Ovi), Opera (a strong performer with Vodafone and T-Mobile deals), Access (one of the earliest to roll out widgets with operators in Japan), Motorola WebUI (great vision, albeit slow to execute), Yahoo (impressively executed Yahoo Go! strategy, now extended to widgets, Sun (Internet and Java centric vision, but well resourced) and finally SurfKitchen (veteran in mobile software and ODPs, and recently extending onto widget deals).

We ‘ve summarised our comparative vendor research into the table below. There’s quite a lot of data in this table - so we ‘ve added a PDF version after the click.

So are widgets just another iFad ? We would argue that they are not. Widgets are perfectly suited for discovering and delivering the 100s of operator services that so far remain hidden behind WAP menus, premium SMS shortcodes and cryptic USSD instructions. Equally importantly, we believe that widgets will be also instrumental for exposing network services to third party developers (i.e. using widgets to wrap network APIs) and also engaging users in a social discussion around widgets (including service) discovery and sharing. We ‘ve only seen the tip of the widgets iceberg.

Comments welcome as always.

- Andreas
twitter: @andreascon

The whole team are excited (and relieved!) to finally announce the launch of the second edition of our Mobile Industry Atlas. The Atlas has been three months in the making with our team and network of advisors involved in the immense task of filtering and reviewing 800+ leading companies in the industry.

This is the first time someone has put so many companies into one map and really distilled the complexity of the mobile industy into clear sense.

The Atlas is twice the size of our already successful first version - spanning 47 market sectors with up to 20 companies each - and also includes category definitions.

You can purchase an A1 wallchart or download a sample of the Atlas here.

This latest version showcases 800+ leading companies in 47 market sectors, spanning all major players involved from handset design through retailing including development and delivery of hardware, software, SIM cards, services and content.

The Mobile Industry Atlas maps the players involved from the core value chain framed by those who offer services, products and infrastructure to the two centres of gravity: the handset manufacturers and the network operators.

Core value chain: the vendors who form the backbone of the handset lifecycle, from industrial design houses to distributors and retailers.

Market sectors: Industrial design, user interface design, reference hardware designs, system integrators, ODMs and elec. manufacturing services, handset OEMs, mobile network operators, MVNOs, SIM card OEMs and appl. vendors, distributors, retailers.

Handset Manufacturer software, hardware & services: the vendors involved in providing software, hardware, technology (IP) and services to the OEMs during the design and development of the handset.

Market sectors: Input technology, plastics and mechanics, silicon, multimedia chipsets, baseband and application processors, operating systems, widget platforms, multimedia middleware, browsers, application environments, UI frameworks, software services.

Network Operator infrastructure & services: the vendors involved in providing infrastructure, software and services to network operators.

Market sectors: Content network and radio infra, service delivery platforms, mobile device management, content retailing and billing, SMS-MMS gateways and aggregators, call completion, voice messaging and voicemail, mobile commerce and payments, mobile service analytics, traffic and content optimisation, MVNEs, mobile video and music platforms, customer support services.

Content and service delivery to Network Operators and Handset Manufacturers: the vendors involved in providing content, services, technology (IP), tools and software to handset manufacturers and network operators for the deployment and delivery of value-added services.

Market sectors: Mobile content, games publishers, mobile advertising, mobile search, mobile messaging IM & VoIP, mobile social networking, location based services, email - contacts backup/restore, on-device portal solutions, active idle screen solutions, developer tools, targeting and personalisation.

The map also depicts the stage where each core value chain player is involved along the handset lifecycle, from product planning through design, implementation, sale and in-life use.

The Atlas is available to order here in A1 glossy wallchart format.

Thank you to everyone involved for all their hard work in getting this Atlas produced.

- Vanessa
twitter: @visionmobile

[Is Google the great benefactor, or is there a bag of tricks hiding behind Android? Research Director Andreas Constantinou explains how Google may be using commercials to deploy services on Android phones, why Android is not that well designed for the mobile industry and how Google can overcome its challenges]

Android was launched in November 2007, breaking new ground with open source in the mobile industry. Single-handedly Android triggered the Nokia S60/Symbian merger and open source roadmap, and pre-empted the openness of the LiMo foundation (Linux-based) initiative.

[updated: this post has been featured on the Carnival of the Mobilists! Thanks Tam.]

The hype tsunami that has followed Android is well documented in the blogosphere. So are the mis-steps that Google made away from its openness pledge, including working behind closed doors with selected developers and restricting applications from its Android Market.

What seems to be still a puzzle is how Google is using Android to further its primary goals; making more money from ad inventory sales. And whether Android is the panacea it’s promised to be;  HTC is only producing devices so far, Arora devices have been delayed indefinitely and many OEMs are promising but not showing any handsets.

Google’s bag of tricks
If the entire Android software stack is open source and freely available to download, modify and reuse, how does Google deploy its services and ads? Surely, Google is not just a benefactor to the mobile industry, there must be something that it gets back in return to the 300+ man years it has put into the effort already, especially as Google is a publicly traded company.

There’s two tricks up Google’s sleeve that we ‘ve been able to deduce based on public info:
- Android Market (or any part of the marketplace) is closed source and Google-proprietary. And it’s not just the on-device storefront that Google holds the key to (which is easily replicable), but the whole marketplace, distribution and - more importantly - the developer ecosystem behind it.
- The Android source code is not productised. You need (in our estimates) 1+ year of productisation efforts and Google’s help to develop an Android phone. By the way, this is true for any phone; even if Symbian’s source code was open source from inception, it would still take OEMs 3+ years to reach a level where they can produce differentiated phones fast enough. In short, Google’s professional services are much needed by an OEM producing Android phones.

In exchange for Android Market and professional services, I would assume that Google can demand a tall order in return;
- bundling of Google apps (and thereby exposure to Google’s services)
- access to usage analytics for Google phones - and thereby helping Google target ads more finely and increase CPCs and CPMs.. surely a highly controversial topic for which Google ought to be keeping the details close to chest..

Designed for 3rd parties, but not 2nd parties and handset OEMs.
Google has released a ton of source code under the APL2 open source license; just have a look for yourself at source.android.com.

Android has been designed exceptionally well for 3rd party application developers; the programming paradigm of Intents and Java-SE environment make programming apps a breeze.

We tested Android against S60 for developing a PhotoEditor and a Mapping application (with two developers per OS) and the results were crystal-clear: development time and emulator debug time was less than half in the case of Android, compared to S60.

However, when designing Android, the Google team had the PC paradigm in mind. And in the mobile industry, it’s not 3rd party developers who create phones. It’s OEMs and their partners (so-called 2nd party developers). And the needs & wants of 2nd party developers are very different to those of 3rd parties.

OEMs care not just about speed of app development, but the speed of variant management; i.e. how quickly can you take one Android phone and create a second one that looks very different in a fraction of the time. Android is poorly designed in going from n to n+1 variant. You need to be re-customising the Java code for each app separately, playing with XML templates and inheritance operators alone will not help. In general, variant management is a major thorn for handset manufacturers and no-one has solved this issue completely (mostly because OEMs are extremely risk averse these days).

Moreover, the APL2 licensed source code at source.android.com is missing several key components for productising mobile phones:
- language packs: Google promised 7 languages for 1Q09, but that’s already passed. You need support for 50+ languages in order to launch a phone globally and Google certainly has a lot of catching up to do in comparison to S40 and S60.
- bluetooth drivers: most phones need them
- DRM support for content: often required by operators and content providers in Europe.
- operator compliance software and certification: one of the main omissions in Android that stalls product delivery into European operators. This is not something that was intentionaly left out, but assumedly comes from the PC-centric mentality at Google HQ.
- theming support

Google has decided to control the roadmap and the code checkins (even cupcake is a development branch not the productised code); and so each OEM who has to develop operator packs, language packs, etc doesn’t have a straightforward way (or any obligation!) to share the developments with the Android community. In plain English, this calls for reinventing the wheel for each OEM that builds an Android phone. This is a very hard problem to solve and not one that either LiMo or Symbian Foundation have got a solution to yet.

Android is a victim of its success
To the surprise of most industry observers, the industry (including operators and handset OEMs) have shifted from criticising Android in late 2007 to adopting Android in late 2008.

So what does this mean for Google?

It means that up to 2008, Google was working with one OEM (HTC) and one operator (T-Mobile). And since 2009 it has to work with nearly 10 OEMs (Motorola, Huawei, Sony Ericsson, Samsung, HTC, Acer, Lenovo, Archos, Garmin, Toshiba) and several operators (O2, Vodafone, T-Mobile China Mobile, ..).

You would think that Google’s mighty 20,000+ workforce can easily cope. But the 100-strong Android team that Google acquired isn’t showing signs of scaling to match the demand; at least the roadmap seems to lack the pace of development, let alone innovation that is expected from Google.

Overall, Google should seriously struggle to meet demand from OEMs in 2009. I wouldn’t be surprised if we see half a dozen phones launch in 2009.

What Android needs most
What Android needs most is for the key productisers within the industry to step up and take a leading role in offering an out-of-the-box Android-based stack. Here I ‘m referring to chipset vendors (e.g. Qualcomm, ST-Ericsson) and system integrators (e.g. WindRiver, Teleca) to provide complete stacks including a UI personality framework, operator-compliant packs and test suites, language packs, app store (doesn’t have to be Android Market) and post-sales software management tools. The role of system integrators can also act as a gap-filler for OEMs looking for expertise in Android phone development.

I would say Android has a window of opportunity that lasts until end-2009 to win the OEM’s support. In 2010, S60/Symbian is going fully open source under the EPL license, and OEMs (in theory) will be taking more package owner (i.e. product influencer) seats away from Nokia. So unless Android can cater to the needs of the mobile industry (and not just 3rd party developers), OEMs might have a change of heart in 2010, back to S60 as the strategic platform of choice for smartphones, which can’t be so bad after all with 200+ million phones in the market. I hope that Motorola, having banked its future on Android really knows what it’s doing.

Comments welcome as always.

- Andreas
twitter: @andreascon

(while on the topic of market insights, make sure to check out our hugely successful Mobile Megatrends 2009 series below.)