The 100 million club: some surprising facts about mobile software
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[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
Very insteresting Andreas,
really, I wasn’t expecting OSE and Nucleous to be so much pervasive.
Anyway I’m wondering of what’s the impact on users and service-providers community. Especially if you look at the wide “phones” market and not only to “smartphones” market that is, actually, sort of precurring future global handset market.
Any idea?
Hi Andreas, whats your opinion as to What makes these companies tick? What is it they have got right, that others have missed out?
Thanks
Hi Simone,
RTOSes are here to stay. Due to the fragmentation and shallow APIs of Java, I would say that both users and service providers are not able to realise the full potential of this 85% of the market. There’s no silver bullet here.
Brijesh,
Good point. I would say that the key success factor for the 100 million club members is having developed a piece of software that’s essential to mass-market handsets and that’s much cheaper/quicker for OEMs to buy than build – for example JVMs, browsers, text engines, codecs, firmware update agents, etc. Plus enough cash to sustain 2-3 year long development cycles and business development cycles, which are typical in the embedded business.
Andreas
Hello Andreas
Your opinion – guidance please. I have a history in the embedded world at Motorola/Freescale. I now work for a weather company and see some parallels. Weather data can be embedded into many consumer applications as a value add feature. Likewise we can data this data and develop complete consumer apps. I see the right answer is to do both, not one or the other. I would like to know if you now of any other examples I could give my mgt team, of companies that did both successfully. (were not afraid to give up the so called strategic IP) and prospered because of this. I realize that I am asking for items that are higher in the OS layer, but right now I can not see the forest from the trees and am looking for another set of eyes
Hi Walter,
As I understand it, you are debating whether you should offer weather data as an enabler to mobile apps developers or to develop complete weather apps for consumers.
Consumer services is way outside my radar, but I will brave an opinion on your question. Weather data (temperature and pressure forecasts) are almost always free. Assuming you have access to higher-valued data (e.g. wind pressure and directions near major sea coasts) you could offer any of the following:
- consumer/prosumer apps for specific niche segments (e.g. people in water sports, sailing, boat owners etc) where you deliver information and guidance relative to the weather at the current location
- weather/wind info (without the apps) to network operators as part of a paid subscription, aimed at similar target segments
- weather info to makers of fishing equipment (Airmar, Furuno, etc) which they could combine with their own telemetry for advanced predictions and guidance on screen
As part of your weather services, you might want to consider building or bundling related services on how does the weather/wind direction/etc affect sea men at a specific location, what clothing is needed if you are venturing at a specific location (in collaboration with an outdoor kit manufacturer), etc. My point is that you should build a more complete proposition, whether this is consumer apps for specific segments or a combination of information & guidance specific to the weather.
- Andreas
visionmobile 2005-2010
visionmobile 2005-2010