Distilling market noise into market sense

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Feature phones and the RTOS – the ignored 85% of the market

[Is mobile technology all about Android, Apple and Symbian? Guest blogger Ben Hookway explains why the other 85% of the market is far more important and dishes out the facts to prove why the death of feature phones and the RTOS has been greatly exaggerated]

Nobody seems to write about feature phones these days. The subject is not very sexy, not very well understood, and the people who contribute products and services to the building of feature phones tend to keep a low profile. The same applies to RTOSes (real-time operating systems) which power most feature phones. On the contrary, the mainstream tech publications breathlessly talk about open OS like Android, Symbian, Apple and WebOS and the smartphones that they power.

RTOS vs OpenOS

I work in business development for Mentor Graphics, maker of the Nucleus RTOS which makes it into 100′s of millions of phones per year. I’ve spent the last 6 years (incl. as CEO of NextDevice, now Mentor) immersed in the business of mass market phones at all levels of the software stack.

Real-time operating systems have low processing and footprint characteristics which make them ideal for powering baseband chips. As a result, RTOSes were for along time the only operating system found on phones and quickly became a key part of the mobile phone technology stack. The key RTOSes today are Mentor Graphics’ Nucleus and ENEA’s OSE, followed by WindRiver’s VxWorks.

Feature phones though are obviously a very large and very important segment of the mobile handset space and reports the death of the RTOS have been greatly exaggerated. Most publicity is around the open OS space at the moment, which tends to eclipse the fact that feature phones and basic phones are the major volume players in this industry. Around 200m smartphones were shipped in 2008 which leaves nearly 1 billion feature or voice phones. Nucleus and OSE are each installed in circa 1.5 billion phones, or circa 32-34% of the devices sold. (see VisionMobile’s 100 million club).

So how did these feature phone software platforms come to be?

Some important facts on the history of feature phones and RTOSes:

- OEM legacy. Feature phones from the big 5 handset OEMs are usually powered by in-house application frameworks which have been developed over 5-10 of years (and over a decade in some cases). They originally ran on the baseband chip of the mobile phone and therefore are designed to run on the real-time operating system (RTOS) which baseband chips run.

- Feature creep. As available processing power on baseband processors increased, the sophistication of the feature phone platforms increased with them. The internal platforms gave birth to additional, more sophisticated features to take advantage of the increased resources.

- The leap to application processors. Today, mid to high end feature phones run separate application processors in order to enable advanced multimedia capability, touchscreens, and so on. We now have feature phones adopting the same chip architecture as smartphones, and this explains why many application processor vendors are keen to have RTOS support on chips previously designated as only supporting high end OSes. The internal feature phone platforms the manufacturers use were designed to run on RTOSes, and therefore you need an RTOS to run on application processor chips so you can run your feature phone platform. Clear?

Indeed, the RTOS based feature phone is far from dead and far from basic. Just consider one of the best selling phones in the UK in 2008 – the Samsung Tocco. Feature phone, touchscreen, advanced multimedia and good pricing and marketing made it a wild success. Indeed there are more and more touchscreen feature phones coming out. The Samsung Jet is a great case in point. It runs an 800MHz processor but is based on a Samsung proprietary OS.

You can also look at the LG Voyager, Neon, Dare, Vu, and the Samsung Behold, and Instinct as top selling feature phones: they are all advanced touchscreen phones powered by OEMs’ in-house RTOS platforms. These Samsung and LG phones make up 5 out of 10 top-selling touchscreen  devices in the US, according to a Nielsen survey.

As it turns out, manufacturers are not using open OSes, but RTOS platforms for their best-selling high-end devices. The death of the feature phone has been greatly exaggerated indeed.

So what is going to keep the RTOS and feature phone important? Why is Android or Symbian not going to overwhelm the market as many analysts predict ?

1. Predictability. OEMs know these platforms inside and out. As a manufacturer, predictable model refresh rate is key. If you are releasing 100 models a year (as some OEMs do) you need to be very, very sure that you are going to hit release dates, otherwise your marketing and financial model breaks down. Internal feature phone platforms are not the greatest software platforms available, but they are far from poor, and crucially they are very, very well known by the internal device development teams building the phones.

2. Cost. RTOSes need less resources – and result in cheaper phones. A feature phone requires less hardware and resources than a smartphone. The BOM is smaller and low cost is important when your main customer is an operator who subsidises the phone for the consumer. For example, Digitimes reports that the overall production costs, including royalty payments and resources, for smartphones are 3-4 times higher than those for high-end multimedia handsets, while smartphones require 3 times more components (link – subscription required)

3. The ubiquity of the Application Environment. Historically, the weakness of the feature phone has been the inability to have a broad set of application available and good post-sales application download experience. App Stores and open APIs has been a key focus for the industry and the high end OSes (Android, OSX, Symbian). However, with the proliferation of application environments like Java, Flash, Qt and web runtime environments, manufacturers and operators can hope for both a diversity of applications – and a first-class App Store experience, thanks to solutions from Qualcomm Plaza, Comverse, Amdocs, Sun, Everypoint and many others.

The hype / shipment paradox
There is an obvious inverse ratio between OS hype and shipments; the high end OSes are commanding the lion’s share of media attention but don’t really ship in big volumes, comparatively speaking. The feature phone application frameworks running on RTOSes get almost zero coverage but are the mainstay of the industry. Behind the scenes, the economic drivers for RTOS based feature phones remain strong for the foreseeable future.

RTOSes and feature phones may indeed emerge as a platform for true mass adoption of mobile services for consumers.

- Ben

[editor's note: see VisionMobile's side-by-side comparison of 16 operating systems and application environments, incl. ALP, Flash Lite, Montavista, Nokia S60, BREW, Qtopia, UIQ and Windows Mobile. A stark reminder of how radically has the mobile software landscape changed in the last 3 years]


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  • http://www.tat.se Hampus Jakobsson

    I agree with you Ben!

    How do you think the market will look in 3 years? Moore's law, as well as the pull for "open innovation" environments drives the market to higher end and smartphones at the moment.

  • http://www.me.com Me

    Interesting read. Would you mind to point out the justification for this statement in your article: "The key RTOSes today are Mentor Graphics’ Nucleus and ENEA’s OSE, followed by WindRiver’s VxWorks."

  • http://visionmobile.com/blog Andreas Constantinou

    Hi Me,

    I 'll try to offer an analyst perspective. We regularly gather data on mass volume shipments of mobile software products as part of our 100 million club (.com). Based on that research, Nucleus and OSE are deployed on 1.61B and 1.45B phones respectively (on baseband or app processors). VxWorks is edging towards the 100m installs, but is not there yet (which is why they are not on our watchlist yet).

    Everything else AFAIK (incl. LG and Samsung's in-house RTOSes) is not licensable. Would be interested to know if you are aware of any other players in the RTOS market with high volume shipments.

    Andreas

  • Ben Hookway

    Hi Hampus, Sorry it took a while to get back to you.

    I think things are going to depend on how high and long the 'hump' of mass productisation of the new OS is. We've seen in the past when OEM's build their first devices with a new OS (e.g. S60) the first devices take a long time. The position people want to get to is producing new devices easily and quickly – in essence they compete on 'excellence of execution'. I believe this is one of the reasons Symbian will struggle. Why compete with Nokia on excellence of execution on Symbian? With Android, HTC have a lead right now.

    So in 3 years, who knows. Even though the hardware will come down in price in order to support open OS' at lower price points there is no certainty this will translate to open OS phones at more price points.

    An example sprang to mind the other day. I saw an advert for the Samsung Jet which I think has an 800MHz apps processor. Samsung are advertising it as the 'fastest' phone. Of course it runs Samsung's internal OS.

    3 years ago we would have expected an 800MHz apps processor phone to be running an open OS for sure…

    I think the public's perception of post-load applications and what they want from them is going to be the key.

  • Guy

    Hi all

    In general I agree with the notion that in the current industry buzz, platforms that are not considered "Open OS" are overlooked and under appreciated.

    However, I would add a few clarifications to this piece:

    1. While OSE and Nucleus are 3rd party licensed RTOSs, the biggest RTOS platform currently is Nokia OS powering Series 40 (and 30) which might ship over 300M per annum.. as far as I know NOS/S40/30 is not based on some external RTOS but on internal Nokia, but I might be wrong?

    2. Another platform people always tend to forget is Qualcomm REX/AMSS/BREW, which powers hundreds of millions of phones around the world. Technically, BREW has Open OS capabilities but most people classify Qcom and/or BREW as a Feature Phone platform. It is also difficult to count since different customers use the platform in varying levels, so there are hybrids

    3. One must remember that sometimes licensed RTOSs will ship in Dual CPU phones and will power the baseband CPU, but another OS (typically an Open OS) will power the Application CPU. From the RTOS vendor perspective, its a shipment that counts, but in considering the market shares and the Feature Phone vs Smartphone battle, what counts is the Application OS, so such phones will be counted based on their Application OS, even if there is an RTOS on the modem

  • Ben Hookway

    Hello Guy,

    Good clarification on Nokia S40 and Qualcomm. I only made reference to commercially available RTOS in the post.

    I think Qualcomm's platform is an interesting one to watch in particular and may become used more and more as their 3G business is doing well.

    I've tried to base my comments on the application OS trends, but you are correct in saying that and RTOS can also appear in a Open OS phone.

    Best, Ben

  • mirmit

    Hi,

    Why Open OSes take so much the light compared to RTOS? One explaination could be there is a market outside of the phone makers to make money around those devices.

    The only ways to make money around RTOSes is either to sell services to phone maker or licence some technology to the same phone maker.

    On open OSes, you can sell to end user applications and services.

    You will argue you can do the same with J2ME apps, it true and in some extent this open the platform and rejoin the second point.

    There is regularly a lot of noise around RTOS based phones, but as the phone doesn't get any addition after being launch, the noise decline after.

    On some extent, you can notice some analogy in Smartphone world. As soon as something appear on Apple's iPhone, you see it all over the web, even if the same feature/apps already exist for years on feature phone or other smartphone platform.

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