Hi Michael, thanks for your comments.

I definitely agree with you that bada (as it is today) is unlikely to prove the right answer to ASP pressure.

I also agree that Android has been very successful in disrupting the smartphone market by drawing in new device makers from related markets. Personally I think that one of Symbian’s mistakes in 2009 was spending too much time trying to woo iPhone and would-be Android application developers into thinking Symbian was cool, rather than defending its strong position with OEMs. Google have definitely capitalised on Symbian’s lack of attention.

But I don’t totally agree that all traditional OEMs are definitely doomed (at least not Nokia and Samsung). I do agree that anyone who holds to the smartphone recipe that’s worked over the last 5 years is in trouble (which calls LG’s WiMo deal seriously into question), but margins can be saved by companies creating new compelling types of devices (just as OEMs avoided the falling margins of voice phones by creating smartphones). In the N900 I see some signs that this may happen. I also haven’t yet seen a device that provides a really deep, high-quality, integraton of internet services which is something I think many consumers would pay for; clearly this is what is drawing Google into the device-maker role.

Finally – I’d actually like to question your statement that “everybody got apps these days”. Sure, everybody as a Twitter and Facebook client, everybody has an API/SDK, and everybody talks about all their apps. But I’d argue that only the iPhone actually has a good volume of interesting applications. I don’t think that Nokia/Ovi, Android, WiMo, or Blackberry have a credible claim yet on this. The reason I pick-up on this point is that I believe many people at Nokia, Microsoft, Google, and RIM think that they’ve done the app thing now; but if any of them are to be serious contenders they need to put a lot more work in.

Thanks again.

Hi Michael — thanks for the interesting comments.

Regarding — “while Android offers differentiation because it’s ‘Open Source’” — I think it’s quite debatable whether Android is really open source for three reasons:

(*) My understanding is that there is a very significant gap between the codeline that is publicly available and the one used by all OEMs actually making Android phones. To access and use the latter you must sign a serious legal agreement with Google.

(*) Everyone with write access to the tree is part of the Android team within Google. Until recently the Android website claimed that outsiders could theoretically become committers, but this has now been removed from the “Android openness policy” and there is no doubt that no-one outside the Android/Google team can become a committer.

(*) Zero transparency about platform decision making.

Antony

Hi Jo — great point about MNOs. As you say, operators dislike supporting more-and-more platforms, so how will they respond to bada? I’m much more familiar with OEMs, developers, and consumers than operators, but here are some thoughts.

(*) Although it’s being presented as something entirely new, bada is actually an open API on top of Samsung’s existing proprietary RTOS (called SHP internally) with TouchWiz also in the mix. So the operators are actually already familiar with the platform. This will make it easier for Samsung to get operators to agree to ship the devices.

(*) Samsung’s long-time strategy has been to listen carefully to operators and deliver what they ask for. This is different to OEMs like Nokia who very much try to dictate to operators what devices should do. bada is the first time Samsung will be pushing their own strategic agenda with operators. It’s an entirely different approach, probably requiring a different kind of channel sales person, and this will make it difficult for Samsung to get operator buy-in.

(*) MNOs hate the Apple model. They go along with it because their shareholders demand it, and the customer acquisition is attractive, but it goes against all their long-term revenue growth plans. MNOs are also starting to fear Android more-and-more after their initial enthusiasm. The reality of the Android services model, and Google’s increasingly aggressive behaviour (e.g. making their own phones, DNS control, full-page ads for Chrome in newspapers) is causing concern. Vodafone’s renewed interest in LiMo is a response to this. If Samsung can create a services business model that works with operators then that would definitely help get operator buy-in for bada. Samsung haven’t given much information about what the complete services story will look like yet, so we’ll have to wait and see on this one.

So my summary would be:

– If Samsung can create a services business model that plays nicely with operators then I think there’s a good opportunity for bada to get good operator support.

– Otherwise, Samsung will get operators to ship some bada phones due to their reputation and relationships, but operators will do little to really push the devices.

Hi Wit / Stephane,

I would definitely agree that smartphone OEMs are looking for additional revenue opportunities that take advantage of their existing strengths and unique capabilities. Integrated device/services offerings such as selling applications are the most obvious such opportunity.

I’m not quite as convinced as you that this approach will definitely succeed and bring “hundreds of millions $$” revenue to Samsung.

(*) Over the last 5-10 years every major OEM has tried to create a content/application sales channel (most of them have tried several times). Every major operator has also tried. They all failed. So whilst it’s tempting for OEMs to point at Apple and say “if they can do it so can we” that’s just not credible when you look at the entire set of examples. I’m not sure Ovi is making much money.

(*) Whilst Samsung ship ~200M devices per year, these will not all be bada devices. Samsung will continue to ship WiMo, Android, and Java devices. China is also likely to be a special case (as it is even for Apple). In the next 2 years I can’t see more than 10-15% of Samsung’s portfolio being on bada (I could easily be wrong here though). The actual market for an application developer is further reduced by the almost certain incompatibility that will exist between different models. No OEM has ever managed to achieve compatibility across a wide portfolio of devices (Apple avoids the problem by only having 3 variants – an approach which Samsung can’t take). So in reality the maximum market for a specific application is likely to be closer to 2M than 200M.

(*) You also must consider that not all mobile phone users are the same. The iPhone happens to be popular in the highest spending segment of the world’s biggest consumer market. Samsung devices are used by people who spend a smaller % of their income on technology and have much smaller incomes.

So earning a 30% commission on other people’s work is indeed a nice way to make money, but the truth is that it’s not quite that easy to achieve.

BTW Stephane, I don’t understand why you say “who won’t dare at some C++” since the bada SDK is explicitly focussed on C++ at the moment (as far as I’ve read)?

Finally — I certainly agree that Samsung benefits from a bada dominated market rather than an Android dominated market.

Hi Cameron,

I’m not what Samsung has to do with the Nintendo Wii. Any device with a high-speed IR and knowledge of the Wii protocol can act as a Wii-mote (I’ve certainly seen Nokia mobiles doing it). So iPhone, Android, and bada can all do this equally.

Your point about Samsung’s presence it multiple home devices, however, is still well made. Apple certainly tried to get into this space with Apple TV and a few other initiatives. I can’t think immediately the best way for Samsung to exploit this, and how bada plays a role, but it’s an interesting angle.

Antony