Distilling market noise into market sense
The VisionMobile blog is a space where VisionMobile analysts and industry insiders exchange views on the fast-changing mobile market and the trends that define the future direction of telecoms.
Breaking the 500 million barrier of mobile software
[Which are the most ubiquitous mobile software products out there? Marketing Manager Matos Kapetanakis opens up our 5th edition of the 100 Million Club, the watchlist of embedded software products and talks about the really big numbers of mobile software.]
Welcome to the H2 2009 edition of the 100 Million Club, the semi-annual watchlist of mobile software products that have been embedded in more than 100 million mobile devices since their release. Despite the apparent opportunity in the one-billion-a-year handset market, very few software companies have managed to overcome the commercial and technical challenges inherent in the mobile industry.
Key highlights in this H2 2009 edition:
- “The cumulative number of shipments of all the 100 Million Club software products up to the end of 2009 is 24.6 billion – an 11% increase since the previous half”
- “The estimated 250 million cumulative shipments for Apple’s WebKit show that it is fast becoming a de facto browser platform.”
- “BlackBerry is the next smartphone platform, after Symbian, that will break through the 100 million shipments barrier.”
What’s new in H2 2009?
So, what major changes have we seen since our previous update?
First off we’re happy to welcome three new entrants to the Club: ARM, Mimer and Numonyx have joined, adding three new middleware products to our watchlist. Mimer has just broken the 100 million barrier with its SQL database engine, while ARM brings us Mali-JSR184, a 3D graphics engine for wireless devices. The Flash Data Integrator by Numonyx is already ahead of the game, having been shipped in more than 900 million devices.
We have also had to remove three software products that have long been part of the Club. For different reasons, Mobile BAE by Beatnik and Picsel’s File Viewer are no longer part of the 100 Million Club, while Nokia’s Series 60 OS has been incorporated in the Symbian OS.
(click to download)
Growth in the 100 Million Club
The H2 2009 edition of the 100 Million Club is comprised of 30 software products by 26 companies. The total number of shipments of all 30 products, up to the end of 2009, comes to 24.6 billion – an 11% increase since the previous half.
In the previous edition, the Club featured 15 software products that exceeded 500 million shipments, 6 of which had also broken through the 1 billion barrier. The H2 2009 edition features 17 products with more than 500 million sales, 7 of which have surpassed 1 billion shipments. In other words, for the first time the majority of the products featured in the 100 Million Club have over 500 million shipments.
In the second half of 2009, CAPS by Scalado and OKL4 by Open Kernel Labs managed to break through the 500 million barrier, while Myriad Group’s messaging client and Nokia’s Series 40 OS now have more than 1 billion shipments each.
Category leaders: apps, browsers, middleware and operating systems
Quickoffice wins by default in the embedded applications category, since it’s the only embedded application featured in the 100 Million Club.
Adobe is still number one in the application environments category, with Flash/Flash Lite having been embedded in more than 1.3 billion devices up to the end of 2009. The growth of Flash Lite has decelerated significantly from 43% (1H09) to 15% (2H09) as share of devices sold with the software embedded; however the pace should be picking up pace again with Flash shipments later in 2010.
Myriad Group, whose browser has almost twice as many shipments as the other category products combined, dominates the browser market.
In the middleware category things are not that clear, due to the diversity of products. In absolute numbers, the messaging client by Myriad Group has the most shipments (1.2B) and vRapid Mobile by Red Bend shows the highest of growth over the second half of 2009. UI software is also highly penetrated within mobile devices, led by graphics engines by Ikivo, Scalado and The Astonishing Tribe which are at or around the 500 million mark.
The operating system market features 6 products that have been embedded in more than 1 billion devices. It’s worth noting that mass-appeal operating systems like OSE, Nucleus and recently Series 40 have cumulative shipments numbering in the billions, while BREW has just broken past the 500 million mark. In contrast, most major smartphone platforms – Android, OSX, Windows Mobile, BlackBerry – apart from Symbian have yet to reach 100 million shipments.
Finally, the input engines category features two products, both by Nuance inherited from the past acquisitions of Tegic and Zi Corp. As is evident in the chart, T9/XT9 is by far the most prominent, having been embedded in a staggering 4.8 billion mobile devices up to the end of the second half of 2009.
100 Million Club facts and trends
Two companies account for 38% of shipments: Only two companies have multiple software products included in the 100 Million Club, each company featuring three products. The cumulative number of shipments of these two companies is 9.5 billion, representing 38% of all 100 Million Club products’ shipments up to the end of H2 2009. The software products are Myriad Group’s Browser, messaging client and Jbed and Nuance’s T9/XT9, eZiText and VSuite.
WebKit on the rise: We estimate that up to the end of 2009 WebKit, the open source browser engine, has been embedded in more than 250 million devices. WebKit owes most of its market penetration to Nokia (Symbian shipments with the Series 40 contribution picking up), while its recent adoption by RIM can only accelerate its market penetration.
Top revenue models: In this edition, we asked the 100 Million Club members to provide us with the top two revenue models for their products. The responses revealed that the most common revenue models for embedded software are per-unit royalties,followed by NRE (non-recurring engineering fees) for product integration or customisation. Despite the tight profit margins, handset OEMs and network operators are still paying for software on a per-unit basis, with the ‘paradigm shift’ to per-active user revenue models taking longer than most would have expected.
What’s in stock for the 100 Million Club
Our watchlist continues to grow, as more products make it past 100 million shipments. Blackberry should be entering the Club in the next edition (H1 2010), with OSX, Windows Mobile and the much younger Android lagging a further 6-18 months behind.
The bigger picture of mobile software is very different than the industry hype would have us think.