[Besides the iOS and Android platforms grabbing the industry headlines, there is an abundance of (over 25) platforms that didn't make it. Managing Director Andreas Constantinou recounts the graveyard of dead platforms and exactly what it takes to build a successful platform today.]
2011 turned out to be open hunting season for mobile platforms, with the MeeGo, webOS and LiMo projects coming to an end.
MeeGo, webOS and LiMo, together with Windows Mobile and Symbian are just the tip of the dead OS iceberg. The last 10 years have seen numerous companies launch operating systems or platforms for mobile devices, most of which have been fallen under the media radar.
A brief history of dead platforms
The table below lists all known mobile platforms that have died or are a â€˜zombie’ (semi-dead) state – that’s all 26 of them, from Access Linux Platform to Windows Mobile. Weâ€˜ve also researched the birth and death date of each platform.
Most of these platforms have been designed as software platforms, that is, aimed at reducing costs and time-to-market for handset makers, aka OEMs. Most of the platforms were provided under a software licensing model were monetized via add-on services (e.g. IXI and Danger) or kept for in-house use (e.g. Nokia GEOS). Only post-2007 did we see applications platforms, i.e. those designed to target primarily developers and offered under a zero-royalty model. For the differences between software and applications platform see our earlier post on Platforms 101 and why not all mobile platforms are created equal.
Why are 25+ platforms dead?
In the last decade, software platforms have failed for a combination of reasons.
Cost of ownership. The cost of creating a mobile software platform should not be underestimated. Symbian was quoted as having cost over $700 million of development cost. Even for lighter platforms, a vendor is looking at a ballpark of $100 million cost over 2-3 years of initial development, plus the incremental integration cost with each new hardware platform and the long-term R&D cost to maintain the platform to a competitive level.
Conflicting revenue model. Prior to the zero-royalty model introduced by Android, all software platforms were monetized through per-unit licensing in the order of $5 to $15 per unit. This obviously represented significant costs for the OEM and also competed with bundled (free) software stacks from chipset vendors like Texas Instruments’ BMI, Qualcomm BREW, Mediatek (HOpen) and Infineon RedArrow. That was of course before the mass arrival of smartphones and the abandonment of the royalty model.
Lack of network effects. Even though Microsoft had pioneered the two-sided software platform strategy with Windows since 1995, the benefits of network effects in mobile platforms were not properly understood until the launch of the Apple App Store in 2008. It was Apple that proved how network effects – the positive feedback loop between app developers and users – can lead to enormous demand-side economies of scale. It was the power of well-oiled network effects that made Nokia realize that “it had to go to developers” (and not wait for developers to go to Nokia) before eventually losing the Symbian battle against Android and iOS.
High adoption barriers. For a handset maker, adopting a new platform is a painstaking, multi-year process. HTC is rumored to have been working with Android since 2005 and with Windows Mobile since 2000, 2-3 years before it produced the first G1 and SPV models, respectively. In addition, handset makers are very risk-averse (they have tough customer commitments to keep up to) and so have in most cases preferred to stick with their internal spaghetti platforms rather than take the risk of adopting a new one.
The ingredients of a successful platform
There are a handful of remaining software platforms today. Besides the usual suspects Android, iOS, Windows Phone and Bada, we should also consider BREW MP (still surviving), Trolltech’s Qt (an API framework acquired by Nokia in 2008 and rumoured to be soon reappearing on Nokia’s Series 40 handsets) and Smarterphone, a niche â€˜smart’ operating system for feature phones recently acquired by Nokia.
The chart above makes it clear what is the success factor of modern platforms. Firstly, software DNA, that is a company with resources, processes and values routed in the PC or Internet world where developers, not OEMs are the platform’s primary customer. Secondly, a successful platform vendor needs to have large pockets due to the billions of dollars in investment needed to build a stable and advanced software foundation, while attracting developers to the platform. Note that the bubble size in the chart shows last relative size of 4 quarters of vendor revenues.
But the secret sauce is neither in DNA or money; it’s hidden in Stephen Elop’s famous burning platform memo: ”Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem”
The secret sauce behind the success of iOS and Android is how thanks to network effects (the closed loop driving users to developers and developers to users) platforms have managed to generate billions of external investment, both in the form of developer investments (time/effort) and operator investments (subsidies).
It’s network effects that have created near-insurmountable barriers to entry for Microsoft who despite boasting 75,000 WP7 developers achieved only one million sales of its flagship Lumia model from its strategic partner Nokia.
And whatever Bada, Tizen or any other alphabet-soup-chef tries to conjure up, they should never forget that you can’t buy developer love. You can only plant the seeds. That’s why Facebook Platform is following exactly the right strategy: take a vibrant developer community and offer it a new addressable market.
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