Distilling market noise into market sense

VisionMobile is the leading research company in the app economy. Our Developer Economics research program tracks developer experiences across platforms, revenues, apps, tools, APIs, segments and regions, via the largest, most global developer surveys.

How to win in mobile without making your own OS

The battle for app ecosystems is over – iOS and Android have won. However, this is not the end of the war for mobile users. VisionMobile’s Senior Business Analyst Stijn Schuermans and Strategy Director Michael Vakulenko discuss how leading ecosystem players like Amazon and Facebook are competing for users without building operating systems.


The mobile industry is buzzing with new mobile operating system initiatives. Microsoft is betting big on Windows Phone. Intel and Samsung are cooperating on Tizen. Telefonica and Mozilla are leading the Firefox OS effort. The Jolla team (ex-Meego) is touting Sailfish OS. Ubuntu is extending its popular Linux distribution from desktop to mobile. Hundreds of crazy-smart engineers around the world are losing sleep as we speak to create the next big OS.

As it happens, operating system technology no longer matters that much in mobile.


Today, the smartphone competition is about ecosystems that connect app developers and users. OS technology alone cannot help you to win this battle. Operating systems are needed but by themselves they are a low-value component of ecosystems. Apart from the OS, the ecosystem value stack contains the app platform, taking care of the monetization, distribution and retailing of apps, as well as a tools ecosystem of 3rd party vendors (from analytics and push notifications to ad networks and cross-promotion networks). All of those things together create the value proposition to both users and developers on which ecosystems compete.

iOS and Android are the only ecosystem contenders who have a strong presence across this entire value stack. As such, their lead is firmly established. Android and iOS have won the app ecosystem war. Challengers like Blackberry 10 and Windows Phone have spent much energy in creating the next generation of their respective operating systems. Yet both are failing to make big headway despite all the resources they have committed.


So how can you compete in the face of this duopoly? Does this mean that Apple and Google are unassailable and will gobble up all the value in mobile? Of course not. There is another way to add value for mobile users, and already some companies are leading the way.

Amazon, for example, has borrowed Android OS technology – a commodity. It has then leveraged Amazon’s existing user base (215 million active users with credit cards on file) to build layers on top of the OS that matter to Amazon. In the process, they’ve created a valuable new source of revenue for Android developers.

Likewise, Facebook didn’t entertain the rumour mongers’ call for a ‘Facebook phone’. Instead, they are building a meta-platform on top of existing mobile platforms. The acquisition of back-end service companies Parse and Spaceport.io earlier this year show that Facebook is adding value to developers with tools. Facebook App Center helps users find great apps, but it’s not an operating system.

There is a clear lesson in this for any company that wants to play big in mobile. Don’t fight a battle that’s already decided; don’t reinvent the wheel in order to compete head-on. To win, leverage ecosystems instead of competing with them.

To win, focus on the parts of the value stack that matter most for winning users. Like Facebook, who is adding value by improving app discovery. Like Amazon, who is improving app distribution and monetization. Like Adobe, who is adding value by improving cross-platform app development.

We discuss these topics and many more in detail in our Mobile Innovation Economics workshops, in which we reveal the hidden mechanics of ecosystem business models and the new basis of competition in mobile. With this perspective, we can help you launch, grow, and defend your business in a world of mobile ecosystems and cross-industry competitive arenas. Sign up now to the next workshop to discover opportunities that others miss.

  • Interesting piece. Platform value is no longer solely at the OS level given the extent of horizontal players at different levels of the stack (e.g. content/apps, cloud). However, one interesting question concerns emerging markets – smartphone penetration is still relatively low, leaving more opportunity for vertical integration before horizontal optimisation


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