Delius Observer

One cuckoo, two turkeys and three horses; how the mobile race has changed

One cuckoo, two turkeys and three horses; how the mobile race has changed

[How do Nokia’s options look in a post-Microsoft and Google world? Why does Google’s strategy with Android resemble a cuckoo’s routine practice of planting its eggs on other birds’ nests? Guest author Delius Observer examines the similes and shows just how much nature has to teach us]

One cuckoo, two turkeys and three horses; how the mobile race has changed

Vic Goduntra, a vice president of engineering at Google, recently tweeted that “two turkeys don’t make an eagle”, echoing an earlier comment made several years ago by a Nokia executive about Siemens and BenQ merging their mobile units. His snipe, was a cheep, premature call as Nokia gets rescued from those icy Atlantic waters by the rich, (white) knight in shining armour. However, in chirping away, Vic would also have known that Nokia’s only other choice to escape from the burning platform would have meant succumbing to Google’s Androidian Cuckoo Strategy, and that would have been a lot worse. What just happened between Nokia and Microsoft should be a wake-up call for the mobile industry.

Google’s Androidian Cuckoo Strategy
The cuckoo, which at first glance has the appearance of a glamorous, aspiring bird of prey, is in fact a brood parasite – a cunning species that lays its egg in another bird’s nest and, in doing so, tricks the host to raise the chick as their own.

In one fell swoop, the cuckoo will turf out one of the host’s own eggs and slyly lay one of its own. Sitting cosily under the warm breast of the host, the parasitic cuckoo egg incubates and then hatches – a little earlier than the rest, naturally. With the egg’s kernel breaking through the shell, its natural reflex is then to immediately dislodge the other eggs from the nest – a well-designed, dominant, first mover advantage. In doing so, it quickly becomes the only chick left resident. Now at the exclusive beck and call of its foster parents, it has the sole monopoly on food supply and attention. The young cuckoo quickly fledges, and rapidly leaves the foster nest in record time. And so it continues, with the cuckoo returning again the next season.

This story should be a familiar one, as it is a story that is playing out across the globe where the poor unknowing parents think they are delivering their own beautiful offspring, but are instead just acting as surrogate hosts to a far grander plan. Cuckoos are, as the BBC’s ‘countryfile’ website states: “nature’s hustlers, cheats that have perfected the ultimate long con”.

This is the story of Google’s Androidian Cuckoo Strategy and the handset manufacturers who play surrogate host in order to raise Google’s young Andricks. Google started this strategy by designing an ecosystem that it cunningly called “open”. Of course, because the offspring’s eggs are delivered out in the open air, many have drunk the deceptively refreshing ‘Kool Aid’ of “open”. The real story, however, is a far subtler affair. Whilst the egg and bird may be open and free, the point of conception is still very much done on a private branch, with the DNA of the next egg always a closely guarded secret – even to those inside the fuzzy ecosystem.

“Run, run as fast as you can! You can’t catch me”, says one new Gingerbread fledgling, as the other birds look on, green with envy, wondering why their offspring have been Froyo’d.

The many handset manufacturers that have joined the Google flock are hoodwinked – and they’re all now singing the same repetitive, robot-like call. Now the birds are just the servants of the dominant master cuckoo. Of course, Androidian Cuckoos have ruthlessly quick development cycles and the Andricks are out of the door in no time, but in doing so, the process sucks most of the energy out of each foster parent. Meanwhile, danger lurks in the grasses as the mighty Oracle hisses over the heart of the cuckoo’s Harmonious virtual machine.

Whilst a few birds are today flying high, others are bewildered and disoriented, trying to work out what exactly is going on. For some it will end in pathetic, dismal fatality. But, a few will no doubt adapt their defenses to overcome the parasite in more imaginative pathways to survival. For, as Dr Nicholas Davies of the University of Cambridge states, with cuckoos “over evolutionary time, the hosts fight back so that the poor cuckoo has to work incredibly hard to be lazy, simply because it has to overcome all of these defences. What we witness is a fantastic arms race between parasite and host.”

And what of Google’s proverbial ‘don’t be evil’? Nicolas continues: “So, we know how the cuckoo pulls off its dastardly plan, but still haven’t answered the question of why. Is it a cruel or evil bird? Of course not; this is just nature at work, and perhaps one of the best examples of Darwin’s survival of the fittest. The arms race will continue with both sides evolving to protect themselves or deceive the other, but our fascination with the cuckoo will remain. After all, everyone loves a rogue.”

Indeed we do, and the rogue’s quip about turkeys was typical of its scheming behaviour. From a mountain view they look down and think one should aspire to be eagles, when what they should really be doing is taking a long, hard look in the mirror and owning up to the mobile industry that they are in fact nothing but a conniving cuckoo – albeit a successful one.

Microsoft + Nokia: running with four legs
In the past few months Nokia realised that in order to halt its slide towards irrelevance, it had to take its head out of the sand and instead take a leap of faith. The brave gamble that Nokia has now chosen is perhaps not the ideal one, but it was the only strategy available for long-term survival and is a bold rejection of the short-termism demanded by short-sighted investors in accepting the call of the cuckoo. In tying Nokia and Microsoft together they have created a rather old-fashioned type of partnership but it will be a partnership of bones not a collection of feathers.

Have no doubt about it, Nokia is “all in” with Microsoft and, yes Vic, four legs are indeed better than two to compete in this race. The trick will be to rapidly get those legs working together, and come up with a pedigree that can run the course. Can they do it?

The jury is currently out and they need to move exceptionally fast. They need to accomplish two feats rapidly; prove the financials and fix the developer message.

Step one is to actually sign the agreement and rapidly prove to both the investment community and the wider ecosystem that they can make the financials work. Indeed, it seems that perhaps one of the reasons why the Capital Markets Day felt like a damp squid, was not because Mr. Elop couldn’t sell the story to investors, but because the guy he’s negotiating the finer details with was sitting right next to him. A complex partnership like this will take time to put together with details of licensing costs, patent portfolios, split revenue shares on search, advertising and mapping as well as marketing contributions, let alone Nokia’s own complex reduction in costs associated with substantial redundancies and the reductions in OPEX that are needed.

The other thing to fix is the confused developer message. One thing that I had expected to hear on Friday was that Qt would run on Windows Phone. In hindsight, however, perhaps this doesn’t make sense. Qt is a fantastic technology but, like many others, it hasn’t reached critical mass. What is needed in this battle of ecosystems is a huge ‘network of externalities’, with a wide range of designer and developer tools. Only with Microsoft do you get that. It is all the more puzzling that Nokia didn’t go ‘all in’ from a developer perspective and instead chose to play coy. In choosing Microsoft tools for Windows Phones and Qt for Symbian and MeeGo, it has created yet another confused message for developers. Developers cannot get economies of scope by using Qt for some dying platforms and Microsoft for others. Nokia must be more courageous. Dust off the old Microsoft Silverlight agreement and get that environment up and running again on Symbian and Series 40 as a stopgap over the long harvest season. This will create the bold message developers urgently need. In this battle of ecosystems Nokia’s strategy cannot afford to be half-cocked.

What lies ahead
As we look ahead to the coming weeks and months, here are a few predictions:-

• Nokia is able to get Windows Phones out the door in record time, taking advantage of Microsoft’s Chassis Specification, a strategy which follows the tight, vertical integration of Apple’s iPhone without the overheads. Whatever the perception, it’s faster to build a Windows Phone from scratch than a cuckoo because of the chassis design.

• There will be an increase in the use of patents to fight the cuckoo club and the almighty Apple. However, Nokia’s earlier Symbian and MeeGo open source strategies may well come home to roost, as they gave away core assets which many vultures will circle around.

• Nokia competes well in the next billion market by using the lower cost base of an enhanced Series 40 platform and creating a smartphone-like experience in the sub $75 market.

• In the long-term, Nokia will realise that there is no division between smartphones and mass-market phones, and will combine those two groups together.

• Members of the cuckoo club finally realise their long-term future only lies in commoditisation and they seek to either combine with other cuckoos for short term economy of scale, or search for the assets that enable them to co-exist profitably with the parasite.

• Someone writes a loving obituary for the truly open, benevolent and well-meaning MeeGo; bless it. RIP. No doubt a resurrection under a different name will happen at a later date.

A three-horse race
Nokia emphasised during its Capital Market Day that the smartphone business is now a three horse race. As things stand, that looks like wishful thinking. But if Nokia and Microsoft can execute with incredible speed and agility in the coming months (and it’s only months they have), then they’ve a shot at getting a thoroughbred in the running.

So which horses do Google, Nokia and Apple have in the line up?

Seabiscuit – the real Trojan horse of the race, full of cuckoos. This one’s been leaving fragmented crumbs all over the place but is currently the bookies’ favourite. This is a wild one for sure! It’s been a fast sprinter but will need to be careful it doesn’t split in two or get strained on the third furlong by its supporters pulling out.

Northern Dancer – the dark horse in the race with the odds currently against it. It will use the Seattle based white knight to give it the extra feet needed and use a range of betting operators to increase its odds. With thoroughbred development tools, attached to a large existing ecosystem, it now has the combined power for survival. It will need to ensure that its more old-fashioned, deep partnership style has the staying power and agility. They have a lot of catching up to do, but don’t write this horse off just yet!

Pegasus – the last horse is not just easy on the eye but is also nothing short of magical. Not only does this white horse have a vertically integrated set of four legs, but it also has wings too and is riding high. This one can’t put a foot wrong. But the dynamics are changing, and how long it can remain so high and mighty remains to be seen.

How the mobile race plays out in the months and years to come depends upon how the various parts of each ecosystem and the punters place their bets.

But, whatever happens, just beware of the cuckoo.

– Delius

[Delius Observer is a pseudonym and can be reached at deliusobserver@gmail.com]

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