Who will own the screen? an analysis of the Active Idle Screen market 2009-2011

[The landscape of idle screen (aka home screen) solutions has changed considerably in 2007-2009. How will it look over the next two years? Research Director Andreas Constantinou looks at the trends in the active idle screen market and tries to answer the perennial question: who will own the screen ?]

ais-report-coverWe recently published a report on the Active Idle Screen market (available here) as part of our Atlas research; in this post I ‘ll highlight some of the most interesting conclusions.

The market of idle screen (aka home screen or phonetop) solutions has grown considerably; in 2002-2006 it was kick-started by active idle screen (AIS) vendors like Abaxia, Cibenix and Celltick and tier-1 operators like Orange; in 2007-2009 it has been capitalised by Apple, HTC, Samsung, LG and increasingly Nokia, Android and Windows Mobile; In 2010-2011 we believe that the idle screen will be elevated into precious real-estate divided across the handset OEM, operator and service providers, led by Nokia.

The role of AIS vendors in an evolving market
Today active idle screen (AIS) solutions are available from Abaxia, ACCESS, Celltick, Cibenix, Insprit, Nuance, and SurfKitchen. mPortal, PointUI and SPB Software have also built custom AIS solutions.

ais-solutionsThe active idle screen market can easily be dismissed as a rapidly shrinking one; idle screen customisation technology is becoming a commodity platform feature while handset OEMs are moving in to claim that same territory. But that would be rushing into conclusions.

AIS vendors act as the commercial matchmakers across the disparate camps of network operators and mobile handset manufacturers; operators will always be looking to go a step further in differentiating on the most premium real estate on the handset, i.e. beyond what is available out of the box. For example, some AIS vendors are starting to offer post-sales idle screen management that is not yet available by OEMs.

Moreover, as global operators manage regional device customisation requirements more centrally, so the need for AIS vendors will increase as the one-stop agent between the operator group and the manufacturers.

European Tier-1 operators like Orange, T-Mobile and Vodafone are developing or have already developed 100-200 people internal software development teams, but we don’t see this as denting the demand for AIS solutions much; operator know-how on successfully delivering software solutions across OEMs is still painfully scarse and their learning curve is slow.

Naturally, AIS vendors will also have to morph and adapt in response to the times. Revenue models are shifting clearly away from per-unit royalties for all pre-load software (i.e. embedded in ROM before the handset is shipped). Software vendors, including AIS vendors will have to follow suit. As such, the more successful AIS solutions will be those that monetise through per-active-user or per inventory (primarily CPA or time-based) revenue models, which are better aligned with the interests of operators and ad publishers.

In order to extract value during the post-sales phase, AIS vendors will have to add value in service delivery, service update, user profiling or targeting; here the fundamental premise holds: you can only extract value where you add value.

Moreover, AIS vendors will have to move away from selling platform enablers to offering vertical solutions, managed and hosted on behalf of the operator. Such vertical solutions can be built around innovative applications like ‘signature’ user interactions, intelligent search, service storefronts, phonebook 2.0, inventory analytics, and the idle screen as a ‘feudal system’.

I ‘ll next discuss these key applications that we believe will be hitting idle screens from 2009.

Key applications: innovation on the idle screen
During the last few years we have seen the idle screen function as a launchpad for device functionality, service discovery, advertising and contacts search. Such product features are now becoming commonplace amongst AIS vendor offerings. As technology is becoming less of a differentiating characteristic, we are seeing many new innovative applications surface.

Signature interaction paradigms: the increase of handset functionality and applications put unhealthy demands on the idle screen for information compression. How can you cram 100s of features on a screen 2.4 x 4.5 inches? Answer: by innovating with new user interaction paradigms.
We have seen user interaction paradigms evolve from soft key, to 4-way navigation, to gesture-based navigation with the Apple iPhone and Palm Pre. Interaction paradigms are particularly important when navigating dense information and this is where we believe there is considerable demand for innovation on the idle screen.

Clever interaction paradigms involving sensors (e.g. accelerometer, compass and tilt sensors) will help in two important ways; firstly by adding multiple dimensions to the otherwise 2-dimensional idle screen; and secondly by allowing OEMs and operators to create differentiating and potentially exclusive user interaction paradigms. This will be an area of intense research in the next 5 years.

Service storefront: The icon grid is becoming the de facto user interaction paradigm for both smartphones and feature phones. Placed on the idle-screen this icon grid paradigm is ideally suited for discovering and accessing new services; a paradigm lovingly associated with widgets.

We believe that the icon grid paradigm will be increasingly used to implement service storefronts, where each operator service is associated with a icon that links to a web or WAP service or even displays service status as part of the same icon. The service store will revolutionise service discovery and delivery – think of the 100s of services today available via USSD, premium SMS and WAP that can tomorrow be exposed as icons or widgets. It will also allow service updates to be reflected on the service store much like the number of unread messages shows up on a Facebook iPhone icon; this should allow service usage to be extended way beyond the famous honeymoon period.

Intelligent search: The idle screen is the starting point for all user journeys; it is therefore natural for the idle screen to provide shortcuts into functionality that is used most frequently, such as search – whether it is for contacts, voicemail summaries, free minutes remaining, where’s-my-nearest, what’s my Facebook status and many more creative search scenarios. We believe that the idle screen is ideally placed to aggregate all such information from third party sources in the internet cloud, the network and the device.

Phonebook 2.0: as the starting point of every user journey, the idle-screen is also the pivotal point for placing the phonebook. We therefore see the idle screen merging in phonebook 2.0 functionality, i.e. integrating not only contacts, but also their location, presence and social networking status. Already, predictive phone book search from the idle screen is becoming commonplace in smartphones such as Nokia E-series and Windows Mobile devices but also feature phones such as Sony Ericsson K, W and C series models. The transition to phonebook 2.0 is the logical next step.

Inventory analytics: it is well known that the idle screen is the most valuable real estate for ad inventory. What is less known is that as the starting point for each user task, the idle screen can track the beginning and end of every user journey, whether it is browsing a web site, looking up a contact, making a call or sending a text message. As such, the idle screen is the pivotal point for capturing usage analytics and therefore attaching richer profiling and segmentation information to the inventory. This implies a boost for the CPCs and CPAs on the idle screen,which are already at the highest valuation across the handset.

The idle screen as a feudal system: Up until the Middle Ages, the land tenure and political structure in Europe was build around the concept of feuds; pieces of land owned and maintained independently. The idle screen has traditionally been a piece of real-estate that is near-impossible to divide  up for the lack of a standard measurement unit; it is common for handset OEMs and operators to hold months-long disputes on the placement of this service or that Start button on the idle screen.

Interestingly, the icon grid paradigm, popularised in the notion of widgets, can be used to divide the real estate of the idle screen into distinct areas owned by different parties (OEMs and operators), much like land is divided up in a feudal system.

Such a paradigm is made possible thanks to a new standard unit of measurement – a single icon – for dividing idle screen real-estate. We are seeing idle screen solutions such as Nokia’s Home Screen adopt this approach.

More importantly this will lead to innovative revenue models where the idle screen real estate can be leased or sold by impression, length of time or active usage. This will allow handset OEMs to trade ‘land’ for a higher handset wholesale price, for a per-icon/per-month lease or a revenue share off operator services.

Who will own the screen?
And so we come to the perennial question: who will own the idle screen?

Following DoCoMo, SKT, Orange and Vodafone we see all European Tier-1 operators issue RFIs for idle screen solutions, expanding to tier-1 operators in Latin America and the Middle East. These Tier-1 operators will want to leverage their purchasing power to deliver differentiation and accelerated service discovery on the idle screen.

Tier-2 and Tier-3 operators will also be opting to customise the idle screen, thanks to variant management (off-the-shelf device customisation) options available by the OEM, starting with Nokia’s S60, Series 40 and Android devices. The big winner at the end of the day will be the user. A clear trend appearing is the move away from operator-centric customisation to user-centric personalisation. The idle screen will be no exception, where we see the widget paradigms favour user personalisation.

In the long run, the idle screen, much like the customer’s wallet, will not be owned by any single party, but shared. In this economy, best placed are those who provide the technology platform and commercial brokering for service delivery on the idle screen and leasing of real-estate among multiple parties.

What’s more, ownership and leasing will not be just about pre-load deals, but about post-sales management of the idle screen. We argue that, what will be important is owning the in-the-hands experience, not the out-of-the-box experience. It is the post-sales idle screen management where sustainable value and revenue will be coming from.

Long term, we envisage that ownership of the idle screen will become as elementary as customer ownership; as ubiquitous as handset branding; and as important a monetisation tool as handset accessories.

Comments welcome as always.

– Andreas

Bright thinker looking for bright readers? Join us at the VisionMobile blog, the stage for mobile industry thinkers.

Feature phones and the RTOS – the ignored 85% of the market

[Is mobile technology all about Android, Apple and Symbian? Guest blogger Ben Hookway explains why the other 85% of the market is far more important and dishes out the facts to prove why the death of feature phones and the RTOS has been greatly exaggerated]

Nobody seems to write about feature phones these days. The subject is not very sexy, not very well understood, and the people who contribute products and services to the building of feature phones tend to keep a low profile. The same applies to RTOSes (real-time operating systems) which power most feature phones. On the contrary, the mainstream tech publications breathlessly talk about open OS like Android, Symbian, Apple and WebOS and the smartphones that they power.

RTOS vs OpenOS

I work in business development for Mentor Graphics, maker of the Nucleus RTOS which makes it into 100’s of millions of phones per year. I’ve spent the last 6 years (incl. as CEO of NextDevice, now Mentor) immersed in the business of mass market phones at all levels of the software stack.

Real-time operating systems have low processing and footprint characteristics which make them ideal for powering baseband chips. As a result, RTOSes were for along time the only operating system found on phones and quickly became a key part of the mobile phone technology stack. The key RTOSes today are Mentor Graphics’ Nucleus and ENEA’s OSE, followed by WindRiver’s VxWorks.

Feature phones though are obviously a very large and very important segment of the mobile handset space and reports the death of the RTOS have been greatly exaggerated. Most publicity is around the open OS space at the moment, which tends to eclipse the fact that feature phones and basic phones are the major volume players in this industry. Around 200m smartphones were shipped in 2008 which leaves nearly 1 billion feature or voice phones. Nucleus and OSE are each installed in circa 1.5 billion phones, or circa 32-34% of the devices sold. (see VisionMobile’s 100 million club).

So how did these feature phone software platforms come to be?

Some important facts on the history of feature phones and RTOSes:

– OEM legacy. Feature phones from the big 5 handset OEMs are usually powered by in-house application frameworks which have been developed over 5-10 of years (and over a decade in some cases). They originally ran on the baseband chip of the mobile phone and therefore are designed to run on the real-time operating system (RTOS) which baseband chips run.

– Feature creep. As available processing power on baseband processors increased, the sophistication of the feature phone platforms increased with them. The internal platforms gave birth to additional, more sophisticated features to take advantage of the increased resources.

– The leap to application processors. Today, mid to high end feature phones run separate application processors in order to enable advanced multimedia capability, touchscreens, and so on. We now have feature phones adopting the same chip architecture as smartphones, and this explains why many application processor vendors are keen to have RTOS support on chips previously designated as only supporting high end OSes. The internal feature phone platforms the manufacturers use were designed to run on RTOSes, and therefore you need an RTOS to run on application processor chips so you can run your feature phone platform. Clear?

Indeed, the RTOS based feature phone is far from dead and far from basic. Just consider one of the best selling phones in the UK in 2008 – the Samsung Tocco. Feature phone, touchscreen, advanced multimedia and good pricing and marketing made it a wild success. Indeed there are more and more touchscreen feature phones coming out. The Samsung Jet is a great case in point. It runs an 800MHz processor but is based on a Samsung proprietary OS.

You can also look at the LG Voyager, Neon, Dare, Vu, and the Samsung Behold, and Instinct as top selling feature phones: they are all advanced touchscreen phones powered by OEMs’ in-house RTOS platforms. These Samsung and LG phones make up 5 out of 10 top-selling touchscreen  devices in the US, according to a Nielsen survey.

As it turns out, manufacturers are not using open OSes, but RTOS platforms for their best-selling high-end devices. The death of the feature phone has been greatly exaggerated indeed.

So what is going to keep the RTOS and feature phone important? Why is Android or Symbian not going to overwhelm the market as many analysts predict ?

1. Predictability. OEMs know these platforms inside and out. As a manufacturer, predictable model refresh rate is key. If you are releasing 100 models a year (as some OEMs do) you need to be very, very sure that you are going to hit release dates, otherwise your marketing and financial model breaks down. Internal feature phone platforms are not the greatest software platforms available, but they are far from poor, and crucially they are very, very well known by the internal device development teams building the phones.

2. Cost. RTOSes need less resources – and result in cheaper phones. A feature phone requires less hardware and resources than a smartphone. The BOM is smaller and low cost is important when your main customer is an operator who subsidises the phone for the consumer. For example, Digitimes reports that the overall production costs, including royalty payments and resources, for smartphones are 3-4 times higher than those for high-end multimedia handsets, while smartphones require 3 times more components (link – subscription required)

3. The ubiquity of the Application Environment. Historically, the weakness of the feature phone has been the inability to have a broad set of application available and good post-sales application download experience. App Stores and open APIs has been a key focus for the industry and the high end OSes (Android, OSX, Symbian). However, with the proliferation of application environments like Java, Flash, Qt and web runtime environments, manufacturers and operators can hope for both a diversity of applications – and a first-class App Store experience, thanks to solutions from Qualcomm Plaza, Comverse, Amdocs, Sun, Everypoint and many others.

The hype / shipment paradox
There is an obvious inverse ratio between OS hype and shipments; the high end OSes are commanding the lion’s share of media attention but don’t really ship in big volumes, comparatively speaking. The feature phone application frameworks running on RTOSes get almost zero coverage but are the mainstay of the industry. Behind the scenes, the economic drivers for RTOS based feature phones remain strong for the foreseeable future.

RTOSes and feature phones may indeed emerge as a platform for true mass adoption of mobile services for consumers.

– Ben

[editor’s note: see VisionMobile’s side-by-side comparison of 16 operating systems and application environments, incl. ALP, Flash Lite, Montavista, Nokia S60, BREW, Qtopia, UIQ and Windows Mobile. A stark reminder of how radically has the mobile software landscape changed in the last 3 years]

Bright thinker looking for bright readers? Join us at the VisionMobile blog, the stage for mobile industry thinkers.

Android and the threat of fragmentation

[2009 might be the year of Android..  Google claims around 20 devices will be in the market by the end of this year. It would give a long-awaited boost to the proliferation of Android, but not necessarily a boost for developers. Guest blogger Gabor Torok looks at what the appearance of Android variants could mean in terms of fragmentation.]

HTC Dream aka G1 was the first Android device offered by T-Mobile. It took quite a bit of time for the next Android-based mobile phone, HTC Magic, to appear and be available first in Europe by Vodafone, with Asia and North-America (MyTouch 3G or G2 from T-Mobile) to follow in H2 2009. Oddly enough, the third and last device to date will also be manufactured by HTC: it’s called Hero and unlike the previous two it is not Google-branded and can be purchased unlocked. Even if the number of models powered by this platform is relatively low, it’s worth discussing how developers may be affected by the differences between these variants.


There are lots of on-line reviews comparing the two officially available handsets, Dream and Magic – visit HTC’s web site, for example, to see for yourself. The hardware specs of these devices are very similar (though Magic has more memory and no physical keyboard) leaving the software as the main differentiator. The Magic is based on Android v1.5 (codename Cupcake) and includes such features as on-screen keyboard, Home screen widgets, Live folders, video recording, etc. These handy software features are available for owners of older devices, too, such as G1 or the Android Developer Phone 1 (ADP1 in short). Whilst the firmware update must be performed manually in case of ADP1, T-Mobile takes care of upgrading the firmware of existing devices themselves.

What does this mean for developers?
Android developers haven’t had to worry about differences between platform versions and various handsets thus far. It’s simply because T-Mobile G1 had been left alone for a very long period and it was enough to write applications for that single device only. This has changed with the introduction of Magic and will be complicated further with the other upcoming models.

First of all and most importantly, existing applications originally written for the first Android handset will run on new devices without any modifications, i.e. they’re binary forward compatible. At least in theory, since there are signs and reported difficulties indicating that some applications need to be re-built and build environments re-configured for a successful deployment with the new SDK. In any case, Google is trying to keep source compatibility between releases, too, however, one should not expect 100% accuracy in their attempt (see Android 1.5 Version Notes for removed APIs, for example).

Obviously, backward compatibility is a different question: special care must be taken in an application to handle the lack of some hardware/software components in an older handset. Thanks to the fact that Magic is from the same manufacturer as Dream (HTC), one should not be surprised about forward compatibility. Nevertheless, the announced 18 new handsets for this year will surely make it more challenging to write such applications that handle the differences in handsets’ characteristics properly.

Fortunately, the SDK already provides APIs that enable run-time query of device particulars, so API-wise it should not be a issue for applications to distinguish between different models and act accordingly. Without this support it would be nearly impossible to write a single program and design it to run on multiple models – however, even with this support it will put an extra burden on developers’ shoulders they will have to deal with. It would be great, too, if look-and-feel guidelines were available as well, and not just Google engineers’ guidance on how “your program should look and behave similarly to built-in system applications“.

A useful addition to the Android SDK (which contains multiple platforms in one package) is the ability to fine-tune the target platform that one would like to build applications for. Developers can create an Android Virtual Device (or AVD in short), where the most important characteristics of a device can be specified, such as the availability of camera/physical keyboard/etc., screen dimension, choosing the system image emulation runs on, etc. The introduction of AVDs gives developers the freedom of using a single SDK for multi-platform development (read: multiple versions of the same platform, Android).

End-users and the impact to UX
There’s not too much to mention about the user experience on HTC Dream and Magic – the UX is pretty similar across the devices. Hero is different, though: HTC Sense UI provides a different user experience that is a departure not just from the Android UX, but from HTC devices themselves whatever platform they’re powered by (e.g. Windows Mobile, Android). A logical question arises: can older & non-HTC Android devices be updated with this framework? The answer is NO: due to licensing issues, “Google branded” devices (both G1 and Magic) are not allowed to be upgraded. This will surely result in fragmentation not only in software development, but in user experience, too.

Network operators, app stores and firmware updates
Both T-Mobile and Vodafone rely on the same central distribution channel, Android Market (AM). Returning the favour, Google-hosted AM takes carriers’ T&Cs into account when determining which applications can be submitted to each ‘market’. For this reason, some applications doing tethering, VoIP, etc. simply cannot be sold on Android Market – hence their developers need to go and find other markets. In other words, fragmentation exists at the distribution-level.

As already mentioned, HTC Sense UI is not permitted on Google-branded devices. Consequently, network operators selling “with Google” and non-Google-branded handsets alike must be cautious which firmware can go to which phone so as to satisfy all legal restrictions. In Hero’s case, for example, the update process is two-level: UI layers (i.e. Sense) are updated by HTC, whereas the rest by Google. The situation can get more complicated as the update hierarchy grows in depth.

If we can believe in rumours, 2009 is the year when a massive number of Android-powered devices will hit the market. Big numbers and diversity, however, will not make it easy to develop for this platform and maintain software updated on existing devices. Fragmentation has inevitably come to Android.

Looking forward to your comments,

– Gabor

[Gabor works as a mobile software engineer and has been in the industry since 2000. You can read more about his thoughts about mobility at mobile-thoughts.blogspot.com]

Bright thinker looking for bright readers? Join us at the VisionMobile blog, the stage for mobile industry thinkers.