[Survey] Which are the best cross-platform tools?

[This week we’re launching the biggest survey on cross-platform developer tools. The results will be available as a free report in Q1 2012. This report will address a segment that is rapidly developing as a convergence of factors has created both opportunity and demand for cross platform solutions.]

[UPDATE: The Cross-Platform Developer Tools 2012 report has been published. You can download a free copy at www.CrossPlatformTools.com]

VisionMobile - Cross-platform tools report

With VisionMobile estimating that each app on the Apple App store represents an average investment of US$30,000 to develop, the attraction of tools that help developers target additional platforms with minimal additional investment are obvious. As regular updates to platforms can effect functionality in existing apps, it is not just cross platform development but cross platform app management that can tax the resources of many a developer and brings the need for cross platform solutions to the fore.

However, on it’s own HTML5 is hampered by the slowness of the standards process and is still largely a nascent solution to the problem of cross platform development. Combined with development frameworks that help deliver a native UI experience, device optimisation and wrapper solutions. The most notable of the latter solutions is PhoneGap, ‘co-incidentally’ acquired by Adobe just before it pulled the plug on the mobile Flash plug-in.  PhoneGap and similar solutions allow web developers to wrap web code in a native shell, sell in the app stores and access native features. With that, the differences between web app and native are significantly reduced.

Such hybrid apps do however have their detractors, with performance and optimisation noted as a key issue for many developers still taking the native route. But several vendors of cross-platform development tools now claim their solutions that can deliver real, native apps, with performance to match for many platforms from a single-codebase.

[Take the cross-platform dev tools survey]

Indicative of a new stage in the maturity of the market, recent acquisitions in the cross-platform tool space include Strobe (Facebook), Bedrock – Metismo (Software AG), RhoMobile (Motorola Solutions), Particlecode (Appcelerator) and Nitobi’sPhoneGap (Adobe). A large number of new products have also recently come to market to fill the need for cross platform, solutions. We have identified over 50 tools that are actively supporting cross-platform mobile development. We need your help to sift through the good, the bad and the ugly with your thoughts, experiences and opinions on which tools matter. So please share your knowledge and experience, and help us to help you and your fellow developers find the right tool for their needs.  Solutions on the market include:

– JavaScript / web frameworks: e.g. Sencha’s Touch and jQTouch which help web apps deliver a native UI look and feel, and behaviours.
– Wrappers: Allow (mostly) web apps to pose as native solutions, most notably PhoneGap. These are essentially a variation on the runtime client solutions such as used by Adobe Flex / Air.
– Code generators and code translation tools: A core component of many tools – and a standalone solution in their own right as porting tools they take one set of inputs and generate code for new platforms.
– Game engines: Provide a full, targeted development environment, toolset and optimised cross platform publishing facilities such as Unity3.
– Development environments and mobile application platforms: Generate apps from a single codebase, often using cross platform APIs or native code extensions to access native features. Platform solutions can also leverage a stack of additional services.



Adobe Flex

Application framework. Flash Builder development environment used to create Flex / ActionScript apps which run in the Flash and Air runtimes.

Appcelerator (Titanium)

App development platform for HTML / CSS / JS / Ruby and Python developers to publish native applications to iOS, Android, and desktop platforms


Cloud based Platform as a Service using HTML5 / CSS / JS input to create native, hybrid and web apps

Bedrock (Metismo)

Middleware solution: CrossCompiler converts J2ME source code to C++, ActionScript & JS or native on a range of platforms


Mobile development tools and framework using Lua to create iOS and Android apps


IDE with drag and drop visual design and Lua scripting, generates codebase for native apps using a project optimised runtime client


C++ and cross platform APIs are used to generate native apps for iOS, Android and desktop platforms


SDK uses HTML 5, Lua or C/C++ as input language, compiles native apps with native UI for iOS, Android, Blackberry, WindowsMobile, Symbian and Java.

Mono (Touch/Droid)

Development toolkits using C# and .NET input, Monotouch for iOS compiles to native code, Monodroid uses a runtime environment to deliver native apps


Cloud based web app / site development using HTML5, CSS, JS and BiscuitML) with native UI framework & publishing platform providing add-on services for web & hybrid apps


Using XML & CSS for UI design, JS, ActionScript etc for scripting tool set builds native self contained iOS, Android Symbian and Win Mo apps


Uses HTML, CSS, JS, input, provides cross platform APIs and wraps web code in a native shell for distribution


Ruby based framework for app logic and HTML for interfaces. App generator creates scaffold native apps and web apps

RunRev Livecode

Uses proprietary Livecode natural programming language, Can compile native standalone applications for iOS and Android

Unity 3

Game engine and development environment using Mono for game logic, JS, C# and Boo for scripting, compiles to native platform code


Game engine development environment and online platform services. Uses UnrealScript (similar to Java) and Unreal Kismet visual scripting system.


Mobile application platform using a visual editor and scripting to output platform optimised native, hybrid and web apps

Sencha Touch / jQTouch

JavaScript frameworks used to give web apps a native look and feel and simplify data handling for iOS, Android and Blackberry


JavaScript framework for developing web apps with improved client side operation


Mobile application platform using HTML5, CSS, JS, (which can be combined with .Net Obj c and Java) to deliver native, hybrid and web apps.

While some may claim that they really are write-once, run anywhere solutions, others note that without significant additional work, that can only be the case for bloated or low-end applications. So how do they match up to the hyperbole – what are the advantages and disadvantages in the real world?

So with a final word of thanks to our sponsors – Marmalade, RunRev LiveCode, Verizon Developer Community, Xamarin, AT&T, Appcelerator, Intel, MoSync, and Orange Partner – who will bring this report to the developer community, I ask you to take part in the inaugural cross platform tools survey and let us know.

– Seth

The death of Flash – 8 years in the making

[Adobe’s decision to stop developing Flash for mobile browsers is the talk of the day – but the reasons behind Flash’s ultimate failure are not that obvious. Guest author Francisco Kattan discusses the chain of events that led to the death of Flash – a time bomb inadvertently planted by Adobe many years ago].

The death of Flash - 8 years in the making

Ever since Adobe announced that it will stop developing Flash for mobile browsers, the blogosphere has been buzzing with a broad range of sentiments including “I told you so” by critics, disbelief by Flash developers, Monday morning quarterbacking by analysts, and even a petition for Adobe’s CEO to resign.  Check out also the Occupy Flash and Occupy HTML manifestos from the opposing camps. Flash is one of those topics that attract very emotional responses from both its passionate developer community and its very vocal detractors. Although I am generally an Adobe supporter, I will put emotion aside and summarize, in hindsight, what went wrong. For full disclosure, I am a former Adobe employee, but this post is based only on publicly available information.

HTML5 did not kill Flash. Steve Jobs did not kill Flash. The death of Flash was caused by a time bomb planted inadvertently by Adobe many years ago.

Although Flash for mobile ultimately died because Adobe did not adapt fast enough to post iPhone changes in the ecosystem, the seeds for Adobe’s failure were planted earlier on. To understand what went wrong, let’s first review what happened before the iPhone and how those events set the stage for what happened later.

Before the iPhone – the Flash Lite era

Back in the early to mid 2000’s, there was great demand from handset makers (OEMs) who were willing to pay for Flash Lite (the mobile version of Flash at that time) and Adobe decided to collect a per-device license fee for the software. This decision set in motion the incentives and behavior that would ultimately lead to the demise of Flash in mobile, and as I explain later in this post, will also kill Flash on the desktop. Adobe’s ambition to create a platform for delivering rich internet experiences is now doomed.

A big question in many people’s minds is why Adobe didn’t just replicate the model that had been successful with PDF and the desktop Flash Player: make the runtime freely available and monetize it with increased tools revenue. Presumably this would have motivated Adobe to prioritize platform consistency over broad (but fragmented) reach. But it was not that simple.

Although there was a thriving Flash Lite ecosystem in Japan (developers creating content and distributing it via the operators), Flash Lite was initially NOT used as an apps platform in other countries. Flash Lite was used in many cases by OEMs who were looking to differentiate their devices by building expressive user interfaces for the core applications (home screen, dialer, address book, messaging, call log, and others). The LG Prada is a great example of the kind of user interface handset makers could build using Flash Lite. This device featured an iPhone-like touch interface back in 2006 (demo). The Samsung D900 and the LG Chocolate are good examples also. Although these devices included Flash Lite, they did not offer an opportunity for developers to distribute Flash-based content. The implementation of Flash Lite was closed to third party developers as there was no Flash in the browser nor the ability to execute Flash-based apps. As there was no clear opportunity for developers and therefore no tools revenue to be made, it made sense for Adobe to collect a per-device fee from handset makers rather than monetize the player via the tools.

Conflicting objectives: handset makers versus developers

As it happens, when the opportunity to deploy Flash Lite as an applications platform presented itself later on (especially on Nokia and Sony Ericsson devices), Adobe did not adapt its business model right away. In hindsight, this turned out to be a costly mistake. At that point, there was an inherent conflict between the needs of handset makers looking to differentiate their devices and the needs of developers who needed a consistent platform across devices. As OEMs were paying the bills and the mobile team was measured on revenue, it was natural for Adobe to prioritize OEM requirements over developer requirements and to let OEMs implement Flash to meet their own needs. OEMs licensed the source code from Adobe and created their own binary implementations that were not consistent across devices. Flash Lite was used sometimes for building device user interfaces, other times for browsing Flash content, and other times for running standalone apps. In addition, OEMs did not always implement the same set of APIs creating additional fragmentation for developers. Worse yet, as the runtime was not updateable over the air, device fragmentation would only get worse with time.

Lack of Distribution and Monetization Opportunities for Developers

Even when Flash Lite was deployed as a platform to run standalone apps (not in the browser), there was no easy way for developers to distribute their apps. There were no iPhone style app stores at the time. Developers had to distribute their content via middlemen (aggregators) who collected a tax and who had distribution deals with handset OEMs and network operators. Worse, the OEMs and Operators did not have good merchandising channels and discovery of apps by consumers was very poor to say the least. There was no streamlined way for Flash developers to reach consumers. This was a major issue for developers as it was for Adobe. At the same time, revenue from OEMs continued to grow –shipments of Flash enabled devices were more than doubling every year– masking the severity of the problem and allowing the time bomb to continue to tick.

A glimpse of hope: partnering with operators to reach consumers

In an effort to create a thriving ecosystem for developers, Adobe turned its attention to mobile operators who at the time controlled content distribution via their infamous walled gardens. Working with operators was not a popular move especially with Adobe’s Web developers who were new to mobile and did not appreciate the level of control that operators had at the time. Adobe worked with several operators but most prominently with Verizon Wireless (see the April 2006 news release) which on paper was an ideal partner. As one of the world’s largest CDMA operators, Verizon Wireless had great influence over its OEMs and was able to specify the Flash runtime on its devices. Verizon Wireless also had the most successful app store in the US at the time (the BREW-based Get it Now download market).

Adobe and Verizon launched two services: A Flash app download service as part of the BREW Get it Now ecosystem (see the October 2006 news) and Verizon “Dashboard” (announced in March 2007), a much more ambitious service based on Adobe’s on-device portal called Flash Cast. Both services, had issues. The BREW Get it Now offering failed because it was too difficult for developers to onboard new apps, developer revenue shares were too thin, app discovery was difficult for consumers, and Verizon moved too slowly to certify new handsets with Flash (for more on this see: Is Brew Dead? Lessons Learned).

The Dashboard service failed because it took far too long to launch, missing its market window. Verizon announced Dashboard in March 2007 promising availability in the second half of the year, but the service did not see the light of day until September 2008. Even then the service was available on only one handset out of a broad device lineup available on Verizon stores. With the iPhone and Android devices attracting all developer attention by then, Flash Cast and Dashboard were too little too late.

It is worth mentioning that the innovation around Flash Cast and Verizon Dashboard was quite promising. In hindsight, the service resembled many of the key attributes of the iPhone: like the iPhone, it had an App Store concept where consumers could discover and purchase widgets with a revenue share back to developers. Like the iPhone, it was designed as a walled garden with a gate keeper (the operator in this case). Like the iPhone it featured an expressive user experience as the widgets and the user interface were based on Adobe Flash. However, unlike Apple, Adobe did not have end to end control of the ecosystem and the service was late to market as a result. The service was designed for 2006, not 2008, a big difference considering the iPhone showed up in 2007 changing all the rules. Although Adobe was innovating fast, its innovation did not reach consumers in time because it relied on slow moving partners.

Enter Steve Jobs and the iPhone — CONTROL-ALT-DELETE on the ecosystem

The launch of the iPhone changed the mobile ecosystem so dramatically that it disrupted all incumbents in ways that were not readily apparent right away. The disruption was so great, that it favored new entrants that were starting from scratch under the new rules (Apple and Google) over incumbents who had existing market positions and established business models (Nokia, RIM, Motorola, Palm, Microsoft, Qualcomm/BREW, Symbian, Sony Ericsson, and of course, Adobe). Like many other players, Adobe did not adapt fast enough and paid the price as a result. Consider three major changes in the ecosystem and how they negatively impacted Adobe Flash:

  • Apple caused the existing operator walled gardens to crumble while Adobe was focused on building ecosystems with operators.
  • Consumers started dumping feature phones in favor of buying smart phones, but Adobe had focused on feature phones which represented a much larger share of device shipments (and revenue to the mobile business unit).
  • Mobile browsing finally took off as a mainstream service, but Adobe’s mobile player did not support 100% of the desktop Flash content as demanded by Steve Jobs.

As you may recall, the first generation iPhone did not have an App Store or SDK. It was all about browsing the internet (see the “internet in your pocket” ad campaign). The iPhone was the first handset with a decent browsing experience and quickly took the bulk share of mobile browsing (even though it represented only a very small share of device shipments). The lack of Flash was a glaring gap at the time.

If there was ever a time that Steve Jobs needed Flash, it was in 2007 with the first generation iPhone 

Unfortunately Flash was not ready at the time. Because Adobe generated revenue from device shipments, it had been focused on the feature phone category which represented a much larger share of the market in terms of shipments (but nearly zero percent in terms of web browsing page views!). Neither version of the Flash Player met Steve Job’s requirements. Flash Lite did not support all the Flash content on the Internet because it had been optimized for more constrained devices and the full Flash Player did not run well on smart phones because it required the power of a desktop computer. Steve Jobs famously once said, “there is this missing product in the middle,” referring to this issue.

Incredibly, Adobe did not ship the mobile version of the full Flash Player until June of 2010 (version 10.1), three long years after the launch of the iPhone! By then, the iPhone was the most popular device on the planet and Apple had shifted focus from browsing the internet to apps where Flash did not matter (recall the “there is an app for that” ad campaign). Adobe had missed the window of opportunity to be part of the iPhone.

Sure, Apple could have still adopted the Flash Platform in 2010, but it was not in the company’s best interest at that time. In the end, Apple decided not to adopt the Flash Platform because Flash would limit its ability to differentiate its devices. Apple marketing was focused on the broad availability of apps that worked best on iOS. To support such positioning, Apple needed developers to target the latest set of proprietary APIs (accelerometer, compass, gyroscope, etc.) rather than write to a higher level cross-device platform that would deliver undifferentiated experiences across Apple and non-Apple devices.  This is why Apple decided to block Flash from iOS (for more on this see: Why Steve Jobs will never put Adobe Flash on iOS devices).

Adobe did react to the disruption the iPhone had created and adjusted its business model, but it was too late by then. In March of 2008, Adobe announced the Open Screen Project essentially making the player free for OEMs as long as they implemented it in a consistent way for developers. To ensure consistency for developers, Adobe also began to create its own binary implementation of the player for the leading mobile platforms in the same way it had always done for Windows and Mac OS on the desktop. However, with “Flashless” iOS devices leading the charts and HTML5 adoption increasing on mobile devices and web properties, the writing was already on the wall and there was no turning back. Adobe had been unable to disarm the time bomb in time and it eventually exploded.

Flash for mobile is dead, but Flash for the desktop lives on, right? Wrong!

It’s pretty simple: Flash for the desktop cannot survive without mobile support. With PCs becoming a smaller and smaller share of Internet connected devices (see chart below), it’s only a matter of time before most web sites will be updated to not require Flash. It is hard to imagine many examples of web properties that would want to exclude the majority of the eyeballs on the internet by requiring Flash.

VisionMobile - Desktop vs. mobile device shipments

Of course, web sites don’t have to remove Flash content outright. They can add logic to serve Flash content for desktops and HTML5 content for other devices. This will in fact be the case during a multi-year transition to a “Flashless” internet. As new content is created that excludes Flash, as HTML5 adoption and capabilities catch up to Flash, and as the share of PCs continues to decline, the percent of web sites that serve Flash content on the internet will approach zero, causing Flash on the desktop to die a slow death.

Note that this transition began several years ago as web properties adapted to support iOS devices — which account for a whopping 62% of mobile browsing page views! YouTube, one of Adobe’s flagship references already added support for HTML5, dealing Flash a major blow. jQuery, a popular JavaScript library that competes with Flash for building interactive sites has already overtaken Flash. The tide on HTML5 is turning and it’s only a matter of time before Flash on the desktop suffers the same fate as its mobile sibling.

To recap, the seeds for Adobe’s failure with Flash were planted many years ago with a revenue model that made sense at that time, but remained as a ticking time bomb for far too long. The model caused Adobe to move in a direction that was opposite to where the market ultimately moved to, especially after the launch of the iPhone (feature phones versus smartphones, OEM requirements versus developer requirements, operators as channel versus Apple and Google as channel). In addition, when the iPhone was launched, Adobe moved too slowly to adapt to the new market reality (3 years to launch Flash Player 10.1), ultimately killing Flash.

What do you think? What do you believe went wrong with Flash in mobile? Do you think Flash will survive on the desktop?

– Francisco

[Francisco Kattan has worked in the mobile ecosystem for over 10 years, including as Director of Product Marketing and Developer Relations for Adobe’s Mobile Business Unit. He also held leadership roles at Edify, Openwave, and currently Alcatel Lucent where he is Senior Director of Product Management. Follow Francisco on Twitter @FranciscoKattan]


Flatten, Expand, Mine: The three pillars of Google's strategy

[Google’s strategy is all about ads, not selling services. Business Analyst Stijn Schuermans examines Google’s three-pronged strategy for making money and the key drivers for the company’s success]

The three pillar's of Google's strategy

Is Google a technology company? Well, sort of. Despite its geeky, engineering-driven reputation, Google is in the first place an advertisement business, as an overwhelming 96% of its revenues come from digital ads. Sure, Google produces some amazing high-tech stuff, spending $3.7 billion in R&D in 2010, but it’s all in the name of crude commerce; of connecting eyeballs to ads.

Let’s explore the three pillars of Google’s strategy that enable the company to sell more ads for more money. Google increases its reach by flattening any obstacle that stands between its ads and eyeballs. Then, Google expands its visibility to the user by providing services, creating more opportunities to show ads. Finally, the company squeezes the maximum out of those opportunities by mining user data, which allows them to understand and target users very efficiently.

This strategy works pretty well for the company, to say the least. Google ranked 92nd in the 2011 Fortune 500. The company is worth almost 200 billion USD. Last year, it reaped over $29B in revenue. If Google were a country, it would be bigger than Cyprus or Bahrain, based on GDP. Since its business is digital, it collected a net profit in 2010 of $8.5B (a healthy profit margin of 27%), despite providing almost all of its user-oriented services for free.

Let’s discuss Google’s three-pronged strategy in more detail.

Pillar 1. Flatten

The first pillar of Google’s strategy is to crush down anything that stands between consumer eyeballs and Google’s inventory, i.e. the ads that Google’s advertiser customers are providing. That is, any friction for users to be exposed to the ads should be removed.

For example, Google provides two operating systems, both immensely complex technologies, at low or zero cost to the world: Android (for smartphones and tablets) and Chrome OS (for netbooks and set-top boxes). Of both operating systems, open source versions are available for anyone to access, develop and build derivatives from.
Google provides OS’s like Android for free, because its goal is to commoditize the devices they will run on. They allow OEMs to make high-quality, low cost devices, which can then be delivered at a very affordable price to the mass market. If more people own and use smartphones and tablets, the reasoning goes, this gives Google more opportunities to reach those users and serve them ads.

In the same context, Google took a very active stance in the net neutrality debate. There the intention was to ensure optimal access of users to the network. It would not be good for Google’s business if operators would impose restrictions of artificially increase the cost of network access.

The theoretical basis for this pillar is the economics of complements. A good analogy is cars and fuel. If the price of fuel goes down, the demand for cars will increase. The services that Google provides are the complements in this case (the fuel) to the core advertisement business. The value of the advertisement inventory increases with the amount of people that Google can reach. Services are subsidized to drive more eyeballs to Google: the price of the service is reduced (in most cases to zero) to indirectly push up the demand for the core product, being ads.


Pillar 2. Expand

Once lots of people have access to the Internet through connected devices, Google’s second goal is to expand its footprint across the user journey. Put simply, Google wants to be part of as many use cases as possible, since that’s where they can present users with advertisements.

Google provides dozens of different services, targeting as many tasks as possible that a user might consider when communicating or looking for information. If a user wants to send email, there’s GMail. For chatting, Google Talk and Google Voice. Want to find directions? Use Google Maps or Google Earth. YouTube allows you to publish your own videos and Picasa to share pictures. In a business setting, Google Apps (like Google Docs) allow you to collaborate with co-workers. If you want to keep up to date with your friends, there’s Google+. The list goes on.
In most of these services, Google ads are displayed. Unobtrusively, but always there for people to see.

Google doesn’t do all the work of reaching users itself. Google provides infrastructure for others to display ads, deriving about 30% of its advertisement revenue this way. Third parties can display ads on their websites (and share in the profits) using the AdSense platform. A similar system is in place to include ads in mobile apps. Despite some competition, Google is still the main advertisement provider on the Android Market. In fact, most developers on Android use advertisement as a source of income, rather than direct payment. The Android market has the lowest amount of paid apps of any app store.

Pillar 3. Mine

Finally, after flattening and expanding, Google squeezes the maximum out of the eyeballs it reaches. The company increasing the value of its ads by data-mining the user’s behavior. By understanding what the user is trying to achieve at the moment that an advertisement is displayed, the ad can be micro-targeted to be incredibly relevant to that user. This increases the probability that the user will click on the ad, measured by the combination of fill rate and click-through rate (CTR), and therefore the probability that she will eventually buy the advertised product. This is what makes the ad valuable to the advertiser.

In its early days, Google revolutionized the advertisement industry this way. Before, an ad was broadcast to a very large audience (think billboards or TV ads) in the hope that someone might find it interesting. Any targeting was crude at best, for example an advertiser could choose to print in magazines with very specific audiences. When Google Search came along (still its flagship product), all of a sudden you could target users almost perfectly, as they conveniently typed in what they were looking for. This made the return on an advertisement spend several factors higher.
A typed search query is only one way that Google can find out what a user is interested in. Scanning the content of emails is another, pretty controversial one. More recently, Google has tried to launch several social networks like Facebook-competitor Google+, hoping to learn something about the user through his social interactions. In fact, social networks are major competitors to Google for online advertisement dollars. With Google Latitude, the company can understand where you are and select advertisements that are relevant to your location. Many industry sources also confirm that the Android OS is used to collect user information.


Google doesn’t give away all its consumer services for free out of the goodness of its heart. Its purpose is to make profit. If services are provided for free, they are meant to flatten, expand and mine in order to sell advertisements.

Google uses complements everywhere. Where other products might have a single or a just a few complements (think fuel for a car), Google works hard to create as many as possible. Because the core business is to reach people, Google throws its nets as wide as it can. Once it has the user’s attention, it can then use its technology to monetize the opportunity to its maximum extent.

– Stijn
follow us on Twitter @visionmobile

[Want a more detailed analysis of Google’s strategy and how it fits into the ecosystem puzzle? Check out our Software Economics seminars].

[Report] Mobile Platforms: The Clash of Ecosystems

[We at VisionMobile have been researching and helping to educate the industry about mobile platforms for the last five years. In this time mobile software has evolved from the world of “open OS” to the world of  complex ecosystems, network effects, app stores which are redefining the rules of telecom industry. Today we share much of this knowledge in our Mobile Platforms: The Clash of Ecosystems report – a critical analysis of major mobile platforms and their battle for dominance – free download here].  

VisionMobile - The Clash of Ecosystems
Mobile platforms are at the center of the epic battle between Internet and telecom giants. The competition is not just about technology, performance, user interface or openness. Today’s mobile platforms win and lose by the strength of their ecosystems of developers, service and content providers.

In the report the Mobile Platforms: Clash of Ecosystems (free download here) we break down  Android, BlackBerry OS, BREW, iOS, Symbian, Windows Phone and webOS across key elements such as history and origins, owner agenda, ecosystem adoption, market penetration, technology foundations and application development experience. Clash of Ecosystems is part-funded by webinos,  a project aiming to deliver an Open Source Platform and software components for web applications across mobile, PC, home media (TV/set-top boxes) and in-car devices.

The report dives into several key trends underpinning the era of mobile platforms and ecosystems – designed to help developers, software companies, entrepreneurs, enterprise CIOs, brands, handset makers and operators to better understand the dynamics of mobile platform competition on intersection of economics and technology.

Smartphones go mainstream, but the devil’s in the details. Just two years ago, smartphones were viewed as expensive toys for geeks and Apple fan boys. No longer. Smartphones have entered the mainstream in developed markets, and are taking a growing proportion of device sales in more cost-sensitive markets around the globe. In the third quarter of 2011, smartphone shipments penetration surpassed 29% globally, although this figure varies widely from nearly 65% in the USA and over 50% in Europe to 19% in Asia-Pacific, 17% in Latin America and 18% in Africa/Middle East.

VisionMobile - Clash of Ecosystems - Regional penetration

The leaders, iOS and Android, are driven by economics of demand. Handset sales are driven not by hardware features (“what the handset can do”) but the user interface and applications available (“what you can do with the handset”). Much like any smartphone platform, iOS and Android are driven by economics of demand, where the demand generated (incl. the number of applications) has a far stronger effect on sales than pure supply chain efficiencies. As of October 2011, iOS and Android are leading the way, with over 500,000 and 300,000 applications, respectively. The rest of the platforms trail far behind with order of magnitude less applications: BlackBerry has 35,000 applications, Windows Mobile 30,000 applications and Symbian 25,000 applications.

Successful platforms are a magnet for financial investment. Application platforms like iOS and Android are able to attract huge financial investments on the part of developers, investors and brands. Taking iOS as an example, and estimating that an app costs an average $30,000 to develop, the 500,000 iOS apps represent an average investment of $15B in the iOS ecosystem. This investment directly contributes to Apple’s bottom line, and its estimated $71B iOS-powered device sales.

App stores are about controlling ecosystems, not profiting from content. The app store business is the polar opposite of the telco content business. As such, application stores like Apple App Store and Google Android Market should not be mistaken for profit centres. Instead, Apple and Google leverage app stores as ecosystem control points. With over 85% of iOS and Android downloads coming from free apps, the 30% revenue share from paid apps subsidizes the operational cost of app intake and distribution, which runs at over $1.2B to date in the case of Apple.

VisionMobile - Clash of Ecosystems - Mobile Platform Status

The rising star of HTML5. HTML5 has the potential to become a common bridge system across smartphone platform islands and the sea of feature phones. HTML5 is the only common app technology supported by Android, iOS, new versions of BlackBerry OS and Windows Phone platforms. With 225 million Android devices and 146 million iOS devices (UPDATE: this figure only refers to iPhones and does not include other iOS devices) sold to date, HTML5 is supported by over 371 million mobile devices today, albeit with mixed levels of compatibility.

Microsoft, Facebook, and mobile operators have very different motivations but are all eyeing HTML5 as a technology that could help dis-intermediate app stores as content distribution silos, reducing the power of Apple’s iOS and Google’s Android platforms.

However, in its present state HTML5 can neither challenge nor displace the leading mobile platforms. In order to become a viable alternative, HTML5 needs to move beyond being just a development tool, and to converge around a dominant solution for web application discovery, monetisation, distribution and retailing.

Mounting developer acquisition costs. Platforms need apps to thrive and developers are the growth engine of the smartphone ecosystems. At the same time, developer attention is scarce; developers are very critical “platform consumers” and need to make far higher investments when adopting a new platform. We estimate that the minimum acquisition cost for a publishing developer is over $2,300 in the case of Apple. As such, Apple, Google, Nokia, Microsoft and RIM have needed to invest billions of dollars in persuading developers to write apps for their platforms.

Moreover, developers are motivated by a complex set of incentives, which includes revenue potential, user reach, ability to raise funding, and the pure coolness or utility of a platform. These incentives vary widely across different types of developers and as such call for developer segmentation as a critical cornerstone of any developer strategy..

Software players put mobile operators on the defensive. The app innovation unleashed by smartphones puts pressure on traditional telecom profit centres, not only around value-added services, but also on core messaging and voice services.

Apple and Google combined control the user experience of nearly 400 million users through their iOS and Android platforms. Both are strategically reducing the role of mobile operators to that of “connectivity providers”.  Internet giants like Facebook and Amazon are using social-centric and retail-centric strategies to profit from mobile. Startups such as Foursquare and Instagram have pioneered mobile-first services. Communication companies like Skype, WhatsApp and Viber put pressure on core telecom services, notably SMS and voice.

Incumbent mobile platforms lose to next-generation challengers. In the last decade we‘ve seen over 20 mobile platforms rise and then die not being able to achieve critical mass. Next-generation platforms (iOS, Android and Windows Phone) have achieved sustainable growth by leveraging on network effects and developer economics. Legacy platforms on the other hand (Symbian, BlackBerry OS, BREW and Windows Mobile) have been designed to handset vendor rather than developer requirements; all have either been discontinued or pushed into narrow market niches. Companies with strong software DNA (common in the US) now dominate the smartphone platform landscape.

VisionMobile - Clash of Ecosystems - Smartphone penetration
No single winner: mobile platforms will remain a multi-horse race. The mobile market will continue to be a multi-horse race for many years to come.  iOS and Android will continue to lead, dividing the market between premium (iOS) and mass-market product segments (Android). Self-reinforcing network effects, gigantic application ecosystems and the rapid pace of platform evolution make the positions of Apple and Google unassailable.  Windows Phone may only challenge BlackBerry for the third place rank.

Patent wars. Apple and Microsoft are trying to leverage their own patent portfolios and paying billions of dollars in patent acquisitions in an attempt to slow down the meteoric growth of Android. Apple’s strategy is to block Android sales starting with Samsung, although with mixed, regional and temporary successes. Microsoft is using an altogether different tactic, namely patent taxes, to coax OEMs like Samsung and HTC away from a higher-cost Android. At the same time, Google is planning to defend Android through the pending acquisition of Motorola Mobile Devices, and its portfolio of over 17,000 patents. We expect a culmination of the patent wars in a multi-vendor consortium designed to standardise cross-licensing agreements across Android, iOS and WP7 handset vendors.

Comments welcome as always,

– Michael V

The elusive long-tail of mobile shipments

[The era of smartphones is upon us, as penetration increases from 11% in 2008 to over 25% in 2011. But what of the remaining three quarters of the market? Marketing Manager Matos Kapetanakis talks smartphone numbers and takes a look at the elusive long-tail of feature phone shipments]

100 Million Club - H1 2011 - Handset OEMs vs. Platforms

Dawn of the smartphone era

Smartphone penetration continues to accelerate, growing from a paltry 11% in 2008 to 20% in 2010 and climbing to 27% in H1 2011. Feature phones continue to make up the bulk of mobile shipments globally, but the revenue potential of each segment is a different matter altogether. As an example, the average selling price for Nokia’s feature phones was 39 Euros versus 144.5 Euros for their converged devices.

Another parameter, namely profitability is much in favour of smartphone vendors. HTC has comparable revenues to Nokia’s successful feature phone segment, with two times the profits and profit margin, despite having six times fewer shipments. The gap is even larger in the case of Apple, whose profits are nearly 20 times those of Nokia’s feature phone segment, despite having less than a third of Nokia’s shipments.

Smartphone platforms: Google vs. Apple

First, let’s take a look at the two leading players, Android and iOS. The vacuum left behind by Symbian’s timely demise has been filled primarily by Android and, to a lesser extend, Apple’s iOS. In H1 2011, Android gobbled up nearly 45% of the smartphone pie, leaving approximately 20% for Apple’s iOS and 12% for RIM’s BlackBerry OS.

Apple has enjoyed a healthy increase of iPhone shipments in 2011, already reaching past the 50M full-year figure for 2010 in the first three quarters of 2011. Despite the initial disappointment of not being a brand-new iPhone, the iPhone 4S managed to get 4 million sales in just one weekend – that’s more than Windows Phone manages in an entire quarter. However, in an increasingly price sensitive smartphone market, there is a limit to how many iPhones can be sold.

Despite being the number one smartphone platform, Android is not guaranteed a smooth sailing. Apple’s lawsuit barrage on Samsung, the biggest Android vendor in terms of sales, has exposed the platform’s Achilles’ heel, namely patents. The large arena of this high-stake drama will not be set in Germany or Australia, but the large smartphone markets, like the U.S. Google’s acquisition of Motorola (don’t miss our full analysis) has indeed armed Google with fresh patent ammunition, but might alienate the big Android vendors.

Smartphone platforms: The best of the rest

But what of the other platforms? Windows Phone continues to fail to impress users, with sales being disappointing, as Ballmer himself recently admitted. Nearly eight months after the much-vaunted Microsoft-Nokia deal, Windows Phone is faced with lukewarm results, being outsold even by Samsung’s bada platform. In H1 2011, Windows Phone barely reached 4M shipments, while bada shipments climbed to nearly 8M. WP7’s growth, after it replaces the zombified Symbian as Nokia’s main smartphone platform, is still uncertain, but the longer it takes for Nokia WP devices to hit the shelves, the more market share will Nokia lose. In H1, even if Nokia were to magically replace all Symbian handsets with Windows Phone handsets, Microsoft’s platform would still be far behind Android, with just half of Android’s shipments.

Windows Phone, however, should not be summarily disregarded, as Microsoft has managed to create a substantial ecosystem around the platform, which is the main ingredient to the success of Apple and Google. Windows Marketplace reached the 30 thousand apps milestone in just 10 months, while the platform has received positive reviews by developers. The platform is widely acknowledged as having the best developer tools in terms of features, based on our Developer Economics 2011 report (www.DeveloperEconomics.com).

Even though Stephen Elop described the smartphone market as a three-horse race, there is another important player to be considered, namely RIM. During the past year, RIM has suffered a number of blows, from declining market share and repeated drops in their share price to a total service blackout that lasted four days. RIM is starting to lag behind its competitors and their leaking market share is up for grabs. Despite a vibrant developer community, problems such as fragmentation issues and an aging platform have cost RIM the creation of a healthy ecosystem. A telling sign is how BlackBerry App World is lagging behind not only Apple and Google’s app stores in terms of available apps and downloads, but also Nokia’s Ovi Store. Now, the BlackBerry blackout fiasco has cost RIM the confidence of 70M subscribers. RIM is on the verge of relinquishing their last remaining competitive advantage, namely reliability. Even though RIM is trying to turn the situation around, with the introduction of the BBX platform, plus the carrot of Android apps compatibility in the second version of Playbook, it’s the RIM brand that has taken a beating, more than the BlackBerry brand. It remains to be seen whether users will flock to the notoriously unsafe Android platform or will opt to follow the safer, iPhone route. The iPhone route seems more suitable to RIM’s enterprise segment, as the segment’s disposable income is enough to carry the weight of expensive iPhones.

Smartphone vendor arena

In H1 2011, Apple and Samsung toppled Nokia as the undisputed king of smartphones. The top-5 smartphone vendor rankings also include RIM and HTC. It’s no surprise that 3 out of the top 5 players are purely smartphone vendors; but the old guard is catching up.

VisionMobile - 100 MC - H1 2011 - Mobile market share by OEM

Although lagging behind, LG is finally on board the smartphone express, while Sony Ericsson has disowned their feature phone heritage and plan to become a smartphone-only vendor in 2012. As smartphone prices are dropping, ZTE and Huawei are also firmly in the game, extending well past their native home market.

It’s interesting to note that in a market of 208 million smartphones in H1 2011, there are very few dark horses. The top 10 players accounted for nearly all smartphone shipments in the first half of 2011, leaving just 3% of shipments in the ‘other’ category.


The elusive long-tail of mobile shipments

While Nokia has lost the pole position in the smartphone market, it continues to firmly hold the feature phone market in its grasp. Nokia accounted for over 27% of total feature phone shipments in H1 2011, followed by Samsung with 20% and LG with 7%.

However, the feature phone market is extremely fragmented, with the top 7 players accounting for just 64% of shipments. The remaining x% belongs to the generic ‘other’ category. But what is this dark, elusive gap in the market? The answer lies in the plethora of primarily Asian phone manufacturers out there (see a slightly out-of-date list here), taking off-the-shelf MediaTek hardware designs to create Shanzai handsets for the Chinese market or brand name handsets for India.

VisionMobile - 100 Million Club - Feature phone market share H1 2011

The long tail of feature phone manufacturers largely caters to local markets, in partnerships with local telcos. India and China are the obvious examples of low-volume feature phone manufacturers, with each country playing host to over 15 such companies. With tens of companies shipping low-end devices to local markets, it’s small wonder that the biggest bulk of feature phone shipments comes from the long-tail of handset OEMs.

The end of feature phones

While smartphone penetration continues to increase, just over 1 in 4 mobile phones are smartphones. The tipping point will come when handset OEMs manage to release low-cost smartphones into the market, in high volumes. Google is already attempting to sell cheap smartphones in the range of $100 unsubsidized, pre-tax. The rate of acceleration will increase even further if there is any truth to the rumors of cheaper iPhones, as consumers are still hesitant of the prices that Apple demands for its products.

Furthermore, most major handset OEMs are keen to lower the volume of feature phone offers in favor of smartphones, as the latter have a much higher profit margin and the market is slowly getting accustomed to the use of touch screens.

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– Matos