The Clash of Ecosystems & The life and death of mobile platforms

Presenting our new infographic – the Clash of Ecosystems. Android, iOS, Windows Phone, BlackBerry, bada and others are locked in a winner-takes-all battle – and everything revolves around an ecosystem. This infographic presents key figures for each of our competing platforms, smartphone penetration per region – but it also shows what happened to platforms that didn’t make it. Which platform has the largest sales base?  Which has the largest app store, with the most downloads? Check out the answers in the Clash of Ecosystems infographic – as well as the mural of dead (or dying) platforms, our Dead Platform Graveyard.

This infographic is based on the VisionMobile report “Clash of Ecosystems”, available for free download at www.visionmobile.com/Ecosystems

Feel free to copy the infographic and embed it in your website (embed codes below the infographic).

[Infographic] Clash of Ecosystems: The life and death of mobile platforms

100 Million Club – Top smartphone facts and figures in 2011

The mobile market is evolving, as increasing smartphone penetration is quickly shifting the balance of power between the major players. Marketing Manager, Matos, examines the latest smartphone facts and figures and announces the winners and losers of the platform and handset race for 2011. Also presenting our latest 100 Million Club report – in infographic format!

Quick facts on the rise of Android

100 Million Club - Facts and figures of the smartphone market in 2011Android is the undisputed king of smartphone platforms, at least in terms of shipments. While this was true even at the end of 2010, Android grew even further in 2011, grabbing a highly impressive 49% share in the smartphone market – this can easily be translated as follows: 1 in 2 smartphones sold in 2011 was an Android device.

Moreover, Android’s share keeps growing, rising from 42% share in the first half of 2011 to a crushing 54% share in H2 2011. This level of pervasiveness has not been seen since Symbian’s heyday, but let’s not forget that Symbian didn’t have to face such stifling competition back then.

In terms of ecosystems, while Android’s 350K apps are still lagging behind Apple’s 540+K available apps, there’s been an upset in the volume of downloads, bringing Android to the pole position. Due to a much larger installed base, Android’s downloads are growing exponentially and the Market will catch up to Apple’s number of cumulative downloads within a couple of years. Granted, a lot of these apps are Viber, Shazam and Angry Birds, but in any case Google’s business model is all about ads and an addressable audience, not device sales and downloads.

Furthermore, the Android brand name is being bolstered by large marketing budgets that provide numerous ads, news items and mentions across all printed and digital media. Android has now become a household name, mainly thanks to the support and promotion of telcos and handset OEMs, who have managed to position the platform as the new and exciting operating system for users.

Rivals to the smartphone throne

Android’s number one rival right now, iOS, also enjoyed a very good year. In 2011, Apple climbed to the second position as a smartphone vendor behind Samsung with 19% share, although it’s a very close call between the two companies. In the fourth quarter, Apple exceeded all expectations and sold 37 million iPhones, claiming nearly 24% share in that quarter. It’s quite telling that in Q4, Apple sold 80% more handsets than its previous record of 20 million, in the second quarter of 2011.

Although they’re still behind Samsung as a smartphone vendor, Apple is the clear winner in terms of both revenues and profits. Aided by the high sales of all iOS devices, including iPods and iPads, Apple raked in a 32 billion USD profit during 2011 – a figure comparable to the GDP of a small country. The question remains whether Apple will be able to repeat such a feat and continue this trend, taking market share away from platforms leaking market share, like Symbian and BlackBerry.

The third mobile platform in terms of shipments for 2011 was Symbian. There’s not much to discuss on Symbian – its expiration date is coming soon and Nokia has to convert as many Symbian sales as possible to Windows Phone sales, as quickly as possible. However, Nokia had announced four new Symbian models in 2012, but they’re only releasing one.

BlackBerry also finds itself in a quagmire, with declining market share, a decrease in share value from around $60 in Jan 2011 to as low as $16 in early 2012 underwhelming revenues and an underused ecosystem. Although RIM’s co-CEOs have stepped down and the company is under new leadership, this is a difficult boat to turn around and RIM is going to have to follow the simplest rule of all in mobile: innovate or die.

Bada snatched the 5th position of the smartphone platform market away from Windows Phone, outselling Microsoft’s platform by nearly two to one. Samsung’s platform for low-end smartphone continues to turn heads and the company seems to have even bigger plans for bada. However, both bada and Tizen (Samsung’s new open source project) are unable to compete in terms of developer mindshare. But that’s fine, as the primary use for bada or Tizen to Samsung is as a negotiating leverage against Google’s Android.

Last, but not least, we have Windows Phone as the sixth smartphone platform, with approximately 2% market share. Despite the fact that Windows Phone has been out for over a year now, Microsoft’s new mobile OS has so far met with lukewarm results – a fact commented upon by Microsoft’s Stephen Ballmer himself. Nokia’s new Lumia line has the potential to install Windows Phone in the upper echelons of the platform market, tapping the vibrant developer community that has sprung up around the platform, but there are still many risks and difficulties ahead. The fact of the matter is that WP’s chief rivals, Android and iOS, have the high ground in this battle of ecosystems and it’s never easy fighting uphill.

The Android court

The top 5 smartphone vendors in 2011, accounting for 42% of the total shipments [UPDATE: accounting for 75% of total smartphone shipments,] were Samsung, Apple, Nokia, RIM and HTC – out of these, two are (mostly) Android vendors.

100MC - Top Smartphone Vendors in 2011

Although many Android vendors enjoyed a good year in 2011, it was Samsung that took the lion’s share. Samsung doubled their smartphone shipments in just six months, going from 32 million in H1 2011 to over 60 million in H2. Nearly 80% of those were Android shipments leaving Samsung as the single most important Android vendor in 2011. Samsung seems to have sold approximately one in three Android devices in 2011.

HTC did reach many milestones during 2011, such as becoming the no1 smartphone vendor in the US during Q3, but its shipments declined in Q4 and are expected to decline even further in the first quarter of 2012.

Other vendors who mainly ship Android smartphones, like Sony Ericsson, LG, Huawei and ZTE are indeed reporting an increased number of handset shipments, but they still have a lot of catching up to do. The big question for 2012 is how Google will play the Motorola card, with the deal having been green-lighted by authorities on both sides of the Atlantic. While some analysts have put forward the theory that Motorola will become a benchmark for Android handsets and will be used to keep in check other Android vendors, it’s quite likely that Google will choose a different path. Motorola’s acquisition is more closely linked to its patents, with the company’s 17 thousand patents more likely to be used as an insurance policy against Apple’s relentless legal onslaught.

 

Android’s expansion continues

Smartphone penetration continues to grow at an impressive pace; the smartphone market grew by 43% in 2011, from nearly 300 million shipments in 2010 to over 480 million in 2011. Penetration is expected to continue to increase and reach well into the 40% range during 2012.

It’s highly likely that, at least for the time being, Android is going to continue expanding and maintaining its current high market share. What’s more important to Google, though, is getting Android on as many screens as possible. Android is already making an impact on the tablet market, rising from 29% market share at the end of 2010 to 39% at the end of 2011. While Android has a lot of ground to cover in this particular market, it’s slowly stealing market share away from the dominant iPad, while keeping other competing platforms, like QNX and Windows, at bay. Another big bet for Google is TV; Google goal is to get as many users as possible hooked on Android, across as many screens as possible.

Feedback welcome, as always.
– Matos (@visionmobile)

[Infographic] The Open Governance Index – A new way of measuring openness

We are proud to present our latest infographic – the Open Governance Index, measuring the relative openness of 8 major open source projects, from Android to WebKit. This infographic presents some highlights from our full report (free download here). The Open Governance Index is authored and researched by VisionMobile, and part-funded by webinos

Feel free to copy the infographic and embed it in your website (embed codes below the infographic).

Infographic- The Open Governance Index - A new way of measuring openness
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[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.

Questions or comments? Drop us a line on Twitter.

Download the full 100 Million Club watchlist.

– Matos

The flywheel effect of Android and iOS (and why their rivals are grinding to a halt)

[Many analysts have speculated on the strength of mobile ecosystems based on the size and download traffic of app stores. But is this economically sound? Business Analyst Stijn Schuermans quantifies the network effects behind the Apple and Google ecosystems and the market barriers they have built.]

The flywheel effect of Android and iOS (and why their rivals are grinding to a halt)

The holy grail in business is to create a product that sells itself, a momentum that automatically drives the business forward and that at the same time raises high barriers for competition. In the mobile domain, Google’s Android and Apple’s iOS are seen as such holy grails. Much has been written about the power of ecosystems. The race for large app stores with hundreds of thousands of apps has caused a lot of speculation about who the winners will be. But how powerful are those app store assets in reality?

Our analysis shows that Apple and Google have indeed managed to create an ecosystem that shows significant network effects. Developers and mobile phone users move in lock-step to create more and more value for each other. Windows Phone, Blackberry and Symbian on the other hand have not succeeded in starting up such network effects. Their sales remains dominated by other events.

The following two graphs show the relationship between the number of apps available on particular platforms at a particular point in time, and the number of devices shipped for that platform in the quarter just preceding it. The number of apps available can be considered a metric for how attractive a platform is for developers. Device shipments  is likewise a measure of the attractiveness of a platform for its users. As time progresses, we move along each line towards the right.

Android,iOS - devices sold vs. apps available

For Android and Apple iOS, there is a surprisingly strong correlation between device shipments and amount of apps available. On a scale of 0 to 1, with 1 being a perfect straight line, correlation coefficients of 0,96 and 0,97 respectively indicate a very tight match. The two measures move so well together that there is no doubt that they are interdependent.

This is a clear and unambiguous illustration of the strong network effects that are in play in these platforms. As more devices are sold, the platform becomes more attractive to developers, who subsequently write more applications, hoping to reach a large user base. Likewise, as more applications become available, the platform gains more functionality for users, who will then be more inclined to buy a mobile phone that supports these apps. This becomes a virtuous cycle, a positive feedback loop which is so strong that it dominates all other aspects that might affect sales or app development, like promotions and advertisements, or the coolness of a particular technology for developers.

So far, there doesn’t seem to be an effect of diminishing returns. That is, an increase in the number of apps will drive an increase in the number of devices shipped, and vice versa, at a constant rate. You might expect that at a certain point, once for example half a million apps become available, the needs of most users would be covered. How many more QuadroPop of Hold ’em poker clones will people need? However, this point apparently is not yet reached. We will leave the speculations about what that implies about the saturation of the targeted user segments to the reader.

Another interesting observation is that the relative rate of app versus devices growth is different for iOS and for Android. The data indicates that to persuade developers to write a thousand extra apps, 220.000 Android devices have to be additionally shipped each quarter versus only 45.000 Apple devices. This implies that users and developers (apps) assign a different level of value to each other depending on the platform they use.

Several tidbits of information support this last hypothesis. The Android market store has much more free applications available relative to Apple’s App Store. The difference is even larger in download behavior. Android users seem to spend less money on apps as well as other services like data plans. Two thirds of the mobile add revenue for Google actually comes from Apple devices, which again suggests that Apple users are more likely to use internet on their phones (and pay for the data plan).

The fact that Android users spend less money would, in a very direct way, make Android users less attractive to app developers. Hence, reading the graph ‘in reverse’ (with axes switched), the amount of extra users needed to entice an Android developer to write an extra app – the “marginal users per developer” – is higher (compensating for their lower spending), explaining the difference in slope.

So what about the other smartphone platforms out there, like Blackberry, Windows Phone or Nokia’s Symbian?

BB, WP, Symbian - devices sold vs. apps available

Here we see another story unfolding altogether. These platforms have not succeeded in kick-starting or sustaining significant network effects. While some traction in app development has been achieved, this has not had the same overwhelming influence on shipments or vice versa. Since network effects don’t dominate as in the case of Android and iOS, other factors come to the foreground.

For Nokia, this is the deal with Microsoft, where Symbian became a victim of Microsoft’s ambition to become Nokia’s exclusive smartphone OS provider, leading to its accelerated demise. BlackBerry’s lack of innovation in an environment where messaging (its key selling point) has become a commodity is causing it to steadily lose ground. While both of them might have benefited from network effects earlier in their history, they are now failing to sustain there ecosystems and losing the race for customers as a result.

Windows Phone is the most recent challenger. Microsoft has managed to convince developers to start writing software for the Windows phone platform, obviously trying to kick-start the network effect process, but device sales have not (yet) followed.

Network effects are a formidable barrier to entry. Once an ecosystem is well established, it is extremely difficult to lure participants away from it to competing platforms (breaking its back), or to stop its momentum. So far, despite similar efforts from its competitors, only Apple with iOS and Google with Android have been able to get the flywheel going. For these two platforms, the momentum will drive both consumer sales and developer enthusiasm with little extra investment needed. We might see diminishing returns effects in the future, but for now the feedback loop is going as strong as ever. Their rivals seem condemned to a futile catch-up race.

– Stijn

follow us on twitter: @visionmobile
[Want something more than a glimpse into the complex world of apps and platforms? Check out our Software Economics seminar]

[Report] A new way of measuring Openness, from Android to WebKit: The Open Governance Index [Updated]

[Much has been said about open source projects – and open source platforms are now powering an ever-increasing share of the mobile market. But what is “open” and how can you measure openness? As part of our new research report (free download), VisionMobile Research Partner Liz Laffan introduces the Open Governance Index – a new approach to measuring the “openness” of software projects, from Android to WebKit]

Update: We have been amazed by the amount of interest to our Open Governance Index (OGI) report that we published just over two weeks ago. Our report was covered in mainstream media across Wired, ZDnet, PCPro, Gizmodo, ARS Technica, BGR, Zeit Online and ReadWrite Mobile. Our intention was to start a debate around ‘what’ openness is, ‘how’ it can be measured and ‘why’ it is important – and we certainly got the ball rolling!

Open Governance Index cover

Openness = governance

We at VisionMobile have been researching, investigating and helping to educate the industry about open source for the past five years.  In this time open source software has been transformed from geekware to business as usual. Much has been written and debated regarding open source licenses – from the early days of the GPL license to the modern days of the Android platform.

Despite the widespread use of open source, from Android to WebKit, there is one very important aspect that has been neglected: openness and how to measure it.

Openness goes far beyond the open source license terms and into what is termed Governance. While licenses determine the rights to use, copy and modify, governance determines the right to gain visibility, to influence and to create derivatives of a project, whether in the form of spin-offs, applications or devices. And while licenses apply to the source code, governance applies to the project or platform.  More importantly, the governance model describes the control points used in an open source project like Android, Qt or WebKit, and is a key determinant in the success or failure of a platform.

VisionMobile - Licensing vs. Governance Models

The governance model used by an open source project encapsulates all the hard questions. Who decides on the project roadmap? How transparent are the decision-making processes? Can anyone follow the discussions and meetings taking place in the community? Can anyone create derivatives based on the project? What compliance requirements are there for creating derivative spin-offs, applications or devices, and how are these requirements enforced?  It is governance that determines who has influence and control over the project or platform – beyond what is legally required in the open source license.

In today’s world of commercially-led mobile open source projects, it is not enough to understand the open source license used by a project. It is the governance model that makes the difference between an “open” and a “closed” project.

Measuring openness

Our research (free copy of full report here) showcases eight mobile open source projects: Android, MeeGo, Linux, Qt, WebKit, Mozilla, Eclipse and Symbian.  We selected these projects based on breadth of coverage; we picked both successful (Android) and unsuccessful projects (Symbian); both single-sponsor (Qt) and multi-sponsor projects (Eclipse); and both projects based on meritocracy (Linux) and membership status (Eclipse).

All of these are open source projects, whether platforms (Android, MeeGo, Qt, Symbian) or engines (Linux kernel, WebKit) or multi-project initiatives with a single, uniform governance. We appreciate that these projects are unique in many ways but they are all ultimately open source projects and to that extent our governance measures can be applied to them all equally. For example all of these projects have decision-making groups and processes that are directly comparable. In the Open Governance Index we attempted to document who these decision-makers are, how they operate, what processes are used to determine project decisions and how easily is to influence these project decisions.

Our research, carried out over a six-month period, included analysis of these popular open source projects, through discussions with community leaders, project representatives, academics and open source scholars. This research was partially funded by webinos, an EU-funded project under the EU FP7 programme, aiming to deliver a platform for web applications across mobile, PC, home media (TV) and in-car devices.

We quantified governance by introducing the Open Governance Index, a measure of open source project “openness”. The Index comprises thirteen metrics across the four areas of governance:

1. Access: availability of the latest source code, developer support mechanisms, public roadmap, and transparency of decision-making
2. Development: the ability of developers to influence the content and direction of the project
3. Derivatives: the ability for developers to create and distribute derivatives of the source code in the form of spin-off projects, handsets or applications.
4. Community: a community structure that does not discriminate between developers

The Open Governance Index quantifies a project’s openness, in terms of transparency, decision-making, reuse and community structure.

Does openness warrant success?

But what is it that makes an open source project successful? Why do some projects become an immediate success, while others barely get off the ground before crashing and burning? We know that just like commercial ventures, open source projects have different cultures and drivers – but we do believe that you should be able to measure the way that open source projects interact with the community of users and contributors that they build up around themselves.

Our research suggests that platforms that are most open will be most successful in the long-term. Eclipse, Linux, WebKit and Mozilla each testify to this.  In terms of openness, Eclipse is by far the most open platform across access, development, derivatives and community attributes of governance.  It is closely followed by Linux and WebKit, and then Mozilla, MeeGo, Symbian and Qt. Seven of the eight platforms reviewed fell within 30 percentage points of each other in the Open Governance Index.

Moreover, our research identified certain attributes that successful open source projects have.  These attributes are timely access to source code, strong developer tools, process transparency, accessibility to contributing code, and accessibility to becoming a committer.  Equal and fair treatment of developers – “meritocracy” – has become the norm, and is expected by developers with regard to their involvement in open source projects.

The Android Paradox

We found Android to be the most “closed” open source project. In the Open Governance Index, Android scores low with regard to timely access to source code in that the platform does not provide source code to all developers at the same time; it clearly prioritises access to specific developer groups or organisations and has acknowledged this with the delayed release of Honeycomb. Additionally Android scores low with regard to access to developer support mechanisms, publicly available roadmap, transparent decision-making processes, transparency of code contributions process, accessibility to become a committer (in that external parties cannot ‘commit’ code to the project) and constraints regarding go-to-market channels.

Android ranks as the most closed project, with an Open Governance Index of 23%, yet at the same time is one of the most successful projects in the history of open source. Is Android proof that open governance is not needed to warrant success in an open source project?

Android’s success may have little to do with the open source licensing of its public codebase. Android would not have risen to its current ubiquity were it not for Google’s financial muscle and famed engineering team. More importantly, Google has made Android available at zero cost, since Google’s core business is not software or search, but driving eyeballs to ads. As is now well understood, Google’s strategy has been to subsidise Android such that it can deliver cheap handsets and low-cost wireless Internet access in order to drive more eyeballs to Google’s ad inventory.

Equally importantly, Android would not have risen were it not for the billions of dollars that OEMs and network operators poured into Android in order to compete with Apple’s iconic devices. As Stephen Elop, Nokia’s CEO, said in June,2011, “Apple created the conditions necessary for Android”.

Moreover, our findings suggest that Android would be successful regardless of whether it is an open source project or not, to the extent that the vast majority of developers working on the project (the platform itself) are actually Google employees.

 Evolving the Open Governance Index

Having published the report, we aim to continue the discussion on governance, to refine our criteria even further and to make the OGI measure as meaningful as possible for the open source community. One of the first suggestions has been with regard to having a time dimension to the criteria i.e. does openness change over time. Mature open source projects such as Eclipse, Linux and WebKit that have stood the test of time, score quite highly with regard to openness of governance. But this has not always been the case. For example consider the following. Apple forked KHTML to create WebKit in the early 2000’s, releasing the first WebKit open source project in 2005 but with reviewer and commit rights restricted to Apple personnel only which effectively sidelined the KDE community. In 2007 however Apple reversed this decision allowing allow non-Apple developers to have full commit access to the WebKit source code version control system. This shows that openness can and does change over the project lifecycle.

Our vision for the Open Governance Index is to for it to be a robust, and as much as is possible, an objective measure of Governance for open source projects. We believe that this is necessary such that users and contributors to open source projects, including commercial entities, understand the means by which they can, or cannot, influence the direction and content of the project.

Download the full report for an in-depth analysis of the openness of Android, MeeGo, Linux, Qt, WebKit, Mozilla, Eclipse and Symbian. Drop us a line and tell us what you think.

– Liz

Addendum – Is copyleft more or less open?

We awarded a higher score to those licenses that are permissive and not copyleft licenses. Firstly it should be noted that all the licenses used by the eight mobile open source projects are Open Source Initiative (OSI) approved and meet the Open Source Initiative Definition, which provides for free redistribution of source code, access to source code and ability to create derived works amongst other requirements. We believe that the OSI is the appropriate arbiter of the appropriate Open Source License definition and all of the licenses used by the open source projects researched in this report meet this definition of being ‘open’.

However we also believe that from a commercial viewpoint there is still some concern about using code that is under a copyleft license – our experience of working with mobile software development organisations confirms this. Our findings suggest that organisations will be more comfortable using permissive licenses which do not mandate copyleft requirements and we reflect this in our criteria and scoring. We are happy to continue debating these findings further with the community. For example it has been suggested that the problem here is not with copyleft licenses but with the business model used by those organisations. Be that as it may, our experience is that this concern is still a valid one being expressed by many organisations, especially in the mobile device domain.

Finally we had a methodology typo which unfortunately survived the proof reading: assigning a bonus to “copyright assignment”. We fully acknowledge that copyright assignment is unnecessary – indeed we state this in our analysis of Qt whereby we acknowledge copyright assignment as inappropriate and a heavy-handed requirement.

[Liz Laffan is a Research Partner at VisionMobile. Liz has been working in the telecoms and mobile industry for over 20 years, with large telco organisations, start-up technology ventures, software development and licensing firms.  Liz’s interests lie in open source software governance and licensing and in particular how best can commercial organisations interact with open source projects.  She can be reached at liz [at] visionmobile.com]

Platforms 101: Not all mobile platforms are created equal

[The term ‘platform’ is used for describing things as diverse as social networks, web browsers, on-line retailers and open source software. VisionMobile Research Partner Michael Vakulenko delves into the platform economics to uncover why not all platforms are born equal.]
Platforms 101: Not all mobile platforms are created equal
The term “platform” is clearly over-used to the point of losing its meaning. In reality, there are many different types of platforms, each having distinct business models, modus operandi, strengths and weaknesses.Focusing on mobile devices, we can distinguish between three main platform types: software platforms, application platforms and communication platforms. Making a clear distinction between platform types offers valuable insights into competitive dynamics between mobile platforms, including iOS, Android, BlackBerry, Symbian and Windows Phone.

Since different platforms types have very different origins and purpose, it is close to impossible to evolve one platform type to another. And while platforms can be compared in terms of adoption, direct comparisons of platforms of different types is like comparing oranges to apples.

Platform type Purpose Primary audience Network effects Examples
Software platform Sharing of software development costs and risks Device makers None Symbian, BREW
Application platform Connecting app developers and users
(and handset OEM in some cases)
Developers – Users to developers
– Users to users
– Developers to developers
Android, iOS, Windows Phone
Communication platform Facilitating communication between users Users – Users to users Telephone, fax, BlackBerry Messenger

Software platforms

A software platform is a common software stack that is used for developing multiple products. As such, software platforms are optimised for flexibility and sharing of development costs when building products based on the same technology foundations. The technology platform approach is also used in other industries such as the automotive or construction industries. Many open source projects have evolved into successful software platforms, such as Webkit, Apache and Linux operating system.

Symbian is a characteristic example of a software platform. Symbian Ltd. was established by Nokia, Ericsson and Motorola in 1999 for the purpose of sharing the costs of building a mobile software operating system. The Symbian software stack was subsequently used by these handset makers as a basis for wide range of mobile devices introduced in the last decade. Symbian is still the most widely deployed mobile platform ever with over 480 million devices shipped up until Q2 2011. As a software platform, Symbian has been optimised for flexibility in customizations by handset makers and mobile operators.

Symbian served its purpose quite well until Apple changed the basis for competition by introducing a different kind of a platform. Applications, developers and app stores suddenly became more important than serving OEM needs. Changing design focus of the platform proved to be impossible for Symbian and Nokia.  Changing the license terms to open source only  further sidetracked the platform.

Application platforms

Application platforms, often also referred to as computing platforms, are designed from the ground up for connecting two disjoint markets: users and application developers. Application platforms are a special case of so called two-sided networks, in which platform owners extract value by allowing members of disjoint markets to transact through the platform. Two-sided networks describe businesses as diverse as dating agencies (match.com), credit cards (VISA), stock exchanges (NYSE) and digital media formats (Blue-ray).Application platforms live and die on the applications built for these platforms. Users consume applications to satisfy a wide spectrum of needs, from word processing to killing time. Since applications are locked to the platform, users need to obtain the platform in order to benefit from applications. Microsoft Windows is a classic example of a successful application platform.

Since application developers drive adoption of a application platform, the platform is only as successful as the developers who build apps for the platform. Even though the number of apps is frequently considered as an ultimate measure of application platform success, it’s really the long-term health and sustainability of the developer ecosystem that will determine if developer investment will sustain, grow or decline.

Application compatibility is the key success factor for a application platform; applications must work unchanged on different variants and versions of the platform (imagine if Microsoft Office would only run on Dell computers). Raymond Chen’s blog on the New Old Thing offers a flavour of the lengths that Microsoft went into ensuring application compatibility.

When a application platform reaches a critical mass of developers, applications and users, it starts to grow exponentially. This is because of network effects, i.e. a positive feedback loops between users and applications, users and users, and developers and developers. Applications attract users, which motivate developers to create more applications, which attract more users, which attract more developers, and so forth. From the end-user perspective each new application adds value to the platform. From an application developer perspective, a platform becomes more valuable with each and every new user.
VisionMobile Blog: Apple Network Effects
The self-sustaining nature of network effects in the application platform is akin to wildfire: The first burning trees generate enough heat to ignite more trees, that generate more heat, that ignites more trees, and so on.Application platforms have another very important property: The ability to attract external investment by developers. For example, given 400,000 iOS applications and a modest estimation of a $30,000 of development cost per “simple” application, developers, investors and brands have invested over $12 Billion into iOS platform. All this investment has directly contributed to the value that iOS brings in the eyes of users and developers.

Apple iOS set a gold standard for a mobile application platform. It’s hardly surprising that iOS comes from a company with decades of experience in personal computing. iOS is end-to-end optimised for nurturing and reinforcing network effects between users and developers. With each of over 400,000 apps adding to the reasons to buy an iOS device, Apple reported all-time record revenue and earnings for Q2 2011.

For now, Google’s Android is the only close competitor to iOS. Google comes from a background of advertising platforms. An advertising platform is also a special case of a two-sided network connecting two disjoint markets of on-line users and advertisers. It’s hardly a surprise that Android has been designed from the ground up as a free application platform, which is monetised by driving traffic to Google on-line advertising services.

Communication platforms

Communication platforms are designed to facilitate communication between people. Examples are telephone networks, email, fax, and social networks (Myspace). Communication platforms also exhibit network effects: Every new user makes the network more valuable for other users.

BlackBerry has the history and DNA of a communication platform. It was originally designed to extend an email communication platform to the mobile domain. BlackBerry exploits network effects of the email platform and creates value on top of it by improving  the availability and usability of email communications.

Once the BlackBerry email platform reached significant scale in 2005, RIM introduced a proprietary communication platform, BlackBerry Messenger (BBM) service. BBM is a proprietary instant messaging service that uses the BlackBerry PIN programed in the device to identify users. In other words, someone needs a BlackBerry device to join the social network formed around BBM. It’s like a members-only club for BlackBerry users.

Because of the narrow focus on communication needs, the user-to-user network effects in the BlackBerry communication platform are weaker than those in iOS and Android. Moreover, the benefits of mobile email and mobile instant messaging are no longer exclusive to BlackBerry. Mobile email is used today by 80% of US phone subscribers, and multi-platform mobile messengers such as Whatsapp, Kik and KakaoTalk are quickly gaining in popularity, each amassing audiences of millions of users.

So how does RIM remain competitive? RIM needs to evolve BlackBerry into an application platform. So far, the company has not been successful in achieving this goal. On the contrary, given the direction and speed of innovation of BlackBerry platform, RIM’s chances to achieve this goal looks less and less promising.

Much like Symbian, changing platform focus on the fly proved to be extremely difficult for RIM. Moreover, replacing the legacy BlackBerry OS with the “high-performance” QNX operating system will not make much of a difference. It could even make things worse by making the platform even more fragmented and confusing developers with multiple development alternatives.

Platforms are not born equal

Mobile application platforms will always have significant advantages over software and communication platforms. Mobile application platforms exhibit multiple, self-reinforcing network effects, user lock-in and the ability to attract external investment.

Nokia stood not only on a burning platform, but also on the wrong kind of a platform, trying to reinvent the Symbian software platform as an application platform. The self-reinforcing network effects of iOS and Android application platforms are much stronger than Nokia’s scale and distribution power. The stark contrast between the Q2 2011 Nokia and Apple quarterly results is excellent example of the power of application platforms.

On the contrary, Windows Phone, Nokia’s only hope to get back into smartphone game, has all the characteristics of an application platform: from application compatibility to the steadfast commitment towards app developers. Application platforms are bread and butter for Microsoft. Yet, the jury is still out on whether Microsoft will be able to grow Windows Phone into a credible competitor to iOS and Android.

It is very difficult to displace leading application platforms like iOS and Android which are protected by self-reinforcing network effects and user lock-in (think of firefighters trying to contain large-scale wildfires). It is not enough to be marginally better. To win, Windows Phone will need to offer users and developers something radically new, over and above the current leaders. Only time will tell if Microsoft will be able to achieve that by combining the resources of Skype, the partnership with Nokia and the relationship with Facebook.

Platforms will continue to be a central theme in the evolution of mobile ecosystem. It will only become more interesting with the recent entry of Facebook (social platform) and Amazon (retailing platform) into the mobile scene.

– Michael

[Michael Vakulenko is a Research Partner at VisionMobile, where he focuses on mobile platform research. Michael has been working in the mobile industry for over 16 years, starting his career in wireless in Qualcomm. Michael has a broad experience across many aspects of the mobile industry, including smartphone ecosystems, mobile services, handset software, wireless chipsets and network infrastructure. He can be reached at michael [/at/] visionmobile.com]

Want to know more about mobile platform strategies and economics? See our Software Economics in a Telecoms World, an executive, 360° seminar on how the telecoms industry is being disrupted by the new software economics.

[Infographic] The Mobile Platform Race – How do mobile platforms stack up?

We’re proud to present our latest infographic, The Mobile Platform Race, showcasing some of the most important findings and insights from our Developer Economics 2011 report (free download here).

Developer Economics is the definitive report on mobile developers, apps and brands going mobile. Developer Economics was created by VisionMobile and sponsored by BlueVia. We hope you enjoy the infographic – and feel free to embed it in your own website. Comments welcome, as always.

Feel free to copy the infographic and embed it in your website.

Developer Economics 2011
600 pixels wide version

760 pixels wide version

1000 pixels wide version

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[Report] Developer Economics 2011 – Winners and losers in the platform race

[Who is leading in the platform race – and who’s lagging behind? Marketing Manager Matos Kapetanakis examines the flow of developer mindshare and discusses how success is measured in the app era – in part 1 of our 3-part blog series on our newly released Developer Economics 2011 report.]

Developer Economics 2011 – free download here – has been created by VisionMobile and sponsored by BlueVia.

VisionMobile - Developer Economics 2011 - Platform race

Developers driving innovation


The role of mobile developers has changed dramatically over the past three years, from a lowly position as back-room engineers to the much-sought-after engine that drives mobile software innovation. Never before have developers, from big development houses to aspiring students to garage entrepreneurs, had such an enormous impact in mobile industry innovation and dynamics.

Handset manufacturers, platform vendors and even network operators (or carriers to our American readers) are competing over who’s going to build the biggest developer community, as success today is measured in terms of thousands of apps and billions of downloads. Platform and OS vendors are the most active in this game, trying to steer developer mindshare towards their platform and create a new plateau of innovative services, as well as a whole ecosystem around them.

So, which platforms lead the race and which are lagging behind?

The platform race

In the platform race for developer mindshare, there are some clear winners. According to our research, the developer mindshare is firmly flowing towards Android and iOS, with 67% of developers currently using Android and 59% using iOS.

VisionMobile - Developer Economics - Developer Mindshare

These figures show a considerable increase since last year, with the two platforms climbing nearly 10%. In contrast, the ‘old guard’ comprised of Java and Symbian are leaking developer mindshare.

However, the most surprising finding is the adoption of mobile web, i.e. the platform for apps written in HTML or JavaScript, which claimed the 3rd spot in terms of developer mindshare, being used by over 55% of the developers. We do not attribute this to the ease of learning this platform (which has a deceptively steep learning curve, as you can see in the full report), but rather the influx of non-mobile developers to the industry. Also, mobile web is fast becoming the de-facto cross-platform choice for developers, especially now that Java and Flash are waning. In addition, there is a veritable host of HTML-to-native development tools that are helping HTML/JavaScript developers target smartphone native app markets.

More on Developer Mindshare in the full report.

It’s also worthwhile to take note of the Developer Intentshare, i.e. the platforms that developers are planning to use.

VisionMobile - Developer Economics 2011 - Intentshare

Android still reigns supreme, but the surprise comes in the form of Windows Phone, which is fast becoming a developer favourite. Despite lukewarm sales in 4Q10 and 1Q11, the newly revamped Microsoft platform has managed to gain the vote of developers.

This can be attributed to a number of reasons: First and foremost, Microsoft has actually released a competitive platform with a strong toolset. Also, the platform’s future seems bright, after the now-famous Finnish Deal. Finally, Microsoft has invested a lot of time (and money) into attracting developers, tapping into the Xbox and Silverlight developer communities to divert the flow of mindshare in their favour.

The inclusion of Chrome OS in the top 5 platforms in Intentshare is more a result of curiosity for Google’s dark horse platform – how will it stack up to other platforms? MeeGo also seems to be vibrant, which goes to show that strong developer communities go a long way in this software era.

In contrast, BlackBerry has lagged behind in Intentshare, suffering from fragmentation issues (see our full report for the surprising answer to which platforms are the most fragmented), as well as minor fixes to an aging platform.

Who’s lagging behind in the platform race? Symbian and Java have suffered the biggest losses in terms of developer mindshare. Nearly 40% of developers currently using Symbian and 35% of developers currently using Java ME are planning to abandon the platforms.

VisionMobile - Developer Economics 2011 - Abandon index

No surprises there, especially in the case of Symbian, which carries an expiration date, despite Nokia’s slow transition to the WP platform. Java’s loss of mindshare is less expected, especially considering the platform’s reach as global sales are still dominated by feature phones – but developers are not sticking around for that.

Palm’s platforms are also being rapidly abandoned by developers, since Palm is all but dead and HP has still to ship its first webOS handset.

What’s in a platform?

 

How do developers make that all-important decision of which platform to select? Well, according to our research, the biggest driver in platform adoption is large market penetration – a sentiment shared by 50% of our respondents, irrespective of the platform they spend most of their time on.

VisionMobile - Developer Economics 2011 - Platform adoption

But what exactly is market penetration? A platform’s installed base is an important aspect – i.e. just how many actual handsets can run a given app – but that is not all. Penetration is also measured in terms of a platform’s ability to reach users and that is also a factor of how and where that content is available. – a centralised distribution and discovery point, such as an app store, accessible by mobile devices, tablets and PCs goes a long way towards providing developers with a direct access to their customers.

Proving that there’s more to market penetration than a large installed base, we present the case of handsets sold vs. apps. There is a large discrepancy between the number of handsets sold and the number of apps available on a given platform.

VisionMobile - Developer Economics 2011 - Apps vs. sales

In an app economy with close to 1 billion [Update: million] apps, more than half of those are concentrated on two platforms: iOS and Android. It’s easily apparent from the graph that vastly more pervasive platforms in terms of total shipments, like S40 and Java claim just a fraction of the app pie. Granted, this is a smart-centric game, but even a pervasive smartphone platform like Symbian cannot much app to the two app moguls.

Do apps mean money? Not directly, but it’s no coincidence that 2011 marks the first time Apple overtakes Microsoft in terms of revenues and Android rushes past the finally burned-out Symbian platform in terms of shipments.

-Matos

Want more Developer Economics?

Follow us on Twitter (@visionmobile) for updates and stay tuned for part 2.

And for those of you who still haven’t done so, don’t forget to download the full report!