The following post is based upon a collaborative dialog between myself and Ben Guthrie. Ben is Symon Communications’ InView Mobile product manager. (FYI, InView Mobile is a smartphone application that plays location-based content.)
Ben and I originally wanted to write an article on the topic contained herein, but we just couldn’t fully agree on some of the points. Rather than scrap the effort completely, I thought that some of the foundational concepts on which we could agree should be shared. The following is a condensed version of our collaboration.
The Nexus One
Last month, Google announced the Nexus One, an Android based smartphone, to massive press and buzz. Much of the coverage however failed to address a larger question: Why did Google launch a phone that would compete with its partners; the many handset manufacturers who are producing phones that use Google’s Android operating system? Perhaps the answer lies in the success of the iPhone.
iPhone as the Benchmark
The iPhone has become the standard against which other smartphones are compared. It is believed that the iPhone’s applications are the primary reason for its market leadership. In the eighteen months following the launch of the Apple iTunes app store, developers have created over 140 thousand applications and consumers have downloaded over 3 billion of these app’s. That’s 5 times the total volume of all PDA and smartphone applications downloaded in the ten years preceding the launch of Apple’s app store. To understand why Apple has had such unrivaled success in attracting developers and applications, one has to first understand the limitations of the traditional handset sales model.
The Traditional Handset Manufacturer Model
Unlike Apple, traditional handset manufacturers (e.g. Motorola, RIM, LG, Samsung, etc.) usually produce several variations of each phone that they create. They do this because the carriers desire to differentiate themselves with unique handsets. But in gaining differentiation, the manufacturers and carriers sacrifice their appeal to application developers. To understand this, let’s examine the sales process of a typical smartphone.
In this simplified example, let’s assume that a single smartphone model is produced for a given carrier. The carrier desires that the device include WiFi. They stipulate however that they will only buy this device if the manufacturer disables WiFi in any units that are sold to another carrier. The manufacturer, in an effort to close the sale, sells the carrier the unit with WiFi, creates a new variation of the same phone but with WiFi disabled and then assigns a new model number to the new variation. The end result is that there are now two models of what is essentially the same phone.
The downside of the preceding example is that a hypothetical application developer will not touch either model because their application, which happens to require WiFi, will only work on one variation of the phone. The application developer does not want to say to its customers: “Buy my app, but be aware: it will only work on model A of the X-Phone, but not on model B.”
Apple has avoided this model-proliferation dilemma by developing one phone and selling it to just one carrier. Sure, they have introduced updated models, but there are no functional variations per model and all new models are backward compatible. Application developers love this “one version” approach because they have a consistent platform on which to develop their app’s. As a result, the number of applications have flourished and consumer demand has followed suit.
It is logical to assume that Google would prefer that its Android platform benefit from the same “one-version” strategy as the iPhone. However with so many manufacturers selling Android-enabled phones to so many carriers, model proliferation is bound to occur and ultimately stifle application development.
Nexus One as the Android Flagship
If one assumes that Google understands that device variation stifles application development. If one also assumes that Google recognizes that the Android market will be ripe with variation if the traditional device manufacturers pursue their old habits. Then one could therefore theorize that Google developed the Nexus One to be the standard bearer for the Android community. One could also theorize that Google, through its “pure” platform and marketing prowess, will work to make the Nexus One the example to which other Android based manufacturers will aspire. This will reduce the number of variations and improve Android’s attractiveness to developers. Failure to entice manufacturers to reduce the level of variation could conceivably mean less applications and less demand for Android phones.
The most sophisticated implementations of digital signage and mobile convergence depends upon the participation of many handset manufacturers and many carriers . If the parties do not participate in essentially the same game, device fragmentation will occur and application innovation will suffer — both of which will impact digital signage and mobile convergence. Let’s hope that Google can set the standard with the Nexus One so that others will follow their lead.