dw2

15 September 2008

De-fragmenting the mobile operating system space

Filed under: fragmentation, openness, operators — David Wood @ 3:37 pm

One response to my previous posting, “Addressing the fragmentation of mobile operating systems“, gave me a lot to think about. The points made by this anonymous commenter deserve a considered response. Here goes:

>Don’t get me wrong, I would like to have just two operating systems in the mobile space. But I’m quite realistic and tired of hypocrites like Arun Sarin, that call for software homogeneity and then sell every OS available: please, put your money where your mouth is.

I recognise the disconnect that often seems to exist, between the strategy arms of various network operators, that say they are going to reduce the number of mobile operating systems they support, and the local operational arms, that appear to disregard that policy. However, I don’t think the disconnect is total. I am aware of several instances where an attractive new smartphone model was rejected by a network operator, on the grounds that the software platform of that smartphone wasn’t on their approved short list.

Admittedly, I suspect that if the smartphone model had been knock-out gorgeous, the strategic directive would have been trumped by local sales considerations. But seeing that the model was only “good” (and not “great”) the centrally approved policy held sway. So these policies do have some force (albeit not so strong a force as you and I might like).

>So, in your point of view, the losses caused by third parties delays and incurred by mobile manufacturers are so large, that they justify that manufacturers relinquish the short-term gains of incompatible operating systems and join their forces to reduce the number of operating systems and/or accept just one OS.

On reflection, it was unfair of me to pick on delays caused by third party software. Delays caused by malfunctions in second party software (written by the phone manufacturer) and in first party software (provided by the operating system vendor) can be equally bad. Unsuspected incompatibilities in the behaviour or functionality of lower-level software can result in lengthy debugging sessions to eventually understand why higher-level software is inexplicably failing to perform as expected on the latest build of the software platform.

My point remains that it can take a long time for a device creation software team to become truly expert in all the vagaries of the underlying software platform. I wish that weren’t the case; I wish that the underlying software platform was more transparent and predictable. Marketing representatives of all the major mobile software platforms might seek to convince people that their own particular platforms are uniquely stable and dependable. And large parts of these software platforms are, no doubt, both stable and dependable. However, because there are many millions of lines of code in the entire platform, and because there are lots of complex fast-changing inter-dependencies between different modules, the unfortunate reality is that the software platforms demand considerable attention from members of the device creation community.

For that reason, manufacturers of advanced mobile phones will put an undue penalty on themselves if they spread the attention of their development teams over several different mobile operating systems. It would be far better for them, over time, to focus on a smaller number of these complex operating systems.

>the natural solution to that problem… [is] to stop outsourcing to third parties those fundamental pieces of code and start producing internally themselves. And maybe, just maybe, that’s what Symbian Foundation is all about: tight control of every software layer

It’s true, the Symbian Foundation has the intent of providing a software platform with a greater degree of completeness that has previously been the case. The idea is that mobile phone manufacturers will receive a more self-contained package of software than in the past. They’ll have less need to source missing portions.

On the other hand, mobile phone manufacturers will still seek to differentiate their phones, by means of:

  • Replacing some of the components provided by the Symbian Foundation
  • Optimising other components, with an eye to the unique hardware and network needs of their own products
  • Adding in new low-level components, that support new services and user experience.

For this reason, I expect that the device creation marketplace will remain large and vibrant.

>Fragmentation manifests itself as a technical problem (incompatibilities between devices) but it’s not created by technical problems in itself, its real nature is political: the inability of all industry players to reach an agreement to des-fragment the mobile ecosystem and, in absence of that agreement, the power/control of one player to impose a standard

I understand the motivations of the different industry players who each participate in multiple different software foundations. We can call this “irresponsible promiscuity” and/or “a failure of industry alignment”, but it can also be seen as a pragmatic hedging of bets. For as long as it remains unclear which of several mobile operating systems will be long-term winners and which will be long-term losers, it’s understandable that industry players will loath to constrain themselves to just one or two mobile operating systems.

However, once it starts to become clear that a particular mobile OS is reaching new levels of utility, productivity, and innovation, industry players are likely to focus their minds sharply – and the political landscape will change. Even so, I don’t expect there will be just one winner. That would introduce its own problems. But I do expect that the number of mobile operating systems will significantly decrease.

>Short-term, no industry player profits from a des-fragmentation process, since it implies to lower the switching costs

Symbian has thought long and hard about the risks and issues in lowering switching costs. If we provide APIs that are more in line with those used by other platforms (for example, the APIs in our PIPS libraries), the risk is that software that runs on Symbian phones will more easily be ported to run on other devices.

At first sight, that looks like a negative outcome for Symbian. However, I think the actual outcome is positive. Partners and customers dislike being locked into a single operating system. If we make it easier for partners and customers to migrate their software assets to other platforms, it means, paradoxically, they will be happier to create software assets on our platform in the first place.

>Even Symbian, when Nokia S60 programs are not allowed to run on a S60 Samsung due to lack of certificates, is creating artificial fragmentation and switching costs: why waste resources with software compatibility when a certificate breaks it all?

I see this example as an implementation error rather than any deliberate policy. The subject of certificates is tricky, but I sincerely hope that we’ll diminish the pains they unintentionally cause. Essential fragmentation is hard enough, without “artificial fragmentation” making things worse.

>Anonymous said…

Final comment: initially I was unsure whether I wanted to reply at length to someone who didn’t give their name. I prefer open discussion to shadow discussion. However, I guess that there’s good reason for the commenter to seek anonymity here.

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4 Comments »

  1. I am aware of several instances where an attractive new smartphone model was rejected by a network operator, on the grounds that the software platform of that smartphone wasn’t on their approved short list.

    That’s good to know!

    Symbian has thought long and hard about the risks and issues in lowering switching costs. […] At first sight, that looks like a negative outcome for Symbian. However, I think the actual outcome is positive. Partners and customers dislike being locked into a single operating system.

    Samsung is gaining market share and producing S60 devices. Let’s suppose that Samsung starts snatching portions of market share from Nokia, do you really think anyone believes that Nokia would refrain from intentionally breaking compatibility to derail Samsung, if that would be necessary?

    I prefer open discussion to shadow discussion. However, I guess that there’s good reason for the commenter to seek anonymity here.

    I apologise, but it’s not possible for me to reveal my identity (maybe in the future). I just hope you are so kind so as to consider that my anonymous comments deserve to be considered.

    Comment by Anonymous — 25 September 2008 @ 11:46 pm

  2. I am aware of several instances where an attractive new smartphone model was rejected by a network operator, on the grounds that the software platform of that smartphone wasn’t on their approved short list.

    That’s good to know!

    Symbian has thought long and hard about the risks and issues in lowering switching costs. […] At first sight, that looks like a negative outcome for Symbian. However, I think the actual outcome is positive. Partners and customers dislike being locked into a single operating system.

    Samsung is gaining market share and producing S60 devices. Let’s suppose that Samsung starts snatching portions of market share from Nokia, do you really think anyone believes that Nokia would refrain from intentionally breaking compatibility to derail Samsung, if that would be necessary?

    I prefer open discussion to shadow discussion. However, I guess that there’s good reason for the commenter to seek anonymity here.

    I apologise, but it’s not possible for me to reveal my identity (maybe in the future). I just hope you are so kind so as to consider that my anonymous comments deserve to be considered.

    Comment by Anonymous — 25 September 2008 @ 11:46 pm

  3. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.“ – The Wealth of Nations, Adam Smith

    The desirable equilibria in the mobile space would be one with just 2-3 operating systems: but, is this equilibria achievable and stable, giving current market forces, industry players and the whole state of the mobile industry? Unfortunately, nobody has ever written about the specific market mechanisms necessary to achieve a des-fragmented mobile ecosystem, whereas too much ink is being wasted in accurate descriptions of how badly broken the current mobile ecosystem is, and how exactly this same malaise is what, non sequitur, would necessarily lead to a much more des-fragmented environment.

    As you wrote in previous posts, “fragmentation is easy, integration is hard”. Currently, mobile developers withstand very high development costs due to a very fragmented mobile ecosystem, meanwhile mobile OSes enjoy a much lower developing cost than they would if they had to built compatible OSes between versions: therefore, a des-fragmentation process would move developing costs from mobile developers to mobile OS developers, that is, mobile OS companies/foundations would have to internalize those costs.

    But developing an OS with full source or binary compatibility between versions is an order of magnitude more expensive than building one with broken compatibility, and it gets worse with time and versions. Moreover, building a des-fragmented mobile OS requires committing considerable resources (people, money, time) in the present, sunk costs that must have positive expected returns in the future (at least to cover developing costs and money opportunity costs). Will foundations/consortiums (Symbian, LiMo, OHA/Android), given their non-profit nature, carry these investments in the present to obtain stable software platforms in the future? As Adam Smith wrote, displaying good will and hope is not enough: mobile foundations/consortiums/companies committing resources in the present must charge higher prices in their future and profit handsomely from their risky investments, otherwise the effort will stop.

    The first and foremost consequence of a mobile ecosystem with 2-3 OSes installed in 80% of mobile phones in the First World, is the oligopolistic/monopolistic pricing power over mobile operators of those owning/controlling mobile OSes. For example, a hypothetic Nokia in the future with 40% market share and an enhanced Symbian with binary/source compatibility, would expand a very profitable software market, ultimately giving Nokia much more power to raise prices. Except that mobile operators would never allow this: after source/binary compatibility is introduced, Nokia would be able to raise prices unilaterally to the detriment of mobile operators, who should in turn start banning whatever functionality they want just to make the handset incompatible (and yes, there is precedent of mobile operators intentionally breaking software platforms: Java APIs/JSRs). Contrary to the PC market, characterized with decentralized and uncoordinated buyers, the mobile phone market is one with very concentrated and coordinated buyers, the mobile operators, so interactions and outcomes are very different.

    Therefore, whilst mobile OSes must commit higher resources in the present to write OSes with source/binary compatibility and the associated risk and uncertainty that they will not recoup those sunk costs, mobile operators will subvert anything that would give mobile manufacturers pricing power over them, as they have always done: mobile operators will always choose standardized and freely licensable technology over proprietary technology, and this fact explains the strategies of Android/Symbian/LiMo, because it is by using standardized technology that they can command high profit margins (35%), while mobile manufacturers have lousy margins (2-7%), since mobile phones are almost perfect substitute goods. The paradox here is that the very strategies of free licenses and/or free/open source that make the mobile OSes much more attractive to mobile operators, is also what almost prevents recouping sunk costs in source/binary compatibility across devices.

    This is the anatomy of a market failure: everyone agrees we need stable OSes with binary/source compatibility, but incentives are misaligned and market forces preclude the emergence of one, much less and by any stretch of the imagination, give rise to a stable equilibria where 2-3 mobile OSes will be able to execute decades-old programs like Windows does (MSFT must test tens of thousands of old programs before every major release).

    Comment by Anonymous — 25 September 2008 @ 11:53 pm

  4. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.“ – The Wealth of Nations, Adam Smith

    The desirable equilibria in the mobile space would be one with just 2-3 operating systems: but, is this equilibria achievable and stable, giving current market forces, industry players and the whole state of the mobile industry? Unfortunately, nobody has ever written about the specific market mechanisms necessary to achieve a des-fragmented mobile ecosystem, whereas too much ink is being wasted in accurate descriptions of how badly broken the current mobile ecosystem is, and how exactly this same malaise is what, non sequitur, would necessarily lead to a much more des-fragmented environment.

    As you wrote in previous posts, “fragmentation is easy, integration is hard”. Currently, mobile developers withstand very high development costs due to a very fragmented mobile ecosystem, meanwhile mobile OSes enjoy a much lower developing cost than they would if they had to built compatible OSes between versions: therefore, a des-fragmentation process would move developing costs from mobile developers to mobile OS developers, that is, mobile OS companies/foundations would have to internalize those costs.

    But developing an OS with full source or binary compatibility between versions is an order of magnitude more expensive than building one with broken compatibility, and it gets worse with time and versions. Moreover, building a des-fragmented mobile OS requires committing considerable resources (people, money, time) in the present, sunk costs that must have positive expected returns in the future (at least to cover developing costs and money opportunity costs). Will foundations/consortiums (Symbian, LiMo, OHA/Android), given their non-profit nature, carry these investments in the present to obtain stable software platforms in the future? As Adam Smith wrote, displaying good will and hope is not enough: mobile foundations/consortiums/companies committing resources in the present must charge higher prices in their future and profit handsomely from their risky investments, otherwise the effort will stop.

    The first and foremost consequence of a mobile ecosystem with 2-3 OSes installed in 80% of mobile phones in the First World, is the oligopolistic/monopolistic pricing power over mobile operators of those owning/controlling mobile OSes. For example, a hypothetic Nokia in the future with 40% market share and an enhanced Symbian with binary/source compatibility, would expand a very profitable software market, ultimately giving Nokia much more power to raise prices. Except that mobile operators would never allow this: after source/binary compatibility is introduced, Nokia would be able to raise prices unilaterally to the detriment of mobile operators, who should in turn start banning whatever functionality they want just to make the handset incompatible (and yes, there is precedent of mobile operators intentionally breaking software platforms: Java APIs/JSRs). Contrary to the PC market, characterized with decentralized and uncoordinated buyers, the mobile phone market is one with very concentrated and coordinated buyers, the mobile operators, so interactions and outcomes are very different.

    Therefore, whilst mobile OSes must commit higher resources in the present to write OSes with source/binary compatibility and the associated risk and uncertainty that they will not recoup those sunk costs, mobile operators will subvert anything that would give mobile manufacturers pricing power over them, as they have always done: mobile operators will always choose standardized and freely licensable technology over proprietary technology, and this fact explains the strategies of Android/Symbian/LiMo, because it is by using standardized technology that they can command high profit margins (35%), while mobile manufacturers have lousy margins (2-7%), since mobile phones are almost perfect substitute goods. The paradox here is that the very strategies of free licenses and/or free/open source that make the mobile OSes much more attractive to mobile operators, is also what almost prevents recouping sunk costs in source/binary compatibility across devices.

    This is the anatomy of a market failure: everyone agrees we need stable OSes with binary/source compatibility, but incentives are misaligned and market forces preclude the emergence of one, much less and by any stretch of the imagination, give rise to a stable equilibria where 2-3 mobile OSes will be able to execute decades-old programs like Windows does (MSFT must test tens of thousands of old programs before every major release).

    Comment by Anonymous — 25 September 2008 @ 11:53 pm


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