The mobile OS market's biggest problem is fragmentation, which will get worse before it gets better

February 13, 2009

4 Min Read
The Downside of Diversity

Enough is enough. If wireless carriers, handset vendors, and mobile application developers can agree on anything, it is that there are far too many handset operating systems (OSs).

"Today there are 30 to 40 different operating systems for mobile, and that is too many," griped Arun Sarin, CEO of Vodafone Group plc (NYSE: VOD), at the 2008 Mobile World Congress last February. "We need to narrow that range to three, four, or even five."

Ten months later – during which another OS, Android, debuted – AT&T Inc. (NYSE: T) made the same lament, telling Symbian Ltd. Partner Event attendees that it wants to address fragmentation-related costs and other issues by standardizing on a single OS, with Symbian "a very credible and likely candidate" for that role.

Not so fast. AT&T later told Unstrung Insider that "AT&T has no plans to standardize OSs on smartphones. AT&T sees potential benefit in standardizing its low-end devices on a single mobile OS, but the company has not finalized plans to do so.

So what does everyone really want? In a word: control. Lately, that has manifested itself in the form of custom graphical user interfaces (GUIs) like the TouchFLO 3D from High Tech Computer Corp. (HTC) (Taiwan: 2498) and the TouchWiz from Samsung Corp. Layered atop the stock OS, such as Windows Mobile, these GUIs exist largely because handset vendors and their carrier customers see them as a viable way to differentiate their products.

The catch is that GUIs are superficial: Navigate two or three times, and the stock OS starts showing through – a negative, in the eyes of influential reviewers such as The Wall Street Journal, whose September 2008 review of the HT Touch Pro was titled "HTC Can't Disguise Windows Mobile Flaws."

To avoid those problems and – more importantly – take full control over the customer experience, carriers and handset developers want to go beyond GUI eye candy and get into deep customization. It is here that Linux-based OSs, such as Android, aim to grab market share by providing the ability to dictate the entire look and feel of, for example, an email client, instead of just the upper few layers.

"Android was built [from] Day 1 to support very deep customization and branding by both OEMs and carriers," says Rich Miner, VP of mobile technology at Google (Nasdaq: GOOG).

As detailed in a new research report from Unstrung Insider, "Mobile Operating Systems: Who's Minding the App Store?," OSs are also at the heart of battle that will heat up in 2009: sales of mobile applications. Carriers and handset vendors alike are adding or upgrading their on-device app stores because they see threats and opportunities in the way consumers and developers have flocked to the iPhone's App Store and Android Market.

This proliferation will create more tension between wireless carriers and their handset suppliers over which store gets to sell what apps and content. As an executive at one involved company said, "I think you're going to see a pretty interesting showdown between carriers and OEMs in the U.S. in the next 12 months on this subject."

Which brings us back to the fragmentation problem bemoaned by Vodafone, AT&T, and so many others. The cost of developing and operating app stores, along with developers' cost of creating the apps themselves, will remain high as long as no single OS dominates the wireless world.

And don't buy into the illusion that "open" OSs will ride to the rescue. The industry migration toward open OSs will not soon fix the fragmentation problem, because "open" does not imply "standardized."

"Fragmentation is going to be with us for a while," says Nathan Smith, group manager for Sprint Corp. (NYSE: S)'s Application Developer program. "Just because we have open platforms doesn't mean that solves developers' problems with fragmentation."

It is enough to make some people wish that the wireless world were more like the PC industry: dominated by a single OS, so that everyone can get on with their lives.

— Tim Kridel, Contributing Analyst, Unstrung Insider

The report, "Mobile Operating Systems: Who's Minding the App Store?," is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit:

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