Android's on top – will Nokia and RIM let it in?
More likely that Nokia will go for WP7
Android has overtaken Symbian to become the number one mobile operating system – a feat never achieved by Apple iOS – and now the new Honeycomb release should enable Google's platform to eat into the iPad's tablet market share too.
With Nokia reportedly mulling a change in OS strategy ahead of its analyst day next week, and RIM considering allowing Android on its PlayBook device, is it really conceivable that Google will gain the kind of dominance of the mobile platform that Windows had on the PC?
Nokia to back Android?
It's unlikely. We think that, if Nokia does adopt a third smartphone OS, it will go with Windows Phone 7 rather than Android, seeking to create an alternative power base to Google. And though WP7 itself has seen a slow start, Microsoft will not be abandoning it, at least not until it can stretch mainstream Windows over the mobile platform too. Apple, obviously, will not go away, and as mobile web usage shifts slowly but surely towards the cloud, new entrants including MeeGo, RIM QNX, webOS and Google's own Chrome OS will become more compelling and start to gain share, especially on large-screen form factors.
And for users who can't decide which OS to choose, virtualisation is likely to become a reality on handsets from this year, while the intensifying focus on HTML5 and the browser will gloss over OS differences anyway. At that point, it will be all about the user experience – the real reason Android has done so well, riding on the back of strong overlays like HTC Sense, Motoblur and Samsung TouchWiz. A powerful UI is what Nokia needs to start biting back against Google, not another operating system.
That hasn't stopped the rumour mill working overtime on the idea that the company will add WP7, or even Android, to its portfolio when CEO Stephen Elop presents its turnaround plan at a corporate strategy day on February 11. The company certainly needs to do something sufficiently radical to restore confidence in its ability to drive the smartphone market. Too few concrete results have been seen in the two years since it outlined its ambitious web services strategy, and Elop has now been in place sufficiently long for the markets to expect strong direction.
Speaking at the company's financial results, Elop said that "Nokia must compete on an ecosystem-to-ecosystem basis. In addition to great devices, we must build, catalyze, and/or join a competitive ecosystem". The word "join" set off a flood of renewed speculation that Nokia would sign up for a third party OS. This would not mark the end of Symbian, which has huge – though declining – market share and is well suited to many of Nokia's increasingly carrier-centric policies in emerging economies. Nokia is expected to continue to target Symbian at emerging markets, affordable smartphones and operator branded products, but there is rising speculation that it will adopt an additional OS for the midrange, and particularly for the US, where its already small market share dropped by a further 32 per cent in the fourth quarter.
A multi-platform strategy for smartphones would also raise questionmarks over MeeGo, the Nokia/Intel platform. It is unlikely that would be canned; it is very advanced and a chance to differentiate in new device formats such as cloudbooks. However, it will take a long time to create a full ecosystem and Nokia may look for a quicker fix for the conventional smartphone space, something to sit between Symbian and MeeGo.
The Windows option
Choosing Android would be a shock for political reasons because of Nokia's interest in limiting the power of Google, though it could also use its weight to wrest the agenda from Google somewhat. WP7 would be less surprising – Nokia and Microsoft have become allies in recent years, and Elop has come over from the Redmond firm. But it would force Nokia to pin its high end devices on two unproven OSs, WP7 and MeeGo. As yet, the jury remains out on whether WP7 will become a significant mobile force, despite its strong qualities. Nokia's market reach and influence would help, but it could also find itself fighting an uphill battle on Microsoft's behalf. According to NPD Group, the older Windows Mobile was still out-selling WP7 in the fourth quarter, at least in the US. Microsoft revealed recently that it had sold two million copies of WP7 to handset OEMs since it shipped (late October in some European and Asian markets, early November in north America), but it would not say how many of these had been sold on to end users.
Microsoft executives have been managing expectations by insisting that WP7 is a long term project and is not expected to be an overnight sensation as it aims to change the way people behave on mobile devices – but Nokia has several slow-burning initiatives of its own. What it needs next Friday is a quick fix.
It also needs to emphasise the strong, but ill-understood, multi-platform strategy that it already has. Spanning multiple OSs is nothing new for Nokia. When it acquired Trolltech for its Qt developer technology, it explicitly stated – and later restated many times – that for now it was focused on Symbian, but its future was to create powerful web and apps platforms, and developer bases, that would run across many mobile OSs. Of course, it is another step actually to make and sell devices running another OS, but Qt remains the centrepiece of the Nokia plan.
The main problem with adopting a new OS would be yet another blow to confidence in Nokia. It would be seen as an admission of defeat in strategic terms, even while it could help Nokia address new segments, notably the US. Samsung is riding high on a multi-OS strategy – Android, WP7 and its own bada – and even RIM may open its BlackBerry products to Android. RIM is expected to adopt the Dalvik virtual machine, which is also used by Android, and this would allow the firm's QNX devices, such as PlayBook, to run apps written for the Google OS. This could be a means to build an apps base quickly, especially before the HTML5-oriented tools of QNX gain full support. It could also be a prelude to running full Android in future.
But a decision like that is more serious for Nokia. The firm has clung to its own OSs, and there is still power behind its argument that it needs to create a fully integrated environment like Apple's especially for emerging economies, its growth engine. Of course the firm will be considering other options, but it would be hasty to adopt Android or Windows now. Instead, Elop needs to make the Qt strategy far more explicit, and hasten the arrival of truly game-changing MeeGo devices. Otherwise he will just be feeding the Android machine and reducing Nokia's own freedom of action and ability to differentiate, despite the temptations of joining the in-crowd.
Android takes the lead
Shipments of Android smartphones rose sevenfold year-on-year in the fourth quarter, to reach 33 million, with Samsung and HTC in the driving seat, said the analysts. The year before, its total was just 8.7 per cent. This time around, the Google OS gained a 33 per cent share of smartphone shipments, just ahead of Symbian, despite the latter's continuing strength in emerging economies and on lower end handsets. Symbian shipments grew from 23.9 million in Q409 to 31 million, but its share was down from 44 per cent to 30.6 per cent.
The Nokia system still has a massive legacy installed base, but the Finnish giant will be concerned at the failure of the reworked, open-source release, Symbian^3, to revive the platform's fortunes. Symbian^3 made its debut on the flagship Nokia N8 last summer. The Symbian base is increasingly focused on the low end of the smartphone spectrum, and is highly vulnerable to low cost Android devices from firms including LG and ZTE. After the big two, Apple iOS claimed 16 per cent of fourth quarter smartphones. iPhone shipments rose from 8.7 million to 16.2 million year-on-year, but their smartphone share still slipped slightly from 16.3 per cent last year. RIM boosted shipments from 10.7 million to 14.6 million, which squeezed its share from 20 per cent to 14.4 per cent, firmly overtaken by Apple now. Windows OSs saw a decrease in shipments from 3.9 million to 3.1 million, so its share was halved from 7.2 per cent to 3.1 per cent, while WP7 achieved 2 per cent share in its first two months on sale.
Honeycomb breaks Android in two
Android was also making strong headway in the nascent tablet sector, according to another analyst report, from Strategy Analytics. This found that the Google OS gained 21.6 per cent of the global market in Q4, up from just 2.3 per cent in the third quarter and mainly driven by the Samsung Galaxy Tab. Android tablet shipments rose from about 100,000 in the third quarter to 2.1 million, even without the release of the Honeycomb OS version, which is adapted for larger screens.
Apple iPad had 75.3 per cent of the sector. That trend should accelerate with the release of tablets running Android 3.0 or Honeycomb, the first version to be optimised for large-screened devices. While first generation Android tablets like Samsung Galaxy Tab were compromise products, the new wave – products like the LG G-Slate – will be far more viable alternatives to the iPad. Honeycomb launches officially this week and will be far more effective as a tablet OS than Froyo. The bad news – it is a "fork" in the platform, not fully compatible with Android 2.x and creating more fragmentation for the Google system, and potentially an entirely different apps base.
It seems increasingly likely that Android 3.0 will be targeted only at tablets while smartphones continue with 2.3 or Gingerbread, and then gain a separate upgrade, possible 2.4. The Honeycomb release, whose SDK was released recently, will support a user interface for large screens, including iPad-style form factors around 10-inches. Other features of Honeycomb include improved graphics performance with 2D and 3D hardware acceleration; multicore processor architecture (though it is still not clear whether dual-core will be essential); enhanced multimedia; and new options for connectivity and enterprise users. Another important change is an extensible DRM framework, which should help address the complaints of video firms including Netflix that there is no consistent DRM system across different Android devices.
Honeycomb will still support a range of DRMs, but it will offer a single programming interface to all of them. The biggest debate centres on how far Honeycomb will be fully compatible with other Androids, because of its radically different UI techniques. The icons and screens will be presented in a "vibrant, 3D experience" on the larger screen space, according to Google, and will move from the single-app norm of a phone to a multi-window approach closer to a PC desktop. Only apps written specifically for Honeycomb will really take advantage of this rich, interactive UI. However, those written for phones and Android 2.x will run, and even see some improvements.
According to Steven Vaughan Nichols of ZDnet, Honeycomb is a fork and it is clear that "Honeycomb is going its own way. There is some good news for developers who don't want to redo their Android 2.x work for Honeycomb." But others argue that this is just a different user interface spin, rather like HTC Sense, which will not affect the underlying Android platform and will be fully backwards compatible with 2.x. This would allow developers to run the same apps across phones and tablets, though – as on the iPad – there will be some who specifically target Honeycomb and its new UI.
One way to address OS wars, and the fragmentation between different releases of Android, is to step up the progress towards true mobile virtualisation. Jason Perl of ZDnet argues that Android ODMs and OEMs could agree to standardise on one or two hypervisors (which abstract the hardware from the OS), so that the process of developing ROM updates for Android smartphones and tablets would become easier. He writes: "The low level device drivers which used to be in the OS are now integrated into the hypervisor, and it becomes a group effort by the vendors to integrate that support there instead of the OS. Instead, the hypervisor vendor creates "virtual" device drivers that expose common services to the virtualised OS, such as networking, display and I/O. No matter whose hardware that virtualised version of Windows or Linux is running on, it runs exactly the same, provided the same hypervisor is used.” It may not solve Nokia's dilemmas, but it would certainly address the number one threat to Android's rising star.
Copyright © 2011, Wireless Watch
Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.