Open Mobile December 7, 2009Posted by chetan in : US Wireless Market , trackback
Telephony Online does an in-depth study of Open Mobile. I talked to Sarah Reedy on the subject. Some of the articles below. you can catch the entire issue here
Open to alternatives
Dec 1, 2009 12:00 PM, Sarah Reedy
more on the topic
In case you haven’t heard, openness is the latest rage of the mobile world. Open networks, open devices, open application certification — the status quo is no longer in effect. At least that’s the message mobile operators are touting throughout North America. For the thousands of developers looking to break into mobile phones, this openness means different things, but its meaning is lost to most who couldn’t care less who’s guarding the gate as long as millions of eager consumers wait on the other side.
In speaking with developers for this month’s cover story on openness, it was interesting how many times Apple’s iPhone Application Store, the archetypical walled garden, was cited as an example of an open mobile ecosystem. Despite Apple’s approval process and the level of control it exerts over developer submissions, many people pointed out that the App Store is highly accessible and a significant departure from carriers’ traditional practices. And, as it did for most things in wireless, Apple changed the development game. Furthermore, consumers have shown — voting with more than 2 billion Apple app downloads — that they don’t care about openness either.
Things have clearly changed for developers since Apple came on the scene. The small “Freds in the sheds” have as much a shot at getting app store placement as the largest developers. The revenue share has also swayed in the favor of developers, with operators taking only 30% of the profits on average, and time to market has significantly sped up, as operators let down their guard on the review process. The result of these changes has been that developers are more excited about building apps for the mobile ecosystem in general, said Chetan Sharma, president of Chetan Sharma Consulting.
“Openness is in the eye of the developer,” he said. “If the application only requires access to a location or graphics [application programming interface], then for practical purposes [Apple] is open enough; you really don’t need anything else. If you require access to the address book, access to the native voice APIs or anything else, that might not be open at that given point. … Holistically, even two or three years ago, basic GPS was locked down on most devices. If it was open, it was only available to a certain set of developers the carrier chose. More things are open now, but are they as open as they can be? Certainly not.”
All of the carriers have committed to some form of openness, whether it be in the networks and the devices they will accept or the applications and services they will offer. They are just beginning to crack open their doors, so it still remains to be seen how they define open versus how they actually practice it. However it ends up, these developers, who spanned the gaming, greeting card and social networking industries, made it clear that whether or not they believe open is a revolutionary concept or an industry buzzword, they don’t really care. Reach and return on investment trump everything else. If that means climbing a 100-foot wall or walking right in, they’ll do it if reach and ROI are the reward.
Breaking Down the Walled Garden
Dec 1, 2009 12:00 PM, Sarah Reedy
more on the topic
Apple is to closed what Google is to open. This was always thought to be a common understanding among wireless developers, but — as it turns out — the dichotomy isn’t that clear. From the point of view of a developer charged with prioritizing dozens of application stores and standing out among hundreds of thousands of other developers, openness takes on different meanings. And while it has certainly opened doors, it has also opened up a new set of challenges.
In the early days of mobile app development, just getting a meeting with a carrier could take six to nine months and deployment could take a year more, said Peter Farago, vice president of marketing for Flurry Analytics. Developers had to pitch their app, it had to be accepted, often modified and ported across all handsets, and a business model had to be worked out. In traditional carrier environments, there were no options for pricing outside of a few pre-determined price points. And there was no choice of handsets. It had to span their entire portfolio.
“Apple came in and fixed all that and has been the most successful combination of [original equipment manufacturer] and storefront manager, basically economy-builder in wireless,” Farago said. “It is funny they are being reamed for being un-open. You can submit an application for approval, and it only takes a few weeks. You don’t have to know anybody.”
What open has meant is that anyone, including the typical ‘guy-in-his-garage’ example, can be a developer and have an equal shot of making it on to an app store. Following Apple’s success, nearly every handset-maker, carrier, software provider and third party has entered the app store market in some form, giving developers more outlets than ever before. Most notable was Google and its Android operating system (OS), which although criticized for limiting access to its software development kit, has positioned itself as the beacon of transparency.
Concrete examples of what has changed as a result of this emphasis on open is the revenue share split and the speed by which apps get to market, said Chetan Sharma, president of Chetan Sharma Consulting. The industry standard used to be 30% to 50% going to developers, and now the common practice is 70/30 in favor of the developers. If an app gets enough volume, it will likely evolve to an 80/20 spit, he said. In terms of speed to market, it can be a matter of days now. “In that respect, more developers are excited about building apps for the mobile ecosystem,” he said.
While excitement has risen, it’s no secret that some big developers preferred the preferential treatment of a more closed system. Opening up access to a carrier or OEM platform means it’s truly open for all. Developers of every size, financial backing and prowess have the potential to compete. Difficulty getting discovered has been a common byproduct.
Social game developer Digital Chocolate is platform-agnostic, but as a relatively small developer of 80 games, it has had to pick and choose where to focus its efforts, said CEO Trip Hawkins. Currently, it is partnered with Verizon, AT&T, Vodafone, Google, Nokia, Samsung and Sony Ericsson. While its leading competitors include Electronic Arts, Gameloft, I-Play and Glu Mobile, it has also found itself up against thousands of other games currently offered in app stores.
“If there’s a fixed amount of retail shelf space, there’s a reason why a big company with big brands has the ability to push the smaller and more innovative companies out of the way for more space,” Hawkins said. “That is going to limit the growth and evolution of the market. Since we are one of the smaller and more innovative companies, that will discriminate against us. We don’t care for that model.”
To address issues like this in the app developer space, Jai Jaisimha left AOL Mobile to start an open-source initiative, Open Mobile Solutions. Developers don’t care about the OS, he said, they just want to reach people. Likewise, consumers buy devices based on their functionality, not the OS. Jaisimha started OMS to make it easier for developers to build apps that can run on lots of devices. He is setting out to outline the essential platforms for developers — the best-of-breed providers for design, development, testing, porting, distributing, marketing and monetizing — and to create a marketplace for mobile app developers to form relationships. Jaisimha said that openness has changed the process because instead of focusing on how developers can make friends with Verizon, for example, the question has become how can Verizon befriend that developer.
“To a developer what it means is that all the sudden [operators] say they are open, but there is so much underlying complexity to take advantage of that new-found openness, which is about accepting content in a low-friction way,” Jaisimha said. “It still gives people pause because you have that ‘Gee, you are willing to accept my app, so I don’t have to spend six months trying to get you to meet with me,’ but I think that is the stage we are all in. We want to take advantage of it; there is a lot of underlying complexity, and there are only a small number of people who have the decoder link today. But if you’re new to mobile, you can crack that open.”
Sarah Reedy November 9th, 2009
Road to Open: For Connected Planet’s December cover story, wireless editor Kevin Fitchard and I took an in-depth look at what open means — in theory and practice — in the wireless world. In our reporting, we spoke with a number of developers and industry experts with first-hand perspective on working in an open world. In the weeks leading up to the issue, we’ll share their thoughts and insights. As always, we welcome your comments below.
The move to openness is underway, led by Google’s (NASDAQ:GOOG) Android platform and, surprisingly, even the initiatives of carriers such as Verizon Wireless (NYSE:VZ, NYSE:VOD). It is still early days in the movement and hard for many developers to tell exactly what open will mean for them, but for carriers, embracing open could be their best shot at avoiding disintermediation, said Chetan Sharma, president of Chetan Sharma Consulting.
Concrete examples of what has changed as a result of an emphasis on open is the revenue share split and the speed by which apps get to market, Sharma said. The industry standard used to be 30% to 50% going to developers and now the common practice is a 70/30 split. If an app gets enough volume, it will likely evolve to an 80/20 spit, he said. It can also be a matter of days versus the six to 12 months it used to take to get an app to market, Sharma said, but outside of these factors, openness is in the eye of the developer.
“If the application only requires access to a location or graphics API, then for practical purposes [Apple] is open enough; you really don’t need anything else,” Sharma said. “If you require access to the address book, access to the native voice APIs or anything else, that might not be open at that given point. … Holistically, even two or three years ago, basic GPS was locked down on most devices. If it was open, it was only available to a certain set of developers the carrier chose. More things are open now, but are they as open as they can? Certainly not.”
While carriers have been forced to become more open, they are also no longer the app channel of choice for most consumers. Especially for smartphones, where the most revenue lies, carriers are no longer a destination, they are only a connection, Sharma said. As such, genuine openness is their best chance of playing in the app ecosystem. If they can mimic what successful app stores have done and attract the same developers, as well as provide more access to user information than competing app stores can, they have the best chance of surviving — or even leading — the app store movement, he said.
“Every carrier or OEM platform will tout their openness,” Sharma said. “The attractiveness of the platform is a combination of what is open, as well as the ease of development and reach the platform offers. Verizon has huge reach but a lot of fragmentation. If someone is trying to build an app for a carrier ecosystem, they have to figure out what devices to support. I might get access to the address book, but it requires I build for a lot more devices. If you build for the iPhone, you have access to 50 million devices, but you might not have all the access you need. But the cost to develop is much, much lower. There are those trade-offs that developers have to grapple with as to what their strategy is short and long term and the need to get to market and so forth.”