The past 5 years have been very exciting for us in the mobile industry. OSs have come and gone, we’ve seen iOS jump onto the scene holding court as the preferred OS almost from day one. However, it really isn’t part of the OS war as it’s just a cog in Apple’s complete end-to-end solution not available to other device makers. The other mobile OS companies, Microsoft and Google, have been arming their partners to compete against Apple with both finally making headway in 2011 and 2012, but all signs point to that approach shifting significantly.
There is a very clear business model change afoot and it will drastically affect us all. Microsoft and Google have seen the light, and it probably originated from the glow of Apple’s 600 Billion dollar market cap and its massive 300% profit margin. They know mobile is the future and failure to adapt will mean the end for them. That sounds extreme, but there is no shortage of examples of huge brand name companies like Nokia, RIM, and Nortel that have quickly fallen from grace. From top of their game at $100 per share to single digits or less—in a few short years. There’s no longer safety in size, and to stand still or move slowly is a death sentence.
So what is this drastic and just recently obvious twist? Android and Windows 8 are now jumping on the Apple business model. Google and Microsoft are producing very inexpensive and high quality devices with the latest version of their OS. These new devices leave very little room for Samsung, HTC, Huawei, ZTE, Sony and a litany of other massive multi-billion dollar companies to build a viable business on top of Android or Windows 8. These companies will still be able to license either OS, but always at a clear disadvantage; older versions, limited roadmap visibility or control, less optimized and less supported. We have seen what happens to a device that ships with an OS that is even 6 months old, and considering it takes 12 months to produce a new device, that makes for a huge issue for these companies. There will be some exceptions and alliances I’m sure, like Motorola, now owned by Google and Barnes and Noble’s Nook which recently took $300m from Microsoft.
What does this mean for the OS war? It’s going to get worse, not better. More and more companies are going to adopt the Apple model and create end-to-end, closed ecosystems from the OS to the hardware. Amazon is a perfect example with its Kindle Fire, a device running a highly customized version of Google Android OS that is completely closed off from the Google Play app store. I think we are entering the era of innumerable OSs and we are going to see some wild moves in the next three years. Another example already in motion is MeeGo, a commercial failure under the Nokia watch, which has been rebooted as Tizen with support from Intel, Samsung and others trying to bring it back to life. We might even see new variants of HP’s old WebOS, and also Mozilla’s Firefox mobile OS rumoured to power devices in China next year.
The real challenges these companies will face are 1) building a developer community for apps and 2) engaging their users with an innovative UI that users will flock to. Microsoft with its Metro UI and by some extension Google has managed to bring a reasonable offering of intuitive, fun and easy to use experiences to devices that run it, but all the others OSs lack a UI that users or developers want today.
The Apple model is obviously more than an OS, it’s a complete, end-to-end ecosystem play containing OS, hardware, content and services. Big players like Google, Microsoft, Amazon, and dare I say Facebook, will have to build their empires to truly challenge Apple. So where does that leave Samsung, HTC, Nokia, Acer, Asus, Lenovo, HP, Dell and the other well-known hardware brand names? I suspect it forces them to look for an OS they can control.
I could go on, but I need to get back to Engadget, The Verge and Twitter so I can watch this epic battle for our mobile dollars. Love to hear your take on this war.