Total Telecom: Certainty in the fragmented mobile handset marketplace
By Matt Bancroft, VP Mformation Technologies
Total Telecom April 17, 2009... (subscription required)
Standards are all-important with the mobile phone market likely to remain highly fragmented for the foreseeable future.
The mobile device marketplace is fragmented and highly competitive. No single supplier dominates market share for either the mobile handsets themselves or for the operating systems running on them. And looking ahead, there will be no quick consolidation.
While there are drawbacks to having a dominant supplier in a marketplace, this also leads to increased certainty, which can be beneficial, especially in technology-based markets, which are characterised by a high rate of change.
For example, buying from a dominant supplier is a low-risk decision for an enterprise CIO who needs a solution that will continue to be upgraded and supported. For consumers, a dominant solution can indicate value as well as a low-risk choice. For third-party application developers and solution providers, who need to build extensions and add-ons to core platforms and products — often with limited resources — a dominant solution is both a low-risk choice and a means of addressing a wider marketplace.
Fragmentation for the foreseeable future
Mobility is already one of the most fundamental technology innovations in history. The number of people in the world with a mobile phone has, by most estimates, already reached 4 billion — more than 60% of the world's total population. However, although Nokia holds the largest mobile handset share — consistently shipping about 40% of all devices — there is no single dominant handset supplier. In addition to the four other large players — Samsung, Sony Ericsson, Motorola and LG — there are a number of smaller players — including Apple, Huawei, HTC, Kyocera, NEC, Palm, Panasonic, Phillips, RIM/BlackBerry, Sagem, Sanyo and ZTE — many of which provide targeted offerings to specific consumer or enterprise segments.
The diversity of handset suppliers is only half the story — there is no dominant mobile handset operating system either. Symbian and Windows Mobile are deployed on a number of devices from different suppliers, but RIM/BlackBerry, Apple and Palm devices have their own operating systems. Linux-based mobile operating systems are starting to gain ground as well; Google's Android, for example, is a recent high-profile Linux-based entrant into the market. In addition, most handset manufacturers not only support multiple operating systems within their mobile device portfolio, they also often have their own closed real-time operating system on some of their devices.
By just about any measure, the mobile handset/OS market, rather than consolidating around a dominant player, has become increasingly fragmented over the last 12-18 months. And the marketplace is likely to remain fragmented over just about any forecasting horizon.
Standards for certainty in a fragmented future
The mobile industry has recognised the reality of ongoing fragmentation, and has come up with a number of strategies to help bring more certainty into the marketplace. These include the establishment of standards that enable devices and operating systems to interoperate on different networks and network software, with different applications, across different mobile operators, service providers and enterprises.
The OMA Device Management (DM) working group is an example of how standards help drive certainty. The Open Mobile Alliance (OMA) provides standards covering a variety of areas including authentication, identity, location and messaging. The OMA DM working group focuses on creating specifications to ensure that any device using any operating system can be managed and secured over any radio-access technology on any network.
Device manufacturers, mobile operators and software companies agree to the specifications on both the network (server) and device (client) side to support this requirement. An OMA DM-compliant client is deployed on each device, irrespective of the manufacturer or operating system on that device, enabling devices to be managed and secured in exactly the same way, irrespective of the device manufacturer, model or operating system(s). This creates certainty for all — device manufacturers, software vendors, mobile operators, service providers and enterprises.
Being able to manage and secure devices and the data on them is an important requirement in the mobile world. Standards help create the certainty needed in this fragmented ecosystem. Handset vendors can deploy an OMA-DM client across their range of devices and operating systems. Mobile operators and enterprises can have confidence that these devices will all be manageable when they deploy them. One clear measure of the success of a standard is the rapid adoption of that standard worldwide.
According to research from Ovum, most of the mobile devices in the world will support OMA device management standards by 2009, ensuring that they can be consistently managed and supported.
In conclusion
In many technology marketplaces, a single dominant supplier creates a level of certainty, driving safe and conservative buying decisions.
However, the marketplace for mobile handsets and operating systems is fragmented now, and will continue to be fragmented for the foreseeable future. In this market environment, standards are one mechanism that helps to create the level of certainty that enterprises, consumers and application developers want and expect.
The broad adoption of mobile standards enables mobile operators and enterprises to manage multiple devices and operating systems while ensuring that key business tasks can be supported consistently across all of them. Consumers benefit from a rich choice of devices, and can base their decisions on whether the device fits their needs. Finally, application developers can ensure that their add-ons and extensions work across different device platforms and operating systems, helping them get the maximum value from their investments.
Application management technologies support top-line strategic objectives to expand the revenue streams from new data services and enable a more customised experience for subscribers. These technologies also help strengthen the operator’s service provisioning role. Execution of application management strategies in the enterprise segment will differ from those in the consumer segment. But in both cases, the market is crying out for faster mobilisation of applications and services, and the mobile operator has a golden opportunity to lead and make it happen.