exploring the right business strategy for open source mobile platformss
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EXPLORING THE RIGHT BUSINESS STRATEGY FOR OPEN SOURCE MOBILE PLATFORMSHong Kong Open Source Conference 2015
Amanda Lam
ABOUT AMANDA
• Product Owner, SEEK Asia (jobsDB + JobStreet)
• MSc (with Distinction) in Programmer and Project Management, University of Warwick, UK
• Podcaster & Executive Committee at Hong Kong PDA User Group (HKPUG)
• Blooger, Youtuber, Gadget Review Writer
• Amateur Developer• Contributor of the Dolphin Input Method engine for Jolla Sailfish OS• Author of Maemo5 Traditional Chinese language pack & various
Maemo / MeeGo apps
• Twitter: @amanda_lam
• DaDaBlog.net
OPEN SOURCE MOBILE PLATFORMS - DO THEY REALLY EXIST?
• No!• Errr…. Somewhat?
100% proprietary software and hardware
100% free software and
hardware
WHICH ARE THE MOST COMMON PROPRIETARY PARTS IN MOST OPEN
SOURCE PLATFORMS?• Hardware
• Most hardware component design details!• Body materials and exterior design are often patented
• Software• Hardware drivers• Multimedia libraries• Compatibility layers of proprietary file formats• UI frameworks• App stores• Key user-level apps and value-added apps added by device manufacturers or
network carriers
• Hardware• Most hardware component design details!• Body materials and exterior design are often patented
• Software• Hardware drivers, telephony and chipset drivers• Multimedia libraries, e.g. OpenGL• Compatibility layers of proprietary file formats, e.g. Adobe Flash support• UI frameworks, e.g. Samsung’s TouchWiz, Jolla’s Silica etc.• App stores• Key user-level apps and value-added apps added by device manufacturers or
network carriers, e.g. Google’s own Inbox, Calendar, Photos apps
THEN WHICH PARTS HAVE HIGHER CHANCE TO BE FREE / OPEN SOURCE?
• Hardware• Hardware Description Language (HDL) of basic components
• Software• Linux kernel• Core language tools, IDEs and compilers• Middleware frameworks and APIs• Web-based apps
WHY THERE’S NO 100% FREE SOFTWARE AND HARDWARE?
• Companies keep things proprietary because:
• they generally believe in “trade secrets”, “competitive edge”, “things to differentiate from others”
• investment cost for innovators is high• for competitors, barrier to entry is low and replication of success is easy if
innovators’ “trade secrets” are leaked out
• most societies are capitalism!
SELECTIVE OPEN SOURCE
GLOBAL MOBILE PLATFORM MARKET SHARE
Source: IDC
Source: NetMarketShare (May 2015)
Mobile/Tablet Operating System Market Share (Web usage)
HOW DID IOS LEAD THE MARKET?
• First “modernised” smartphone and tablet platform
• First app store platform with one-click app purchase and successful app developer business models
• Beautiful and ergonomic hardware design
• Simple user interactions
• Stable and speedy system
• Relatively value for money for premium customer experience
• Excellent i-Branding; product perceptions usually associated to “coolness” peer effect
Source: Apple.com
HOW DID ANDROID DOMINATE THE MARKET?
• Device manufacturers looked for viable alternatives to Windows Mobile and Symbian to compete with iPhone
• Most Android’s software components are open source and can be adopted by device manufacturers without cost
Collective manufacturing capacity of thousands of KIRF / “Shanzhai” brands in emerging markets is huge!
Diversified device portfolio covering devices of low-end, mid-range and flagship classes
• Integrated with Google services and great cross-platform and cross-device experiences
• Java development familiarity and looser app development and submission restrictions
Source: AndroidCentral.com
ANY CHANCE FOR OTHER MOBILE PLATFORMS?
• (Relatively) Proprietary platforms• Microsoft Windows Phone / Windows 10 Mobile
• Competitive edge: Cross-device experience, Microsoft Office and camera
• Apple iOS• Competitive edge: Premium device & customer experience, mature app ecosystem
• BlackBerry 10• Competitive edge: Enterprise-level security, stable OS with intuitive UI, physical keyboard
• (Relatively) Open platforms
• Google Android
• Mozilla Firefox OS
• Ubuntu on Phones
• TIZEN
• Jolla Sailfish OS
Let’s look into more details!
GOOGLE ANDROID: SWOT ANALYSIS
Source: source.android.com
Positive Negative
Internal
origin
(attributes
of the
organisatio
n)
STRENGTHS
Absolute global dominance
Strong app ecosystem
Thousands of device manufacturers
Diversity of device
Backed by Google and integrated with its services
(like it or not!)
Active open source communities
Extensible to other devices such as wearables,
automobiles, TV and IoT
Support multiple hardware architectures
WEAKNESSES
Inconsistent user experience across brands and
devices
Not fully hardware optimised for better
compatibility
o Higher spec phones just for reasonable
usability
o Lower spec phones suffer from
performance issues
Chaotic upgrade paths
External
origin
(attributes
of the
environme
nt)
OPPORTUNITIES
Develop ecosystems for different form factors of
connected devices (wearables, automobiles, TV
and IoT)
Leverage more aggregated behavioural data from
users for user experience improvements and new
product development
THREATS
Increasing awareness of privacy concerns by the
public
System development and app ecosystem over-
dominated by Google, suppressing innovations on
the platform
Challengers’ exclusive deals with governments in
developing countries
GOOGLE ANDROID: PESTLE ANALYSIS
POLITICAL ECONOMICAL SOCIAL
National security concerns by some countries,
especially for the proprietary portions.
Forked Android versions in China and India.
Economic factors affect demand of high-end
phones, and may affect the ecosystem
engagement distributions.
Brand diversity creates huge positive social
influences than the other solo-brand platforms.
Android is still associated with bad UX by
many people due to historical reasons.
TECHNOLOGICAL LEGAL ECOLOGICAL
New form factors of connected devices
emerge.
Stiff competition on cloud and big data
analytical capabilities.
Potential anti-monopoly accuses
Data privacy related legislation
Maintaining such a large scale of ecosystem
and big data requires tonnes of power from
data centres, and may trigger eco-concerns
from the public.
GOOGLE ANDROID: MICHAEL PORTER’S 5 COMPETITIVE FORCES
Potential EntrantsHigh entry barrier for new
competitors, as expertise for hardware, software, strategy &
marketing are required.
Industry competitorsHigh competition mainly from iOS
in developed markets; competition from Windows
Phone on developing markets
SuppliersCompetitiveness heavily depends on
order quantity; could be hard for small manufacturers.
BuyersSome users who may find Android
phones less user friendly than iPhone and Windows Phones; users expect
cheaper phones in such an
ecosystem with vigorous price war
SubstitutesResponsive web design; mobile
friendly sites; wearables; Internet of Things
MOZILLA FIREFOX OS:SWOT ANALYSIS
Source: developer.mozilla.org
Positive Negative
Intern
al
origin
(attrib
utes
of the
organ
isatio
n)
STRENGTHS
Both Mozilla and Firefox are well-known brands that
could easily attract market acceptance.
Porting web sites to web apps is technically easy; mostly
based on open source technologies.
Solid partnership with device manufacturers. Cheap
devices from LG, Alcatel, Geeksphone and others are
available.
Support smartphones, tablets and smart TV platforms.
Strong global developer communities.
WEAKNESSES
Inefficient UI handling due to HTML5 overheads,
especially on low-end hardware.
While Mozilla targets emerging market, the web-based
nature of apps and preliminary offline support are not
realistic in countries where data connection is expensive.
Web apps provide limited utilisation of devices’ hardware
capabilities.
Users may not easily distinguish the differences between
search results and installable apps.
Lack of great social integrations; no native WhatsApp
client!
Lack of CJK input method varieties.
Exter
nal
origin
(attrib
utes
of the
envir
onme
nt)
OPPORTUNITIES
Expanding the support of Firefox web apps via Firefox
Marketplace on other platforms.
Could attract governments, enterprises and users who
care about privacy concerns.
Lots of business collaboration opportunities on
smartphone, tablet and Smart TV platforms.
Huge opportunities to grow market share in BRICS and
other emerging markets, if offline support is improved.
THREATS
Android and other mobile platform newcomers can easily
challenge Firefox OS by supporting web apps natively.
Lose of Firefox market share at the browser front could
impair perception and acceptance level of Firefox OS
globally (similar to Opera)
MOZILLA FIREFOX OS:PESTLE ANALYSIS
POLITICAL ECONOMICAL SOCIAL
National security concerns by some countries,
especially for the proprietary portions.
Economic downturns in emerging markets
could boost feature phone sales more and
affect the demand of entry-level smartphones
Mozilla holds certain common values for open
web and developer community is huge and
loyal.
TECHNOLOGICAL LEGAL ECOLOGICAL
Increasing acceptance and standardisation of
HTML5 and other web standards help Firefox
OS naturally.
Enforcement of proper use of Mozilla and
Firefox logos and brand names by hardware
manufacturers.
Misuse of Firefox OS’ open source software
components may cause legal disputes.
No prominent ecological concern as device
manufacturing scale is still small.
MOZILLA FIREFOX OS:MICHAEL PORTER’S 5 COMPETITIVE FORCES
Potential EntrantsHigh entry barrier for new
competitors, as expertise for hardware, software, strategy &
marketing are required.
Industry competitorsVigorous competition with
Android in the targeted segment.
SuppliersCompetitiveness heavily depends on device manufacturers’ commitment
and trust on the platform.
BuyersUsers in developing markets who are
new to the Internet
SubstitutesResponsive web design; mobile
friendly sites; wearables; Internet of Things
UBUNTU ON PHONES:SWOT ANALYSIS
Source: developer.ubuntu.com
Positive Negative
Intern
al
origin
(attrib
utes
of the
organ
isatio
n)
STRENGTHS
Development led by Canonical.
Natural continuum of the Ubuntu desktop app ecosystem
and device experience; less effort to port apps.
Based on many open source technologies (such as Qt,
Qt Quick, HTML5 etc.)
Mature middleware codebase.
Ubuntu is well-known in Linux communities and
developer base is huge.
WEAKNESSES
Less known by general public.
Low device base and user base.
Relatively weak app ecosystem.
Swipe-based UI requires some learning curve.
Unclear business strategy.
Exter
nal
origin
(attrib
utes
of the
enviro
nmen
t)
OPPORTUNITIES
Privacy concerns on personal data collection in Android
sets a good position for Ubuntu on phones to
differentiate by offering secure and privacy-focused
products to targeted segments (e.g. governments and
enterprises)
Device experience continuum is a unique selling point for
users.
THREATS
Android offering more unique selling points to huge user
base.
Windows 10 is also selling device experience continuum.
Less known to the public compared to Firefox OS.
UBUNTU ON PHONES:PESTLE ANALYSIS
POLITICAL ECONOMICAL SOCIAL
National security concerns by some countries,
especially for the proprietary portions.
Economic factors affect the demand of niche
mobile devices.
Large Ubuntu and Qt developer communities.
TECHNOLOGICAL LEGAL ECOLOGICAL
Only two phones supporting Ubuntu on
Phones were launched. Support of devices of
other form factors is yet to be announced.
Enforcement of proper use of Ubuntu logos
and brand names by hardware manufacturers.
Misuse of Ubuntu’s open source software
components may cause legal disputes.
No prominent ecological concern as device
manufacturing scale is still small.
UBUNTU ON PHONES:MICHAEL PORTER’S 5 COMPETITIVE FORCES
Potential EntrantsHigh entry barrier for new
competitors, as expertise for hardware, software, strategy &
marketing are required.
Industry competitorsVigorous competition with
Android in the targeted segment.
SuppliersRelatively easier to attract current desktop app developers to extend
their apps to mobile; but less momentum if no devices are
available!
BuyersUsers are mainly geeks and early
adopters; focus on multi-device and
continuity experiences.
SubstitutesResponsive web design; mobile
friendly sites; wearables; Internet of Things
TIZEN:SWOT ANALYSIS
Source: developer.tizen.org
Positive Negative
Inter
nal
origin
(attri
butes
of
the
orga
nisati
on)
STRENGTHS
Backed by the Linux Foundation with support from
Samsung, Intel, Huawei, KT, NEC Casio Mobile, NTT
DoCoMo, Orange, Panasonic etc.
Support web apps based on open web standards as well
as native apps
Rich inheritance of the MeeGo project
Already deployed on Samsung devices of multiple form
factors: Galaxy Gear smart watches, smart cameras, TVs
and smartphones.
WEAKNESSES
Phone UI design resembles Samsung’s TouchWiz
Android / Bada UI; lack of unique selling points for users.
Lack of serious support and commitment outside
Samsung
Relatively weak app ecosystem.
Exter
nal
origin
(attri
butes
of
the
envir
onme
nt)
OPPORTUNITIES
Great option for users who look for great performance
low-end smartphones. Scale for this market segment is
still big.
Potential coalition with other mobile platform newcomers
and provide native support of each others’ web apps
Huge space to grow in automobile, IoT and embedded
system segments.
THREATS
Android being more optimised for low-end smartphones.
Direct competition of Windows Phone at the low-end
market, while Windows Phone provides more “fresher”
experience.
Less known to the public compared to Firefox OS.
More MeeGo followers jumped to the Sailfish OS camp
rather than TIZEN.
TIZEN:PESTLE ANALYSIS
POLITICAL ECONOMICAL SOCIAL
National security concerns by some countries,
especially for the proprietary portions.
Economic downturns in emerging markets
could boost feature phone sales more and
affect the demand of entry-level smartphones
Relatively small developer community and
user base.
While many products are based on TIZEN,
Samsung did not market it separately and
hence less known to market.
TECHNOLOGICAL LEGAL ECOLOGICAL
Increasing acceptance and standardisation of
HTML5 and other web standards help TIZEN
naturally.
Samsung’s legal disputes on software patents
with Apple and various others.
No prominent ecological concern as device
manufacturing scale is still small.
TIZEN:MICHAEL PORTER’S 5 COMPETITIVE FORCES
Potential EntrantsHigh entry barrier for new
competitors, as expertise for hardware, software, strategy &
marketing are required.
Industry competitorsVigorous competition with
Android in the targeted segment.
SuppliersChicken-or-egg question to attract app developers to build apps, given fewer devices are available in the
market.
BuyersUsers in developing markets who are
not conscious about mobile OS; focus on practical use cases than
app ecosystems.
SubstitutesResponsive web design; mobile
friendly sites; wearables; Internet of Things
JOLLA SAILFISH OS:SWOT ANALYSIS
Source: SailfishOS.org
Positive Negative
Intern
al
origin
(attrib
utes of
the
organi
sation)
STRENGTHS
Great expertise and know-hows in both hardware and
software with great agility and innovation capabilities.
Good connections with hardware manufacturers and
carriers.
Superb fundraising capabilities.
Continuity of Nokia’s brand loyalty in Finland.
Positioned itself as a Finnish brand that emphasises
design and experience and sets apart from the American
brands.
Rich inheritance of the MeeGo project: Mer, Nemo
Mobile, Qt Quick etc.
Supportive and engaging community inherited from
Nokia Maemo age.
WEAKNESSES
Low marketing budgets as a start-up.
Sailfish OS UI components were started nearly from
scratch and it took two years to mature – hard to
compete with more mature Android
Lack of ODM and OEM partnerships.
Less bargaining power to hardware manufacturers.
Device model: huge cost but lack of manufacturing
capabilities; device (and even accessories) is not on
sale in many countries.
Weak app ecosystem; on paid app support yet!
Less known by the public.
Yet it’s intuitive, Sailfish OS’ swipe-based UI has higher
learning curve than Android & iOS.
Extern
al
origin
(attrib
utes of
the
enviro
nment)
OPPORTUNITIES
Privacy concerns on personal data collection in Android
sets a good position for Sailfish OS to differentiate by
offering secure and privacy-focused products to targeted
segments (e.g. governments and enterprises)
Partnership with Russian government on developing the
app ecosystem.
Still lots of opportunities to work with hardware
manufacturers in BRICS to launch non-Jolla branded
Sailfish OS devices.
e-Commerce business model on mobile is still yet to
explore.
THREATS
Running out of capital before the product has got traction
from the market.
Slow Go-To-Market executions impair competitiveness.
Lack of strong unique selling points at consumer front.
Supporting Android apps via proprietary Allien Dalvik
runtime may discourage developers to develop and
discourage users to use native apps.
Other mobile platform newcomers are backed by larger
companies with more resources.
JOLLA SAILFISH OS:PESTLE ANALYSIS
POLITICAL ECONOMICAL SOCIAL
Countries that worry about American monopoly
in the mobile space would welcome Sailfish
OS.
National security concerns by some countries,
especially for the proprietary portions.
Economic and exchange rate factors cause
increase of hardware component costs, which
could bring larger impact to the start-up.
Small but very passionate and engaging
communities help driving the Sailfish OS
collaborative development.
More potentials to attract Qt Quick developers
from BlackBerry and Ubuntu platforms.
TECHNOLOGICAL LEGAL ECOLOGICAL
Jolla is still yet to deliver its first tablets.
Support of devices of other form factors is yet
to be announced.
Misuse of Sailfish OS’ open source software
components may cause legal disputes.
No prominent ecological concern as device
manufacturing scale is still small.
JOLLA SAILFISH OS:MICHAEL PORTER’S 5 COMPETITIVE FORCES
Potential EntrantsHigh entry barrier for new
competitors, as expertise for hardware, software, strategy &
marketing are required.
Industry competitorsVigorous competition with
Android and BlackBerry in the targeted segments.
SuppliersCompetitiveness heavily depends on order quantity; hard for Jolla to push the cost down for more profit margin.
Manufacturing partnerships – depending on their strategies and
priorities.
BuyersMostly geeks, Nokia-followers and
early adopters. More feature demanding and more focus on user
experience.
SubstitutesResponsive web design; mobile
friendly sites; wearables; Internet of Things
Scale of devices
App ecosystem
Company Commitment
Platform Sustainability
User & Dev Community En-
gagement
Unique Selling Points
Industry En-gagement
where increasing proportion of free & open source components can help!
CRITICAL SUCCESS FACTORS OF MOBILE PLATFORMS
• Open source software and hardware help increasing manufacturing capacity
• Open source development tools and frameworks facilitate app development
• Open governance and community pressure drive company commitment
• Open source drives innovation and hence sustainability of the platform
• Democratic processes in open source projects empower users and developers and hence engage more
• Open source components handled the fundamentals and so more resources to work on USPs
• Reusability of open source components reduce individual companies’ development cost for higher profit margin
Product
People
Physical Evidence
Process
Promotion
Place
Price
where increasing proportion of free & open source components can help!
ALSO THINK ABOUT THE 7P’S IN MARKETING MIX
• Code reuse and collaborative design• Diversified products
• Identify target segments of customers
• Passionate employees, developer and user communities
• Conferences, meet-ups, live demos
• Steering committees and open governance
• Developer communities, User groups, social networks, digital marketing
• Developer communities, User groups, social networks, digital marketing
• Price flexibility• Crowdfunding