LiMo Foundation builds bridges to Wholesale Applications Community

Keen to increase its relevancy across all industry areas, mobile Linux evangelist group the LiMo Foundation is looking to build bridges with the recently formed Wholesale Applications Community.

At Barcelona in February, 24 operators accounting for over three billion subscribers formed the Wholesale Applications Community, an alliance designed to build an open platform for delivering applications to all mobile phone users.

The alliance plans to initially use both the JIL and OMTP BONDI requirements, evolving these separate standards into a common standard within the next 12 months.

LiMo sees itself as a perfect fit here, having already produced standardized white-label SDKs for the LiMo platform in both native and OMTP BONDI-compliant forms, while a number of LiMo’s key stakeholders also hold leadership roles within the JIL initiative.

Since LiMo’s launch in 2007, three major releases of the LiMo Platform have been delivered, with 52 LiMo devices brought to market including the Vodafone 360 H1 M1 devices from Samsung and a wide range of devices for NTT DoCoMo from Panasonic and NEC. Altogether ten operators representing approximately one billion subscribers participate within the LiMo group.

In an open letter to the Wholesale Apps Community, Morgan Gillis, executive director of the LiMo Foundation, offered “full support, committed participation, and immediate practical assistance” to the strategy.

“It is clear to us that the highly complementary areas of focus, shared belief in true openness and common industry vision create an exceptional opportunity for deep and long-term collaboration between LiMo Foundation and the Wholesale Applications Community to release unfettered innovation across the industry and fully ignite the mobile internet in a way that is compelling and life-enhancing to consumers everywhere,” Gillis said.

Vodafone cheers on developers with 360 vision

Vodafone 360, the UK operator’s social media interface and aggregation platform is making some headway. The UK firm said Tuesday that more than 7,000 apps have been made available to customers across eight European markets in the three months since the service launched.

By March 2010 the operator also expects to have shipped two million Vodafone 360 capable handsets, with the platform featured on some 50 different handsets.

Vodafone 360 features a specially designed user interface using Vodafone’s ‘proximity algorithm’ (it brings the most frequently contacted to the front of the list), which was built and designed on the LiMo Foundation’s Linux platform. The native functionality of 360 will focus on content aggregation – bringing together all contacts and content in one place and allowing customers access to different networking sites including Facebook, Windows Live Messenger and Google Talk. Users can also create different contact groups across social networks, so as to share different information with different groups of people.

To keep up momentum with the developer community, Vodafone will hold its first 360 Developer Conference at Mobile World Congress in Barcelona on February 15, 2010. The conference will feature interactive discussions on developer topics, providing tips on how to create and publish apps across Vodafone 360 devices, with developers given the opportunity to audition their apps and be rewarded with prizes.

With its 360 strategy, the carrier is looking to avoid becoming a bit pipe provider by tapping into what it hopes will prove a lucrative value added service and application revenue stream by acting as the gatekeeper. But it has been questioned as to how this strategy, first pioneered by former CEO Arun Sarin around own-branded handsets, will sit with those giving the power to third parties, such as Vodafone UK’s recent launch of the iPhone.

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Whenever spiders crawl into the Informer’s consciousness he’s reminded of one of the most terrifying pieces of cinema ever created; the end of the original, 1958 version of The Fly, in which a fly with a man’s head and arm is stuck in a spider’s web screaming for help as the owner of that web stalks ever closer to his tasty dinner.

What’s this all got to do with wireless, though? Simply this: it occurred to the Informer this morning on listening to this news that it’s a useful metaphor for explaining the battle for customer ownership that typifies our industry today. Firms are always talking about how important it is that their services are ‘sticky’ and those services are all on the web. End users are like the prey, trapped in the sticky web of services. The more consumers the service providers catch and feed upon, the more nourished they become and the more webs they can build.

The carriers, the handset players, the internet firms, they’re all after customer ownership. And the latest trend is for social network aggregator services that enable users to manage all of their accounts under one umbrella interface. Vodafone became the latest outfit to launch such a proposition, with its Vodafone 360 solution. The new services enable users to pull together all of their content and contacts from Facebook, Windows Live Messenger, Google Talk and will include PC- and Mac-based services, as well as games, mapping solutions and a whole bunch of other stuff. This is the Voda-web, and it wants you stuck bang in the middle, injected with its special serum, that leaves you too weak to try and leave.

The thing is, the Informer thinks, that – just as a number of organisations have launched social networks – so a number will launch social aggregators. And if you’ve got a number of aggregators, that’s just going to require another aggregator to be launched. Like some kind of spiderweb fractal repeating itself into infinity.

At the heart of Vodafone’s 360 solution, the firm said, is “the most personal address book available”. Maybe it’s just the Informer, but that immediately called to mind a phone contacts book where each entry had a nude photograph of the contact. And a piece of intimate information about them. The Informer scrolled through his own contacts. He only had to get to ‘Dad Mobile’ before he went right off the idea. The 360 contacts book also has a feature rather grandly titled the “Vodafone Proximity Algorithm” which simply ranks entries by most recent usage.

Vodafone’s 360 offering also heralds the arrival of the first Release 2 handsets from open source mobile crowd the LiMo Foundation. LiMo – another splinter group chasing the mobile Linux bandwagon – is known to be very accommodating to the operator community, seeing handset customisation as its forte. Other than Vodafone, the operators that intend to bring LiMo-based handsets to market include NTT DoCoMo, Orange, SK Telecom, Telefonica and Verizon Wireless.

Vodafone will use the LiMo R2 software to stock its app store – the Vodafone Shop – with over 1,000 apps available for the LiMo handsets at launch and Vodafone 360 also appearing on Symbian-based Nokia handsets as a pre-install or a downloadable software suite.

Not to be outdone in the social networking stakes, Nokia recalled one of its reconnaissance droids to the mothership this week, through the acquisition of Dopplr, a social network that was launched two years ago by Nokia’s former director of design strategy, Marko Ahtisaari.

Status and intention broadcasting could be used together. For example:

Status: “I am currently on my eighth pint of premium strength lager, it’s only 9pm and I think Susan from logistics might be up for it.”
Intention: “I’m going to phone in sick tomorrow rather than come to work in the same clothes. Lol.”

Nokia is rumoured to be buying Dopplr for a purchase price of between €10m and €15m, which is also thought to be less than Ahtisaari was hoping for. Both Nokia and Dopplr are keeping quiet, but the move fits in with Nokia’s rash of acquisitions in this space. Earlier this month, Nokia bought cloud-based social media sharing and messaging service Plum, and that was in the wake of the acquisitions of Cellity and Bit-Side earlier this year. In 2008 there was the acquisition of Plazes, and prior to that, Twango.

As one comes back another one leaves, though. Could this point towards a future acquisition? Swiss firm Myriad – one of those middleware vendors not many people have heard of but which has software installed on over 1.8 billion handsets – has stolen Nokia’s chief technology guru Benoit Schillings. Schillings joined Nokia after its 2008 acquisition of Scandinavian mobile Linux firm Trolltech and is to take up his new role with Myriad on October 1. The move is likely to leave something of a hole at Nokia, where Schillings was responsible for Nokia’s cross-device technology strategy as advisor to CEO, Olli-Pekka Kallasvuo.

It’s quite an interesting strategy, when staff who are itching to try something new are given a long leash and told to go fetch. UK carrier O2 did something similar this week, when it announced the creation of a new MVNO called GiffGaff. Details are scant, deliberately so judging by the website, but from what the Informer can glean, the idea is that subscribers are rewarded for bringing in new subs, or participating in marketing drives for the firm, even creating its advertising and answering technical queries posted by other users.

The firm’s headed by one Michael Fairman, who has previously been head of broadband, new product development and online sales at O2. The firm’s head of marketing is Kylie Evans, who joined O2 earlier this year (presumably with a view to boarding the spinoff pod) from UK broadcaster ITV.

It’s got more than a whiff of failed ad-funded MVNO Blyk about it, particularly when it comes to relying on a self supporting user base (Blyk was very keen on the idea that its users answer one another’s queries). Perhaps Blyk’s departure, which was painted by the firm as the “plan all along”, created a vacuum in the market for the whacky MVNO that hopes to get its users to pay its bills, without actually paying its bills. We’ll see.

Now, Canadians have a reputation for warmth and generosity, at least that’s what the Informer’s heard. So he was surprised to see them objecting so strongly to Johnny Foreigner trying to carve himself a slice of their mobile market this week. Globalive Communications is the new mobile licensee in Canada, and the fact that it’s backed by Egyptian firm Orascom (Globalive will use Orascom’s Wind brand in the market) has caused a few Canadian kerfuffles. Voting rights apparently remain with Canadian investors and Orascom’s top man, Naguib Sawiris, claims to be unhappy to be such a dominant financial stakeholder in the company. The credit crunch is to blame, he said.

In other news from that vast country, Research In Motion (RIM) said this week that net income for the quarter to the end of August fell slightly to $475.6m from $495.5m in the same period 2008.

The BlackBerry manufacturer reported quarterly revenues of $3.5bn, up 37 per cent from $2.57bn in the same quarter of 2008, broken down as 81 per cent for devices, 14 per cent for service, two per cent for software and three per cent for other revenue.

During the quarter, RIM shipped approximately 8.3 million devices and added around 3.8 million net new BlackBerry subscriber accounts. At the end of the three month period, the total BlackBerry subscriber base was approximately 32 million worldwide. RIM also revealed it had settled litigation with mobile email firm Visto, resulting in a one time payment of $267.5m, from Rim to Visto. Ahhhh, Visto.

And, at risk of making it look like we’ve got some kind of mad Canadian bias going on here at Informer Towers, here’s the news that the Nortel fire sale continued this week with the once flag-carrying vendor announcing the auction of its Carrier Networks Packet Core assets.

The Packet Core Assets consist of software to support the transfer of data over existing wireless networks and the next generation of wireless communications technology, including relevant non-patent intellectual property. The deal will however include a non-exclusive license of relevant patent intellectual property.

Finally this week, two of those firms we were talking about that are driven to own the consumer through services, Apple and Google, have had their dirty linen aired in public over the weekend, as the US regulator gave an insight into the row the two firms are currently having.

The spat started back in July when the FCC began looking into the application approval practices of mobile app stores. The regulatory body sent letters to Apple, AT&T (the exclusive carrier of the iPhone in the US), and Google asking about the rejection of the Google Voice for iPhone app.

The result is something of a ‘he said, he said’ argument, with Google claiming that Apple has outright rejected the Google Voice app, and Apple claiming that it is still reviewing the app.

In Apple’s initial response, which the company published in its entirety online, the company said: “Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it. The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail.”

Apple argues that the Google Voice application replaces native iPhone functionality such as Apple’s Visual Voicemail by routing calls through a separate Google Voice telephone number that stores any voicemail, preventing voicemail from being stored on the iPhone, effectively disabling Apple’s Visual Voicemail. Similarly, SMS text messages are managed through the Google hub, replacing the iPhone’s text messaging feature.

By way of response, Google has asked the FCC to publish its own response in its entirety, which the authority has done. In its letter, Google claims that it was informed that the Google Voice application had been rejected because “Apple believed it replaced the core dialler functionality of the iPhone.” Moreover, Google also claims that it was Phil Schiller, Apple’s senior VP of worldwide product marketing, who informed Google of the rejection in person.

The question now is, which firm is factually correct in its claims? Has the Google Voice app been outright rejected, or is Google able to tweak it so that it falls within Apple’s guidelines? This is likely to be something the FCC wants to find out too.

What a tangled web we weave…

Take care

The Informer

Vodafone 360 is a social network aggregator built on LiMo

Wireless behemoth Vodafone on Thursday announced an aggregation platform that brings a user’s contacts, social networks and messages together in one place.

Vodafone 360 will feature a specially designed user interface using Vodafone’s ‘proximity algorithm’ (it brings the most frequently contacted to the front of the list), which was built and designed on the LiMo Foundation’s Linux platform and heralds the first handsets to be built on LiMo R2.

LiMo – another splinter group chasing the mobile Linux bandwagon – is known to be very accommodating to the operator community, seeing handset customisation as its forte. Other than Vodafone, the operators that intend to bring LiMo-based handsets to market include NTT DoCoMo, Orange, SK Telecom, Telefonica and Verizon Wireless.

Handsets for the upcoming operator deployments will be sourced from LiMo OEMs which have worked on the development of the platform, including LG, NEC, Panasonic, Samsung, CasioHitachi, Huawei and ZTE.

Samsung will be providing the first LiMo R2 handsets to be used by Vodafone 360, with the first of these confirmed as the H1. The device features HSDPA, wifi, a five megapixel camera, a 3.5 inch WVGA AMOLED display, 16GB of memory and a MicroSD card slot.

Over 1,000 apps will be available for the LiMo handsets at launch via Vodafone’s own app store, the Vodafone Shop, and 360 will also be made available on Symbian-based Nokia handsets as a pre-install or a downloadable software suite.

Read our profile on Morgan Gillis, executive director of the LiMO Foundation

The native functionality of the 360 platform will focus on content aggregation – bringing together all contacts and content in one place and allowing customers access to different networking sites including Facebook, Windows Live Messenger and Google Talk. Users can also create different contact groups across social networks, so as to share different information with different groups of people.

The service and handsets will launch in Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain and the UK before Christmas, and will be followed by launches in a number of other countries in 2010, including India, Turkey, South Africa, New Zealand and Romania and in France through SFR, through MTS in Russia, and through Vodafone Hutchison Australia.

Morgan Gillis, executive director LiMO Foundation

For all the noise that Google and Symbian might make about the open source nature of their handset operating systems, they are still driven by single vendors. The LiMO Foundation, says Morgan Gillis, is genuinely free of a dominant corporate leader. And Gillis has the responsibility of proving that such an environment can generate an operating system that is truly competitive to those that are more obviously steered.

Founded by NTT DoCoMo and Vodafone along with Samsung, Motorola, NEC and Panasonic, the real beneficiary so far has been DoCoMo, which has been the sole recipient of the vast majority of LiMO handsets. Membership is open to all.

The crucial achievement of the LiMO Foundation has been to bring carriers to the operating system game, and LiMO now boasts 11 carrier members. But in this regard it is no longer unique in its class. Heavyweight carriers are present in numbers in both the Open Handset Alliance and the Symbian Foundation.

If the handset industry has got wise to this requirement, it remains to be seen what Gillis and the LiMO Foundation can do to gain widespread commercialisation for its OS. Privately at least one major handset vendor has expressed concerns that the LiMO foundation progresses at too slow a pace. Gillis has to prove this is not the case.

Competing in the theatre of operations

The number of smartphone operating systems is on the increase. With a variety of business and development models, from end to end proprietary to true open source, there ought to be something for everybody. While the smartphone sector as a whole is growing, though, not all of the operating systems will enjoy the same levels of success.

There is a temptation to dismiss the battle for dominance among smartphone operating systems as a competition that has relevance only for the organisations directly involved in OS development. But it is a temptation that should be resisted, because this is not a niche tech-war. In fact it’s the latest iteration of the industry’s abiding internal struggle-that for control of end user relationships and revenue streams.

The most prominent industry trend of 2009 is the mobile application store. Handset vendors are launching them, operators are launching them and software and internet firms are launching them, with all three groups positioning themselves to directly engage the application-buying consumer.

The proliferation of app stores owes its existence to Apple. More than a slick user interface, more than the bar-shifting industrial design of the iPhone, Apple’s legacy in the mobile world will be the fact that it showed users what they could do with their smartphone and showed the industry that money could be made by doing so.

This, according to Malik Saadi, senior analyst at Informa Teleoms & Media, will spark an evolution in the criteria by which end users select their handsets. Apple won’t have the game to itself for ever and, “in the future,” he says, “terminals will be bought because they support good applications.”

If Saadi is on the money then operating systems will become central to the popularity of handsets-even if end users don’t know which OS they’re selecting-because it is operating systems for which applications are developed. Developers-like everyone else in the value chain-follow the money and, the more deployments of a particular OS there are, the more applications will be developed for it. The more applications are developed for it, the more popular it will become-and the more money will be made through the application stores selling products for that operating system.

In short, if Android proves the most popular mobile OS, Google (of the firms backing the various operating systems) will reap the most significant benefits from application sales through its Android Marketplace. If the Symbian Foundation wins out, then Nokia-as the only vendor to ally itself to the Symbian Foundation as its sole smartphone OS-has the most to gain.

A little over a year ago Arun Sarin, then Vodafone’s chief executive, used his keynote speech at the 2008 Mobile World Congress to call for a reduction in the number of smartphone operating systems. The ideal number of OS in the market, he said, would be three. But the tide was already against him; the Apple iPhone had established itself as the darling of the handset space, and sneak peeks at Google’s Android platform were being offered on the show’s exhibition floor.

A year on and Sarin’s desired consolidation shows no signs of arriving; indeed it is more distant. Android handsets are in the market, Apple continues to gain traction and the creation of the Symbian Foundation, partly in response to the open source essence of the Limo Foundation, would indicate that neither grouping anticipates departure. Meanwhile the enterprise specialists of Microsoft’s Windows Mobile and Research in Motion’s Blackberry are widening their scope and the long-dormant Palm has resurfaced with its Web OS. The space is becoming more cluttered, not less.

This is in part due to the fact that the smartphone sector is growing, with Informa Telecoms & Media putting unit sales at 161.72 million in 2008 and forecasting growth to 507.12 million in 2013. As a share of total handset sales, the firm predicts, this will grow from 13.5 per cent to 38.1 per cent over the same period. Adding to the appeal for handset vendors is the fact that smartphones are higher margin products, with Informa estimating that, while smartphones currently account for only 10 – 15 per cent of sales, they represent 40 per cent of vendor profits.

As smartphone sales grow, the handy delineations that were once used to order the market are no longer reliable. While Symbian proponents look to push their OS further into the enterprise space, RIM and Microsoft have set their sights on expanding into the consumer market. Apple and Android, meanwhile, believe they can be all things to all people.

And this is not just a battle for the mobile form factor. Apple and Microsoft herald from the computing space, of course, but Android and Symbian are both being touted as potential notebook operating systems as well.

One means of grouping today’s mobile operating systems is according to the extent to which they are open or controlled. Apple, RIM and Microsoft all control their respective operating systems. The LiMO Foundation-which spearheads the open source Linux movement-is completely open, Symbian is transitioning to a similar state and Google’s Android, also based on Linux, purports to be open but is actually somewhere between open and closed. And it is with this classification that the nature of competition within the mobile OS sector comes into focus.

For the likes of RIM and Apple, the situation is a simple one. As the sole manufacturers of devices that carry their OSs-and sole developers of those OSs-they alone as handset vendors reap the benefits of improved sales of handsets and application revenue. For the open source OS players, the situation is a little more subtle, a little more complex.

Outwardly, the mobile operating system sphere does not seem the most hotly competitive part of the industry. Different OS vendors or groupings seem keen to acknowledge one another’s individual successes and contributions to the overall sector and the importance of the variety that they collectively bring. But dig beneath the surface and the competitive tensions are there.

Perhaps the most frequently displayed of these is the dismissal of Symbian as Nokia by another name. It’s not hard to understand such a perspective. Nokia has by far the largest share of the handset market, and an even larger share of the Symbian market. Symbian, in turn (and because of Nokia’s market share) dominates the open OS market. Nokia itself has clearly taken this perception to heart, with the move to create the open source Symbian Foundation a direct response to these concerns.

The foundation has ten founding board members-AT&T, LG Electronics, Motorola, Nokia, NTT DOCOMO, Samsung Electronics, Sony Ericsson, STMicroelectronics, Texas Instruments and Vodafone- and plans call for the organisation’s platform to be available on an open source basis from mid-2010. Software assets are being contributed to the foundation, including Symbian OS and S60 by Nokia, UIQ technology by Motorola and Sony Ericsson and MOAP(S) by NTT DOCOMO and Fujitsu.

Despite the backing of such a range of companies, the belief that Symbian is at heart a Nokia vehicle remains popular in the industry. “The Symbian Foundation will have to do a lot to dispel that sort of thinking,” concedes Erik Jacobson, a Nokia employee speaking on behalf of the Symbian Foundation. “But when the Foundation is up and running, Nokia will have just one seat on the board, like everyone else. So there will be no formal control by Nokia. Give the Foundation another six months and people will have got out of the mindset that it’s a Nokia-led organisation.”

That could turn out to be an optimistic assessment. Morgan Gillis, executive director of Linux OS collective the LiMo Foundation, clearly doesn’t buy the notion that Nokia will be relinquishing control to a committee. “The industry is not interested in ceding the platform to Nokia and allowing it to take the platform forward,” he says. Gillis does agree, though, that the creation of the Symbian Foundation is a move to a genuinely open source and non-partisan structure-but he points out the caveat that the Symbian Foundation board retains right of approval over membership.

Michel Piquemal, senior vice president for European operations at Japanese software vendor Access-whose Linux Platform v3.0 OS product is based on the LiMo Foundation’s output-backs Gillis’ viewpoint, dismissing the Symbian Foundation’s shift to open source operation.

“Symbian’s move to open source is not going to radically change the game,” he says. “If you are Samsung or LG or any kind of major player in the handset market, it’s unlikely that you are going to source your technology from your number one competitor; Nokia. That has nothing to do with whether the technology is any good, it’s purely strategic.”

Under the proposed governance rules of the not-for-profit Symbian Foundation, as Jacobson is at pains to point out, Nokia won’t be the organisation from which handset vendors source the OS technology. The real issue is that, given Nokia’s market share in the handset sector, any work put into the Symbian Foundation by other handset vendors could be seen to benefit Nokia to a greater extent than it benefits them.

Piquemal raises a similar issue over Android, the Linux-based OS led by Google but developed and promoted by the Open Handset Alliance. Here, he says, it is not the vendors who risk harming their own chances, but the operators. “If you are a carrier you may have a second thought about enabling a new competitor that may take all of the revenue stream from the service. The carriers are afraid of Google because of the revenue Google could take from them.”

Better, say Piquemal and Gillis, for independent-minded players to choose an independent-minded operating system. And this is the central thrust of the LiMo camp’s case; that it is truly open, not beholden to one dominant company, not marked by conflicts of interest.

It can’t really be faulted on this assertion but its independence could be something of a double-edged sword. The absence of a single leader driving the organisation could prove a major obstacle; after all, the LiMo Foundation currently has no heavyweight international backer taking handsets to market.

The founding members of the LiMo Foundation were Motorola, NEC, Panasonic, Samsung, Vodafone and NTT DoCoMo. At the time the LiMo Foundation was formed, in January 2007, Motorola was already a weakening force on the global handset circuit, a trend that has proven to be linear. Panasonic and NEC, meanwhile, were then-and remain today-heavily dependent on Japan generally, and NTT DoCoMo in particular. Samsung is a big name, but has yet to produce a LiMo compliant handset.

To date, 33 LiMo compliant handsets have been produced. Motorola has brought eight models to market, targeted primarily at the US and Europe, and LG, a more recent member, has produced a single phone. The rest, from NEC and Panasonic, have gone exclusively to DoCoMo, a carrier which has been historically unrivalled in the control it has exerted over its handset suppliers.

While membership of the LiMo Foundation has swollen to 65, including 11 operators, of which six are tier one players-and while Samsung and LG were showing demo handsets at this year’s Mobile World Congress-the commercial story so far has been dominated by NTT DoCoMo. And if operating systems will live and die on volume sales of handsets and applications, there is work to be done in the LiMo camp.

What it did do that was vitally important, however, was bring carriers to the mobile OS table, a move that was aped in November 2007 by Google, Android and the Open Handset Alliance (OHA) and later reflected in the new structure of the Symbian Foundation. Sensitive to a shifting industry dynamic, the LiMo Foundation was created in part to give carriers a hand in OS development. Whether or not this will prove a winning strategy depends on which organisations-handset vendors or carriers-prove the most adept at selling applications to their end users.

Egalitarian as LiMo may be, there is a perception-which is in part a hand me down from the development of desktop PC Linux solutions-that committee-led structures like this lack decision making skills. The absence of a majority voting superpower stops choices being made, critics suggest. “The governance model is not obvious yet,” says Malik Saadi. “Who will steer the roadmap?”

Slides from a major, platform agnostic handset vendor seen by telecoms.com which compare and contrast Symbian, Windows Mobile, LiMo and Android contain the following assessment of the LiMo community: “Large open source community, yet progress in the platform is slow.”

Morgan Gillis disagrees: “We have a board of fifteen companies, and all the people who are on the board are very senior and seasoned industry professionals. The great power of that set up is that, as decisions are taken, you don’t then have to go and sell them afterwards to the industry, because the industry has already taken those decisions in collaboration. A one company board can take decisions more quickly, but that doesn’t mean that the decisions are enacted more quickly,” he says.

There are similar issues in the Android camp. That there was only one new Android handset announced at this year’s Mobile World Congress, and that it was from the same vendor that produced the only other Android handset-HTC-was one of the great surprises of the show. Many within the industry had been expecting a rash of new Android handsets, signalling widespread enthusiasm for the operating system.

Just as LiMo has been most successful by taking handsets to market through collaboration with NTT DoCoMo, so Android is relying in the first instance on exclusive carrier relationships. T-Mobile took the debut Android handset, the G1, and Vodafone the second-dubbed the Magic.

Google is more than aware of the suspicions it inspires in the carrier community, despite its partnership with a number of the world’s largest operators. With this in mind it was interesting to note that, while the Magic demo units being shown at MWC sported HTC, Vodafone and Google branding on the front of the hardware, Dave Catt, head of operations for UK and Ireland at manufacturer HTC, told telecoms.com that in the commercial iteration, the Google and HTC brands would be relegated to the back of the phone.

HTC, a brand that has emerged over the last 18 months or so from the shadow of its white label carrier customers finds itself in the somewhat unlikely position of having 100 per cent share in the Android handset space. This cannot be expected to last and, in any case, says Catt, the firm is keen to stick closely to its Windows Mobile heritage.

” Windows Mobile is our DNA, our core business,” he says. “Android is a new platform and it’s very exciting but from our company perspective it’s very important that we keep a focus on the Windows platform. I wouldn’t say that we would never do a Symbian phone, for example, but we’re not interested in getting involved with [application] development communities, we’d rather sit outside of that.”

Catt’s view reflects that of most handset vendors. Nokia aside, manufacturers are not keen to ally themselves to a single operating system, preferring to talk in terms of meeting the requirements of the carriers to which they ship their product. Samsung, present in the OHA, the LiMo Foundation and the Symbian Foundation, is the perfect example of the spread betting approach employed by most vendors.

The carriers, too, need to keep their options open, which is why the same carrier names appear in the various OS alliances alongside the manufacturers. Nonetheless, not all of the operating systems will meet with the same degree of success as we move into the next decade. So which will be the most successful?

In the short term, over the next four years, Symbian looks likely to remain dominant, although its market share, according to the analysts, will begin to dwindle. Informa Telecoms  & Media forecasts that the total Symbian market share (including both Symbian Foundation handsets and legacy Symbian product that remains in the channel even after the first foundation handsets are shipped) will drop from 44 per cent this year to 42.6  per cent by 2013. But it will still be shipping in almost twice as many handsets as its nearest competitor, Windows Mobile, due for a major overhaul in 2010.

The facts of life in the handset space are simply that whatever Nokia does will prove dominant. But, says Eric Jacobson, there is more too Symbian’s future performance than simply Nokia’s patronage. “Symbian is battle hardened,” he says. “There are a quarter of a billion Symbian devices out there now and, while there have been a lot of mistakes along the way, there has been a lot of learning done. And it’s interesting to see other groups now coming to this space and finding out the hard way the answers that we’ve already learned.”

Informa’s assessment of LiMo’s prospects is less rosy, with projections suggesting that the firm’s shipments will peak in 2011, before dropping off fairly steeply. But the Android platform is expected to do well, overtaking LiMo and Apple in 2012, and stretching its lead by 2013. RIM’s growth is predicted to be slow and steady, suggesting that its designs on the consumer market may not be met with huge success.

What the Informa numbers tend to indicate is that a major backer, either as a channel to market or as a high profile branded service like Google sitting at the centre of the application offering is critical to success. Without that weight in the team, it will be difficult to get an operating system to flourish commercially.

Linux remains high on the agenda with regards to mobile handset operating systems but some degree of fragmentation looks likely to remain. This week, a handful of major operators committed to rolling out devices this year based on the LiMo Foundation’s flavour of Linux.

NTT DoCoMo, Orange, SK Telecom, Telefonica, Verizon Wireless and Vodafone, have all committed to deploying handsets based on the latest version of the LiMo Platform.

To date 33 commercial handset models have been certified as LiMo compliant, including ten being displayed at Mobile World Congress next week by NEC and Panasonic together with new prototype models from LG Electronics and Samsung.

Further active operator participants in the LiMo Foundation include KTF, SFR, Softbank Mobile, Swisscom, and Telecom Italia.

LiMo has one of the biggest presences in the mobile Linux space, since last summer’s absorption of Linux splinter group the Linux Phone Standards (LiPS) Forum. The LiPS Forum’s member base counted players from across the mobile ecosystem, including chipset suppliers, Linux OS and mobile stack vendors, handset designers and OEMs and regional and global wireless operators, but decided to merge with LiMo in the wake of announcements by a number of LiPS members that they would be joining LiMo – Access, France Telecom / Orange, Open-Plug, Purple Labs and Texas Instruments.

Many members of LiMo are also members of the Open Handset Alliance (OHA), which develops the software for the Google-backed Android platform, indicating that many carriers are reluctant to reduce their reliance on multiple flavours of Linux.

“The mobile industry’s shift toward true openness has come another step closer to being realized and major operators from around the globe continue to back the LiMo Foundation,” said Malik Kamal-Saadi, principal analyst of handsets and devices at industry analyst Informa. “As more and more companies jump on the open source bandwagon, industry unification around mobile Linux is expected to gain momentum, enabling the delivery of next-generation handsets and new waves of innovative applications that will provide consumers with a truly personalized mobile web experience.”

On Monday, the LiMo Foundation endorsed the OMTP BONDI specification, designed to allow diverse web applications and widgets to make use of native functionality on mobile handsets, such as calendar, camera or contact services.

The organisation said that to date, the mobile industry has lacked a common specification that allows for easy re-use and portability of web applications and widgets-often forcing developers to repeatedly re-write their code in order for their program to run on the many different types of mobile handsets. The purpose of BONDI is to create a common interface between these applications and the underlying handset functionality.

The World’s Largest Carrier in terms of Revenue, Vodafone, has given a clear indication that Linux will remain a major part of its handset platform line up going forward.

On Thursday, Big Red said that it has tapped open mobile OS company Azingo to develop applications for mobile phones based on the LiMo platform.

LiMo has one of the biggest presences in the mobile Linux space, since last summer’s absorption of Linux splinter group the Linux Phone Standards (LiPS) Forum. The LiPS Forum’s member base counted players from across the mobile ecosystem, including chipset suppliers, Linux OS and mobile stack vendors, handset designers and OEMs and regional and global wireless operators, but decided to merge with LiMo in the wake of announcements by a number of LiPS members that they would be joining LiMo – Access, France Telecom / Orange, Open-Plug, Purple Labs and Texas Instruments.

Azingo will develop applications for Vodafone handsets based on the LiMo platform, but that’s all the company is giving away at present. A couple of years ago, Vodafone adopted a three pronged approach to handset software, selecting Linux alongside Windows Mobile and Symbian.

Like many of its peers, the Big V is also a member of the Open Handset Alliance (OHA), which develops the software for the Google-backed Android platform. A membership move which some interpreted as the carrier preparing to reduce its reliance on other flavours of Linux. Evidently this is not the case.

Services over hardware

Handset vendors need to get more involved with the services market and thrive, or stay hardware-focused and wither on the vine.

The popularity of the Apple iPhone, despite the introductory price of $499 for the 4GB version in 2007, gave vendors a respite from the steady fall in average handset prices. Here, at last, was a device segment that could be not only a reliable source of revenue growth, but also a way of increasing a vendor’s operating margins.

In developed regions-Western Europe, North America and Japan-growth in the value generated by smartphones is expected to be sharp in the next five years, making up for the decline of the nonsmartphone market. In emerging markets, growth will continue to be driven by devices other than smartphones.

The smartphone market will see double-digit annual growth until 2013, according to Informa Telecoms & Media forecasts. The value of devices other than smartphones is expected to register almost zero annual growth until 2011, partly because of the aggressive migration of subscribers in developed markets to smartphones, with an adoption level exceeding 60 per cent in 2011. After that year, the value of nonsmartphone sales will start to grow again, but this time it will be driven by the take-up of 3G and 3.5G services in emerging markets, such as China and India.

The value of the global smartphone market will grow from almost $39bn in 2007 to more than $95b, or 47 per cent of the total value of the handset market, in 2013, Informa says. This impressive potential is encouraging device vendors to prepare strategies to tap into the market. A number of vendors are increasing their involvement in open mobile-terminal software, which is central to the development of smartphone devices.

Open source will play an essential role in bringing smartphones to the mass market. A number of mobile-open-source foundations have been created in the past two years, including the Symbian Foundation, the Open Handset Alliance and the LiMo Foundation. Virtually all OEMs and the leading operators are actively working within these organizations and preparing themselves to compete strongly in this market segment.

But the growth in the value of the smartphone market will only just make up for the sharp decline in nonsmartphone revenues in the developed countries. The growth in the value of mobile handset sales is expected to drop to zero by 2010 and could decline shortly thereafter. In these regions, vendors will have to create new opportunities if they want to maintain revenue growth. The creation of ecosystems bundling handset sales and associated services (e.g. S60-Ovi, iPhone-iTunes, Android-Google) is a trend that will help vendors to sustain revenue growth.

Handset sales in developed markets are reaching saturation, leading to increasing competition among handset OEMs. The price war will only intensify, since new entrants, such as Apple and Google, are putting more pressure on competitors to reduce their prices, mainly for feature phones and smartphones. With average selling prices of feature phones and smartphones falling, several leading vendors are looking for new ways of controlling handset-manufacturing costs to maintain margins.

With that in mind, vendors have already shifted the majority of production to low-labour-cost regions, such as China, Taiwan, India, Vietnam and Eastern Europe, and now they have to play their only remaining card: lowering the amount they pay for chipsets and terminal software.

Device vendors have traditionally relied on customized chipsets to power their products. Now that modem chips are becoming a commodity, and vendors are adopting off-the-shelf technology, price competition is expected to increase significantly, requiring suppliers to generate significant economies of scale.

The mobile handset industry is also turning its interest to open source, a community-based approach that promises vendors a reduction in or the elimination of royalties related to terminal software and will also help them lower the cost of maintaining commoditized software, because, under open-source rules, the cost is shared among all members of the community rather than being borne by a single vendor.

Despite all these efforts, OEMs will find it hard to maintain feature-phone and smartphone margins, because of the growing competition in these market segments as different types of vendors, including incumbent OEMs, consumer-electronics makers, PC vendors and internet-content providers, seek their share of the mobile handset market. Overall, the mobile handset market will undergo some radical changes and will be controlled less and less by the top five vendors, which hold an impressive 85 per cent market share.

Informa forecasts that ASPs will stabilise at $123-130 and average margins will continue to decline sharply. Vendors will need to control costs or face losing market share. This situation will push the market toward a period of strong consolidation within the next five years at every level of the value chain, including chipset manufacturers and OEMs.

It is becoming clear that, in developed markets, handset vendors can no longer rely on mobile phone sales to sustain growth. They will have to look at other opportunities, such as getting involved in creating content and offering services. The trend is already happening, with a number of device vendors, including Nokia, Apple and Sony Ericsson, seeking to create end-to-end ecosystems linking their devices to services they offer. Not only will this move enable them to differentiate themselves by offering users an enhanced experience, but it will also create new revenue opportunities for them by either delivering their own services or teaming up with mobile operators to deliver these services.

This development indicates that the industry is entering a new era, in which product differentiation will shift from hardware to software. Vendors that have prepared themselves for this radical change will find themselves in a better position than those that continue to differentiate their products on the basis of hardware.

Mobile Linux collective, the LiMo Foundation, announced a raft of new handsets to ship with the operating system on Monday.

Seven new devices from Motorola, NEC and Panasonic bring the total number of LiMo devices available to 21 and introduce features such as HSDPA roaming capabilities, GPS, mobile TV and advanced video streaming.

A not for profit organisation, LiMo aims to blend the community-based development benefits of Linux with development practices from the mobile community in a bid to minimise fragmentation. Release 1 of the platform came out in April.

“LiMo was founded on the notion that fragmentation of the mobile industry among dozens of proprietary, closed operating systems was inhibiting innovation,” said Kiyohito Nagata of NTT DoCoMo, chair of the LiMo Foundation.

The organisation also announced 11 new members: Cellon, Esmertec, Freescale Semiconductor, Longcheer Holdings, MIZI Research, Movial Corporation, PacketVideo Corporation, SK Innoace, Telecom Italia, VirtualLogix and ZTE, taking LiMo’s membership to more than 50.