Exploring the right business strategy for open source mobile platformss

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




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.


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




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



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




Economic factors affect the demand of niche

mobile devices.

Large Ubuntu and Qt developer communities.


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




UBUNTU ON PHONES:MICHAEL PORTER’S 5 COMPETITIVE FORCES






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.



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




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.


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.



TIZEN:MICHAEL PORTER’S 5 COMPETITIVE FORCES






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.



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


Countries that worry about American monopoly

in the mobile space would welcome Sailfish

OS.



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.


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




JOLLA SAILFISH OS:MICHAEL PORTER’S 5 COMPETITIVE FORCES





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.



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

THOUGHTS? QUESTIONS?