DEVICE STRATEGIES OPERATING SYSTEMS DANGEROUS DUOPOLY


Vodafone keen to see more competition in the mobile OS space, but analysts and handset makers believe the battle is already over. By Mary Lennighan


M


obile operators are still concerned about the lack of competition in the operating


system market. A year ago a group of key European


telcos - including Vodafone, Telefonica, France Telecom and Deutsche Telekom - met to discuss the impact of Apple and Google’s respective operating systems on the mobile industry and presented their concerns, apparently without naming the companies in question, in a letter to Neelie Kroes, VP for the digital agenda at the European Commission. Although little has been heard from what the indus- try dubbed the “smartphone panel” since, recent developments show that the oper- ators’ concerns have not gone away. Furthermore, statistics show that Apple


and Google have only strengthened their grip on the global market in the past 12 months. Android accounted for 52.5% of the 115 million smartphones sold to end users worldwide in the third quarter of 2011, more than double the market share it captured in the year-ago quarter, according to Gartner. The fact that Apple shipped 3 million fewer devices in the quarter than it did in Q2, as customers waited for the new iPhone 4S it announced in October, left it in third place behind Symbian, but Gartner predicts strong growth in Q4 thanks to that handset. “A monopoly or a dupoloy is never


good,” says Michel Combes, Europe CEO at Vodafone. Combes describes iOS and Android as two “strong and compelling” operating systems. “[But] we are keen to see other operating systems emerging,” he says. “Would I like Microsoft to be successful? The answer’s ‘yes’.” Nokia launched its first smartphones


based on Microsoft’s Windows Phone 7 operating system - the Lumia 710 and Lumia 800 - in November. It has yet to release any sales figures for the devices, but insists the reception has been positive from both mobile operators and end customers.


December 2011/January 2012 www.totaltele.com And the operator community could


influence how the market plays out. Vodafone says it will not push one OS over another. “We can’t make a success of a new operating system. It’s the customer choice,” says Combes. However, the operators’ relationship


with the end user is a valuable tool. “We have to provide the ability to port,” contacts, content and so on between devices and operating systems if the customer decides to change handset, says Combes. Vodafone’s retail outlets help customers to do that “whatever the phone is,” he says. Making it easier for end users to switch


from one OS to another could be key to fostering greater competition in the sector. Earlier this year Kantar Worldpanel ComTech advised OS provid- ers to look to the first-time-buyer market for growth after research showed that existing smartphone users are reluctant to change platforms. “Our data shows that Apple and


Android’s customers are intensely loyal when choosing their upgrade,” said Dominic Sunnebo, global consumer insight director at Kantar, Worldpanel ComTech in a research note. He attrib- uted this apparent platform loyalty to customers’ inability to port apps between operating systems. Opinion is divided on what the OS market will look like in future.


3Q11 Units


Speaking at iDate’s DigiWorld Summit


in Montpellier last month, Exane BNP Paribas analyst Alexander Peterc suggested it will be difficult for other players to take on the top two. ‘[The battle] was fought and won by


Apple and Google,” said Peterc. “Symbian [will be] wound down to zero by 2013,” and Nokia’s bid to regain ground by converting to the Windows platform “will be a tall order,” he warned. “RIM’s future is [also] in the balance,” he added. The handset makers themselves have a


similar view. “The OS war is kind of finished,” leaving Android in a dominant position, said Olivier Bourdeau, EMEA product director at HTC Europe. “We need to differentiate somewhere in another space,” he added. “We’re going to be in [the market],


definitely,” insisted Laurent Schlosser, operator channels director at Microsoft, noting that there will be opportunities across different devices, in the living room and in the car, as well as in smartphones. Indeed, not everyone believes the battle


is over. “I am cautious on that [assump- tion],” says Vodafone’s Combes. “Who would have imagined two years ago that Google would be where they are today?” he says, noting that at that time the focus was on Apple and Symbian. “[Nokia] have missed the smartphone opportunity but they can still revive,” he predicts. n


Worldwide smartphone sales to end users by OS (000s of units) Operating System


3Q11 Market Share (%)


Android Symbian iOS


Research In Motion Bada


Microsoft Others Total


60,490.4 19,500.1 17,295.3 12,701.1 2,478.5 1,701.9 1,018.1


115,185.4


52.5 16.9 15.0 11.0 2.2 1.5 0.9


100


20,544.0 29,480.1 13,484.4 12,508.3 920.6


2,203.9 1,991.3 81,132.6


3Q10 3Q10 Market Units


Share (%) 25.3 36.3 16.6 15.4 1.1 2.7 2.5


100 Source: Gartner (Novemeber 2011) 15


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