The smartphone race: what can we learn from the PC wars?

The richness and diversity of today’s intensely competitive mobile market has provided a level of choice like never before. With Apple, RIM, Google and Microsoft battling it out, we have seen an explosion in the development of devices and applications for consumer and enterprise use.

If the battle between the major players in this multi-platform, multi device world seems somewhat  familiar, it’s perhaps because we can draw a number of parallels between the smartphone wars of today and the PC wars waged in the 80’s and 90’s.  The names have changed but, essentially, what we’re now seeing, as the battle lines are drawn and re-drawn between Apple and Android, is reminiscent of the Microsoft and Mac wars which played out a couple of decades ago.

As the giants jostle for position, what can we learn from these PC wars of the past and what does it mean for developers and enterprises alike, faced with the choice of investing in a mobile ecosystem?

Back in the 80’s as the software giants, IBM, Linux and Microsoft fought for share in the desktop market, Apple emerged with a proprietary model, which locked users in to their ecosystem, fostering brand loyalty and setting new standards in the user interface experience.

Just as in the 80’s, when Apple captured market share through this innovation over the more established players  in the PC market, now too, we see a smartphone market where the other mobile giants are playing catch up with the functionality it offers. It’s the same business model as the Mac PC, in which Apple will not license the use of its iOS to any other company.  With this closed business model, Apple has seen its revenues rise to $28.27bn in the quarter ending September 2011 compared to revenue of $20.34bn, in the same quarter the year before.

Now history is repeating itself with the battle of the ‘open’ versus the ‘closed’ models.  Android, for example, is achieving dominance with the open business approach: seeding its software across the market to achieve critical mass and widespread adoption and influencing hardware manufacturers to embrace its OS.  It has also focused on the more price sensitive spectrum of the hardware market. This approach – in which Google licenses the mobile Android OS for free – has now seen it surpassing other players to become the most used smartphone operating system.

But whatever the paradigm of the platform selected, be it open or closed, both can result in ‘lock-in’ for developers and enterprises alike. Competition and diversity has its advantages, providing choice and driving innovation, however the multi-platform era and the explosion of devices and platforms also creates uncertainty around which players will dominate. Therefore, for developers and those tasked with investing in a platform, it’s difficult to determine where the best commercial opportunities will come from. Moreover, the rate of change of new versions of operating systems and hardware has created a ‘lock-in’ of a different kind: it can be difficult to innovate or remain competitive with an old system or an old device which can’t be upgraded due to budget.

These choices now facing enterprises in the mobile space were played out as the PC market evolved. Regardless of which hardware is selected, once you have bought into an interface or an operating system, be it proprietary or an ‘open’ system, it becomes costly to change. Investment in a new platform in an enterprise environment represents a significant outlay and, besides the cost of migration, there is a sharp learning curve for users and those supporting a new OS.  The risk lies in making choices that could limit them from moving to a different platform or from incorporating new devices in the future, as well as the need to ensure integration with existing applications, ease of interoperability and ongoing support.

Consolidation is Inevitable
For developers, the risk lies in opting for a platform which may become obsolete and commercial interests dictate that market share will be a key factor when considering which platform to develop for.  It’s not a decision which businesses or developers can afford to postpone for much longer; with IDC predicting that the global mobile worker population to increase to more than 1.19 billion in 2013, up from 919.4 million in 2008.

To add to this complexity, with the tablet market evolving at a pace, there are further changes ahead and most businesses will want their applications to work both on smartphones and on tablets, because each has its own uses and relevance. Can businesses risk choosing one technology over another?

The competing platforms of the smartphone market and diversity of platforms have made the stakes, for companies faced with mobile strategy decisions, much higher. Instead of the two-horse race of the 90’s between Microsoft vs Apple, companies now have the ‘paradox of choice’ and the pace of change has accelerated, with operating systems updated more frequently and hardware lifecycles shortened. However, if we can learn something from the PC wars it is that convergence is inevitable and, while new entrants may yet emerge to shake things up, eventually there will be consolidation of just two or three big players, be it through partnerships or acquisitions.

Unlike the 90’s however, the question of who will win, is perhaps the wrong one for today’s smartphone market and the question now should be, why choose one model or ecosystem over another? Whilst enterprises are faced with options, times have moved on, and it may be too limiting to think in terms of ‘winners’ and ‘losers’ or the drawbacks of ‘lock-in’ to one channel – be it operating system, platform or device.

Our multi device, multi application world is driving the need for greater flexibility and approaches are needed which can deal with the complexity of taking any application to any channel.  So, instead we should think about the power of choice, providing developers and enterprises alike with the flexibility to transition applications across platforms and devices without the ‘rip and replace’ scenario of the past.   In this way the limitations of vendor lock-in which typified the PC wars, need not repeat itself.

David Akka is the UK, Eire & Nordics MD of Magic Software

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