Three major news items underline the centrality of applications development to the future of the telecoms industry.
The first is the Wholesale Applications Community (WAC) - this essentially extends the Joint Innovation Lab (JIL) proposal, originated by Vodafone, Softbank, and China Mobile, to a brief who’s who of major world operators, 28 carriers in all. The aim is to establish a common environment for mobile apps development and deployment. By ‘apps’, however, they mostly mean JIL-style Web widgets.
The second is Meego, a merger of Nokia and Intel’s mobile linux efforts, and the third is Ericsson’s eStore.
In short, that’s three major applications platforms who will line up against Google Android, Apple, and RIM at the top of the industry.
We’ll be discussing these in detail with senior representatives from all of these initiatives at the 9th Telco 2.0 Executive Brainstorm in London on 28-29 April but, in the meantime, to whet your appetite, below is an analysis of what this all means and why it matters?
WAC - Telcos seek their own Appstore
The really good news about WAC is that the project looks set to clean up some of the standardisation proliferation that’s beset the industry. Telco 2.0 spoke to people involved, who seem quite clear that the plan is to eventually filter the alphabet soup into a clear, single structure. JIL, despite being called the Joint Innovation Lab, you may recall, was actually a standard, similar to the Open Mobile Terminal Platform’s BONDI standard, which was intended to provide a single API for access to device functionality across any OMTP-compliant gadgets. Unfortunately, being quite standard is the same thing as not being standard at all.
A bit of history…
At the same time as JIL and BONDI were emerging, the LiMo Foundation’s flavour of mobile Linux was being marketed to operators concerned about the growing power and influence of Apple, RIM, and Google, as we discussed in this Analysts’ Note. LiMo supports BONDI, and as we noted back in February 2009, the JIL operators wanted to support three platforms - Windows, Symbian, and Linux. It now seems that WAC will subsume JIL, and will be compliant with BONDI. And this week, the LiMo Foundation sent WAC a nice letter. Hopefully they won’t need to go all the way to sending a cake.
… and the endgame
If successful, it might provide the kind of scale that individual operators struggle to offer in comparison with the major global vendors (i.e. Apple, RIM, Nokia, and Samsung), all of whom can offer access to their entire device fleets. In that case, further help to redress the balance between the operators and the vendors, especially Apple and RIM.
Voda seeking unity?
It’s also significant that the Vodafone 360 devices are both LiMo-powered and BONDI-compliant. Vodafone is represented on the board of LiMo Foundation, a founder of JIL, and a founder of WAC; it certainly looks like the world’s biggest operator by revenues is trying to bring about a rapprochement between all three groups. (We noted that something like this might be afoot as long ago as April 2009.)
Meego - big vendor effort for consolidation
From the vendors’ side, the big news was Nokia and Intel agreeing to merge their mobile Linux efforts. Intel has had a version of Linux (Moblin) around for a while without really getting any traction; Nokia has been supporting Maemo Linux for some time and has used it in tablets (N800/810) and in the new N900 flagship phone. These two will now be rolled together into Meego. Any reduction in the number of competing platforms is to be welcomed, of course, but more significantly, this signals a further move on Nokia’s part to shift emphasis from Symbian S60 to Linux in their top-end devices, and to build up their developer community.
It may also mark a renewed effort by Intel to break into mobile, and by Nokia to diversify their sources of silicon. In 2009, Nokia buried the hatchet with Qualcomm, agreeing to develop devices for North America based on their MSM chips . Nokia also agreed to cooperate with Intel on a new mobile platform. Meego is a software project, but it is unlikely for a deal between the world’s biggest manufacturer of semiconductors and the world’s biggest buyer of semiconductors for mobile devices to have no influence on the market for semiconductors.
Qt - an attempt to bridge complexity and devices
Further, Nokia is putting a lot of emphasis on the Qt cross-platform graphical user interface framework. This is used in the KDE graphical desktop for Linux and in many other applications; Nokia acquired its parent company, Trolltech, some time ago. It will be the primary applications framework for Meego, and increasingly for Symbian as well.
The importance of Qt here is that it provides a common GUI and a common developer environment (Qt Creator) across multiple underlying platforms, that’s sufficiently powerful to implement a whole desktop PC user interface and apps suite - it’s available for Symbian as well as Maemo, and even for MS Windows. Meego and Nokia/Qt documentation frequently refers to Qt applications on the desktop and on embedded devices, which seems to suggest that Nokia is keen to see their technology used elsewhere than on mobile devices only. Nokia’s developer activities have been repeatedly hindered by the sheer diversity of their device and software output - this is an effort to bridge over the complexity.
Ericsson joins the AppStore Value chain with eStore
Not to be outdone, Ericsson also made a play for a role in the apps world with the launch of its eStore, a cross channel, cross device app and content store that it is selling as a white label service to telcos as well as content owners. For operators, it provides the opportunity to get an app store up and running in weeks rather than months and is primarily targeted at tier 2 and 3 operators struggling to get into the app and content games. For Ericsson, it embeds the vendor in the app store value chain. Indeed, Ericsson confirmed to Telco 2.0 that developers would receive the standard 70% of revenue split, with Ericsson taking a ‘small percentage’ (it would not be more specific) drawn from operator’s 30% share.
The eStore launched with 30,000 free and paid for apps, offering decent scale from day one. A partnership with Opera Software provides the client framework for web widgets and applications across multiple devices, so as with JIL, apps in this case primarily mean widgets, although the store offers native apps as well. However, the real differentiation for the eStore comes with the thinking Ericsson has put into ensuring a variety of business models could be supported, including pay per download, ad-funded and cross channel service bundles.
For the eStore, Ericsson has built on its SDP to offer payment for apps using the operator’s bill, APIs to network functionality and an ad orchestrator that allows app developers to work with alternative ad-based business models tied in with device functionality. The billing capability is provided via Ericsson’s existing IPX, while access to network functionality, such as location, identity, SMS etc, is delivered through APIs compliant with the GSMA’s OneAPI initiative.
More than Apps, Media too…
A further differentiation is the cross channel proposition. It is not just a mobile app store but a content distribution platform offering IPTV and video content, which could lead to some more interesting cross-channel service bundles.
Summary - More New Flavours competing for a share of the App Pie
So, to sum up, Ericsson’s eStore is providing a white label platform for telcos which gives developers access to revenue-generating network functions, while on the device side we’re seeing the emergence of a couple of large, Linux-based, mobile development environments.
One is carrier-driven, built on LiMo, using a Web/widgetry approach, and using the WAC as its route to market.
Another is vendor-driven, based on Maemo/Meego, using Qt as its apps framework, and primarily using Ovi as its route to market. (They’ve also signed up Orange.) They join Google Android, Apple, and RIM at the top table.
It’s probably worth noting that Samsung is represented in LiMo and that its recently announced Badu apps ecosystem is BONDI-compliant - so that’s the major smartphone vendors covered.
But what about Blackberry and Apple?
An interesting question will be what becomes of BlackBerry OS? There are those who think RIM needs to update it in order to fend off the fate of PalmOS. It will certainly be a difficult decision and one based on whether the OS itself contains significant value and differentiation, enough to warrant the costs of developing it further, or whether RIM’s unique selling points are in the applications layer and in device design. If the latter, we could see RIM opting for one of the mobile Linuxes and concentrating on its own apps framework, competing at the level of JIL, Qt, and Apple’s Cocoa.
As for Apple, it’s a racing certainty that they will insist on keeping their own vertically integrated stack.
[Ed. - Come and contribute to the debate around appstore business models at the 9th Telco 2.0 Exec Brainstorm on 28-29 April in London.]
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