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Mobile software management (MSM) is an umbrella of emerging technologies which encompasses firmware over-the-air (FOTA), user interface management and enterprise device management, which have traditionally been considered applications of mobile device management (MDM). However, MSM extends beyond MDM by enabling management of software at the individual component level and doing so at any point in time, not only post-sales, but also pre-sales and pre-manufacturing. In this second part of the series on mobile software management, I take a look at the industry side of this new umbrella of MSM technologies, digging into the software lifecycle, the industry benefits of software management and the multitude of vendors who are claiming a stake of the pie. For the user benefits of mobile software see part one of this series. This article contains extracts from our recent report titled Mobile Software Management: Advances and Opportunities in Service Delivery. The handset software lifecycle The handset lifecycle consists of three main stages: pre-load (i.e. from concept to in-ROM), post-load (from in-ROM to in-shop), and post-sales (from the time of sale to handset retirement). Mobile software begins life 18-24 months before the handset leaves the factory. Software requirements are captured as use-cases and are translated into specific technology, hardware and system dependencies. The process of requirements gathering, collation, prioritisation, definition and agreement often takes up to six months. Thereafter follows the software development process, comprising configuration management, integration, testing and quality assurance. This phase of software development and integration requires typically another six months. Adding in handset-specific hardware requirements, generation of variants for different channels, operators and regions, acceptance testing, interoperability testing and resolution of last minute bugs results in another six months before the software is finally embedded into the ROM. Post flashing to the ROM, there are additional development requirements regarding channel customisation, addition of specific applications and settings. The handset lifecycle post-sales is much more familiar; the user can personalise the handset with ringtones, or games. We can also envisage new handset features being delivered over the air (as in the case of the iPhone). Why the mobile industry cares about MSM The industry does care for MSM; mobile software management can address a large number of diverse challenges for the various industry players, as we will see next. Handset manufacturers. Handset manufacturers use software to develop, deliver and manage handset features and services across the handset lifecycle. There are multiple challenges for manufacturers: – Software reuse: Software delivery across multiple product lines is inherently complex and costly for manufacturers. MSM and specifically modularisation technologies offer easier software re-use across handsets and componentised software development, integration, testing and delivery. – Variant management: Handset manufacturers have to address the continually increasing number of channels, operator customers and end user segments, each of which requires creation of a unique handset variant. For example, it is believed that Nokia currently manages around 10,000 software releases every month, i.e. discrete versions of applications (SMS, email, browser, Java) for a certain handset model, for a certain region and channel. MSM technologies enable not only pre-load, but also post-load delivery and management of software modules to address channel, customer and user needs of handset manufacturers. – Post-sales services: Tier-1 manufacturers have since 2006 been packaging after-sales services onto their handsets (e.g. Nokia Catalogs, Motorola Screen 3 and Sony Ericsson s TrackID) via specialised clients. MSM would allow this client software to be easily manageable and scalable across handset models. Mobile network operators MNOs face continual challenges in delivering services, particularly as these services are increasingly dependent on handset software enablers: – Variant creation: Similarly to OEMs, operators must offer a variety of software features to target different end user segments. Operator solutions must ideally be capable of managing hundreds of different device models, a challenge that MSM technologies cater to with post-sales software update and componentisation capabilities. In general, MSM can decouple the service lifecycle from the handset delivery lifecycle, so that new services can be provisioned directly to the handset at any time in the handset lifecycle. For example, operator-customised applications could be delivered to the handset post-load via software component updates. – Device base enablement: New operator services (e.g. i-mode, open web strategy or HSDPA network upgrades) are often not supported by the installed device base. MSM technologies can enable the existing device base to support newly launched services, thus generating additional revenues throughout the post-sales device lifecycle. – Post-load handset specification: Typically operators will provide hardware and software requirements to handset manufacturers as fixed, one-off requirements. This is a process manufacturers struggle with, given that operator specifications often exceed 4,000 requirements and are refreshed every six months. By moving part of the handset tailoring or variant creation process to the post-load phase, operators can achieve faster time to market. Independent software vendors (ISVs) ISVs develop software for the device pre- and post-load by working directly with the OS provider, handset manufacturer or operator, or alternatively by providing applications to the device in an after-sales market. Software management challenges for ISVs are evident in pre-load, post-load and post-sales cases: – Pre-load integration: ISVs report that pre-load integration and acceptance testing of software is both complex and resource intensive. An ISV that we spoke with indicated that the lead time for software acceptance testing is 4-8 weeks for the S60 platform, 8 weeks for Java and 10-12 weeks for Windows Mobile. MSM stands to reduce that time-to-market cost by decoupling software acceptance testing from device delivery, i.e. allowing testing and integration to occur post-load and post-sales. – Post-load / post-sales variant management: ISVs catering to consumer applications have to deliver thousands of variants of each application that must be created for the equally numerous flavours and types of software platforms, particularly due to Java fragmentation. For example, software development house Glu Mobile generates approximately 5,000 variants (SKUs) for each one of their top-selling games in order to be ported to 700 device models. As another example, Jamdat shipped 57,000 SKUs of their game titles in 2006. MSM technologies stand to deliver a difference here by allowing application variants to be bundled into a single application that checks for the platform version and adapts the application accordingly. For example in the PC environment where software management is more advanced, Electronic Arts, the largest game developer has to produce 70 variants for each game. Enterprises Enterprises are actively asking for MSM today under the context of specific enterprise applications such as device policy management, ability to manage/update software and applications on the device and inventory reporting. Mobile phones need to be managed as IT assets similar to the PCs on the enterprise network. The requirement here is very much for an end-to-end solution and key to this is security and reliability with service level agreements becoming the norm. MSM provides the ability to gain control over granularly managing software on employee devices in the field. End users Last but not least, mobile software management enables a wide range of scenarios that offer value to end users, such as: – Buy, pick & mix. – Accessorise me. – Dress me up. – Fix me. – Check me up – Supersize me For a detailed discussion of these user-centric scenarios see part one of this series on mobile software management. Behind the industry scenes: deployments and vendors Based on 20+ interviews with software vendors, network operators and handset manufacturers that we conducted for our VisionMobile report on Mobile Software Management, we understand that at least eight trials of mobile software management technologies are underway as of H1 2007. The supply part of the MSM market is in a nascent stage. Despite the early stage of the market, a large, diverse range of vendors are moving to exploit revenue opportunities in mobile software management. The above table summarises key vendors from each category of actors playing in the MSM market: – OS vendors, e.g. S60/Symbian, Windows Mobile, EMP, Mentor Graphics (Nucleus) – Modular operating systems, e.g. BREW and Open-Plug – System integrators, e.g. Teleca, Sasken, SysOpen Digia – Software component management vendors, e.g. Red Bend – Retailers, e.g. Carphone Warehouse – Distributors, e.e.g Brightpoint, Brighstar, Cellstar – Software vendors, e.g. Abaxia, Cibenix – MDM incumbents, e.g. HP, InnoPath, mFormation, Nokia (Intellisync), Sicap, SmartTrust, Smith Micro, Synchronica, WDS Global – Application environment vendors, e.g. Java, Flash Lite Winners and Losers Amidst this emerging market, we argue that winners are operators with an advanced handset software strategy such as Orange and Vodafone and manufacturers who have embarked on a complete software redesign and service-focused modularity like Motorola with their Linux-Java and UIQ platforms. Vendors we have high expectations from include Open-Plug, which offers tools for software modularity; Red Bend Software, which provides a solution to perform software component updating on mobile devices and is already the preferred firmware update partner for several major OEMs; mFormation who has grown its product portfolio to offer a full set of MDM and MSM services, while continually attracting venture capital and securing global deals with tier-1 operators; and Abaxia who has pioneered use of SIM cards for service delivery post-factory. The challenge these providers will face is to build relationships and strike deals with major operators and handset OEMs early on, while the market is still figuring out how to solve’s today s issues. – Andreas The VisionMobile research report Mobile Software Management: Advances and Opportunities in Service Delivery dissects the complex array MSM technologies, reviews eight major vendors, presents several operator case studies and uncovers key market trends within mobile software management. The paper is available as a free download from www.visionmobile.com/whitepapers.

Why Google’s Android is boring: – The Open Handset Alliance is another alliance designed to bring openness to the world (like OMTP, LiMo, LiPS, GMAE, the MontaVista partner programme, Trolltech’s Greensuite alliance & integration project, and many more). – OHA is another industry alliance for building better phones, but with zero phones out in the market. If it weren’t for the G company, it would probably be discounted as slideware. – Android is another Linux stack. We ‘ve already got WindRiver, MontaVista, Purple Labs, ALP, Mizi Research, Trolltech Greensuite, Celunite, Applix, OpenMoko, A la Mobile, .. do we need one more ? – The Android OS (in connection with Google’s OpenSocial) will help Google compete against Nokia’s Ovi, the umbrella of (mostly unannouned) mobile services. Nothing new here. – It shows that Google is not going down the RIA route, but the native application route. – It’s Google’s way of bringing advertising to mobile. Duh. Why Android is exciting: – It is the first software stack to use an open source license and one that makes sense. Android will be made available as open source via the Apache v2 license, which is a non-copyleft license. As such, OEMs, operators, distributors, etc can add proprietary functionality to their products based on Android without needing to contribute anything back to the platform. – Handset producers (new term?) can add/remove functionality easier, without being restricted by component-specific licenses, as is the case with Symbian OS and the Windows CE stack for example. It allows white label phones to be created by design, not afterthought. – As Nomura points out, it’s Google’s attempt to reach mass-market, mid-range phones where Nokia’s S40 and Sony Ericsson’s EMP control the service game. – It will allow not only developer innovation, but also user innovation. ”users will be able to fully tailor the phone to their interests. They can swap out the phone’s homescreen, the style of the dialer, or any of the applications.” (source). See what happened to Facebook which was designed to enable both developer innovation and user innovation; it scaled and scaled beyond all expectations. Why Android is a breakthrough: – It’s the first time a mobile Linux stack gets a major long-term partner, which is what HTC’s chairman said was needed back in September. No other stack can come close to the multi-billion cash reserves that Google amasses. – The Android OS will be offered to OEMs for free, which makes Android the first true disruption for mobile phone operating systems as it accelerates the commoditisation of mobile OSes and pushes the value line several thousand lines of code higher. – It’s the first time that core apps will be equal citizens to downloadable apps. This is a VERY big step forward for two reasons: a) It’s extremely challenging for any OpenOS developer to design a downloadable app that can replace the dialer, idle screen, inbox, calendar, contacts. There’s very few Open OS apps that can replace the idle screen or contacts, but they need serious know-how and access to manufacturer ABIs (hidden binary interfaces), lots of trial & error and licking OEM boots. Out of 1+ billion phones a year, there’s been no innovation on core apps, other than the Vodafone Simply phones, LG Prada, Samsung D900, Windows Mobile 6 dialer and the iPhone. Android is now making this possible BY DESIGN, not afterthought, contrary to all other open OSes. b) By replacing core apps with third party apps, it will be possible (and far easier) to design visually consistent UIs, where the usage experience feels like a single personality, from the startup screen through idle screen, dialer, contacts, shut down screen, without breaking the user experience. And hopefully designing a Barbie UI will be exactly the same drag & drop process as designing a BMW UI. This is happening in Japan already. – It is the first true service platform that allows content to be inserted at any point of the user journey, aka ‘widgets in any application’, aka Magpie (the 2002 Symbian project that was way ahead of its time). This allows core apps (dialer, inbox, contacts, calendar, etc) to come alive, allowing internet services, ads/informercials, content, alerts, etc to be inserted where relevant and in a *context-specific* way. Imagine seeing a weather icon next to a calendar travel entry, or location whereabouts info next to a contact. The Android brings you your entire connected world of services onto your mobile – in the same way that Facebook brings it onto your ‘me-portal’ on the web. Only Android does this by enriching the familiar user journey, not redefining it, acting like a ‘parasite’ or lying on its periphery. The OS of the future might have arrived early. Fingers crossed. – Andreas [update: a few readers have written back to question my optimism for Google’s Android. I could easily have criticised Google’s announcement as many industry observers have done. I chose not to. I believe that the OHA and Android are strategic initiatives from Google, which as more credible than previous Linux forums (LiPS, LiMo and GMAE included) and that there are likely several phones coming out from leading OEMs in 2H08. The New York times seems to confirm this by reporting that “mobile phones based on Google s software are not expected to be available until the second half of next year. They will be manufactured by a variety of handset companies, including HTC, LG, Motorola and Samsung and be available in the United States through T-Mobile and Sprint. The phones will also be available through the world s largest mobile operator, China Mobile, with 332 million subscribers in China, and the leading carriers in Japan, NTT DoCoMo and KDDI, as well as T-Mobile in Germany, Telecom Italia in Italy and Telef nica in Spain.”]

Today s mobile handsets are highly underutilized; beyond calling and texting, tens of typical handset features go unused. Are handsets over-featured, crammed with capabilities that leave most users indifferent ? Why can t the user today pick a handset based on style and then choose the features they would like to include, much like choosing the extras for a new car? Why are today s handsets most limited; why can t you transfer a game from a friend s handset? Why can t you get FM radio functionality on a new 400 smartphone? The answers lie in how the handset software is designed, built and managed through the handset lifetime. Whereas software inside most phones is highly sophisticated, at the same time it is practically shaped into a rigid monolith. In a sense, the phone software from birth to retirement suffers from chronic arteriosclerosis; for all its PC similarities, the software is mostly immutable and unmanageable, only fit for the narrowly-defined purpose for which it was designed two years before being sold. At the same time, the user is little interested on how the handset menus can be coloured red, orange, blue or magenta by the mobile operator, but how the phone could be made a bit more friendly and a bit more personalised. A shallow dive into mobile software management Mobile software management (MSM) is a new wave of technologies that allow the handset software to be turned from a monolith into soft clay. MSM technologies treat the software as malleable from the design stage and embedding on the device, to configuring at the point of sale, installing features post-sale and prolonging its use until the handset is retired . From a technical perspective MSM enables the management (deployment, installation, activation, update, de-activation and removal) of software components (applications, handset features and their dependencies) on any device, throughout the software lifecycle (from architectural design, to manufacturing and post sale). The umbrella of MSM technologies encompasses firmware over-the-air (FOTA), user interface management and enterprise device management, (traditionally applications considered within the scope of mobile device management, MDM) and extends into software variant development, service lifecycle management, feature customization and dependency management. The next diagram shows the taxonomy of technologies under the umbrella of MSM and the relationship with mobile device management. Figure: Taxonomy of MSM and MDM applications (source: VisionMobile research) One fundamental difference beyond MDM and MSM is that, while MDM offers control of the higher-level functionality of the device (e.g. skins, ringtones, contacts backup, antivirus and device detection), MSM extends far deeper into the handset, allowing any part of the internal device software to be manipulated. MSM is a much more powerful and much more complex set of technologies, especially for mass-market (non open OS) handsets; The deeper you go into the handset to manage software components, the more surgery you need to perform. Adding or removing software is like performing organ surgery where each organ is highly interconnected, making interventions a highly complex operation. Mobile software management is a relatively new and still emerging market, both technically and with regard to commercial deployments. But demand and supply are both ramping up to exploit the benefits that MSM brings to both the user and the mobile industry. What does all this mean for the user ? The MSM umbrella of technologies brings several distinct, welcome and newfound benefits to the user: – Buy, pick & mix. MSM goes far beyond installing ringtones at the time of handset purchase. At the operator retail shop, the user can personalise the handset features, for example adding FM radio functionality, upgrading the camera resolution or adding a stereo enhancer feature to the built-in mp3 player. – Accessorise me. A month after handset purchase, the user can log in to the manufacturer s website and accessorise their phone with an automatic photo panorama function or a real-camera upgrade for instant click-to-shoot experience. The features are automagically downloaded and installed on the handset in a matter of seconds. – Dress me up. MSM goes far beyond changing wallpapers. Through a dedicated on-device portal the user can preview and buy complete UI themes; themes that change the way the phone looks and feels, from dialing up a contact to texting and taking pictures. Purchasing a new real-theme morphs the user experience from a pink Barbie look to a sleek, silver BMW look; and themes can change to reflect the user s mood. – Fix me. Operator Telefonica use MSM technologies like firmware OTA to offer customer reassurance; the user does not need to be go into a repair shop when there s something wrong with their handset; instead they can call up customer services and have the software fixed over the air in a matter of minutes. In the near future, handset software will be able to be fixed or upgraded in a matter of seconds. – Check me up Automatic, proactive fault detection means that the user can rest assured that their contract includes a monthly health status check-up and monitoring. Like a car regular check-up, only that in the case of handsets it happens overnight, and without an inconvenient visit to the car service centre. – Supersize me With MSM the user can get the latest and best features and exclusive promotions on the handset before his friends do. Supersizing can be bundled or offered as part of an add-on monthly subscription. Easing the industry s headaches Naturally, mobile software management aims primarily to solve many challenges facing handset manufacturers, mobile operators, service providers and software developers; As such, MSM technologies enable a range of scenarios and associated revenue opportunities for industry players: – Configuration of the handset software as part of 1-to-1 just-in-time customer segmentation at the point of sale, installing, removing and updating features based on the specific customer profile. – Ability to install and update a new application environment like Java MIDP3 or Flash Lite on the existing handset installed base. – Ability to personalise the handset user interface twice a month as part of the user s subscription package. – Upgrade of the handset installed base to support a new 4G network technology and associated data services introduced by the operator. – Granular monitoring and management of the services supported by handsets in the field by an enterprise. – Repurposing of handsets for a new channel and customisation for a specific market segment, after the handset has left the factory. – Component-based software integration and testing as the handset parts move along the value chain, reducing cost and time-to-market for the handset OEM. Behind the industry scenes: deployments and vendors Based on 20+ interviews with software vendors, network operators and handset manufacturers that we conducted for our VisionMobile report on Mobile Software Management, we understand that at least eight trials of mobile software management technologies are underway as of H1 2007. The supply part of the MSM market is in a nascent stage. An evolving puzzle of 10s of vendors principally active in MDM and handset software development are moving to exploit the revenue opportunities in MSM. The next diagram shows how vendors from multiple solution categories are participating in mobile software management. MDM incumbents HP, InnoPath, mFormation, Nokia, Sicap, SmartTrust, Smith Micro, Synchronica, and WDS Global are introducing applications that are increasingly extending into MSM such as service lifecycle management and user interface management. Software platform providers Nokia (S60), Symbian, Microsoft (Windows Mobile), EMP, Qualcomm (BREW) and Mentor Graphics (Nucleus) are enhancing their platform modularity, reshaping the software architecture into configurable, updatable building blocks. SIM card manufacturers like Gemalto are showcasing SIM-driven software configuration. Software houses like Abaxia and Cibenix are launching SIM-based software configuration and on-device portals for browsing & buying software, respectively. Vendors Red Bend and Open Plug are offering solutions for granular feature customization at the software platform level throughout the software lifecycle and across phone tiers. This amalgam of MSM technology and service vendors will be continuously expanding and evolving over the next three years, to exploit the revenue opportunities ingrained in the many user and industry scenarios opening up. – Andreas Coming next: a detailed view of the technologies, players and benefits of mobile software management from the industry perspective. The VisionMobile research report Mobile Software Management: Advances and Opportunities in Service Delivery dissects the complex array MSM technologies, reviews eight major vendors, presents several operator case studies and uncovers key market trends within mobile software management. The paper is available as a free download from www.visionmobile.com/whitepapers.

Welcome to the 97th edition of the Carnival of the Mobilists! This week’s Carnival is hosted at the VisionMobile Forum. It’s been another busy week for mobile industry observers. Om Malik analyses the volume of LBS deals in 1999-2007 and shows how the number of deals is really peaking in 2007; not a coincidence given the numerous GPS-capable handset models on manufacturer roadmaps for 2008. Openwave, once the unshakeable market-share leader in mobile browsers, revealed its 1Q08 revenues and a steep drop in license and service revenue. Mozilla announces Prism, a tool that gives web applications its own window/desktop presence and shows that “the desktop isn t dead at all and that a hybrid approach is a successful way to go”, according to ZDNet’s Ryan Stewart. The blogosphere has also been buzzing with debate as to how soon will Java ME eclipse or become superceded by Java FX Mobile (aka SavaJe). So let’s look at what’s in store at this week’s Carnival of the Mobilists. One of my favourite analysts, Chetan Sharma has written a very detailed and analytical CTIA Wireless IT and Entertainment 2007 Roundup. Chetan writes about the openness touted by Facebook, Microsoft and RIM, the progress in mobile advertising, WiMAX picking up steam, the anachronistic pitches of US operators and how mobile video has (not really) changed. Chetan also comments on the recent activity on the LBS landscape: “I have been working in or following this space since 1995 and it finally feels that there is going to be some activity in this space after years of posturing, delays, and hype.”, which strikes a chord with my thinking; it seems that built-in GPS support by major handset manufacturers in 2008 is acting like a magnet for a horde of LBS startups and deals. On the subject of location services, Tarek Abu-Esber talks about how Google Maps still has minor glitches. Tarek puts his engineering hat on and Fixes GPS for Google Maps on the HTC TyTN II. Abhishek Tiwari postulates the structure of Google’s rumoured mobile OS in GPhone If I Built It. His analysis suggests that the OS would consist of three layers; base OS (where the OpenMoko distribution may be used), messaging/productivity/media (where we ‘re likely to see an integration of Gmail, Gtalk, Orkut and GrandCentral) and application ecosystem/revenue enablement. Abhishek writes thoughtfully “I see a lot of power within the contacts list. The contact list is the user s true social graph, which can offer much more than just phone numbers. “ – I totally agree that the contacts list will become the centre of the user journey, and Google might just show us how. C. Enrique Ortiz at the mobility weblog writes about Interaction Triggers in Mobile Applications. He breaks down triggers into dial + voice, texting, URL, visual tags (2D codes, etc) and radio tags (NFC, etc). Somehow I feel there is an important learning on Enrique’s abstraction for interaction, but the article is very terse. Martin Sauter writes about a popular topic in the mobile industry, IMS vs. Naked SIP. Martin analyses the features and capabilities which the Naked SIP protocol lacks, but which exist in the ‘operator sanctioned’ IMS architecture. Interestingly, Martin notes that Naked SIP is “already implemented in some 3G phones such as Nokia N-Series and E-Series S60 phones”, continuing to say “I have yet to see an IMS capable terminal in the wild”. This is yet another reminder that mobile operators always finish the innovation race last. Dennis Bournique at WAP Review writes about Opera Links, Opera Mini 4 Beta 3 and Opera 9.5. Dennis attended the Rock Opera party at San Francisco (sounds cool!) and writes about how Opera Link can keep your web surfing activity synchronized across all the browsers you use, on multiple desktops and mobile devices, even if they aren’t all running Opera browsers. Dennis explains how Opera Link works and discusses the many new features in the latest versions of Opera Mini, which according to Dennis “delivers a mobile browsing experience rivaling the best browsers on the latest smartphones”. Jason Devitt at Skydeck writes about how Sprint Will Start Unlocking Phones. Following a class-action lawsuit, Sprint Nextel has agreed to unlock customers phones at the end of their contracts and to activate non-Sprint phones on the network – however all is not lost for Sprint. Jason’s short analysis talks about how Sprint could benefit from this change, in terms of net adds and lower CPGA. I like Jason’s realistic view of the repercussions: “Data services may not work, but those looking for the cheapest option in the market won t care that they can t subscribe to VCast.” Steve Litchfield at All About Symbian writes in fury why Motorola and Sony Ericsson need to ‘get’ it. Steve recounts his frustrating experiences from visiting the first Sony Ericsson store in London and trying to snap a picture of the Motorola Z10 at the Symbian Show. “Motorola are appalling, quite appalling at keeping journalists informed and resourced. While, in contrast, Nokia consistently go out of their way to keep a flow of press releases coming, to provide all press materials needed, to run a sumptuous blogger relations program, to think of new and innovative ways to fire peoples imaginations, and so on.” I was also at the Symbian Show and I have to agree with Steve: what on earth were the Motorola PR/AR people thinking when they put these basketball jugglers there, especially in London of all cities ? My friend Ajit Jaokar at Open Gardens writes about Widget once run anywhere and Opera Widgets on KDDI handsets. Ajit makes a thought-provoking observation when he says “widgets are a much more likely driver of client side service convergence”; in other words if operators can ensure that the same widgets are available across handsets and terminals, they have a better chance of delivering service convergence and reducing churn. Antoine RJ Wright deliberates the relevance of Web/Mobile 2.0. Antoine pauses to think out of the box of the ‘2.0 hype’ and concludes “that is where I see a lot of the web/mobile 2.0 movement failing. There are a ton of services and applications out there. But very little that has made Joe and Suzie Consumer run out and try it.” And finally for the fashion-consious reader, Doris Chua asks What s your favourite colour for a phone? The post of the week award goes to Chetan Sharma’s very detailed and analytical CTIA Wireless IT and Entertainment 2007 Roundup. And if you are still reading, stop over to read our lengthy analysis on Motorola s UIQ: Diversion or U-Turn ? which postulates why Motorola’s Linux strategy has been facing an uphill struggle and why theUIQ investment does make sense as a medium-term diversion. Next week tune in to Michael Mace’s excellent Mobile Opportunity for the 98th installment of the best of the mobile blogging! Which reminds me that it’s only three weeks until the Carnival hits the magic 100 number! – Andreas

In a surprise announcement last week, Motorola agreed to buy 50% of UIQ Holdings from Sony Ericsson. Pending regulatory approval, Motorola’s co-ownership of UIQ questions the US-based OEM’s vision for mobile Linux handsets. Motorola has shipped more than 9 million Linux-based handsets to date, while in August reaffirmed its commitment to base as much as 60% of its device portfolio on a Linux operating system by 2012. So did Motorola have a sudden change of heart and was that a diversion or a U-Turn from Linux ? The dent in Motorola’s Linux vision. Motorola has to date made huge investments in building a mobile Linux platform. The investment began in 2001 by Mark Vandenbrink s Beijing-based team tasked to develop an in-market, for-market operating system with reduced costs for the manufacturer. The OS initially known as EZX is based on MontaVista’s Linux-based kernel, and uses Trolltech’s Qt/E (now Qtopia) for graphics and application framework, both of which have been heavily customised by Vandenbrink’s team. Over time, Motorola replaced the 2.4.20 kernel used in EZX with a newer 2.6.10 kernel and renamed the platform to L-J (for Linux-Java) which uses Sun’s KVM virtual machine for supporting third party applications. During Motorola’s 6-year Linux history, the OEM has launched around 15 models (A1200, A728, A732, A760, A768, A780, A910, E680, E680g, E680i, E895, MING, ROKR E2, ROKR E6) for the Chinese market and recently the RAZR2 V8 for the US and European markets. At LinuxWorld in August 2007, Motorola re-baptised the L-J platform as the more brand-policy-friendly name MOTOMAGX and reaffirmed that “in the next few years, up to 60% of Motorola’s handset portfolio is expected to be based on Linux”. The remainder of Motorola’s portfolio would probably be powered by Windows Mobile for enterprise devices, UIQ for high-end handsets, and TTP Com’s Ajar for low-end handsets. Yet only two months later, Motorola bought into a 50/50 ownership of UIQ from Sony Ericsson. As a Symbian spin-off, UIQ (along with its Symbian OS base) is practically a competitor to Motorola’s MOTOMAGX. Is this is a dual supplier strategy for Motorola ? Hardly, as the OEM is under extreme financial pressure and needs to urgently trim its cost base. Motorola s operating profits have suffered a major blow in the last year, dropping from an operating profit of US$ 819 million in 3Q06 to an operating loss of US$ 332 million in 2Q07, according to Fitch Ratings. At the same time its market share dropped from 21.1% in 2006 to 14.6% in 2Q06, according to Gartner. In response, Motorola announced a reduction of 15% in R&D budgets. Is the UIQ announcement a tactical move? Certainly not. Motorola could easily continue licensing UIQ from Sony Ericsson as it did for its five Symbian OS -based handset models to date, the A1000, M1000, A925, A920 and the recent Z8 handset. Analysing Motorola’s change of heart Motorola’s financial troubles are only the trigger behind Motorola’s change of heart in its Linux single-platform strategy. I would argue that there are four reasons for Motorola’s rethink of its Linux strategy. 1. Motorola has been quietly trying to develop a single-core version of its MOTOMAGX platform, in order to reach a planned 50-60% of its handset portfolio, as indicated by the announced-but-never-released MotoRizr Z6. The move from a dual core to a single core architecture would mean a major re-architecture, as a single-core OS has to run both the applications and the modem stack. Virtualisation techniques (see WindRiver, Trango and VirtualLogix) are designed to faciliate single-core OS development, but I suspect Motorola would still have to re-architect major parts of its Linux-based OS even if it used virtualisation. [updated: a reader reports that the MotoRizr Z6 has been released in China and is based on Freescale’s Starcore single-core CPU. According to the same source, the Z6 is far better in terms of performance compared to the ROKR E2. This finding implies that Motorola is 6-9 months ahead of any other OEM in launching a single-core based Linux stack. Well, it turns out that Motorola’s Z6 is based on a dual core Freescale MXC275-30 SoC (single chip) architecture, and not a single core one. This is according to a Freescale presentation which you can find here. The model name has been changed from MotoRizr Z6 to MotoRokr Z6, according to a LinuxDevices report, while the handset appears to be available in 20 countries according to the same report. Moreover, given that no single core Linux handset has been released by Motorola, this would strengthen the argument on how single core Linux remains a challenge for the Linux OEM champion.] 2. Motorola has invested man-centuries into building MOTOMAGX, based on MontaVista s Mobilinux Linux support package and Qt/E (an old version of Trolltech s Qtopia). Motorola has had to add lots of glue and optimisations on top of Mobilinux and Qt/E, and so a migration away from these components would mean significant re-investment. Yet this is exactly what Motorola would have to do if it is to keep its costs down for equipping more than half of its product portfolio with Linux and at the same time to migrate to a new scalable, end-to-end UI framework architecture as other handset OEMs are doing. MontaVista and Trolltech make money by selling developer seats and Motorola had in 2Q06 ordered 200 developer seat licenses (in addition to the 100 they already had). 3. Motorola s 9 million Linux-based phones up to mid 2007 have shipped in China and Latin America, primarily due to the relaxed device testing/certification and operator customisation requirements in these countries. The RAZR2 V8 which started shipping in July 2007 has been the first Linux-based phone for Western and European markets. It is likely that Moto s Linux platform strategy met with long delays due to increased requirements for handset certification (GCF in Europe and FCC in the US), the stringent network interoperability testing requirements (particularly with US operators) and the need to comply with voluminous operator customisation requirements (in Europe these measure at 4,000 lines of requirements per handset and change twice yearly). 4. Motorola has been the leading force behind the foundation of LiMo, its chairman, its chief architect, according to Nomura’s Richard Windsor. In addition, Motorola has committed to contributing to LiMo multiple software components (package model, application execution model, architecture, registry (with Samsung), security policy, certificate manager, event system+input method (with Panasonic/NEC). However, the LiMo foundation has recently more than doubled in size, while its complex licensing models and unfamiliar processes for new contributions has likely resulted in more delays and higher resource commitments for Motorola. As the leader in LiMo, Motorola may have deemed that incorporating LiMo requirements into its MOTOMAGX platform would prove too costly. Why Motorola invested in UIQ The number one priority for handset manufacturers is to make money from handsets. Handsets come first, while software and hardware platform strategies come second. At a time of extreme financial pressures and competition from Nokia and Samsung, Motorola had to stick to its product commitments and seek an alternative software platform for launching its handsets in 2008 and beyond. Ajar, Its other in-house platform which Motorola acquired alongside TTPCom is designed for low-end handsets, not mid-range or high-end ones and was intended to complement the L-J platform. The manufacturer has also launched Windows Mobile based handsets, but these have been targeted to enterprises, not consumers. Motorola has also launched five handset models based on UIQ, the M1000, A1000, A925, A920 and Z8, so why not continue persuing a typical platform licensing strategy ? Let’s do the math. Motorola has been looking to scale it s Linux-based handsets from an estimated 2-3% portfolio share in 2007 to a claimed 50-60% in 2012. Assuming a linear growth and a steady 15% mobile device market share this would mean that the OEM would need to build around 225 million handsets based on Linux in the next 5 years, of which around 50 million in the next two years. Now assuming that a tenth of Motorola’s 2008 and 2009 portfolio of Linux handsets would have to move to UIQ, at $3 royalty, this means a cost of $15 million to Motorola. How much is UIQ worth ? Symbian’s financial statements do not yet account for the UIQ sale, so it’s difficult to tell. Nomura reports that 1.2 million UIQ phones shipped in 2006 (a paltry 2.3% of Symbian-based smartphones), which at around $3 per-unit royalties implies $3.6 million in annual revenues, and at a x10 valuation factor, UIQ is worth around $30 million. Therefore the value of Motorola’s acquisition of 50% of UIQ is the same as the licensing cost for 10% of its 2008/9 planned portfolio of devices, were Motorola to replace Linux with UIQ on these devices. With 1.2 million devices shipped in 2006 and nearly 150 staff, UIQ is definitely a loss-making business. Therefore, Motorola’s move was clearly strategic, with the OEM hoping that the UIQ software will help reduce platform TCO and time to market, at a time of challenged Linux strategy. Motorola would longer-term benefit from reduced licensing costs, a major stake at defining UIQ’s roadmap and hopefully a profitable licensing business once UIQ one-handed interface penetrates higher volume devices. The 50/50 split shows alignment of incentives between Motorola and Sony Ericsson, but also hints at the fragile balance between the two competing manufacturers down the road. The sale of 50% of UIQ also makes sense for Sony Ericsson, who is dealing with a massive and rapidly growing cost base, with employee numbers more than doubling from 142 staff in February to over 350 in October, and new offices in Budapest and London. There are two more noteworthy consequences here: 1. To support Linux developers at a low cost, Motorola essentially handed off development of its Linux SDK to Trolltech. The Norwegian software vendor was probably eager to accept, given the poor performance of Qtopia’s dual-licensing strategy and the industry alignment behind the competing GTK graphics library (LiPS, LiMo and GMAE all endorse GTK, not Qtopia). [updated: I spoke to Trolltech who clarified that they don t have direct responsibility for Motorola’s SDK. Motorola licenses Trolltech’s Qtopia SDK and is free to make it available to handset application developers] 2. Motorola s UIQ strategy will likely lead to a reduced presence in LiMo, particularly since the OEM is heavily resource-constrained and because LiMo has specified a GTK-based graphics stack. To keep it s membership in LiMo and save face, Motorola would most easily contract an ODM to release Motorola-branded devices based on other distributions such as Linux stack vendor Celunite, who recently joined LiMo, rather than re-architect its own stack. Repercussions for Symbian In the short term, Symbian s industry valuation and prospects have been significantly strengthened as a result of Motorola s UIQ co-ownership. In the medium term however, Motorola does not have any ownership in Symbian, and so I doubt the co-ownership of UIQ will impact Nokia s near-majority influence (read: control) over Symbian OS. Longer term, the OS game for UIQ stakeholders becomes quite interesting. The Symbian stack provides little value above the kernel and drivers (Symbian has essential become akin to a board support package) – read the latest specs of S60 (here) to see that not only the application suites and UI frameworks, but also the vast majority of middleware have been drawn out of Symbian OS. In other words, the value of the Symbian OS software stack is similar to that of a zero-royalty Linux-based stack from the likes of MontaVista and WindRiver. [updated: I realise that the above argument is not backed up with hard data. I hope to delve into some research to detail the components in the Symbian stack vs those in MontaVista/WindRiver distros and what is the *sale* value of each component]. However, while academically it s possible to replace Symbian with a Linux support package (kernel, hardware drivers and base OS functions), it is an expensive undertaking, of the order of $50 million. Given Sony Ericsson and Motorola are facing difficult times competing with the Nokia giant on launching successful handsets, large-scale investments in a software platform is hardly the priority these days. Diversion or U-turn ? Motorola s acquisition of 50% of UIQ is clearly a strategic initiative, which will likely continue with the launch of several high-end handsets powered by UIQ in the next year. At the same time, Motorola has far too much invested in Linux. It was only late 2006 when Motorola’s Christy Wyatt, said that There isn t a group within Motorola s 70,000 workforce that isn t impacted by Linux and open source in one way, shape or form . Consequently, UIQ is a diversion, not a U-Turn for Motorola. While R&D investments are being curtailed, the manufacturer will naturally try to re-use its assets and existing Linux-based research, especially since its mobile Linux software know-how is second to none in Western markets. Medium term, Motorola will likely pursue a dual-OS strategy (UIQ and MOTOMAGX), with the more ambitious and demanding handset projects (esp. western markets) powered by the mature UIQ platform. Longer term, the fate of Motorola s Linux platform strategy will depend on the success of the UIQ investment and how UIQ will help the OEM constrain the total cost of ownership, cost of variant creation and time-to-market for its new handsets. Time will tell. – Andreas

The cat’s out of the bag. Google is creating an operating system for mobile phones, according to mainstream news media. A phone OS would make sense for the search & paid advertising giant (after all Google is a software company), but it doesn’t make sense for Google to branch out into making phones, right ? Wrong – and there’s three good reasons for a Google phone. Beyond the gossip and rumours, details on Google’s mobile phone OS has hit the mainstream media. According to the NY times: “In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows Mobile from Microsoft and other operating systems, which are built into phones sold by many manufacturers. And unlike Microsoft, Google is not expected to charge phone makers a licensing fee for the software.” So why would it make sense for the Google software company to branch out into making actual phones ? There are three good reasons: 1. To seed the market Google needs to scale its mobile platform if it is to have any relevance to advertisers. Google can do that by seeding the market with its own phone, hoping that others will follow. 2. To create a reference platform Google creates a commercial proof-of-concept phone that is robust and cheap enough to produce, so that it forms an enticing proposition for any ODM (or even OEM) who wants to use the Google software and service platform. (as in ‘look, we did it, and so can you’). A Google-phone would not only be a proof of concept, but also a proof of viability, cost of ownership and sugar candy for ODMs and OEMs who want to get into the mobile service business (basically, everyone who doesn’t have Nokia’s operating profit margins). 3. To set pricing and marketing norms A good platform strategy player needs to also introduce a product that runs on top of the platform; this is vital constituent of a platform strategy depending on product complementors, so as to set a precedent and the norms for product pricing and marketing. (for case studies see HBR article: With Friends Like These, The Art of Managing Complementors) (updated: there’s actually a fourth reason) 4. To productise the Linux-based software stack According to the same NY Times article, Google’s software stack is based on open source Linux. As experience shows, open source projects cannot be productised without the help of a commercial sponsor. What a sponsor adds is not necessarily money, but commitiment and disciplined drive to move from a beta-state software to a finished, tested, working product. While individual contributors to open source software care about scratching their own particular ‘itches’, commercial sponsors usually care about productising the software in a form that works out of the box, with zero amount of tinkering. In the case of Google’s Linux-based software stack, hardware integration, testing and quality assurance is essential in order to move the open source stack from ‘in a working condition’ to a ‘ready to integrate’ status. A Google phone would provide this needed much productisation and finishing touches to the open source software stack. A Google-phone would make a lot of sense indeed. – Andreas

The GNU GPLv3 license, successor to the pervasive GPLv2 license, was published in June 2007. Following publication several discussions have sprung up regarding GPLv3 s interpretation as well as the perceived benefits and cons as compared with GPLv2. So why the debates and disagreements and is GPLv3 really important anyway? Firstly one must consider GPLv3 in context to GPLv2. To date, GPLv2 licenses the vast majority, typically 60-70% of all FOSS (free and open source software) projects. Moreover the Linux kernel is licensed under GPLV2 and is used in increasing numbers of consumer electronics and mobile devices thus furthering proliferation of GPLv2. These attributes give GPLv2 a privileged position in the league of FOSS licenses. Therefore any successor license has the capacity to greatly impact the FOSS community. Historically GPLv2 was a watershed when first published 16 years ago due to its copyleft properties. These intend that users of the license continue to receive the source code and derivatives of that GPLv2 covered code, thus preserving users freedom to run, copy, distribute, study, change and improve the software . As successful as it has been, GPLv2 has also attracted a certain amount of criticism. These criticisms concern the difficulty in interpreting the license due to the lack of formally defined terms, differing views about what makes a derivative work and ambiguous patent license grant. In writing GPLv3, the FSF (Free Software Foundation and original publishers of GPLv2) set out to rectify these concerns as well as advance the license in light of contemporary themes of patents and digital rights management. Specifically GPLv3 introduces new terms regarding the DMCA (Digital Millennium Copyright Act), a new patent provision and new mechanisms for dealing with anti-Tivoisation. Firstly, the section titled Protecting Users Legal Rights from Anti-Circumvention Law is intended to prevent GPLv3-covered code from being included in technology or products that would be used to enforce the DMCA. Secondly, there is an explicit patent provision in GPLv3 but some argue that the wording used is not particularly clear or straightforward. Thirdly, the anti-Tivoisation section appears to place very specific additional obligations on users to provide source code and its installation information. So what is the impact of these new terms? Is GPLv2 better than GPLv3? What are the differences? What are the similarities? If I were starting a FOSS Project now would I use GPLv2 or GPLv3? In our just published white paper titled GPLv2 versus GPLv3, The Two Seminal Open Source Licenses Their Roots, Consequences and Repercussions we explore these issues in detail. There are many issues that need to be considered in making such decisions and these criteria are explored and reviewed further in this paper. The end of the road seems unlikely, particularly given that nearly 600 mature open source projects have already moved from GPLv2 to GPLv3, a transfer rate of about 10% of existing software projects (see Palamida’s website for more details). Additionally on the 10th September 2007 the Open Source Institute (OSI) announced their approval of GPLv3, thus providing formal endorsement of the license. Whilst time will only tell if GPLv3 continues the successful legacy of its predecessor we can for now analyse the issues and contemplate its future. Liz P.S. We are at the OSiM Conference in Madrid this week, come and speak to us if you are there also.

[last part of the series on five traits of open source and its impact in the mobile industry. See also part 1, part 2, part 3 and part 4.] In early November 2006, Sun proclaimed the most significant shift in Java strategy since the launch of the software platform in 1995. The US software giant announced that it is licensing several key components of the Java for mobile (Java ME) and desktop (Java SE) platforms under an open source license. With this move, Sun provides Java ME and Java SE platform reference implementations not only under its traditional commercial license terms, but also under open source license (GPL) terms. Furthermore, Sun has created a web-based repository for open source Java projects (the Mobile & Embedded community), and announced a governance model for it. It is worth stressing that the Java Community Process (JCP), the process by which third parties can play a role in the future of the Java platforms, remains unaffected. With the open source strategy, Sun s goal is likely to incentivise the industry into adopting a single reference Java implementation and mitigate the threat from rapid market penetration of Adobe s Flash as well as other competing application environments such as BREW. The fundamentals of open source Java To estimate the implications that Sun s Java open source strategy will have in the mobile industry, we should consider four fundamental elements of Sun s licensing and trademark policies. 1. Sun s choice of GPL license, requires third party modifications to be also distributed under GPL for no charge. This dis-incentivises handset manufacturers from even accessing GPL code due to IP contamination concerns. 2. Sun s open source Java phoneME Feature and Advanced projects are reference optimised implementations, but ones which have not been optimised for specific phone hardware. Handset manufacturers today compete heavily on Java platform optimisation to accelerate the performance of Java applications and games on each handset as a means of differentiation. Even if an OEM takes Sun’s optimised implementation of the MIDP2 JVM, they would have to further tweak the JVM to adapt it to their particular hardware and add own memory or speed optimisations. 3. Sun Microsystems retains a trademark to the Java term and has a copyright on the cup & steam logo. Sun requires handset OEMs and Java implementation vendors to pass TCK certification tests for the base CLDC and CDC platforms (at a considerable cost) in order to be able to claim that their handsets are Java Compatible. 4. Sun’s phoneME GPL branch excludes about 5% of the source code corresponding to ‘IPR-encumbered’ code which Sun does not have the right to release under GPL. This means that you can’t build the full phoneME project from source code. On the other hand, Sun did a couple of things right: firstly, contributors to the GPL branch of phoneME have to surrender copyrights; thereby allowing Sun to integrate these changes directly into the commercial branch. This prevents the divergence of the two code branches in a dual licensing model, as happened to Trolltech’s Qtopia. Secondly, Sun receives direct feedback from developers and is able to use that feedback within product planning. Too much an effort, too small a change Overall, I believe that Sun s Java open source policy will change very little in the mobile industry; the choice of the GPL license protects Sun’s revenue stream from licensing of optimised implementations, but scares off handset OEMs (in fact I recently had a conversation with an exec at a top-5 OEM that confirmed just that). Sun does maintain its revenue stream from TCK licensing due to its Java trademark. Was Sun too greedy to choose the GPL ? Perhaps, as Sun’s optimised implementation is mostly licensed to ODMs; OEMs use their in-house optimised implementations. Did Sun have any other choice ? Probably. They could have licensed the ‘core’ JVM under GPL and the hardware-dependent code under a non-copyleft license like the Apache license, so that OEMs could optimise for their hardware. When I mentioned this to Sun last week they sounded interested in the idea, but said it might be too complex from an organisational perspective. I would also argue that Motorola s intentions for releasing Java MIDP3 under open source will likely see more uniform adoption and consistent implementation of MIDP3 across mobile handsets. This is assuming Motorola sticks with its promise for releasing the full MIDP3 source code under the liberal Apache License 2.0; Motorola wants to first test the waters by releasing the code under the Motorola Extensible License, which is a copyleft license. Motorola will also release the TCK under an open source license, which means it will be cheaper for OEMs to certify their implementations as MIDP-3 compliant. – Andreas [this article has been updated following a briefing with Sun at the Informa Open Source in Mobile conference]

[part 4 of the series on five traits of open source and its impact in the mobile industry. See also part 1, part 2 and part 3.] Open source in mobile goes far beyond the confines of Linux-based operating systems for mobile phones. Examples are Sun s Java, Motorola s MIDP3 project, Microsoft s Shared Source Initiative, Symbian s use of open source, Adobe s project Tamarin, Nokia s S60 web browser, Funambol s MDM server, the Eclipse Foundation s open source development tools and the rising interest in open source hardware. One of the biggest disruptions created by open source is in the case of mobile browsers. Since 2003, the mobile browser market had been dominated by three heavyweights, Openwave, Teleca (Obigo) and ACCESS (in addition to in-house browsers used by major OEMs). These companies had been responsible for the majority of mobile browsers shipped, while few manufacturers most notably Nokia had not only been sourcing browsers from third parties but also developing their own browser software in-house. However, in the last few years, the browser market has been facing a number of challenges, namely: – mobile browser per-unit royalties have been continually dropping, following the trend of software commoditisation. It is believed that browsers for mass-market phones today sell at a few pence per device. – mobile browsers are inherently complex software, which have to cope with rendering malformed HTML (often called street HTML ), the numerous evolving W3C standards around HTML, CSS and ECMAScript and the proprietary vendor extensions (e.g. rendering pages designed for Internet Explorer). – as operator walled gardens are opening mobile devices are being exposed to the wilderness of billions web (HTML) pages, as opposed to thousands of simplified WAP pages that we previously the norm. The complexity and diversity of these web pages have called for advanced browsers, which typically take years to iteratively mature, as browser vendor Opera attests. – the differentiating features of mobile browsers lie not in the HTML parsing and the rendering engine, but in the value-added features, such as intelligent zoom and navigation. As these pressures were mounting, a critical point was reached in May 2007; within the space of one week, mobile browser vendor Teleca announced that it halted investments into renewal of Obigo product , while Openwave announced it was up for sale following a 50% tumble of its share price in 12 months. The industry impact has been significant, given that the Openwave and Obigo browser families have claimed the lion s share of the mobile browser market. Behind the scenes, this blow to the mobile browser business was struck primarily by Nokia s S60 WebKit, Nokia s newest browser based on an open source rendering and scripting engine for web pages. While business execution errors may have affected the demise of Obigo and Openwave s business, it is the availability of WebKit, a reliable, open source, core browser engine that essentially drove browser pricing down. Nokia s move towards WebKit also displaced some of its previous browser suppliers who lost a major customer. Furthermore, the open source WebKit has been developed into a first-class browser engine, under the auspices of Nokia, Apple and KDE. The corporate and community backing of WebKit implies that any further efforts to develop proprietary browsers is unlikely to be viable (although Opera and Access are still maintaining their proprietary browser products at the time of writing). For deeper insights on what went wrong with the browser business see Bye Bye Browser. – Andreas [Want to learn more about open source and its impact on the mobile industry? Register for the pre-workshop ‘A Crash Course in Mobile Open Source: Economics, Licensing, Linux, Java and Beyond’ (see here for workshop agenda) delivered by VisionMobile as part of Informa’s Open Source In Mobile conference taking place in Madrid on 17-20 September. Next on this series: Sun s open source Java policy will mean very little for the mobile industry.]

[part 3 of the series on five traits of open source and its impact in the mobile industry. See also part 1 and part 2.] Linux is by far the software most commonly associated with (and often mis-identified with) open source and free software, where free refers to liberty, not costs. However the access to source code, ability to modify or redistribute, or the royalty-free nature of Linux are hardly the reasons why four out of five handset OEMs have adopted Linux. In other words, mobile Linux has not been adopted because of its free software qualities. In 2007, handset OEMs have adopted Linux to varying degrees, from Motorola s portfolio-wide Linux strategy to Nokia s Internet Tablets segment-specific strategic experiment with Linux. The reasons behind the almost-unanimous OEM turn towards Linux are as follows: – Reduced cost and time-to-market. The availability of a stable, high portable Linux kernel, hundreds of supporting royalty-free middleware components, thousands of Linux developer enthusiasts and a growing number of commercial mobile Linux software and service providers mean that mobile Linux is an effective operating system for mobile handsets, both in terms of time-to-market and cost of development. According to Nokia, one of the most successful corporate entities in working with open source, “Linux is the launching pad you need to stand on to be productive .. we have never managed to bring out a product in such a short time, with so few resources . – Wider choice: handset manufacturers have considerable freedom in selecting the middleware components of choice whether from open source communities, or in some cases from closed-source commercial components. A healthy exists in Linux-based software components such as graphics frameworks (e.g GTK+, Qt Core, FluffyPants), application environments (e.g. Qtopia, Hiker, Hildon, OpenMoko, SKY-MAP), multimedia frameworks, PIM middleware, file systems and telephony APIs. – Strategic control: Linux-based operating systems afford manufacturers almost as much control of the platform roadmap as their in-house OSes. Manufacturers are much less dependent on a single software supplier, effectively lowering the cost of switching suppliers, an important strategic consideration. Furthermore, manufacturers are able to steer platform development of their own Linux OS variant in any direction they wish. – Scalability: The Linux kernel has evolved over the years, to one of the most scalable and reliable operating systems, powering commercial mobile devices from low-end single-core feature phones to high-end smartphones. Manufacturers may easily trim unnecessary features or add high-end features such as USB support and VoIP protocols which are widely available for Linux distributions for PCs. – Quality: Peer-review of popular Linux-based open source software provides for fewer software defects ( bugs ). Both Nokia and Panasonic report that Linux-based software for mobile handsets has a high quality and very few bugs, compared to typical in-house software – Innovation: The open, decentralised nature of Linux backed by strong developer communities, makes Linux-based operating systems a good choice for cultivating innovation. Chances are, a component will be already available somewhere in the Linux community ecosystem and can be adapted to a mobile Linux OS. – Andreas [Want to learn more about open source and its impact on the mobile industry? Register for the pre-workshop ‘A Crash Course in Mobile Open Source: Economics, Licensing, Linux, Java and Beyond’ (see here for workshop agenda) delivered by VisionMobile as part of Informa’s Open Source In Mobile conference taking place in Madrid on 17-20 September. Next on this series: How open source is shaking up the mobile browser market.] #opensource

[The Msearchgroove mobile advertising podcast series and close collaboration with VisionMobile continues with a look at ad-funded content and the impact of interactive advertising. And what better senior executive to speak out on this than Patrick Parodi, Amobee Media Systems CMO and head of European operations. His company got in on the ground-floor and has consistently argued that only user-centric (translated: opt-in) services will cover all the bases and boost everyone’s revenues in the end. Next week we pick up with ScreenTonic and keep up the momentum with a top-notch line-up including Hyperfactory, Enpocket, 4INFO, and MoPhat so check back regularly.] alt=”ingameadvertising.jpg” align=”right” /> Take the recent tie-up between Amobee and Anam Mobile, a provider of messaging infrastructure technologies, to deliver a joint solution for ad-funding subscriber originated SMS messages. The solution effectively pays off for both parties: operators can boost their revenues through opt-in advertising, and users have access to a lower cost SMS package (since ads help subsidize the messaging service). It reminds me of the ads and messages that appear at the bottom of email messages, and which we automatically pass around. In a word, that’s the value prop here: a peer-to-peer communication and advertising model that enables viral marketing. (It’s quite unobtrusive, but relevancy is another story.) At the other end of the content spectrum, Amobee sealed a deal with PacketVideo to serve targeted and relevant opt-in advertising impressions within that company’s media platform. Amobee also sharpened its focus on mobile music, teaming up with SDC, a provider of mobile music solutions, to serve opt-in advertising impressions. (The partnership provides SDC s white label music players the ability to serve contextual and targeted opt-in advertising impressions without affecting the mobile music listening experience.) But the real news is deployment and operator interest in ad-funding. Amobee tells me both are on the upswing, so we can expect some operators to reveal their trials and learnings soon. In the meantime, I caught up with Patrick Parodi, Amobee Media Systems CMO and head of European operations, to find out how operators are thinking about this model and hoping to protect their turf at a time when strength as a gatekeeper in this scenario is waning. Patrick, who is also Chairman of the Mobile Entertainment Forum, the leading global trade association representing both the mobile and entertainment industries, believes the “user-paid” model is THE key barrier to the growth of mobile data consumption and revenues. His warning: Adapt or die. Listen to the podcast here. [21:02] [display_podcast] Don’t get fooled again: As the mobile phone is fast becoming a media channel, bringing advertisers on board in a way that creates value for all stakeholders will lead to a better and bigger market for all. Patrick says signs are good so far that mobile operators have learned the lessons of the fixed Internet and finally figured out that giving it all up to Google & Co. is a short-term solution that’s bad for business long-term. “We ve been excited about seeing some operators take charge – taking a more active role in the ad model as opposed to just saying: Well, you know, at this point we re getting commoditized so we should let some of the Web guys come in and figure out how to monetize the audience.’ We re very much on the operators’ side of the fence in this particular battle that is beginning in this space and we feel that they re in a much better position to provide relevancy and to provide an environment that is going to be positive for the user, positive for the media company, positive for the advertiser and of course positive for themselves as they grow their own brand and their relationship with users.” Social media hype: Sure, there’s a lot of excitement about the Facebooks, Bebos, MySpaces and other social networking destinations that we can rattle off. But Patrick thinks there’s also a lot more mileage in SMS, which he regards as the mother of all social networks. “I think our implementation of SMS is probably different than some of the others in the sense that it s not application to person, it s really person-to-person.” This approach underlines the importance of the operator, which sits at the center and makes sure ads are inserted in a way that benefits everyone. By utilizing the unused part of the SMS payload, which is what Amobee enables, an SMS exchange between users can be a vehicle that delivers “an ad impression in a relevant manner.” The operator could sweeten the offer by providing users “some type of benefit to be part of a loyalty program, some type of ability to get an upgrade on their handsets or even a reduced cost for the SMS bundle.” Mobile search matters?: Not until the industry gets it right. “To look at the web and say Well, you know, search is now garnering 50 percent of the online advertising revenue’ and then therefore to assume the same thing is going to happen on mobile is a bit simplistic.” Patrick is lukewarm on search and convinced that when it does finally arrive the user experience needs a rethink. “Clearly, what I ll be searching for on a mobile phone is going to be different. It s going to be much more tied to location and to immediacy.” Don’t get too excited about the tie-up between mobile search and mobile advertising just yet. “I don t see that as being the highest incidences of impressions being served on a mobile phone in the short-term. I think there s much more that s going to happen .The notion of using the unused part of the peer-to-peer SMS payload as a way to deliver an ad impression [is] going to lead to much higher volumes of inventory in the short-term.” [Well, Patrick may believe this play on P2P communications will drive more advertising. However, I would contend that ads in connection with search results conveniently placed when we are in buy-mode, not chat-mode will pay bigger dividends.] Skin in the game:Ad-funded can be a particular boost in the case of mobile games, a market that hasn’t “been able to break beyond the 5 percent of mobile users downloading a game over the air for two years now.” If you figure it’s still managed to chalk up impressive growth, then you can imagine the hockey stick in usage when the price can come down as part of an ad-funded content pitch. “It’s exciting for us to be able to be part of a new business model that is going to boost the number of users by reducing, potentially, the price of a game by 25 – 30 percent.” He adds: “It means that the developer and the aggregator and the publisher are getting paid more based on game plays as opposed to downloads. It s going to have an inherent [knock on] effect, producing better games for the industry. I think a lot of people have complained about the poor quality of mobile games. Well, if the model shifts from a pay-per-download to a pay-per-game play for the developer and the IP owners of these games, you could see how that would have a positive effect overall on the mobile games business.” Look for Amobee to “launch some key video trials” to gather the metrics that will tell us more about the right price point for these types of services and how much the brands and the agencies are prepared to pay for those impressions. More to come: So far only Orange in France has come out of stealth mode, admitting it has launched a mobile ad-funded trial with Amobee. (Brands include Coke and Saab, and the ads are served interstitially during idle time in between levels or while a mobile game is loading.) In Asia, Amobee has tied up with Hungama Mobile, a provider of mobile marketing applications and the largest aggregator of Bollywood and South Asian content globally, to raise the profile of ad-funded content in the South Asian market. (Hungama has already implemented more than 600 mobile advertising campaigns for its portfolio of over 100 leading brands, such as McDonald s, Coca-Cola, Citibank, Apple etc.) What’s next? Patrick expects more of Amobee’s operator customers to go on the record with their trials and results to date. BTW: Patrick can’t share stats, but I did report on this during the 16 months I covered the space (and specifically mobile search) for MoCoNews. Based on aggregated data from multiple trials with tier 1 operators in multiple markets, Amobee reported (last November) that for every user who paid to download mobile content, up to 50 users went for the ad-funded offer. The advertising revenues can be worth as much as four times the equivalent download value. Patrick later told me that, when given the choice, over 90 percent of users opted for the ad-funded version rather than pay full price for ad-free content. Special thanks to the Amobee team and Cristina Whittington @ Nelson Bostock for arranging this interview and my invitation to other companies to keep the pitches coming. If you’re not keen to participate in a podcast, contact me directly to be included in my strategic white paper, a research project I have undertaken for a client to show off the best& brightest in the mobile ad space and weigh their relative strengths and weaknesses.

[part 2 of the series on five traits of open source and its impact in the mobile industry. See also part 1] Open source is in many ways the antithesis of corporate software development. The culture and dynamics of OSS development are defined by the nuances of a software community collaborating over the Internet. A community is typically formed by a combination of paid-for, pro-bono and hobbyist software developers with the same motivation towards solving a particular problem ( scratching an itch in open source lingo). Community members are motivated by personal needs, peer recognition and last (and often least) financial reward. Communities are formed and organised ad-hoc around opinion leaders who are recognised based on the merit of their contributions to the community. This environment defies most rules of corporate software development: – Processes and roadmaps: The mobile industry is accustomed to 100% specified and controlled development environments. However, thousands of open source software projects thrive despite a lack of project requirements and feature roadmaps. Open source development addresses features on an ad hoc basis; OSS projects are thereby evolved, not designed, driven by the needs and wants of individual developers or commercial participants into Linux development. – Partner selection and management: Corporate software development projects rely on warrantees, indemnity clauses, non-disclosure agreements and service-level and marketing agreements. Each agreement is unique to the customer-supplier relationship and takes months to set up, adding up to an expensive relationship management. Moreover, software suppliers are chosen based on RFIs and RFPs which often consume extensive resources and time. On the contrary, open source software comes under oft-used licenses such as the GPL, LGPL and BSD, irrespective of the entities using or developing the software. Use of a few well-understood licenses in open source projects results in significantly reduced product time-to-development and time-to-market precluding customer-supplier negotiations. Moreover, the qualities of a software supplier are often evident through their OSS works, which are open to the community for inspection. – Reversed customer-supplier relationship: In corporate software projects, the customer dictates conditions to the supplier and has control over project requirements, deliverables and roadmap. In open source projects, even if these are sponsored by a commercial entity, the community is the one who owns the project, not the sponsor. It is the norm for the sponsor s corporate agenda to be in antithesis with the incentives of the community members; in these cases the community may take the project in a direction well beyond the control and the desire of the sponsor. As such, the customer-supplier relationship is reversed in open source projects. The community, which may be likened to the supplier, becomes the customer who must be appeased. Managing open source projects can be likened to walking on a tightrope, finely balancing the corporate agenda with community incentives. To win the community s heart, sponsors must dedicate efforts, creativity and resources to the community. – Innovation: Innovation in the software industry is almost always driven top-down; market segmentation and customer requirements filter all the way down to floor-level product decisions. Open source software is completely different. Innovation is entirely anarchic and ad hoc, often resulting in genuinely fresh concepts and product usage scenarios. – Andreas [Want to learn more about open source and its impact on the mobile industry? Register for the pre-workshop ‘A Crash Course in Mobile Open Source: Economics, Licensing, Linux, Java and Beyond’ (see here for workshop agenda) delivered by VisionMobile as part of Informa’s Open Source In Mobile conference taking place in Madrid on 17-20 September. Next on this blog series: ‘Mobile Linux is not about free software’]

[Over the next two weeks leading to the Informa’s open source conference, I ‘ll be looking at five traits which characterise open source software and its impact in the mobile industry, ranging from community culture, to what open source means for mobile Linux, browsers and Java.]Open source software is one of the most hyped, misunderstood, feared and high impact phenomena in the software industry today. The success of Linux, from a pet project to Microsoft s arch-rival operating system has fostered hype for the success of the open source model. The unconventional business models where open source is employed, offer plenty of opportunity for misconceptions. Open source has also given rise to fear of IP contamination due to the copyleft properties of the GPL license. At the same time, open source software has created tidal waves within many facets of the PC and mobile industries, from operating systems to browsers.So what on earth is open source? A Google search produces more than 25 distinct definitions of open source, each one from a different perspective. In practice, there are three distinct contexts in which open source is used today:- Software that comes with an OSI-certified license.The Open Source Initiative (OSI) is a non-profit organisation tasked with maintaining and promoting the definition of open source. The OSI defines 10 criteria for open source software, including that open source software must be freely distributable, access to source code and redistribution of modifications. Hundreds of open source-like licenses exist, of which the OSI has approved nearly 60. The vast majority of open source projects have been licensed under the GPL, the LGPL, the Mozilla Public License (MPL), the BSD License, the Apache Software License, and the MIT License.- A social movement for making source code freely available.For many, open source represents a social movement among software development communities. This movement supports that software should be freely available to anyone interested in using it, modifying it or redistributing it. Community-based development and viral distribution are important characteristics of this movement. The very term open source was coined to avoid misunderstandings arising from the earlier term free software .– Open source as a collaborative development methodology.From a business perspective, open source is a collaborative software development methodology whereby a community of entities and individuals (commercial, non-profit or entirely voluntary) develop software through a transparent, distributed peer review process. Open source development can pool community efforts towards development of a software base that is of common interest to all participating parties, while allowing differentiation through derivatives built upon this software base. In this sense, open source as a business model is the polar opposite to commercial forums, which foster collaboration through exclusive or paid-for membership. Yet in some cases open source development may be equally or more effective at achieving the same goal. An example of a successful open-source based collaborative software development effort is the Eclipse non-profit foundation which is backed by over 150 industry players, including heayvyweights Google, HP, IBM, Intel, Motorola, Nokia and Wind River Systems.Open source started in the early 90s as a social movement in favour of maintaining software freedom; the development of the Linux kernel as a free Unix alternative and the creation of the GPL license were the two defining milestones of that movement. Yet 15 years on, open source has evolved gradually and perhaps unexpectedly into one of of the most succesful methodologies for commercial, collaborative software development.- Andreas[Want to learn more about open source and its impact on the mobile industry? Register for the pre-workshop ‘A Crash Course in Mobile Open Source: Economics, Licensing, Linux, Java and Beyond’ (see here for workshop agenda) delivered by VisionMobile as part of Informa’s Open Source In Mobile conference taking place in Madrid on 17-20 September. Next on this blog series: how open source turns corporate software development on its head]

[The Msearchgroove exclusive mobile advertising podcast series in close cooperation with VisionMobile continues with AdMob CEO & Founder Omar Hamoui. Special thanks to Paul Nash, creative director at fifty50, for designing the cheat sheet for mobile publishers based on input from AdMob’s best & brightest. Paul, together with his colleague matt Harper, is also driving our new design, and a long list of innovations in navigation and site usability that really rock!] AdMob has gained some serious traction since it broke on the scene just two years ago, building up the scale and the clout to take on major league players including Google, Microsoft and Yahoo. In fact, AdMob effectively enables the world’s largest mobile advertising marketplace, having just reached its mega-milestone of delivering over 5 billion ads in the last 20 months one billion of those in the last month. (We covered it here and calculated AdMob generally serves more than 370 ads per second.) Since then the company has quietly and cleverly launched a new advertising unit focused on the iPhone. In plain text, AdMob ad servers will recognize iPhone users and serve up iPhone-specific advertisements, paving the way for the company’s network of 2,000+ publishers to monetize their iPhone traffic and develop iPhone-specific content. And speaking of reach, AdMob has sewn up a slew of deals most notably a tie-up with CBS Mobile, which made AdMob one of its “gang of four” advertising-enabling companies to provide clients ad options ranging from text and banner ads to video interstitials. More recently, AdMob struck a deal with Contec Innovations to deliver ads via Contec’s BUZmob mobile publishing service. Of course, enabling mobile advertisers to place more ads with more publishers creates inventory for all and solves the bottleneck of having more ads to serve than sites to show them on I caught up with Omar Hamoui, AdMob CEO & Founder, to talk about the stellar stats, the competitive landscape and pose the all-important question: When are you going to be acquired and by whom?! The answer: AdMob will stay an independent company for now, but would consider the option more seriously if and when it runs out of steam. (Not likely to happen any time soon since Omar told me off-line that he predicts “on a revenue basis [by next year] we’ll make 6x what we did this year. If I annualize our revenue last year, the year was probably 10x of what we did last year.”) Listen to the podcast here. [23:51] [display_podcast] And a special feature for novice mobile publishers: AdMob agreed to share the secrets of site optimization with our readers. It’s free and fact-packed and you can download it here. Numbers that matter: First, AdMob has hit a new high, serving up 1.5 billion ads per month, and AdMob does not deal in adult period. What are the stats beyond ads served? “Anywhere from 1 to 3 percent are clicking on the ads. There are ads that perform less than that, and there are ads that perform better than that. But I would say that’s a good middle-ground in terms of what click-through rates are.” Beyond that “anywhere from 5 to 10 percent engage with the advertiser or make a phone call In many cases, if the content is free or you’re signing up [users] for free services, then it’s higher than that.” AdMob also collects reams of information on usage, everything from the user’s geography to the device type. It’s great stuff, and Omar is mulling over how to dice and slice it for us all to peruse. In the meantime, here are a few surprises: The U.S. accounts for 40 percent of AdMob’s network; South Africa is also upbeat on mobile advertising a phenomenon that likely benefits from flat rate data plans and aggressive mobile operator mobile data promotions U.S. carriers that pack them in are Boost and Metro PCS – as Omar puts it: They “highly over-index in terms of the percent of users that we re seeing from them.” 40-60 percent of devices on the AdMob network can do mobile video and could therefore receive video ads (probably one reason delivering them is high on AdMob’s agenda ) Partners that pay off: Granted, AdMob’s model doesn’t give operators a cut of the action (or revenues), but Omar can imagine how the shift to off-portal could change all that. “Operators have a unique advantage over anybody. They have data, and that data for demographic information, as well as just user behavior, can be used by advertisers. Even if it s not uniquely identifiable, it can be used by an advertising company such as ourselves to better target our ads. We could increase our CPMs, we could increase our CPCs, and they would rightfully, or should rightfully, be able to charge us for that. If there was some sort of cross-operator standard for providing non-uniquely verifiable data to trusted partners, we would absolutely participate in that and we d be willing to provide a significant amount of the uptick in revenue to the parties that are providing the data. I think that s a really easy example of how we might be able to work with them.” Mobile search that delivers: AdMob bumps up against Yahoo so they are competition for ad dollars. But all mobile search companies could be a boost to AdMob it’s a mechanism that points people to new and interesting sites. Nothing specific at this time, but interest is high. “We don t really have any sort of explorations going at this point but there s certainly an opportunity there for us.” Content discovery is a different matter. AdMob will likely announce a tie-up with an on-device portal company in “the next 3 to 6 months.” Inventory that counts: “We ve gotten to the point where there s a lot of traffic, a lot of page using and more than you can fill with brand advertisers at this point, but what s important to the brand advertisers is not just the volume but the actual content, and I would agree that if you re looking at sort of the high-end sites like the CNN s or ESPN s, or anything like that, then there is certainly not yet a viable amount of content for advertisers to spend a huge amount of money.” He continues: “It s not the fact that it s not available for them to run decent sized campaigns, but what everybody s interested in is just much more content and a lot more standardization so that they know that if they really want to turn up the dials and go up to a huge spend, they d be able to do that without encountering some sort of ceiling on inventory. I wouldn t say we re at the point where demand for advertisers for inventory is so high that their bidding price is up to crazy levels or anything like that. I think it s at a decent point where pricing is still reasonable and advertisers are getting most of what they want, although everybody would want it to be more, if possible.” R&D that rocks (!): So what’s the deal behind the cryptic iPhone announcement? The new AdMob unit “definitely falls more into the R&D category for us.” He adds: “It also allows us to do some really interesting data analysis and we ll probably be talking about that more in the next month or two, but there s a little bit of an ‘AdLab’ going on with the iPhone right now for us and so it s more than just kind of the overall reach because there s a number of devices out there relative to everything else that s still small. It s not a huge revenue driving issue right now; it s more of a learning as well as a R&D issue for us.” The bottomline: Omar can’t go into detail right now but basically it’s about “learning things that are going to help our ads on all the other phones.” Count on Andreas and me to keep a close watch Next week we continue the series with Marc Henri Magdelenat, Screentonic CEO, who will discuss the mix that makes for a successful mobile advertising campaign, the tie-up with Microsoft and the role of mobile advertising.