The Mysteries of Consolidation
Been thinking a lot about consolidation these days. For many years as different players entered the mobile space, we have been told by analysts that the market will consolidate to a clear winner, and just one or two viable alternatives. I heard that when Palm had several licensees like Handspring, Sony, IBM. I heard it again when Microsoft’s Pocket PC platform began to gain some traction against Palm, and other players were trying to emerge in the PDA platform.
And you hear it these days as well, that the mobile smartphone market will consolidate to one or two main players.
But why does it seem that just the opposite is happening? For us, supporting HanDBase on the Palm OS and Pocket PC platforms in the early days was a challenge enough. Now over the years we’ve added Nokia’s S60, Windows Mobile Smartphones, RIM BlackBerry, and iPhone to that mix. And now there are three other looming platforms that may take hold- Palm WebOS, Google Android and Nokia’s Maemo.
In the world of open standards, open source, etc, why is this happening? I think the main reason is that manufacturers want to own the software and hardware. They feel if they have control over all aspects they can deliver a well integrated product. It worked well for current market leaders RIM, Nokia and Apple, so everyone else follows suit trying to do the same thing.
And in some cases it does appear to be working- there are some really beautiful, functional and well integrated products shipping and soon to ship. And all seem to support developers with SDKs and developer toolsets. With each of these platforms supporting popular web standards like the WebKit browser, many web based apps run well on all platforms as well.
So then, what are the downsides to all of this reverse-consolidation? From our perspective, it’s third party software. Just because manufacturers supply an SDK doesn’t mean everyone will develop every key app for it. And even if they do, can they really afford to treat each equally even though some have a relatively small percentage of their customers on there?
Facebook and Google are two great examples of this..
Facebook is still wildly popular and probably one of the all time top downloads for mobile devices. But while their iPhone app is cutting edge, they only recently released one for Google Android and is decidedly less full featured than it’s iPhone counterpart. And while they were there at the big Palm Pre announcement, there has yet to be any official facebook app on the Palm Pre (see here).
Google has a bunch of apps that they’ve released as either native apps or web optimized apps depending on the platform. Google Latitude is just one example, while Google Voice is another story altogether.
These are big companies, some with thousands of IT and programming staff, and they can’t keep up with the deluge of platforms to support. How is a small company with a staff size you can count on one hand expected to keep up?
This is the dilemma we and many other small programming shops are facing these days. Open source and freeware has driven down the acceptable cost you can charge for an application on a mobile device significantly, and this affects how much potential revenue one can bring in on a given platform. So smaller developers typically choose just one or two platforms to support and focus on and leave these other platforms alone, much to the chagrin of customers using the platforms they passed on. Or they deliver a very basic app on most platforms and can’t spend the time/resources needed to make the app truly wonderful on each of them, much to the chagrin of every customer. Or they deliver a web app that runs on every platform’s browser, but doesn’t feel like a real app and has awkward pauses while loading screens or limited integration with the features of the device.
Eventually it could be this, third party software, that leads to real consolidation in the market. While big companies can create their own platforms and even support developers, it’s the developers who can’t support all of these platform choices. And not just the small developers, but even the larger ones. And eventually customers won’t want to buy the devices that don’t get the attention from their favorite software makers. Something will have to give eventually!
What do you think about this? Do you think that all of these companies can truly succeed simultaneously? If not, which ones will fail and why? What is a developer to do? Looking forward to your comments!