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Saturday, November 21, 2009, 02:00 pm PT (05:00 pm ET)

Inside Google's Android and Apple's iPhone OS as software markets

Google's Android is working to match the iPhone App Store's mobile software market but with fewer restrictions for developers. This article is the fourth in a series examining how Android stacks up in comparison to the iPhone as a smartphone software platform, with this segment looking at third party support.

Articles in this series:
Inside Google's Android and Apple's iPhone OS as core platforms
Inside Google's Android and Apple's iPhone OS as business models
Inside Google's Android and Apple's iPhone OS as advancing technology
Inside Google's Android and Apple's iPhone OS as software markets

Previous articles in this series have examined the underlying core technology and business models used by Apple and Google to create their smartphone platforms. This segment looks at how each platform compares in terms of third party software offerings and the market for those apps available to both users and developers, and how they stack up against previous attempts to deliver third party mobile software markets. On page three, there's a direct comparison of the Android and iPhone software stores, along with some serious issues affecting the platforms' futures.

How important are different mobile software platforms? Microsoft’s chief software architect Ray Ozzie recently told his audience that, among smartphone platforms, "all the apps that count will be ported to every one of them." However, this summer Google's VP of engineering Vic Gundotra said that even his well funded company does not expect to port its apps to every platform, insisting that "we're not rich enough to support RIM" and every other proprietary smartphone platform available.

Ozzie's claim is not just challenged by Google, but also belied by the reality that popular platforms always get the best apps first, if not exclusively, and that this makes a huge difference in how attractive the platform is to users. Microsoft knows this is the case in video games, where relatively poor sales of the Nintendo GameCube and the original Xbox resulted in far fewer gaming titles for those platforms compared to the PlayStation 2. Microsoft subsequently worked hard to fund differentiating, exclusive game software for the Xbox 360.

Every other consumer market for products capable of running third party software has similarly required unique offerings to stand out and attract hardware sales that could stoke demand for additional software development in order to keep the platform fresh and popular. While the total number of available apps isn't critically important, the quality, variety and depth of third party offerings are. It is clear that there will not be a large number of successful smartphone platforms that every developer will spend equal resources porting their apps to; there will be winners and losers.

Success and failure in third party mobile software

Apple's iPhone App Store and Google's Android Marketplace are widely considered to be the two most viable mobile software platforms today. Apple boasts a library of more than 100,000 iPhone apps while Google touts around 11,000 apps for Android; both stores are growing rapidly. However, long before Apple and Google first announced their plans back in late 2007 to create mobile platform Software Development Kits for the iPhone and (future) Android phones, a series of smartphones with their own SDKs had existed for more than half a decade.

Symbian, Palm OS and Windows Mobile have been marketed to both users and developers dating back to the beginning of the decade. Other software platforms capable of running across multiple mobile operating systems have also existed for years, including Sun's Java ME (J2ME), Adobe's Flash Lite, and Qualcomm's BREW. These have been broadly licensed among phone makers and adapted by certain vendors such as RIM's BlackBerry or Danger's Sidekick (both of which run specialized Java ME software), LG's Flash Lite phones (such as the Prada, Chocolate, Dare, Venus, and Voyager) and Verizon phones that use the BREW platform to rent game applets through the "Get It Now" service.

Considering how long these various alternatives for creating and selling mobile software have existed, it may seem puzzling that Apple's App Store was able to make such an immediate and profound impact on the mobile software business. What made Apple's entry into the market so successful? In order for Google's Android (or any other aspiring platform) to catch up to and surpass the iPhone App Store, it will have to figure out what has worked in Apple's favor and what has resulted in the failure of other earlier platforms.

smartphone timeline


Third party mobile software success: development tools

Some pundits credit Apple's robust development tools, its market buzz and media attention, or its status as the first mover in its field as being the reason for the company's current success; these factors suggest that a challenger could simply swoop down and take Apple's business away by doing the same thing on a grander scale, an implication that frequently references how Microsoft Windows overshadowed the Macintosh in the mid 90s. None of those factors are really unique to Apple, however.

Apple's App Store success wasn't merely due to the availability of familiar coding tools facilitating new software. If that alone was the key to Apple's success, the much larger reach and far more entrenched ecosystem of third party developers behind Sun's Java ME or Microsoft's Windows Mobile would have resulted in similar success for those platforms. Java has a strong presence in server applications and has been one of the most popular languages and APIs in computing for over a decade; Microsoft's licensed Windows Mobile devices use a different operating system kernel than Windows PCs, but their apps are created using the same tools and very similar APIs to desktop Windows apps. Both mobile platforms have been available for well over a decade, an eternity in tech time.

Microsoft introduced Windows CE (the core OS inside Windows Mobile) back in 1996 with an SDK familiar to Windows developers. It invested lots of effort in making WinCE a viable mobile handheld computer platform in reaction to the 1994 Newton Message Pad, then a PDA platform in reaction to the Palm Pilot in 1998, then a smartphone platform in reaction to the Handspring Treo in 2002, then a portable media player in reaction to the iPod in 2004. Microsoft is now working to build touchscreen handheld devices in reaction to the iPhone and iPod touch. Despite years of massive investment, Microsoft has now reached its 13 year anniversary of WinCE without having attracted the same kind of attention as Apple's iPhone SDK in its first year and a half on the market.

Clearly, just having familiar and functional development tools is not enough, although it is essential. One of the problems limiting the software available for the Newton MessagePad was that Apple delivered largely unfinished and very unique tools that involved a significant learning curve for coders. Both Android and the iPhone provide adequate development tools, although Apple has a significant head start in having shipped its native SDK.

Third party mobile software success: buzz

The iPhone's software success wasn't merely due to favorable buzz either. The Palm OS once created such heady anticipation for devices running mobile software that by 2000, the company's IPO earned $874 million and the fledgling new company (built on a half decade of work within US Robotics and then 3Com) reached a market valuation of $54 billion, twice that of Apple at its own dotcom peak, despite having actual revenues that were only about a tenth of Apple's. That year, the Palm OS was powering 85% of all PDAs as the company broadly licensed its operating system to power some of the first advanced phones on the market.

Palm's unit sales were hovering around 5 million per year, nothing to sneeze at in an emerging market with so much potential. Palm even began licensing its Palm OS to Sony to create a new line of Clié handheld devices. The company also lined up an impressive roster of developers and at one point claimed a library of 50,000 Palm OS apps. And yet Palm's software business never resulted in much actual success for the company or its users, and is now a historical footnote.

Palm's second wind with the Palm Pre and its WebOS this year similarly caught an enormous wave of buzz, but that alone failed to actually result in a sustained success for its second attempt at a software store.

Similarly, Java was once the biggest buzzword ever to grace computing. But while Sun has earned lots of revenues from licensing its mobile version to phone makers, the widely deployed technology hasn't actually created a functional platform nor kicked off any sort of popular and viable marketplace for Java ME developers and phone users with Java ME capabilities, largely because the Java ME platform is so fractionalized between "almost compatible" variants.

It is critically important to generate excitement around a platform, and both iPhone and Android have created lots of buzz. However, Apple has targeted its buzz at iPod users and retail consumers and its own Mac OS X developer base, while Google's buzz has largely been confined to punditry and open source advocates who neither buy a significant number of products nor develop the commercial software that mainstream users want.

Google is not even advertising Android as a brand name. In contrast, Apple now has everyone from broadcast networks to insurance companies to newspapers to rival music services prominently advertising their apps for the iPhone and its App Store within iTunes.

Third party mobile software success: first mover

The iPhone wasn't just first time lucky either. Apple's previous attempt to float the Newton MessagePad in the early 90s as the first mainstream handheld computer platform wasn't successful. Palm or perhaps Symbian could be credited with first mover status in the smartphone industry, yet despite valiant efforts to establish third party development programs, neither has achieved the kind of success Apple has with the App Store.

Danger produced what may be the first functional app store, but could not attract enough third party attention to remain viable. Microsoft purchased Danger and largely dropped it into maintenance mode (without the maintenance), and lots of Danger's original talent has joined Google's Android efforts. However, the ideas behind the innovative software store Danger created have not been put to use by either Microsoft or Google.

Palm and Symbian are now retooling, along with Microsoft's Windows Mobile, to deploy software stores in imitation of Apple. Microsoft's efforts to copy the App Store are lifted clearly from Apple's blueprint, and Windows Mobile kicked off its new Marketplace with thousands of existing developers and their apps created over the past decade and an installed base similar to the iPhone's. Still, Microsoft's store opened with barely a trickle of interest.

The history of high profile failures and reversals of fortune in the mobile business suggest significant potential for Android as a third party software platform, if it can copy what Apple got right and improve upon that. Unfortunately, Google has not copied many of the factors leading to Apple's success, and has instead emulated the course of mobile platforms that haven't done well. The following page outlines how Google's platform strategy differs from Apple in key areas.

On page 2 of 3: Third party mobile strategy, Security, and APIs.