TXLF: Defining and predicting the mobile "ecosystem"

At Texas Linux Fest (TXLF) on April 2, MeeGo advocate and Maemo Community Council member Randall Arnold took Nokia CEO Stephen Elop to task over his February comments about open source handsets — not on the reversal-of-strategy signaled by Nokia's deal with Microsoft, but on Elop's assessment of mobile devices as an "ecosystem." The Nokia chief misses the big picture of open source's effect on the ecosystem, Arnold argued, but the open source community hasn't done much to prepare for it, either.

Elop was installed as Nokia CEO in September of 2010, after two years heading up Microsoft's Business Division, which oversees Office and various Microsoft ERP and CRM products. On February 11, 2011, he announced that Nokia was pulling MeeGo from its future product lines (at least in the medium term), and would instead ship devices running Microsoft's Windows Phone 7 (a move predicted by many LWN readers as early as day one of Elop's tenure). Although it received less attention at the time, the February 11 partnership deal also placed Microsoft's Bing as the default search engine on Nokia hardware and Microsoft's adCenter as the mobile advertising service, and tied Nokia's mapping service into Bing.

All the mobile horses

In his talk, Arnold launched the discussion from what he considered two curious statements by Elop in the CEO's justification for the controversial Nokia-Microsoft deal: "The game has changed from a war of devices to a war of ecosystems," and "It's now a three-horse race." Elop's three horses are Apple's iOS, Google's Android, and Microsoft's Windows Phone 7.

That assessment of the marketplace rang false to Arnold, and he displayed a chart of the major mobile operating systems, including iOS, Windows Phone 7, Blackberry, HP's webOS, Android, Symbian, and MeeGo. Each was represented by a bubble roughly corresponding to its relative market share, with the bubble sorted on the horizontal axis by the openness of the platform. Windows Phone 7 rates solidly among the smallest.

In addition, Arnold said, although historically device makers have favored the more closed platforms because it simplifies the manufacturing and QA process, the chipmakers and carriers are increasingly interested in the open platforms because of the flexibility they can offer to customers. Chipmakers and carriers are driving much of Android's momentum, he said, and chipmakers already account for many of MeeGo's supporters. Considering those factors together, Elop's "three-horse race" comment seems way off base. The stock market did not care for Nokia-Microsoft deal either, Arnold observed, with Nokia's share price dropping 14% on the news and continuing to slide, which shows that the news was not what the mobile industry wanted to hear.

Arnold then paused to invite feedback from the audience on the bubble chart, both on the size of the various OSes' market share, and their openness. Naturally, considering Google's recent decision to withhold the source code to Android's "Honeycomb" release until an unspecified future drop date, some thought that Android belonged further on the "closed" end of the spectrum. Some also commented that Symbian was no longer open source, because Nokia had re-absorbed the Symbian Foundation. Although at the time the released Symbian source was still under the Eclipse Public License, Nokia has since taken the source code down, and moved Symbian to a proprietary license.

What exactly is an ecosystem, anyhow?

Aside from whether or not there is room for a "fourth horse" in the mobile device race, Arnold continued, the open source community ought to consider what a mobile device "ecosystem" really is, and how openness can be disruptive. As Elop used the term, it seemed to mean, broadly, anyone making money from the platform: device makers, carriers, even independent developers.

Device makers are facing shrinking margins on handsets as hardware prices fall and carriers subsidize phones. That accounts for Elop's decision to abandon MeeGo-based products, Arnold said — Elop simply couldn't see how Nokia could monetize an open platform, and viewed Apple's profitable locked-down iOS with envy.

But closing down the platform doesn't guarantee money either, Arnold observed, not even for the application maker. Apple takes a cut of all non-free apps in its App Store, but an ever-increasing number of those apps are becoming free (or at least, zero-cost). The chief reason, he said, is that independent developers are finding it difficult to compete in a marketplace of 100,000 apps, so they have had to look for other business models.

The most notable is the subscription service model, where the app itself is a free download, but a small fee is required to connect to the remote service on an ongoing basis. Second to that is the fee-based add-on model, where (for example) a game is available as a free download, but additional levels or content are sold.

In neither model is the openness of the underlying platform a particularly large factor. Furthermore, as is the case with "desktop" web services, Amazon (the de-facto web service infrastructure provider) may actually be poised to become the biggest money-maker of all in the mobile ecosystem. Arnold pointed to Amazon's "Cloud Drive" music-storage service, and asked "what's to prevent them from doing the same thing with videos, or games, or anything else?"

The challenge — and the open question to the audience — is how the open source community fits into the picture, at the platform level (with MeeGo, Android, webOS, and other projects), as well as higher in the stack. If in the long term, web services are where the money is to be made, does source code and hackability of the system matter? As one audience member added, HTML5 is poised to make the platform irrelevant altogether, even for profitable application categories like games.

Arnold, at least, seemed to think that source code and hackability are important. He is a staunch believer in open platforms, with experience on the mobile side to back it up. He was a QA engineer for Nokia's first Maemo device, the 770 tablet, and part of the launch team for the N800. As he explained to the audience, he wants to see handhelds reach the "commodity" point just as desktop PCs did in the 1980s, and get there faster. "I want to install anything I want to on my hardware," he said, without having to jailbreak it first, and without fear that the "IP police" will come after him.

The "open repository" model used by Maemo — where any project, no matter how alpha-quality, is installable if the user adds the right repository to the package manager — might not work for a lot of casual handheld users. But the "Ubuntu Software Store" implemented in Ubuntu is an example of building a user-friendly application store done right; Arnold referred to it as a good "best practices" example.

Feedback

About one third of the session time was reserved for questions and feedback from the audience. As one might expect from a "Linux crowd" the vast majority agreed on the importance of platform openness. One audience member likened the current handset market to the pre-1984 land-line phone market. Before the US government's anti-trust breakup of AT&T, he said, no one could even own their own phone; they had to rent it from the phone company. We are right back in the same position with cell phones today, he observed, and yet no one seems to care.

Where there was less consensus was on Arnold's predictions for the future of the third-party application market and how open source could influence it. Some did not seem convinced that service-based sales were really the future, citing the large volume of app purchases on iOS and Android. Others agreed with that premise, but could not see how the openness of the platform could have an effect. After all, if anyone can develop an HTML5-based application and offer it under proprietary terms, the browser is essentially a "write once, run anywhere" environment that makes the operating system irrelevant.

Arnold responded, in effect, that it was true that paid services would run equally well on closed and open platforms, but that predicting the economics did not make the underlying platform unimportant. Chipmakers and carriers may be pushing for more open platforms for their own reasons, but if the end result is a market filled with PC-like commodity handsets where the user can install any OS he or she wants, the user still wins.

Arnold closed out the session by inviting the audience to send him feedback to further refine the talk for subsequent conferences. As of this week, he said he has already heard from a number of attendees about Symbian and other recent events that may shake up the landscape.

Predicting the future is a risky business, but less so for the open source community than for Stephen Elop. No matter what ships on Nokia's phones in 2011 and 2012, the open source platforms will not disappear. Wherever there is money to be made in the mobile ecosystem, even if the bulk of it is web-delivered services, the cost pressures that come with proprietary platforms will certainly drive more of Nokia's competitors to examine the open alternatives. But now that Nokia's search, advertising, and map services are also intertwined with Microsoft, it may not have as much flexibility to adapt. In the meantime, no one else is standing still waiting to find out — Amazon has opened its own "app store" targeting Android devices, loosening Google's control over the ecosystem surrounding its own product.