Competition for the Mobile Applications Ecosystem Grows

By: Bill Hughes, Principal Analyst, In-Stat
(Top News, 14 Jul 2008)

The success of any smartphone platform depends upon having a complete suite of applications and a vital development community continuously making enhancements. Without good applications, end-users will select another smartphone or end up staying with a feature phone.

The competition for these developers has reached a new level with the opening of the Apple App Store for the iPhone 3G. The effort by Apple to build its developer ecosystem for the iPhone 3G is impressive. Their effort has included coverage by the mass media, not just the trade press, investments to provide corporate funding for developers from the iFund, state of the art software tools that are available at nominal cost, and a revenue sharing model that is innovative because of its simplicity.

However, it is important to put this situation into perspective. They are entering a space that already has major competitors. In the U.S. alone, there are eight organizations that offer a distinct development environment for applications intended for mobile users. This is in addition to the developers programs that wireless operators use to serve their customers.

All of these organizations, including Microsoft for Windows Mobile, Qualcomm for BREW, and RIM for its BlackBerry product line, have years of experience in supporting these developers. With very few exceptions, most have a much larger installed base of devices and are projected to sell more devices in the coming years.

For example, Apple has sold over 5 million of the original iPhone, and their projections for the iPhone 3G are about 10 million units over the next 12 months. Compare this to the installed base for Symbian. Manufacturers have made over 200 million Symbian-based phones. In-Stat projects that cellphone manufacturers will sell over 80 million Symbian based devices in 2008.

The decision for developers to support a particular technology or technologies is highly strategic. Being a member of too many developer ecosystems dilutes company resources. Being a part of too few may result in low sales.

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