The Operating Systems and Application Eco-Structure of the Smartphones Advance - Research Paper Example

It has been said that within the next few years, smartphones will become the single most important digital device we own. Discuss the implications of this statement. (60%) Evaluate the role of e-commerce and Web 2.0 technologies in Ebay’s and Amazon’s increased popularity? (40%) 1. Mobile Telecommunications – Introduction Mobile telecommunications has been one of the fastest growing sectors in the world (White, 2009), with revenue from telecom services estimated at $1.7 trillion USD globally in 2008 and growing to $2 trillion USD by 2010 (Research and Markets, 2010) Many developing nations, which could not afford or find investment for landline installations that connected the rural areas of nations (and the poor) with telephone lines, experienced a surge of connectivity with mobile telecommunications that in many cases transformed rural life. As the International Telecommunication Union wrote in an influential report released online, “In the developing world, mobile phones have revolutionized telecommunication and have reached an estimated average of 49.5 percent penetration rate at the end of 2008 – from close to zero ten years ago. This is not only faster than any other technology of the past, but the mobile phone is also the single most widespread ‘Information and Communication Technology’ (ICT) today.”(ITU, 2009) The “smartphone,” as it has become known, is changing the way people communicate all over the world in the 21st century. Following Moore’s law, as technology improves, processors become more powerful, memory and speed increase in the mobile device, size & cost diminish, and the functionality & computing power of the hand-held client increases exponentially. (Intel, 2010) Combined with the effects of networked knowledge, online databases, and cloud computing, the hand-held client can access vast amounts of data and display it in near instantaneous fashion to the user, provided that there is a sufficiently fast wireless connection available. As the network infrastructure, bandwidth, and processing power increase, so does the complexity and number of applications available. Marshall McLuhan wrote: “The movie is to dramatic representation what the book was to the manuscript. It makes available to many and at many times and places what otherwise would be restricted to a few at few times and places. The movie, like the book, is a ditto device. TV shows to 50,000,000 simultaneously... Today we're beginning to realize that the new media aren't just mechanical gimmicks for creating worlds of illusion, but new languages with new and unique powers of expression.” (McLuhan, 1960) Following McLuhan’s logic it is clear that the smartphone represents an important new development in communications, a paradigm shift similar in ways to the development of the internet. Just as the world wide web assimilated all aspects of previous media – video, audio, text, magazines, TV, movies, mail, phone, photography, libraries, etc. into a new digital media environment based on networked computers, the smartphone extends the web by adding mobility and portability. Yet, it is not only tracking the light-weight web client that is transformational, it is the new possibilities for application development that are opened up by the liberation of the computer from a fixed office environment, becoming a device that is carried by the individual close to the body nearly 24 hours a day. With geo-location and streaming data, application developers can design for possibilities that did not exist with the stationary model of centralized computing. As the number of accessories to smartphones such as digital cameras, video cameras, temperature & blood pressure sensors, augmented reality headsets, motion sensors, etc. increase, so does the vast complexity of data that application developers have to work with in networking and mapping information. Smartphones are only “smart” because of the applications that run on them and the data that is exchanged through them. With the first satellite smartphones released in 2010 including broadband data capabilities (Ziegler, 2010), and the accelerated development of terrestrial telecommunication data networks across the globe, we may reach a point where every part of the planet has broadband data access to the web through wireless networks. Indeed, in Finland, broadband access has been declared a basic human right. (Ahmed, 2009) While the planet has not yet bridged the “digital divide” between technological access and education when referencing rich and poor, wireless networking is an actual solution that can accomplish that cost-effectively. As smartphones become less expensive, more open, and more powerful, they also become more ubiquitous. Google CEO Eric Schidt was quoted as saying, “Over my lifetime, we are going to go from a small number of people having access to most of the world's information, to virtually everybody in the world having access to virtually all of the world's information. That's because of web search, cheap phones and automatic translation.” (Kiss, 2010) As the operating systems and application eco-structure of the smartphones advance, they also bring into possibility other forms of the mobile thin client, such as the tablet computer. The interchangeable customization of the operating system & applications made for the smartphone & tablet computer, their seamless integration with network servers & home computers, and the “Swiss Army knife” functionality of the pocket device all combine to make the platform one of the most innovative and exciting in IT today. 2. The Smartphone Revolution – iPhone & Google Android Market share of Smartphone Operating Systems (Gartner, 2010) A. The iPhone: In 2010, Apple threatened to overtake Exxon as the largest publicly-listed U.S. corporation by market capitalization. (Randall, 2010) While one of the foundational companies of Silicon Valley and the personal computing market internationally, Apple was vastly outpaced by the Microsoft-Intel platform fusion that developed during the dot-com boom days of the 90’s in terms of market share, but has subsequently passed both companies in value. (Siegler, 2010) The return of Steve Jobs and the iPod revolution changed digital music (Ostdick, 2010), but the company did not soar on Wall Street with investors until after the release of the iPhone. The iPhone changed everything, the entire cultural landscape of computing, just as the original Apple computers had in the late 1970’s and 80’s. As the New York Times writes: “Thanks in large part to the iPhone, introduced in 2007, and the App Store, which opened its doors last year, smartphones have become the Swiss Army knives of the digital age. They provide a staggering arsenal of functions and tools at the swipe of a finger: e-mail and text messaging, video and photography, maps and turn-by-turn navigation, media and books, music and games, mobile shopping, and even wireless keys that remotely unlock cars.’Apple changed the view of what you can do with that small phone in your back pocket,’ says Katy Huberty, a Morgan Stanley analyst. ‘Applications make the smartphone trend a revolutionary trend — one we haven’t seen in consumer technology for many years.’” (Wortham, 2009) Number of Apps Available in App Stores (Mobile Developer Economics, 2010) The main innovations the iPhone introduced were: Touch Screen Display, Keyboard, and Navigation A Mobile device with sufficient memory, storage, & processing power to function as a personal computer Complete web browsing on Mobile (except for Flash) High-Resolution Color Display Video and MP3 Music playback Consumer design & component quality Controlled development environment for custom application programming All of these aspects had been around previously, in one form or another, on various computer platforms but they had never synergized in a way with the public as the iPhone did, capturing the imagination. Despite exclusive carrier agreements with AT&T in the U.S., and limited availability worldwide, the iPhone still broke sales records. (Slivka, 2009) It even redefined how analysts viewed carrier networks. As Fred Vogelstein wrote in Wired: “The carriers had become accustomed to treating their networks as precious resources, and handsets as worthless commodities. This strategy had served them well. By subsidizing the purchase of cheap phones, carriers made it easier for new customers to sign up — and get roped into long-term contracts that ensured a reliable revenue stream. But wireless access was no longer a luxury; it had become a necessity. The greatest challenge facing the carriers wasn't finding brand-new consumers but stealing them from one another. Simply bribing customers with cheap handsets wasn't going to work... It may appear that the carriers' nightmares have been realized, that the iPhone has given all the power to consumers, developers, and manufacturers, while turning wireless networks into dumb pipes. But by fostering more innovation, carriers' networks could get more valuable, not less.” (Vogelstein, 2008) The iPhone defined, and continues to define, what a “smartphone” is in popular terms. However, it did not evolve from a vacuum nor does it exist as a product without competition, so a full portrait of the smartphone requires the history from which it developed, including previous products from other companies, and current challengers. “Report: Apple, RIM losing market share to Android,” (comScore, 2010) B. Google Android The Android operating system, open source, based upon Linux, is to iOS what Windows was to the original Macintosh operating system, basically a clone or re-packaging of all the same features, but with the possibility of going much further due to cross-platform compatibility in hand-set hardware. Consider Apple and Microsoft at the beginning of the PC revolution: Apple chose a closed environment and keeping hardware & software tightly bundled under proprietary license and brand, as they do now with the iPhone & iOS platform. Microsoft, with a rather inelegant DOS interface, essentially copied the Mac’s icon based desktop navigation and user interface, offering it to the much wider market of cheap “IBM clones”. The rest is history, for Microsoft went on to attain over 95% of the worldwide market share in desktop PC operating systems, and remains the standard today. Google is applying the same tactics with the Android operating system, with the main difference of keeping it under open source license and free. The result is the release of the Nexus One, and the rapid expansion of the Android platform bundled with handsets made by third party manufacturers. Just as iOS can be ported to other thin-clients such as the iPad, Android will also form a base, touch-screen OS for tablet computers, operating on a wide variety of different chipsets and hardware configurations. Needless to say, analysts believe this will propel Google to even greater heights and wealth as a public corporation. “Google announced a free, open-source application development platform called Android for mobile devices with the intention of eclipsing existing operating systems from Microsoft, Symbian, Palm and others... Android will have a complete set of components, including a Linux-based operating system, middleware stack, customisable user interface and applications. Google envisions that with Android, developers will flood the mobile market with new applications and online services that can be written once and deployed in many phones, something that, as Google sees it, the current mobile technical fragmentation prevents. The goal: to radically improve the creation, delivery and provision of mobile online services and applications, in the hope that as people find the experience more satisfying, their mobile web and internet usage will balloon, along with online ad revenue.” (Perez, 2007) 3. Tablet Computing – The Next Generation Apple’s release of the iPad marked another turning point in the evolution of personal computing, in a way it is the ultimate thin-client, even if only first generation. As Wired wrote after the press conference announcing the release, “The iPad is designed for reading, gaming, and media consumption. But it also represents an ambitious rethinking of how we use computers. No more files and folders, physical keyboards and mouses. Instead, the iPad offers a streamlined yet powerful intuitive experience that’s psychically in tune with our mobile, attention-challenged, super-connected new century…” “The fact is, the way we use computers is outmoded. The graphical user interface that’s still part of our daily existence was forged in the 1960s and ’70s, even before IBM got into the PC business. Most of the software we use today has its origins in the pre-Internet era, when storage was at a premium, machines ran thousands of times slower, and applications were sold in shrink-wrapped boxes for hundreds of dollars. With the iPad, Apple is making its play to become the center of a post-PC era.” (Levy, 2010) The potential for tablet computers had been championed by industry analysts for years, but previous offerings on the Windows platform of tablet computers were not embraced by consumers, who still showed a preference for laptops over hybrid devices. Pen driven tablet computers that could accept handwriting input or advanced graphic art techniques were sold in niche markets but never penetrated the mainstream until the iPad became a household word. When released, many analysts remarked that the iPad was simply a large iPhone or iPod touch without the phone capabilities. Next generation iPads, and tablet computers based on the Android operating system, Palm OS, and others may include phone, video phone, cameras, and other accessories that extend functionality. The possibilities for the next stage of the digital society are huge with tablets, and their synergy with smartphone applications give huge impetuous to developers to build apps for the platform. “As we’ve begun to embrace today’s incredibly powerful app-capable phones and pads into our daily lives, and as we’ve embraced myriad innovative services & websites, the early adopters among us have decidedly begun to move away from mentally associating our computing activities with the hardware/software artifacts of our past such as PC’s, CD-installed programs, desktops, folders & files.” “Instead, to cope with the inherent complexity of a world of devices, a world of websites, and a world of apps & personal data that is spread across myriad devices & websites, a simple conceptual model is taking shape that brings it all together. We’re moving toward a world of 1) cloud-based continuous services that connect us all and do our bidding, and 2) appliance-like connected devices enabling us to interact with those cloud-based services.” “Continuous services are websites and cloud-based agents that we can rely on for more and more of what we do. On the back end, they possess attributes enabled by our newfound world of cloud computing: They’re always-available and are capable of unbounded scale. They’re constantly assimilating & analyzing data from both our real and online worlds. They’re constantly being refined & improved based on what works, and what doesn’t. By bringing us all together in new ways, they constantly reshape the social fabric underlying our society, organizations and lives.” + Ray Ozzie, Chief Software Architect at Microsoft (Ozzie, 2010) Section II – eBay & Amazon, Web 2.0 e-Commerce: 1. Web Traffic Statistics In evaluating the role of ecommerce and Web 2.0 technologies in the increased popularity of eBay and Amazon.com, one must first verify that both sites are becoming more popular. For example, during the 2009 holiday shopping season, Auction Bytes reports that eBay is actually losing traffic and popularity in comparison to Amazon. “Amazon experienced a 29% surge in unique visitors from September to December, according to data provided by Nielsen, while eBay experienced flat numbers for the last four months of the year. Amazon reached 66.472 million unique visitors in December, up 9% from November and up 8.8% from December 2008.” (Steiner, 2010) “eBay is currently at 2005 levels in terms of unique visitors after peaking in 2006. As the following chart shows, eBay had topped out at 66.193 million unique visitors in December 2006 and hasn't broken the 60 million mark since August 2007. eBay had 51 million unique visitors to its site in December 2009, down 0.27% from November and down 11% from December 2008.” (Steiner, 2010) eBay went through a period where it lost the support of many small sellers due to changes in their feedback system, listing fees, and store policies over the last few years. As eBay and PayPal expanded to include more international sellers from China, India, and other large markets, the selling dynamic of the site changed considerably. Add to this the limited nature of users’ interest on the internet, and examples such as MySpace’s rise and fall, and eBay is clearly in a precarious position despite its profitability and registered user base. Amazon, on the other hand, continues to increase traffic, registered users, and sales, year on year, consistently. The company has barely begun international expansion, with only some European outlets, leaving vast possibilities for future development and revenue growth. As Michael Brush writes, “Since the dawn of Internet shopping, bargain hunters have reveled in the thrill of the hunt for deals at eBay, the online equivalent of an auction house. But the thrill is going, going, almost gone. And eBay's losses are Amazon.com's gains in this battle to sell the most stuff on the Internet -- a battle that is about to take a turn for the worse for eBay. Busy shoppers are already skipping eBay's time-consuming auctions, which they might lose at the last second when a computerized shopping bot slips in a bid. Instead, they're opting for ‘everyday low prices’ via the Internet and, in particular, at Amazon.” (Brush, 2008) Nevertheless, with 57 million visits per month, eBay is still neck and neck with Amazon, and far ahead of rival online shopping portals such as Walmart, Target, Best Buy, and Sears. eBay, to a much larger degree than Amazon, has eliminated its competition and has a business model in auctions that nearly no other website offers. With an inventory-less system that charges the customer three times to make a transaction – to list the auction, as a commission on every sale, and through a processing fee for every payment with PayPal, eBay earned $432 million in profit on $2.25 billion revenue in the third quarter of 2010. (AFP, 2010) Thus, while critics may point to many apparent problems in eBay’s online business, the facts of web traffic, revenue, and profitability position it as one of the strongest companies in the world. Amazon, at number one in ecommerce on the web in both traffic and revenue, continues to grow at a pace that most start-ups strive for, leaving little doubt as to its success in the marketplace. 2. Web 2.0 Characteristics “Web 2.0 is the business revolution in the computer industry caused by the move to the internet as platform, and an attempt to understand the rules for success on that new platform. Chief among those rules is this: Build applications that harness network effects to get better the more people use them. (This is what I've elsewhere called ‘harnessing collective intelligence.’).” (O'Reilly, 2004) Ebay and Amazon.com both were established during the mid 1990’s during the early days of the internet, during which time they pioneered many of the practices that became known as “Web 2.0”. One of the main characteristics of Web 2.0 is database driven content within standard HTML web pages. Both eBay and Amazon were the earlier adopters of database driven content in ecommerce, and during the time when static HTML pages were the standard, this was a very vast difference between what most small online shopkeepers could manage. Thus, eBay and Amazon both leveraged their advantages in the early days of the web through technological superiority in web platforms. Not until open source content management systems became prominent in Web 2.0, and MySQL databases became common on most hosting plans, did the smaller websites begin to have access to the same enterprise-quality software that the large corporate sites were using. Thus in this example, of database-driven content, eBay and Amazon can be considered to have set the standard for Web 2.0. The other characteristics of Web 2.0 can be considered as: Social Networking & Online Community Sites Blogs, Forums, Wikis, and other User-Generated Content Tags, Microformats, Semantic Web, and Keywords Video & Image Sharing – Archives Micro-blogging, Tweets, Cross-Site Link Sharing RSS feeds and Auto-Updating Web Architectures Whereas the database driven web platform that can be custom coded and designed through CSS/XHTML/DHTML/XML/JavaScript and coding languages like PHP, ASP.Net, Ruby on Rails, and others are the software basis on which much of Web 2.0 is built, eBay and Amazon also lead the market and industry with social networking, online communities, and user-generated content. From the start, eBay was a person-to-person network, while Amazon operated more like a traditional store or bookseller. Later, Amazon opened up its platform to third-party sellers and included auctions in its own format, becoming the main challenger to eBay in auctions following the collapse of the Yahoo auction site. Web 2.0 characteristics have again sought to imitate eBay and Amazon in these areas of functionality, but there has been a definite attempt by both companies to add Web 2.0 features to their own platform through acquisitions. This can be seen in eBay’s interest in Ali Baba, PayPal, & Skype as well as Amzon’s purchases of community book review sites, group shopping and coupon clubs, as well as larger ecommerce sites like Zappos. Acquisitions like these have kept both companies at the leading edge of Web 2.0, incorporating innovation from the most popular and successful sites after they have been established. Section III – Appendix: Other Smart Phone Manufacturers Number of Apps Available in App Stores (Mobile Developer Economics, 2010) A. Nokia & the Symbian Operating System If the first generation of mobile phones, providing mobile voice communication and low-bandwidth data transfer only, can be considered Mobile 1.0, and the smartphone as represented by the iPhone and Android platform as Mobile 2.0, there is a gradual improvement of services, increase in application complexity, and proliferation in number of applications that occurs in between, along with the improvement in hardware and network standards. Nokia’s Symbian operating system for mobile phones is an example of this transition period in telecom. Handset makers, network service providers, and third party developers worked together through this stage to gradually add applications to mobile handsets that loaded email, basic arcade games, and web browsing to advanced mobile handsets. Using a base of Linux and customizing it for mobile phones, Nokia is able to sell web enabled hand-sets using the Opera browser. (Opera, 2010) While there is limited application development on the Symbian platform, consumers have largely abandoned it for touch-screen navigation platforms like iOS and Android. “Report: Apple, RIM losing market share to Android,” (comScore, 2010) B. The Blackberry The Blackberry generations of phones produced by the Canadian company Research in Motion are considered by many to be the prototype of the early smartphone, including a custom operating system and a focus on secure, enterprise email communication. Where Nokia developed on the open source Linux platform to build application support and web browsing into mobile phones, Research in Motion primarily built around the Microsoft Windows platform in order to build corporate client base on their enterprise server technology, at which they were hugely successful. But RIM is generally regarded as having been caught flat-footed to the innovations in mobile computing brought on with the advent of the iPhone and Android. To date, they maintain their lead in market share based on popularity in the Verizon network and have released a new series of touch-screen smartphones to compete with Apple, Android, and other hand-set makers, but are still losing market share quickly. “ComScore has just released its latest report on smartphone marketshare, and the trend we saw last month has continued: Google’s Android is gaining quickly on the iPhone, as Palm and Microsoft’s shares continue to dip. The report compares smartphone market share averaged over the three-month period ending November 2009 against the three months ending February 2010. The report concluded that 45.4 million people in the United States were using smartphones in the period ending in Feb. 2010, which is a 21% increase over period ending last November. RIM still has a strong lead over the field, with 42.1% of the smartphone market share, and it rose by 1.3% over this period. But the most interesting story is the rapid rise of Android, whose share grew 5.2%. Apple’s share has remained stable, with a .1% drop.” (Kincaid, 2010) C. Windows Phone 7 Microsoft, like Nokia and Research in Motion, are viewed as having failed badly in keeping up with Apple and Google in the smartphone race. Microsoft recently released Windows Phone 7 as a touch-screen capable operating system intended to compete with iOS and Android. The company has tried redesigning the user navigation interface to provide a “tiled” start page, with large colored squares rather than desktop like icons as found on the other smartphones. Microsoft is integrating many of its own software based cloud services into the operating system, but has yet to capture the consumer and developers’ imagination as a smartphone platform when compared to Android and iOS. Microsoft’s upper management has insisted innovation in mobile telecommunications and smartphones is a company priority. "We were ahead of this game, and now we find ourselves No. 5 in the market," said Microsoft CEO Steve Ballmer, speaking at the D8 Conference in 2010. "We missed a whole cycle. I've been quite public about the fact that I've made some changes in leadership around our Windows Phone software. We had to do a little cleanup." (Leffall, 2010) D. Palm – HP Palm, as noted above, was an innovative company in producing PDA devices that pre-dated the smartphone revolution, and it was also a leading innovator in the sector with the release of the Pre, but it failed badly with consumers and the company was bought by HP. (Hewlett-Packard Development Company, 2010) HP has announced plans to preserve and advanced the Palm operating system by releasing new smartphones and tablet computers based on the Palm OS. It remains to be determined however whether HP will regroup the $1.2 billion it invested when buying the company or if the new devices will be adopted by consumers and developers. E. Motorola, Samsung, Sony, HTC, Huawei, & LG The leading handset makers in Asia, Motorola and Sony in Japan, Huawei in China, HTC in Taiwan, and Samsung & LG in Korea all have produced multiple latest-generation smartphones with the Android operating system. These companies supply most of the market after Apple and Nokia, and will switch to Windows 7, Symbian, or whatever software platform is popular with consumers because they are the hardware base-foundries. These companies also work closely with telecoms, carriers, network equipment manufacturers, and software developers in building the standards on which the mobile web is based. F. Terrastar, LightSquared, & Satellite Phones Recently, the Terrestar company released what was marketed as the first satellite network smartphone. The Genus 1, integrated with the Terrestar 1 satellite, has 24/7 broadband and voice connectivity even in locations where terrestrial networks cannot reach. (Ziegler, 2010) The Genus phone is based around the Windows 6.5 mobile operating system. Released just before the company went bankrupt, the idea of satellite broadband for smartphone networks is not limited to Terrestar’s business model. Harbinger Capital is also developing the Lightsquared network with Nokia based upon the same principle of satellite bandwidth systems. (de Selding , 2010) While the cost coverage ratio can be debated between tower and satellite systems, the latter are too generally unproved and untested with the consumer, and have no popular support in the marketplace currently. Nevertheless, satellite based broadband wireless networks is an important future development path for the smartphone industry. G. The PDA The PDA or “Personal Digital Assistant” is in many ways the proto-type of the smartphone even more than the traditional mobile phone is, for the first PDAs were designed to function as an all-purpose, mobile data organizer, whereas the mobile phone is primarily designed for voice communication. In mobile telecom, a development similar to the web occurred, where data was transported across networks designed for voice communications, forcing engineers to build means of data transfer with greater bandwidth. With this, the evolution from CDMA, Edge, and 2G networks, to 3G, 4G, Evo & other standards that allowed the mobile communications frequency to stream data sufficient for watching video or even making live video-to-video calls. (Apple, 2010) But the smartphone is really only using the mobile technology as a modem or for data transfer, and the basis is the personal data organization of the PDA. Where the early PDAs lacked memory, processing power, battery life, and display resolution, the current smartphones are approaching the level of being considered “mini-computers” rather than PDAs. This is primarily because of the open operating system that allows developers to build applications to run on the smartphone OS independently. Interestingly, two of the most popular and powerful companies developing the early PDAs, Apple with its “Newton” and the Palm with multiple series of signature PDAs, both began developing custom operating systems for the PDA before building smartphones. H. Corporate Landscape - Summary Mapping the corporate landscape of the smartphone ecosystem is important, because smartphones, mobile telecom development, and related hardware & software services represent a $2 trillion USD per year business sector worldwide in 2010. Following the dot.com collapse, mobile telecommunications has been a leading driver of innovation in the IT sector, providing well needed skilled jobs to programmers, engineers, and technicians. The smartphone is only the end product of a long chain and network or corporate development that involves thousands of companies worldwide. Examples include: Hand-Set Makers: Apple, Nokia, HTC, Samsung, LG, Sony-Ericsson, Motorola Chipmakers: Qualcom, Broadcom, Apple, Arm Holdings, Nvdia, Intel, AMD Carriers: Verizon, AT&T, Vodaphone, Sprint, Orange, Deutsche Telecom, etc. Network Routers: Cisco, Juniper Networks, HP, IBM Telecom Hardware: Ericsson, Powerwave, Dragonwave, Huawei, Alcatel-Lucent Tower Management – American Tower, Crown Castle, Fiber Tower Mobile Software Development – Facebook, Glue Networks, Zynga, etc. Complex modern economies can only expand through innovation and invention. Section IV – References AFP. "EBay earnings ride on PayPal success." Live Mint, Oct 21 2010. 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