monopoly smartphone tablet OS dominant standard de facto newdigitalcafe Randy GiustoI’ve been involved in a discussion recently in The Business and Technology Forum on LinkedIn revolving around the question — “Should smartphones and tablets work on a standard operating system? “ — based on comments from Deloitte that state “The emergence of a de facto standard is very important to everyone involved in the smartphone and tablet markets. Technology industries with a single dominant provider of hardware or software tend to have economics very different from those with multiple providers.”

I challenge this assumption.

As I went on to point out, I believe that someone needs to remind Deloitte that technologies with very dominant players are called “monopolies” and that we have laws both in the U.S. and EU against that. These conditions stifle competition rather than encourage it. Apple was not a dominant player in PCs, nor were they in MP3 players, smartphones, or tablets when they first rolled out their now historic products. Others were. In a monopolistic segment, Apple wouldn’t have been given a chance. Maybe they would have in MP3 and tables because those segments hadn’t scaled yet, but the PC market was big as was the mobile phone market. In Deloitte’s vision, Apple, with years of under 10% market share, should not have been allowed to exist.

According to Deloitte’s, in mobile phones and smartphones, Nokia should have remained king as it sold millions each day, effectively stifling any competitive work coming out of Apple, Google, RIM, etc. over the past five years. But that didn’t happen.

When any market segment gets very large, inevitably there is a shakeout of players, standards, etc. Any segment, not just technology. Three seems to be the optimal number with scale. In the case of smartphones we had six OSes just two years ago. We are now down to iOS, Android, Windows Phone, and QNX, and some may argue Bada although its shipments are questionably small and its direction hazy. We’ve shed Symbian (which was #1) and WebOS recently— let’s face it, its future is questionable at the moment. There is room for maybe three smartphone OSes two years from now as the market segment reaches scale.

One of the comments on the forusm was also around the post-PC era and post-OS era in favor of the cloud. PC growth has maxed out, and while some may say we are in the post-PC era because of scale (mobile devices sellin the millions, not millions like PCs), PCs will remain the content creation platform of choice for years to come, especially in business. Margins may be slim in PCs, one reason why HP is trying to get out, but they’re not great in smartphones either. “It’s the apps stupid!” is the cry of the day when it comes to realizing where the ROI and margins are.

I don’t think we’re getting close to the post-OS era because of cloud. Many people don’t trust the cloud for obvious reasons- security, identity, control, etc. especially as cloud becomes a power struggle between some very large companies that people have issues with already. That won’t stop the cloud movement from happening; it just won’t replace everything overnight. Are you ready, willing,and able to trust everything your business does, everything your household does to Google, AT&T, Verizon, IBM and a few others? In many ways cloud is an evolution of client/server. Remember when “that” was all the rage and would replace everything?

There may not be many advantages to one person having multiple OSes personally in their household, or at their place of work. But there are many advantages of having multiple OSes, frameworks, development platforms in the marketplace. And that’s because it breeds competition and innovation. The question is “what’s the optimal number?” And the answer is three when a market segment reaches a certain scale (it’s two with PCs). Without that, we’re at the mercy of the monopolists.

And don’t forget, open source runs counter to any closed OS or dominant development platform. But we see that even open source is not truly open depending on how it is implemented and by who.

No, one de facto, dominant dog is not the answer.

– Randy Giusto