The following is an excerpt that I’d like to share from the “Android Economy,” a report I recently published that is available on the RaynoReport web site. I hope you enjoy it and if interested, you can find more details below this post!

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The Android Ecosystem

By Contributing Analyst, Randy Giusto

Introduction: Smartphone Transformation

The “smartphone” market is entering a stage of enormous growth and change as it moves from closed operating systems to open ones. Google’s entrance into this market with its open-sourced Android OS could be transformative to the industry.

Let’s talk about how the market has changed. There’s no industry consensus on a smartphone definition, but most people believe it needs an evolved operating system (OS). For many, the first true smartphone came in 1996 with Nokia’s Communicator 9210 and the Symbian operating system.

While Nokia dominated both the global mobile phone market and its nascent smartphone segment, mobile networks shifted from 2G to 2.5G to 3G, and rich data services and mobile applications arrived.  Other operating systems arrived as well: Microsoft’s Windows Mobile, Palm’s Palm OS and WebOS, and Research in Motion’s BlackBerry OS, each with their own proprietary features. Java on feature phones and Linux on some smartphones were considered “open” platforms, but they soon splintered into multiple personalities straining developers’ resources. It wasn’t easy bringing applications to market in volume. In addition, mobile operators, especially in the United States, remained at the center of the handset feature approval process and for years only allowed subscribers to access content from within their own “walled gardens.”

It took Cupertino, California-based Apple, known for ease of use and great designs, to raise the bar both for smartphones and the mobile phone industry in general in 2007, with the debut of its revolutionary iPhone. The iPhone created market buzz, stimulated consumer demand, and re-defined what a smartphone should be. It provided a better integrated experience and design. It was a kick in the pants to all the smartphone OEMs that came before it. But for all its glory, Apple’s platform remains closed and proprietary. They own the stack and the experience, which is why it works so well for those who embrace it.

For over a decade, there’s been a tug-of-war — with device OEMs and developers on one side and mobile operators and technology providers on the other — to establish open standards for mobile devices. In 2002, the Open Mobile Alliance (OMA) formed. That opened the door a bit, but the specter of Open Source, which became popular on the Web, was looming. Everyone knew something was brewing in Santa Clara, and that another giant brand outside of the mobile phone market would make a definitive statement, this time leading with open source.

In July of 2005, Google acquired Android, Inc., a small Palo Alto-based startup that was quietly developing a mobile device platform around a Linux kernel.  In September 2007, the company filed several patent applications around mobile telephony. In November they joined 47 other firms to form the Open Handset Alliance, with a goal to develop open standards for mobile devices based on the Android OS. The cat was now out of the bag.  In October 2008, HTC released the first Android-based smartphone — the HTC Dream, also known as the T-Mobile G-1 in the US. And so Google is now thought of as creating the second biggest psychological shift in the smartphone market (next to the iPhone).

With the writing on the wall, in mid-2008, Nokia purchased the remaining rights to Symbian and declared it to be an open source platform going forward.

Android

Why Android Matters: The First Truly “Open” Platform

As discussed above, the new move toward open mobile systems and an open development environment is a big shift in the industry. There is a lot of debate about “open” and what it means. With Android, Google is emphasizing open systems in two senses:

  • It’s offering open, unlocked phones that can be sold through a variety of channels and can run on any operator’s network.
  • It offers an open-sourced OS, which allows a wide range of developers to build applications for the platform.

Just as the iPhone upset the balance between mobile operators, so will Android, but from a different approach. With the iPhone, Apple controlled the subscriber experience and the operators ceded activation control.  It also created an app store, impacting the operators’ own content stores, and popularized geo-location services. With the iPhone, consumers still had the choice of whether to buy the product from the mobile operator’s retail or online store or from Apple directly. But the iPhone still remained “locked” into an operator.

Google, with its own Nexus One phone, is hoping that consumers, especially in the US, will embrace a distribution model not controlled by mobile operators. By leading with unlocked phones, it’s trying to gain control over pricing and access.

Outside the US, especially in Europe and in Asia, the purchase of a device and the SIM card with access are not typically done at the same time. Many consumers go to retail stores to buy a device and then look for service (a unified GSM network in Europe really helps here). In other areas of the world, there are no device subsidies. Americans have become drunk on cheap mobile phones (via operator subsidies). And yet they complain about the stranglehold that mobile operators have over their device choices, service plan details and costs.

The Android OS is optimized for the web, as one would expect coming out of Google. This could be a huge competitive advantage. In the past, software on PCs and the Web differed greatly from software on phones.  Andy Rubin, Google’s mobile chief, speaking at Harvard Business School’s Cyberposium 15 in November 2009 stated that, “As a company we iterate a lot and now you have a cell-phone platform that you can quickly iterate upon. When were you able to do that on Symbian?”

It is true that most mobile operating systems are not optimized for the Web. Microsoft’s Windows Mobile and RIM’s BlackBerry OS certainly are not. Apple’s iPhone OS is to some extent, but it is not open-source. Palms WebOS is but has found little traction. Nokia has recently transitioned Symbian to open source and was also pushing the development of Maemo-based non-smartphone devices. At the Mobile World Congress 2010 in Barcelona, Nokia announced a partnership with Intel and its own Moblin efforts to create a joint platform called MeeGo for pocketable devices, netbooks, tablets, connected TVs, and in-vehicle infotainment systems.  Symbian was a very closed and fragmented OS in the past. There remain rumors that the Finnish brand may support Android down the road.

Android OS is also meant for more than just mobile phones. It comes with the basic operating system features that one would expect but also includes middleware and other Google-developed applications.  It supports wireless networks and touch-interface technologies. Its browser is based on WebKit, which is an important point. WebKit is the toolkit under the Android environment as well the one under the Phone OS and Safari, meaning that it makes it easier to create mobile applications………

For more information and to purchase a full copy of “The Android Ecosystem, please visit the RaynoReport web site.

Cheers!

Randy Giusto

@randygiusto

randygiusto@newdigitalcafe.com

The Rayno Report Introduces Premium Google Android Report

Are you interested in learning about how the introduction of Google’s Android operating system could change the entire mobile communications market – forever? With the push toward open and unlocked mobile platforms, Android is likely to change many models for building mobile phones and applications.

The Rayno Report has published its first premium research report, a 35-page analysis of the future of the Google Android mobile operating system. “The Android Ecosystem” was researched and written by Randy Giusto, a veteran research analyst (former IDC) who spoke to dozens of companies about how Google Android will change the telecom market forever. The report was edited and published by R. Scott Raynovich, publisher of the RaynoReport.com.

The report, which will be regularly priced at $1,500, is available now for a special discounted price of $1,250 (17% off). It is available at http://www.raynoreport.com/shop.

Android’s introduction is shaking up the entire mobile communications market with the push toward open and unlocked mobile platforms. This reports details all of the impacts that Android is having on the telecommunications market and how it’s likely to evolve in the future.

 

Topics covered by the report:

  • The Android Developer Community
  • Device OEM Partners and the Nexus One
  • Mobile Advertising, App Downloads, and Site Traffic
  • Competitive Hardware and OS Outlook
  • Android Opportunities
  • Summary: What to Expect From the Android Attack
  • Appendix A.: Announced Android Devices
  • Appendix B: Other Android Devices in Development

Android

Companies mentioned in this report include: Acer, Archos, Dell, Garmin, Google, HP, Huawei, Kyocera, Lenovo, LG, Microsoft, Motorola, Nokia, Research in Motion, Samsung, Sony Ericsson, and Symbian.

 

Read this report to learn:

  • How Google Android will change the mobile operating system market forever
  • Which hardware manufacturers are readying Android devices
  • What the impact will be for application developers.

Sample Chart: Mobile Operating System Comaparison

 

 

 

For more information, please see http://www.raynoreport.com/shop.

– Randy Giusto

about.me/randygiusto