And this is how the Mobile Application ecosystem will start mimicking the behavior of the World Wide Web.

Application stores are to the Mobile App Ecosystem what search engines are to the World Wide Web – a platform to discover content and applications. Most sites on the world wide web are free and rely purely on advertising to generate revenues. We will soon see this replicating on the mobile app ecosystem, where a majority of the applications will be free with ad support, to generate revenues. We are already seeing platform owners such as Apple and Google, acquiring mobile advertising engines such as AdMob. It is in the interest of these platform owners to promote free apps with ad support, as it gives them a recurring source of revenue. However, there will exist a market for paid apps, just like there are sites on the web which charge for premium content.

In conclusion, developers and app ecosystem owners will shift their focus from the current model of making and selling paid apps to a model where they will get recurring revenues by making their apps free and incorporating ads.

But……

Game producers spend a considerable amount of time and effort in trying to develop exciting games.Their development skills are geared towards producing content on smart phones and smart devices(e.g the ipod touch). Any game producer looking to put realtime human multiplayer support in their games would require server side development skills and would also need to invest in setting up and supporting the infrastructure. A few game developers that do manage to set this up face a bigger hurdle,which is that of creating a user base ,large enough to support and sustain such a system.There is clearly a huge gap between their needs and their capabilities.

With the introduction of Game Center in iPhone OS 4 ,Apple has made an attempt to fill the void by creating an ecosystem, which will help support these game developers.They can now take their single player games and add multiplayer support to it.The system will take care of the end to end requirements of game developers, right from discovering players,inviting them for match-ups,transferring game data between players to publishing scores and maintaining leader-boards.

But…..

There are a couple of inherent weaknesses in Apple’s solution which Google can exploit if they play their cards right.The first drawback in Apple’s solution ,is that it only addresses the iPhone/iPad/iPod Touch platform.It’s tough to argue on why this is the case, but it’s important to remember that Apple still just controls 15% of the smartphone market.Game producers don’t just stick to one platform,they produce Game titles for all popular platforms. Unlike Apple and in-spite of being the creator of the Android OS, Google can help create an ecosystem which can be used by game producers across all platforms.The second drawback in Apple’s solution,is that it still does not have a perfect solution to address the human need to compete with friends and contacts.Google can leverage on it’s existing Google talk and GMail infrastructure to build a network where a user can easily compete with his friends and contacts.

If Google can pull this one off, it will succeed in creating an open and thriving ecosystem where there is no restriction on game producers and everyone enjoys a level playing field.And with this ,Google can literally take the ‘Game’ to Apple .

Commentators and analysts have given their views on it and most of them have focussed on how, despite having a winner in webOS, Palm failed because of their atrocious marketing campaign plus the fact that they were tied to sprint when they launched the pre and the pixi. Can’t argue much about that, but there was also a big fundamental problem with this attempt at Palm resurrection, the loss of the old Palm ecosystem.

Palm (Handspring) was the first company to make a successful transition from just a PDA to a PDA with phone. The Treo line of phones were one of the most popular smartphones in the early part of the last decade. Some of the first application stores on the web were sites like Handango, PalmGear etc. that were built to satisfy the ever growing demand for applications on the ‘Treo’. The Palm developer community produced tons of applications, despite the severe restrictions placed by the Palm OS environment.

Consumers absolutely loved this, resulting in them buying plenty of applications for their devices and becoming extremely loyal to the company – to the point that if they wanted to buy a newer phone they would buy a newer ‘Treo’.

With so much going for them, Palm still managed to botch it up because they failed to innovate in terms of both hardware as well as the OS. Instead of trying to fix this, they went ahead and tied up with Microsoft to bundle their OS with the ‘Treo’. This antagonized a lot of the native Palm OS developers and consumers who actually saw a regression in terms of phone quality and performance.

The ecosystem that they had helped create was withering.

Consumers started moving to better phones, developers began developing for more lucrative and ‘geared for the future’ platforms. The application stores began supporting more device platforms with less emphasis on Palm OS. Incredibly, Palm’s answer to this was to spin-off the company making the OS, selling it to ACCESS while it tried to keep it’s focus solely on the hardware.

The last remnants of the ecosystem also got destroyed.

When Palm finally started to ‘get’ the fact that an ecosystem (software, developer, consumers) is as important as the platform (as shown by Apple and BlackBerry) and created the webOS, it was too late in the day. Consumers and developers had moved on and had different expectations, which were in part set by the iphone and the android devices. The old application stores are no longer relevant in their segment since most device/OS manufacturers now had their own inbuilt application stores. For Palm, building the new webOS was actually the easy part, building back the ecosystem was just too difficult.

Now the entire sale/resurrection drama is again in full flow. Will the new buyer be able to ‘resurrect’ Palm and give webOS a new lease of life? I don’t know.

The only take away from this is: platforms which do not learn to nurture their ecosystem are destined for failure.

I disagree…

Microsoft isn’t just another startup which needs to come out with something revolutionary to make the right kind of buzz and capture market share.They just need to get it right once and Microsoft has the marketing muscle to pull it off.Microsoft has to be realistic though, given the state of the mobile OS market they cannot possibly expect to get more than 10-15% of the market share.Going ahead the OS market will increasingly get fragmented and no single OS is going to see the kind of dominance that was enjoyed by symbian OS.Some may argue that this is too less and it would be much better if Microsoft spends it’s time and resources on something else.That according to me would be foolish,smartphones are increasingly going to be the gateway to future innovation & services and Microsoft needs to have a presence in this market and be in a position to shape and react to the future trends.

So what can Microsoft do?

Microsoft has existing relationships with OEM/ODMs. They work with players like HTC,Samsung,LG,Sony-Ericsson among others.The smartphone market is too important for any of these players to just ignore .What Microsoft need to do is listen to these OEMs, they understand the market and the needs of users.Microsoft should avoid a one size fits all approach while making its new OS.OEMs make devices for all segments and different segments have different needs.Microsoft should come out with a bare  bones implementation of the OS on the device and build features on the cloud.This way it will create flexibilty for the OEMs and allow them to tweak it as per the requirement of the segement at which a smartphone is targetted.

In conclusion,Microsoft needs to adapt to the changing market and come out with a more focussed OS in order to stay relevant in the smartphone OS game.

The problem with LBS is that inherently it is a pretty invasive service.People value their privacy and are generally edgy about reavealing their location to everybody without having too much control over it.People tend to be ok with revealing their location in anonymity.This is the reason why Google Maps is more successfull than Google Lattitude.When people use Google Maps on their GPS enabled phones, their cell tower id is transmitted along with their GPS location ,while requesting for a map.This data is then processed which enables Google to let people,using non-GPS phones to know their approximate location on Google Maps.Google Lattitude is a slight extenstion to Google Maps where people can enable their buddies to see their location on Google Maps.There hasn’t been a serious uptake of Google Lattitude because it has the ability to invade privacy.

So what does the future hold for Location Based Services.Not Bright..but with a slight modification might just pull through.Location Aware Applications will do well and have a better chance of sustaining themselves in the retail world. In this case the service is reactive as opposed to being pro-active.A user can query for any information and along with the query he passes his location information, with the assumption that the information returned will be customized taking into account his current location….So what kind of applications are we looking at.

An Application which provides  traffic details and suggest  routes  a user can take to avoid traffic and  get to his destination.Another application could be one that provides information on public transport utilities based on the user’s location.In a nutshell,any application that will provide a user with information, which he is likely to use on a regular basis, will do well.In conclusion,the quality of the content provided will, in the end decide the future of the service.If the content is useful and something that the user will use often, the service will do well

Apple controls everything that can go into the IPhone..while others don’t

On IPhones ,one cannot install anything without iTunes.This makes it easy for application developers,since this is the only channel they need to concentrate on while building their applications.Especially so for developers making paid applications,they need not worry about any special copy protection mechanisms to prevent their apps from being pirated.Consistent and standard device specification on the IPhone makes it easy for developers to create rich apps with good usability. Users will constantly keep getting new apps and will keep buying!And the only place they can get this from the iTunes store!

The problem with all the other app stores promoted by vendors such as Nokia,RIM etc  is that they have not been thought from ground up.Their devices have not been designed in a way that applications can only be installed through the app store.Their inbuilt mechanism for copy protection,falls way short of developer expectation,with the result that developers need to put in extra licensing features for their paid apps.So this is what i think will happen on these stores,application developers will put the free version of their apps on these app stores and direct users to their site to buy the paid version.This also saves them the commision they need to pay each time a sale of their application happens on the app stores. So if these app stores do not make any money, they will find it hard to justify their existense.And this is why in the current model Apple will win the game while others will need to find novel ways of attracting developers and customers to their app stores.

Android:

Android is Google’s offering to the Smartphone OS world.Mobile devices are an important medium through which people access the internet.Getting into this was an obvious extension of Google’s internet strategy.What has worked for the Android OS  so far is that it is  free and open source.This essentially means that OEMs can manufacture phones based on the OS without having to pay any royalty/license fees.But this, in my opinion is the very same reason why it’s not going to be the OS of the future.With google not ‘owning’ the OS anymore, it will not be able to control what goes into it,the specs of the devices which carry the OS among other things.This will lead to fragmentation and customization of the OS to the point where OEMs would compete to build their own software layers on top of the OS.There will be no one single “Android Experience”.OEMs will come out with different flavours such as touch screen,non touchscreen,different resolutions such as QVGA,VGA,WVGA..etc all matched to suit different price points for their device.Something like this is already happening with Microsoft’s Windows Mobile OS, and we all know what it’s current situation is like!.And for software developers it’s only going to turn into a nightmare making sure that their software works on all flavours of the Android OS while having a consistent user experience.

IPhone:

Apple’s IPhone OS will not suffer from the problems which will eventually plague the Android OS.Apple owns the OS, the device specifications and controls what softwares can go into it(via the App Store).This is what the ‘Apple experience’ is all about.Consistent device behavior,specifications and features will lead to a consistent user experience.But this also has it’s disadvantages.Apple will never come out with a range of phones to cater to different market segments.Eventually human tendency and need for change is not going to be satisfied by Apple merely upgrading it’s OS from time to time.People will want to change devices ,get newer ones and there will come a time when they will not be satisfied exchanging an Iphone for another Iphone!

My guess is the smartphone OS market is going to continue to be fragmented and no single OS is going to have a significant share of the market.As is currently happening  Symbian OS is going to continue to constitently loose it’s majority market share till there is  an equillibrium amongst all smartphone OS.