Saturday, October 29, 2011

Battle of the Ecosystems

After months of waiting and countless strategic adjustments, Nokia finally released its new flagship phone - the Lumia 800 is billed as the first true Windows Phone and hailed by some critics as the most beautiful smartphone ever built. This phone heralds the return of Nokia and more importantly, the rise of a third mobile ecosystem.

The question is, does the world need another ecosystem? Apple and Google are already locked in a fierce two-way battle, and the arrival of the juggernaut combination that is Nokia Windows will only add fuel to the fire. The more they fight, the better it is for everyone else. Competition works wonders for innovation, and I don’t think there’s any industry in the world right now which is innovating faster than the mobile sector.

Compare the things you use today to the things you used two years ago - clothes, appliances, car, laptop. Chances are there may be some slight changes, but if you compare your phone today to the one you used just two years ago, it's an entire generation's worth of changes. Two years from now, you’ll feel the same way about the phone you're using today. Two years is a period of incremental change for most industries, but it is an eternity in the mobile business.

At that time, a Blackberry phone was the ultimate status symbol. the Iphone had just entered the zeitgeist, and Nokia was still the undisputed king of the mobile world. As for Android, most people didn’t even have a clue what it was.

Fast forward to today. We are living in a world dominated by Apple and Android. Who still uses Nokia phones? Symbian has long been out of the smartphone race. Blackberry is a shadow of its former glory, and all signs point to its eventual demise. In this two year span, some challengers emerged to disrupt the market, but eventually became collateral damage as the battle wore on. Bada will survive through the sheer scale of Samsung, but will never gain traction. WebOS and Meego, beautiful as they are, never even had a fighting chance.

In this tough market, it's not enough to have great hardware - a thousand other OEMs can make great-looking, crazy-specced handsets selling at half your cost. It's not enough to make great software either - the most seamless user experience cannot trump a buggy system backed by three hundred thousand apps. The only way to actually compete nowadays is to be a standard, to have a flourishing cloud of third-party apps and services around the product. On this front, it has now come down to a battle between three ecosystems.

Powerful as they are, the big players themselves have to keep innovating in order to survive. With the release of IOS 5, Apple has built ever higher walls to its hallowed garden. IOS is the soul of the world’s bestselling smartphone and the gateway to the richest app ecosystem in the planet. With new features like the highly-touted Siri virtual assistant, IOS has become all but impossible to beat. Its only Achilles’ heel is the restrictions enforced by its tightly-controlled approach.

Android has exploited this weakness to a fault, as it has everything for everyone. From the cheap brandless phones to the bleeding edge in mobile technology, this OS covers it all. This has of course resulted in fragmentation, so Android tries to solve this Ice Cream Sandwich. This latest OS iteration even manages to encroach on Apple’s territory with a smart, beautiful UI redesign.

Windows Phone, as the latecomer to the party, carries the burden of differentiation. It has done this through the acclaimed Metro UI, but its ecosystem remains weak. By partnering with the biggest phone manufacturer in the world, it hopes to change that. What’s interesting with Windows Phone is that it presents a middle solution between the opposite approaches of IOS and Android. It’s not as restrictive as Apple yet not as chaotic as Android. It’s already a compelling alternative today, but the true ace in Windows Phone’s sleeve is Windows 8. Once this OS is released, it could only propel Windows Phone to greater heights.

So it’s a game of thrones for these three tech giants, which will drive down prices and inevitably lead to faster innovation. The question of who will win is not really important anymore. The market is big enough for three winners, with each OS serving different consumer needs through their unique competitive strengths. The only problem now is that the abundance of choices would make us want to change our phones more often, but that is of course a good problem to have. In the battle of ecosystems, the consumer is the true winner.

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