There is an epic battle taking place before our eyes, in our pockets and in our wallets. Smarthones have come to dominate consumer behavior and the headlines of media. What is the newest development with the iPhone? What are the newest and hottest Android devices this week? Can Microsoft make a dent in the mobile market? What kind of tricks does Amazon have up its sleeves? Does Facebook have a plan to tap into consumers' wallets through mobile devices?
Make no mistake, the pipeline between users' bank accounts through smart devices is what each one of these companies is looking to tap. Each one of these five major American technology companies is taking a different route to this one goal. Yet, each one of these companies is taking a different route to the same goal. Let's break down the roads that each one of these companies is taking in the quest to win the Mobile Platform Game of Thrones.
The Game Of Thrones
To borrow from George R.R. Martin's epic "A Song of Fire And Ice," the "Game of Thrones" is set around the war for Westeros, a continent in a fictional land laden with political intrigue, war, magic and strange and exciting characters. There are a plethora of correlations we can make between the major OS providers, OEMS and major third parties in the mobile space.
For instance, Apple has a dominant position in the mobile OS space and a pile of money to push around the rest of the ecosystem. In Westeros, Apple would be the Lannisters of Casterly Rock. With Android Google has a vast but unaffiliated empire. To a certain extent, we can call Android the Free Cities across the narrow see from Westeros - rich and powerful but with no centralized power player outside of the fact that Google is the gatekeeper. Google itself could correlate to the Stormlands controlled by House Baratheon. Microsoft also has a lot of money but a struggling platform with Windows Phone. It is not unlike the Kingdom of the North, centered around Winterfell and House Stark. Facebook does not have a mobile OS to its name but make no mistake, influences much of what happens in the mobile OS wars, much like House Tyrell of The Reach. Amazon is large and dangerous and nobody quite knows exactly what kinds of things it may be doing in the background. Sounds a lot like the Martell's of south Westeros in a place called Dorne.
There are other players outside of the five major kingdoms. BlackBerry has seen some troubles, much like the Riverlands of House Tully. Nokia has aligned with Microsoft, much the way that the Iron Islands have been ruled by the Starks. Samsung wields influence across the ecosystem, like the slave cities to the east of Free Cities (in no way am I actually saying that Samsung has anything to do with slavers, it is a metaphor).
Just as each of these kingdoms have different strengths, the goal for each is simple: to gain the throne and rule dominant over the rest. We see this play out on a weekly basis among the OS makers.
AppleStrengths: Hardware, application ecosystem, closed system, money, developer ecosystem, popularity.
Weakness: Closed-system, ubiquity, incremental innovation.
Apple is a funnel that channels money. This is done fundamentally though hardware tied to iOS that has captured the imagination of consumers since 2007. As a singular player, Apple is the most dominant entity in mobile computing. It lures consumers in with slick hardware that is the primary mode of revenue for the company. As we have seen though, it is not just hardware that sells devices. Apple is a conduit for software through the App Store and iTunes. The idea is to be able to store that content locally on the device. That is why Apple sells its iDevice line in growing increments of storage. Even iTunes Match and iCloud are designed towards this content funnel towards local storage. Essentially, you can have more content than you can reasonably keep on your iDevice and store it in Apple's cloud for you to peruse and download back to the device when you want something new.
Roadmap: Software and content creates incentive to buy hardware which is where Apple makes it true money.
Weakness: Open system, fragmentation, application revenue (problem for developers).
If Apple has created a funnel, Google has created a net. That net is what got the company to this point in the first place. Google's stance has always been: the more people on the Internet, the better we will do. It is the same approach with mobile. The Android Market and content ecosystem is designed to get people to buy Android devices and the OEM partners that use Android create a landscape that dominates by its variety of devices at different price points across mobile carriers worldwide.
The idea is to get as many people using the platform as possible and get them to use search, which it can sell ads against and to download apps where it can place ads with AdMob and AdSense. Unlike Apple, the application ecosystem is not a source of revenue but Google has advantages with its cloud approach and native apps like Gmail, Talk, Voice and Calendar.
Roadmap: Smother them with numbers and cast the net to get users to use search and apps that ads can be sold against. There may be a difference in this approach eventually if the Motorola acquisition goes through and Google decides it needs to start making money off hardware.
MicrosoftStrengths: Patents, differentiated OS, developer ecosystem, partners.
Weakness: Application ecosystem, consumer mind share, differentiated OS.
Unlike Google and Apple, Microsoft makes money through Windows Phone by selling licenses. This is the same thing it has been doing with Windows for years. One of the reasons that Windows Phone has not taken off quite yet is because it has not matched the ubiquity of Android across carriers with different devices nor the software to device conduit that Apple has created. Apple makes money from hardware, something that Microsoft has almost never done outside of the Xbox. Microsoft also has not been able to make the same dent in search and advertising that is the core of Google's strengths. When it comes to the important aspects of creating value in mobile, Microsoft is at best second or third tier in each category. Hence, it sues the pants off of Android OEMs to create value out of the ecosystem that was otherwise not available to Microsoft. The company has made more money at this point from the royalties it is paid from OEMs making Android than it has from Windows Phone.
Roadmap: Microsoft's main problem is that the popular channels for creating money out of mobile are not its strengths. It is not dominant in search, ads, content or apps. It is fairly good at licensing its OS and has a stout legal arm. For Microsoft to take off with Windows Phone, it is going to need its loyal developer ecosystem help the mobile platform transcend Apple and Android and make money on the margins through its app ecosystem and licensing.
AmazonStrengths: Cloud services, content services, e-commerce services.
Weakness: Does not create its own OS, does not have an advertising strategy, patents, developer ecosystem, fundamentally third-party.
When it comes to mobile, Amazon is diametrically opposed to Apple. iOS wants users to download content, Amazon wants people to use its services and consume its content. There are no bells and whistles with the Kindle Fire's specs, it does not have what you would expect a lot of mobile devices to do, like have a camera, GPS or a microphone. The Fire (and to a lesser extent the other Kindles) is a store in your hands. Apple stresses that iOS can help you "do" things while Amazon wants you to "consume things." Just look at the issue of local storage. Amazon does not have any. Everything goes to the cloud, even the browser.
This approach will not work with an Amazon phone. Phones by nature are functional devices. If Amazon is going to create value with phones it will need to build its own flavor of Android into a completely different OS than what is on the Fire because services only go so far on a smartphone without applications that have device access to fundamental characters such as a contacts list, accelerometer, GPS, camera and microphone.
Roadmap: Sell hardware for cheap and sell services and content.
Weakness: No OS, no robust payments system, no hardware.
Of the major tech companies, Facebook's mobile approach is much different from the rest of the others. It has no operating system, does not plan on having an operating system and everything is based on the Web. Even its native apps are based on the Web and wrapped for whatever platform is being used, a la the PhoneGap approach. Facebook's mobile approach is the same as its Web approach: get people on the platform and start having them share their lives. Take that data and monetize it.
Facebook is in a unique position to disrupt all of the above through its approach to Web apps. Though it does not have an application repository at this time, there is nothing stopping Facebook from creating an HTML5-based app store that it pushes on the masses through its native apps. The idea right now is that apps will be spread through the social graph and that will be a better approach to app discoverability than searching and actual app store.
Roadmap: Set itself up to disrupt with HTML5 and Web apps while focusing on Web innovation and the social graph.
Five Companies, Five Approaches
What is the common theme for these five companies? It is the fact that each one comes at the same issue from a intensely unique set of strengths with is clearly seen in how it approaches the mobile space. Apple: hardware through software. Google: ads through search. Microsoft: licenses through software. Amazon: cheap hardware buoyed by content and services. Facebook: social graph through mobile apps and sharing.
The lines blur often between the companies. Facebook is on every platform. Two of the best iOS applications are the Google and Bing dedicated search apps. The Kindle Reader app is everywhere and so is the Amazon store. These companies are competing against each other but they are also built on top of each other.
Where do your align your allegiances? Let us know in the comments.