Mobile phone operating systems based on Linux have been around for nearly a decade now (eg. Linux for Mobile - LiMo). Yet it is only with the advent of Google-led Android in 2008 that the market for this really took off. What is the secret sauce Android brought to the party that the Linux-based OS did not already have?

First off, it’s not about cost. Both Linux and Android are distributed without fees and are Open Source Software (OSS). The OSS movement was founded on the idea that the open development of software is more effective for wider adoption than its proprietary alternative. It was advocated strongly by the likes of Richard Stallman with the start of the GNU project in 1983. Put simply, it is about access to source code, freedom to modify and distribute without licence fees. So, it has to be something beyond the “free” tag that has led to Android’s wide adoption.

Two-sided market

The answer lies in understanding the principles of Two-Sided Market (2SM). In a typical 2SM, there are two sets of users who complement each other’s usage, thereby increasing the network effect for enhanced value. For example, operating systems such as Linux, Android or Windows provide a platform that serves users as much as application developers. The platform is of no value unless there is a critical mass of participants on each side. By subsidising Software Development Kits (SDKs) for Windows and nurturing the app development process, Microsoft has created a large development community that continuously meets user needs.

Hence, the users did not actually mind paying the licence fees to use Windows as they gained from the strong network effect created by the suite of applications. On the other hand, in an OSS platform such as Linux, though the copy-left arrangement enabled development of applications that were available at minimal or often no fee, the quantity and quality of applications were just not enough to match the scale of Windows. This explains the limited penetration of Linux as the choice of operating system for PCs compared to Windows, which is a near monopoly.

A key aspect of success in 2SMs is how quickly the critical mass of participants on both sides of the platform is ramped up. The first-mover creates a strong entry barrier for subsequent entrants who cannot dislodge the incumbent, even with a stronger value proposition (such as giving something “free”). But being the first firm to enter the market does not guarantee success; critical mass is crucial. While Linux entered mobile phone OS earlier than Android, the latter was able to attract sufficient number of customers to gain critical mass. How did it do that?

Google could leverage its core assets of search, maps, and the all-important Gmail. These already had a huge PC user base that was willing and eager to transfer to the more convenient Android-based smartphones. All that was required was to combine these core assets with a better user interface and nil licence fees, and Android became an instant hit for the mass market. The app developer community also responded by building more and more applications for Android. And, seeing the surge in both sets of participants in the 2SM, handset makers such as Samsung responded even more swiftly, adopting various versions of Android as quickly as possible and attracting even more users. The huge surge in both the user base and applications created a strong network effect that resulted in Android’s market share nudging 80 per cent.

Sustainability

The OSS movement exemplifies the creative and proactive ways that Intellectual Property (IP) can be deployed to stimulate openness and adoption. However, unlike Linux, which depended on the user community to manage the updates and distribution, Google took control of these processes in an organised way, giving both the users and developers a stable and sustainable working platform.

So, is Android invincible? Strictly speaking, platform markets can get commoditised over time when other platforms offer similar features. New entrants can easily mimic the existing platform and take away market share through attractive pricing and/or user-friendly features. But the switch takes place with the emergence of another unique killer app offered only on the new platform that draws users away from the existing platform.

There are quite a few new platforms in the reckoning today. Apart from Windows 8 being an alternative proprietary platform, others such as Tizen are being quickly adopted as an alternative to Android by handset makers.

Mozilla Foundation’s Boot-to-Gecko (B2G) capable of running native HTML5 Web applications with full device integration, and China’s home-grown operating system called Kylin, based on open source Ubuntu, are also catching on. Unless Google and Android keep up the innovation momentum, the market for mobile OSs could see rapid changes in the future.

(The writers work at Sasken Communication Technologies. Views are personal. )

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