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December 28, 2012
Mobile Platform Wars: Winners & Losers in 2012

[This post first appeared on the VisionMobile blog on 9 July 2012.] The game of ecosystems is in full bloom, with each player attempting to draw as many developers as possible around their platform. As we finally see some signs of consolidation, VisionMobile Senior Analyst Andreas Pappas, talks about mobile platform wars, the rules of engagement and identifies the winners and losers in this game of ecosystems in 2012.

Moreover, we’re proud to introduce VisionMobile Visualisations – live. These are interactive graphs with tons of data from the Developer Economics 2012 research!

Below, a very small sample of our newly-launched Visualisations, depicting how Intentshare varies by the platform developers choose. The sample contains just one variable. For more filters and full functionality, visit data.visionmobile.com

INTENTSHARE INDEX
Percentage of developers planning to adopt each platform, irrespective of which platform they’re primarily using now.

The graph above is just a sample of what our new Visualisations can do. Visit data.visionmobile.com for full functionality. Just bear in mind that you need a minimum resolution of 1024 × 768 px to access.

Developer Economics 2012 confirmed that reach remains the strongest motive for platform selection, as indicated by 54% of developers. (You can download a free copy from here, thanks to the sponsorship by BlueVia.) With Android and iOS accounting for 82% of total smartphone sales in Q1 2012, according to IDC, these two platforms can now guarantee near ubiquitous smartphone reach for developers using them. As a result, developers’ mindshare is being increasingly dominated by these two platforms. More specifically, Android is being used by three-quarters of developers and iOS is being used by 66% of developers.

Mobile platform wars: market is consolidating but still in early stages

This duopoly has resulted in development platform consolidation. In 2012 developers are using 2.7 platforms concurrently compared to 3.2 platforms last year. However, less than 20% of mobile subscribers currently using smartphones. This indicates there are still opportunities for competitors to build up market share in the years to come. Ericsson estimates that the smartphone market will exceed 3 billion units in 2017. This means that the addressable market for all contenders is significantly larger than the current installed base, which is slightly less than a billion.

While developers are adopting the platforms with the highest reach, they are also keeping an eye and hedging their bets on the long-tail of platforms. These are the platforms with lower reach but which allow them to extend their footprint to a wider user base or that will allow them to reach niche and underserved markets now and in the future. This is evidenced by Developer Mindshare for mobile web, Windows Phone and BlackBerry and the high Developer Intetshare for Windows Phone.

VisionMobile - Top platforms being used - Developer Economics 2012
Despite mobile browser fragmentation issues, mobile web is being used extensively by developers (53% Mindshare) as it provides a low-barrier, cross-platform entry point into mobile app development. While it trails behind native development platforms in terms of API richness and performance, it provides a good alternative in several cases, particularly when cross-platform development is important. Mobile web will continue to evolve and to integrate native features. While native apps will probably remain one step ahead, the choice between the two will not always be clear-cut.

As Tom Hume, founder of FuturePlatform argues,

“User expectations will always be formed by the native platforms, and native will always be a step ahead of HTML, as that’s in the interest of platform vendors”.

He explains that “today, HTML5 performs poorly with new user interface paradigms like Microsoft’s Metro UI. Tomorrow, HTML5 will need to catch up with ambient sensing. It’s always going to be a cat and mouse game.”

Mobile platform wars: Windows Phone is the new cool

Windows Phone sales continue to disappoint, a year on, with 2.6 million devices sold in Q1 2012. However, according to Gartner, interest among developers continues to build up. The Developer Economics 2012 survey indicated that irrespective of which platform they currently favour, the majority of developers who plan to adopt a new platform, plan to adopt Windows Phone (57%).

Overall, 42% of developers using iOS and Android indicate that they plan to adopt Windows Phone. The intention is slightly stronger among developers using mobile web (44%) or other, less popular platforms. However, the intention doesn’t seem to vary significantly by the platform developers currently use.

At the same time, seeing as last year’s 32% Intentshare for Windows Phone added only 1% to this year’s actual Mindshare, it becomes clear that converting intention to adoption is not a given. Windows Phone is indeed the new cool. A platform generating increasing developer buzz and anticipation. To turn the buzz into developer buy-in at the levels of iOS and Android, actual adoption must follow soon or fall flat.

To attract more developers into Windows Phone, Microsoft also needs to rethink its tool strategy. At present, developing on Windows Phone 7 requires a Windows PC, which presents a barrier to entry for iOS developers and the many web developers who are using a Mac. Support of WP7 development on a Mac is therefore crucial for reducing the onboarding friction for iOS and web developers.

There are indications that Windows Phone sales are picking up in China and the US. Of course, the growth is nowhere near the rates that iOS and Android devices achieved in their first years since launch.

Survival of the fittest: platforms disappearing into oblivion

As with previous Developer Economics reports, we measured each platform’s defection rate, i.e., the percentage of developers who recently abandoned or plan to abandon each platform. BREW and Symbian fared the worst. They do not lack scale; on the contrary, BREW is still strong in the feature-phone segment, and Nokia shipped in four times more Symbian devices than Windows Phone devices in Q1 2012. Yet, both ecosystems lack the ingredients necessary to generate the kind of network effects enjoyed by iOS or Android.

BREW, the first mobile platform with an app store (launched by Qualcomm in 2001) is approaching the end of its shelf life. After some initial success attracting carrier attention, BREW failed to compete against low-end Android designs targeting similar market segments. However, developer exodus is a much greater and more measurable testament to the terminal decline of BREW than any other market indicator: 60% of developers now using BREW indicate they plan to stop using it. We therefore believe that Qualcomm is quietly preparing to discontinue or sell the platform.

Not surprisingly, following last year’s burning-platform drama by Nokia, Symbian showed the second-highest rate of developer attrition among the platforms in our survey. Developers see little reason to invest time or effort in the platform, given its effective end-of-shelf-life somewhere in 2013. Symbian developer abandonment rate has rapidly accelerated from 39% of developers last year to 52% in 2012. Clearly, developers heeded Nokia when it unambiguously declared it would bet its smartphone business on Microsoft.

Despite substantial handset shipments – 11 million units in Q1 2012 – and the promise of a completely revamped BB 10 platform in the second half of 2012, BlackBerry is very close to becoming an endangered species. RIM has had significant difficulties competing with iOS and Android as its USP, based on messaging, is becoming increasingly irrelevant with email and instant-messaging now being commonplace features across all platforms. As a result, RIM experienced a 25% year- on-year decline in shipments in Q1 2012, with investors pressing the company to break up and sell its assets.

BlackBerry is being abandoned by a relatively larger number of developers that use it as their main platform (14%), when compared to other major platforms and a large number of developers overall (41%). There are still developers that are loyal to BlackBerry. The platform continues to bring in more revenues on average than any other platform (4% more than iOS and 41% more than Android). Development costs are also significantly lower on BB OS. We calculated that the average development cost for a BlackBerry app is around $15,000. Android and iOS apps on the other hand cost around $22,000 and $27,000, on average, respectively. But, unless RIM manages to reverse the downward trend in sales, these revenue and cost advantages will soon become meaningless.

In yet another sign of industry consolidation, Samsung’s Bada platform is high on the list of platforms being abandoned. Some 49% of developers currently using Bada plan to drop it. Bada is Samsung’s application platform for low end smartphones. It has 20 million units sold cumulatively since its launch in 2010. In Q1 2012, Bada shipments grew only 10% year-over-year, reaching 3.8 million devices. This lacklustre growth has developers flocking away to platforms seen as safer investments. Other challenges, for Bada, include its immaturity and substantial bug count, low-end smartphone hardware, and a lack of consumer pull leading to missing “hero apps,” like Angry Birds.

The resulting mindshare churn should ring alarm bells at the Korean HQ, since Samsung needs Bada as a negotiating card against the mobile platform war with Google’s Android. With a weakening developer ecosystem, Bada looks to be niching itself to mostly Korean developers, and Samsung risks losing bargaining power as a result.

Mobile development has become commoditised

Contrary to popular perception developers will overcome any barriers (e.g. learning curves, monetisation) and adopt any platform that gives them reach. Amidst the debate over the relative merits and drawbacks of iOS and Android, interestingly, most developers use both at the same time. 72% of developers that use iOS, also use Android. 64% of developers using Android also use iOS. With switching costs and learning curves on mobile development being lower than ever, developer mobility across platforms is higher than ever. Improvements in cross-platform development will increase mobility even further.

In such an environment, platforms that provide reach (Android, iOS) will retain and attract developers as long as they continue to provide reach. However, platforms with lower reach (e.g. Windows Phone) will only attract developers if they extend their reach and at the same time provide additional incentives to compensate developers for the platform’s reach-deficit. In order to do so, they need to identify the developers they need to get on-board. They will also need to find the right incentives to attract them. This becomes an almost impossible task without using a proper segmentation model.

How can platforms solve this?

Traditional segmentation models, based on the developer career stage (student vs pro), demographics (income or age), technologies (programming language or platform) or app category (games vs enterprise developers) rarely yield actionable results. An alternative is to take a “job-based” segmentation approach. As Professor Christensen defines it: “A job is the fundamental problem a customer needs to resolve in a given situation.”

In Developer Economics 2012, we used both empirical knowledge and quantitative data from our survey of 1,500+ developers. We arrived at a definitive job-based developer segmentation. Our model consists of eight developer segments, divided according to developer motivations, the platform they primarily use and their decision criteria for adopting a platform, tool or API. These are: the Hobbyists, the Explorers, the Hunters, the Guns for Hire, the Product Extenders, the Digital Media Publishers, the Gold Seekers and the Corporate IT developers.

We believe that this segmentation model is instrumental for both developers and for companies producing platforms, tools or APIs. For developers, it helps understand their own competitive ecosystem. On the other hand, companies identify who the right developer is and how and where to approach them.


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