Netbooks: Up from Phones, Not Down from Notebooks

Last week I began a discussion of whether Linux will survive as an OS for netbooks.  I received a number of comments, some highlighting which netbook OEMs favored which Linux distros, other despairing at the paucity of verifiable market numbers (a distress that I share).  One reader pointedly chastised me not to

“overlook the fact that, after being caught off guard by netbooks, MS bent over backwards to get XP-based netbooks on the shelves. Then, they forced the Linux netbooks off the shelves with exclusivity agreements and strong-arm tactics. It’s rather difficult to sell Linux-based netbooks when the retail outlets have been bullied by MS to only stock XP-based netbooks.”

I am actually keenly aware of Redmond’s “negotiating skills”.  In the mid-1990s, while I was at Acer Latin America,  our entire group was audited by Microsoft.  It seemed that our mix of DOS, Windows and Windows for Workgroups was too skewed towards the command line for Redmond’s bottom line.   Our channels licensed a lot of DOS, principally to enable installation of Netware, UNIX and yes, also Linux, especially in Brazil where I was based.  The audit lasted three months and actually shut down several of Acer’s smaller regional subsidiaries. We “got the point” but didn’t change our OS mix until Window95 appeared a year later.

Mobile Phone (Volume) Lust
I think that one strategic error made by purveyors of Linux netbooks was to covet the volumes of the global mobile telephony market while following the business models and channels of the legacy notebook marketplace.  Linux fans – .orgs, Linux ISVs and device OEMS – unfortunately approached the netbook opportunity as a downward extension of the desktop and portable PC business, with volumes of 297M units in 2008 (IDC).

Instead, the Linux ecosystem needs to envision netbooks (and MIDs and tablets) as building on the worldwide mobile handset business, with its 1.28B annual unit shipments (Gartner) the most lucrative slice of which, smart phones, constitutes 14% (ABI) with 20% annual growth rates.
The structure and dynamics of the mobile handset market depart from the PC business on several parameters:

• End users (a majority in the US) acquire their devices from service providers, not from the retail channels favored by PCs and notebooks
• Mobile operators and carriers view handsets first as service delivery vehicles and second as applications platforms
• Operators subsidize handset acquisition costs, making up their margins over multi-year service contracts

This time-worn model is beginning to break down, however, challenged by flat and falling voice revenues, encroaching VoIP services from “virtual” network operators, and surging EDGE and 3G data traffic that threatens to overwhelm existing network capacity.
As a means to preserve flagging ARPUs (Average Revenue Per User), mobile operators and regional carriers are accelerating next-generation (4G) rollout, emphasizing data, not voice, on WiMax and soon on LTE (Long-Term Evolution) in select markets, as well as experimenting with pure data business models over existing WiFi access points.  Most interestingly, after lackluster efforts of marketing WiMax and WiFi network interface cards to existing notebook owners, operators like ATT, T-Mobile and Verizon are instead following their historical playbook and bundling Linux-based netbooks with data services subscriptions through their own channels.
This bundling, unlike CE/Retail channels, actually has the ability to leverage the presumed virtues of Linux-based netbooks:

• Lightweight BoM further subsidized by data plan subscriptions
• Greater opportunity for operators to preserve and build on brand equity and differentiate through custom applications and services (as with mobile phones)
• Built-in network access and ability to leverage the Cloud

Such programs have the further charm of driving 3G+/4G revenue in the short and mid-term preserving ARPUs with data (rather than voice) and for building subscriber loyalty.

But will operators build out the mainsream versions of these programs using Linux-based devices?  Can developers and purveyors of Linux sieze this opportunity and stay in the netbook game?  Let me know what you think as we continue this discussion next week.

Filed under: Linux, Nokia, mobile, netbooks, open source

Nokia to Buy Symbian, Dive Headfirst into Open Source

By now, most interested readers have heard the news about Nokia and Symbian:

Substance

• Nokia to buy the 52.1 percent of Symbian shares it doesn’t already hold
• Stop paying annual US$250M to other Symbian stakeholders
• Merge Symbian with S60 organization to create the Symbian Foundation
  • Also covers UIQ and MOAP platforms
• New entity to launch SymbianOS under EPL

Challenges

Interestingly, the mobile press and blogosphere have been quite reserved in their reception of this “fantastic news”. From my point of view, formation of the Symbian Foundation is GOOD NEWS for the Symbian platform and for mobile open source in general.

However, despite increasing levels of deployment (200M phones in 2007), is not the darling of analysts and pundits, and definitely not the golden child of developers.

The challenges facing Nokia itself and also ahead of the announced Symbian Foundation are numerous and daunting. These challenges organize themselves into three areas:

Technical Challenges

• Making the new platform easier to program
  • SymbianOS programming model famously complex
• New platform unwieldy
  • Need to support SymbianOS, S60, UIQ, MOAP and also TrollTech’s Qt/Qtopia in single s/w base
  • Stated goal of backward compatibility could cripple innovation
    • Symbian OS v9 and S60 3rd edition
    • Java, Adobe FlashLite and Microsoft Silverlight
    • Compliance suite will be late

Building A Shared Platform

• Dilution of Tier I Resources
  • Foundation members LG, Motorola, NTT DOCOMO, Samsung Electronics, TI and Vodafone already members of LiMo, OHA
  • Are there enough platform developers to go around?
• Discourage further fragmentation
  • It’s a myth that commercial platforms like SymbianOS and MW WindowsMobile are unitary
  • ISVs already suffer from minor and major fissures in each platform
• Opening SymbianOS
  • Platform complex mix of IP
  • Could see sigficant delays in opening under EPL
    • Cf. OpenSolaris, Java, Android

Community Challenges

• Build community beyond orbit of Nokia
  • Open source is not a verb: opening SymbianOS code under EPL does not make it into living, breathing “open source”
  • Building free-standing community for large complex code base is “non trivial”
  • Danger of cutting CAPEX but not enhance ecosystem
• Engage Broader Audience
  • NA : single digit market share, no mind share
  • SA : price points out of reach for SymbianOS handsets
• Make Foundation Egalitarian
  • Despite low cost of membership, tilted towards founding/board members

Real Impact

For Nokia and the SymbianOS, this move is either a stroke of genius or a move born of desperation. It will certainly help to lower the cost of entry onto SymbianOS and into the very tidy Symbian ecosystem. Remember, one of the drivers for the swath of mobile Linux initiatives and platforms, and also for continuing investment by Microsoft has been the difficulty of dealing with Symbian and the fear of living in Nokia’s shadow on a platform dominated by the Finnish mobile giant.

Whether it will actually motivate new platform deployments and the rollout of new applications and services is debatable.

Whither Mobile Linux?

Nokia’s announcement concretizes the ongoing balkanization of mobile platforms around consortium-led open source and commercial entities:

• SymbianOS – Symbian Foundation

• Android – Open Handset Alliance, built on Linux and neo-Java (Dalvik), led by Google

• LiMo – The LiMo Foundation, built on Linux and led by Motorola, NTT and other others

• Windows Mobile – despite Redmond’s “shared source” programs and loud protestations, still a closed proprietary effort

• iPhone – Based at least partially on open source BSD and dominated by Apple (to say the least). The jury is still out on the impact of the iPhone SDK and as-yet unreleased 2.0 software

• RIM – the Blackberry platform has a phalanx of even more fanatic users than the iPhone, but is increasingly relegated to niche usage (a lucrative corporate IT niche, but not a growing one)

As with the launch of OpenSolaris, I question whether an open Symbian OS will draw developers away from Linux. Probably not – the new platform will just provide an open basis for developers and ecosystem players already engaged with Nokia/Symbian.

And just as with Sun’s kimono-loosening, the opening of SymbianOS will make it more difficult for many current Symbian ecosystem players to remain profitable, accustomed as they are to 100% proprietary dealings.

Shallow End of the Pool?

Don’t forget that SymbianOS is definitively a smartphone platform, and that smartphones still only occupy about 8-10% of the billion unit global handset market. That’s the shallow end of the mobile swimming pool. Ask yourself, how deep are available developer resources and how boyant is end-user patience?

Watch your head, shareholders!

Filed under: Nokia, mobile, open source , Nokia, open source, Symbian

Finland Needs Trolls

How Trolltech Complements Nokia Internal and External Technology

Upon reflection, gossip-mongering, and even more reflection, the Nokia acquisition of Trolltech begins to make more sense.

Look Beyond Maemo

Maemo, the applications platform that runs on Nokia 770/N800 and family, bases its Hildon UI framework on GTK. the main open source rival to Trolltech Qt. These web pads and the software that drives them are a market experiment for Nokia, albeit a strategic experiment. They’ve evidently had as much internal impact with the Finnish mobile giant as they have outside, in particular they’ve

• engendered (additional) rivalry among Nokia divisions focused on Linux (web tablets, Nokia networks) and those who build SymbianOS and legacy-based phone-ware (S40, S60 et al)
• heightened internal perceptions of platform fragmentation and given urgency to calls for cross-platform compatibility (which Qt offers, crossing over embedded and desktop OSes)
• highlighted the need within Nokia for more ubiquitous FOSS and Linux competence

Motorola Impact

Did Nokia take out a key Motorola mobile supplier to stymie their mobile competitor? Probably not. Just like the folks in Redmond, Nokia spends its time worrying about Apple and Google. It’s hard to argue with that sensibility: Tampere is better served by looking ahead, worrying about threats to come instead of troubled competitors, over whom they leapfrogged long ago.

Filed under: Linux, Nokia, Trolltech, mobile, open source

Nokia and Trolltech: Out loud and on the Qt

Bill Weinberg, LinuxPundit.com — Reposted from ActiveAnalysis.net

Today, Nokia announced its intention to acquire UI application framework provider Trolltech ASA . This move on Nokia’s part is touted as facilitating “application development for multiple platforms and devices”, and indeed one of Trolltech’s claims to fame is the cross platform agility of its Qt framework. I have already encountered waves of exuberance (rational and otherwise) about the virtues of this acquisition for Nokia, but little discussion of the trends and values underlying it.

Trolltech Background

Established in 1994, Trolltech built its fortunes on launching, supporting and commercializing the Qt graphical application framework. Qt exists as both a commercial offering and an open source project. To some degree, Trolltech pioneered the concept of dual licensing, by which two or more licenses apply to a single code base. In the Trolltech Qt case, the company offers a commercial license (with royalties) for deployment in commercial applications (desktop and embedded) and a FOSS license for development of and deployment in FOSS projects. Recently, Trolltech updated the FOSS license for Qt and for other code it licenses to employ GPLv3.

In 2006, Trolltech enjoyed a fairly succesful IPO (OSE TROLL), and today enjoys the position of the ISV with the greatest number of deploymenst on Linux-based mobile phones. Among their OEM customers are Motorola, NEC, Panasonic, Samsung and others, who ship upwards of three dozen handset models with Qt and the Qtopia application set. Indeed, one of the most successful Linux-based phones to date, the Motorola A1200 (MOTOMING) garnered an unprecedented 1% share of China’s entire mobile market.

Qt enjoys a large developer base and also a worldwide end-user
following around the K-Desktop (KDE) for Linux and other OSes. KDE
boasts an active community and is the default desktop for many Linux
distributions. Indeed, while recently best known for its embedded
wins, Trolltech reportedly garners the majority of its revenues from
desktop ISVs.

Trolltech Challenges

Rosy past does not always translate into lucrative present and future. While today, Qt and Qtopia represent the leader in mobile framework deployments (in a highly fragmented field), their position in embedded /mobile is less then 100% solid:

• Motorola and other OEMs have stated publicly and privately that they intend to move away from Qt and Qtopia in the mid and even short term, designing with and deploying instead GTK+, the GIMP Took Kit (part of GNOME).
• OEMs of all stripes, especially those is an Asia, are reportedly turning away from Qt and Qtopia to reduce the software burden on their bills-of-material. They justify the move not just on financial grounds, but claim that current level and quality of Trolltech support does not justify the additional development and deployment costs. The acquisition is likely to accelerate this trend.
• Mobile stack providers ACCESS and Azingo , the OpenMoko project, and Nokia’s maemo.org have also gone with GTK. Stack providers Fluffy Spider Technologies and Mizi Research do not use Qt, nor will Palm in its Linux-based phones. Among Linux-based stack providers, only a la Mobile continues to integrate and ship Qt and Qtopia.

• Standards bodies, consortia and other .orgs, even those in which Trolltech participated, participates or plans to participate, have standardized on GTK rather than Qt. These bodies include LiMO, LiPS, and OSDL/Linux Foundation (Desktop Linux). Trolltech quite visibly exited the last two and recently made hay about joining LiMO at the beginning of this year. The newest addition to the Linux-based knitting circle, OHA/Android, eschews native frameworks entirely, basing its UI on the Dalvek Java dialect (and so not on Qt, either)

• In 2006, Trolltech released the Greephone , a software and hardware-based mobile prototyping kit. While it received initially positive reviews, it never caught the imagination of the developer and OEM communities. While it boasted “real” phone h/w (instead of ATX or other evaluation board form factors), it offered too little to Tier I OEMs and was too closed to satisfy the yearnings of FOSS developers.
• Free and Open Source ideologues have never liked Trolltech’s dual license strategy. While KDE (and to a lesser extent Qt itself) enjoy sizable and active development communities, many developers claim they resent having their work taken into Qt and commercialized without gains for themselves.

In light of these and other challenges facing Trolltech, the acquisition by Nokia represents a tidy and lucrative exit strategy.

Benefits for Nokia

In theory, Nokia receives a lot of value for its money and stock: mobile deployments, easy-to-use and ubiquitous Qt technology, and platform software that crosses desktop and mobile platform barriers. But key questions remain:

• Nokia already invested heavily in Hildon (underlying Maemo), based on GTK, for its 770, N800 and other web tablets. While Trolltech has successfully demo’d Qt and Qtopia on Nokia hardware (as it did at LinuxWorld last year), it seems unlikely that Nokia would change over to Qt.
• Even if Nokia were interested in Qt and Qtopia for their own sakes, why buy the Troll when you can get Troll tech on reasonable commercial terms?
• Nokia already has its own smartphone OS and UI – SymbianOS. The company vocally positions SymbianOS as a hedge against Microsoft. Will a second mobile stack strengthen or prune that hedge?

Of course there are other factors to consider, outside of Nokia’s own OEM operations:

• Motorola has been slow to act on its roadmap to move away from Qt to GTK. Even if Schaumburg negotiated a perpetual license with Trolltech, will Motorola want a key mobile technology to rest in the hands of its number one competitor?
• The LiMO foundation, founded by Motorola, NTT, NEC, Panasonic, Samsung and Vodaphone, is aligned and allied to counter Nokia’s number one handset supplier status. With Trolltech just having joined LiMO, is Nokia also lining up to combat OHA/Android, or just coverings its bases?
• Some speculate that Nokia will abolish the commercial branch of Qt, Qtopia and other Trolltech product lines. Would making Qt completely open and free also make it completely ubiquitous?
• With Trolltech’s acquisition, there is one fewer free-standing open source company that is also public. Besides Red Hat, how many are there?

Filed under: Linux, Nokia, Trolltech, mobile, open source