Tuesday, April 20, 2010

Mobile Application Development Industry and the Potential Impact of Android


Over the past decade, Google has become the dominant force on the web, processing over one billion search requests per day. However, Google's web dominance only extends to desktop PCs, which are slowly being replaced by mobile devices, with over 3 times more mobile devices than desktops being sold each year. The Android is Google strategy to extend its reach into the rapidly expanding mobile market.

The open source property of Android is Google's unique selling point. Google recognised that the mobile experience on the most part is inferior to the desktop experience due to the restrictions placed on Mobile application developers. Apple, the manufacturers of the iPhone have been known to refuse to approve third party programs because they replace integrated features of the iPhone. Android is a completely open platform that will allow developers to create applications that call upon the use of any of a handset's core features. Android also aims to give developers the tools to innovate by allowing applications to combine information from a variety of sources such as the internet or other mobile device users.

The Android operating system aims to bring the experience users enjoy on desktop PCs to the mobile world. Mobile devices operate on a closed system where only applications approved by the manufacturer can be installed on devices. Mobile applications developers are usually forced to obtain code-signing certificates, which cost both time and money. With Android, developers will be able to install any application they develop instantly. The reduction in development costs will open up the market to new developers. Since Android's success hinges on how third party developers react to the open system, the more developers able to develop for the system, the better for Google.

Google has a 16 billion dollar advertising empire on the web and seeks to transfer this to mobile devices. Although smaller screens pose a challenge to advertising space, mobile devices also offer new opportunities, as due to their mobile nature location based adverting can be used to market nearby services to potential customers. All Android devices will be constantly connected to the web to take advantage of location-based services.

For all the promise of Android, there are several barriers to its success, some of which have already begun to affect its chances of success. The biggest barrier to Android's success is the sluggishness with which network providers are adopting Android devices. In 2008 when Google launched its first mobile device on T-mobile, it was widely thought that they would quickly enter into partnership with larger mobile network carriers such as Verizon and AT&T. Their failure to do this has resulted in a slow uptake of Android devices by consumers, as T-Mobile is only the fourth largest carrier in the US.

Mobile network providers may also be reluctant to enter into partnership with Google because several applications developed for Android completely circumvent their services resulting in a loss of revenue. The biggest example of this is Google Voice, which allows users to send text messages through their phone's data plan. This means that there is no need for a Google voice user to have a text-messaging plan with their network since Google Voice offers what is essentially free text messaging.

The Android operating system has also encountered resistance from manufacturers for a number of reasons. Some manufacturers feel that the an open source mobile operating system threatens their own pre-packaged applications as network operators and users will be able to completely re-customise an Android phone, rendering manufacturers' own applications useless. To compete effectively manufacturers want to be able to differentiate their phones and have a unique identity.

Some manufacturers fear that the emergence of a mobile operating system without any licensing fees could result in an influx of new manufacturers into the market as license fees act as a barrier to entry to new firms. This will result in a loss of market share for the existing firms.

Google's Android has fulfilled part of the promise it had when it was first unveiled. It has lead to new and innovative applications being developed and allowed more developers to enter the market. However, it is yet to live up to its potential. If it is to succeed Android needs the support of more manufacturers and mobile network providers. In November and December 2009 Verizon and Motorola launched a new phone using Android, which is a step in the right direction. Google has the influence and vision to completely revamp the mobile market and with the help of their hardware partners, they are likely to succeed.


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