The number of mobile operating systems just keeps getting bigger and to our count close to ten platforms are now competing in this space. They include Symbian, Android, iPhone OS, BlackBerry OS, WebOS, MeeGo, bada, Windows Mobile, LiMo Foundation-compliant platforms, Brew Mobile Platform and Linux variants. The question that obviously comes to everyone's mind is who will win in this mobile software platform market.

There are some interesting angles to think about this.

• Can the smartphone market size accommodate this many platforms?

• Do consumers care about operating systems?

• Is it a zero-sum game or can there be a more than one winner?

• Everyone is talking about carriers becoming dumb pipes but what about handset OEMs? Will Google and Microsoft make handset OEMs as dumb pipes or add value?

• Should every handset vendor build their own OS? Can they cope with incremental mobile OS R&D costs?

• Can horizontal and vertical business models co-exist in the mobile industry?

• Is there enough developer support to address every OS?

• How many platforms operators can support?

We think R&D capabilities, scale, brand, and strong partner and developer ecosystem are necessary ingredients to sustain a long-term smartphone OS and only few of the above mentioned platforms check most of the boxes. Strategy Analytics estimates that smartphone OS vendors currently spend close to $100-$200 million on R&D on average and this is expected to grow incrementally.

Nokia (Symbian and MeeGo): 2010 will be remembered as a software transition year for Nokia and 2011 will see a settled software platform strategy with both Symbian and MeeGo (Maemo) getting much waited Qt UI and app frameworks. Nokia has a unique software strategy and is the only vertical vendor who is open sourcing its proprietary platforms. Nokia already has scale, brand, and R&D capabilities and if the company can excite the developer community and consumers with Qt then it should keep its smartphone lead for a long time to come. Nokia is well positioned to democratize the iPhone and BlackBerry experience to the masses. Nokia's software transition will be watched closely as competitors becoming stronger.

Microsoft: We believe Microsoft can not afford to lose in the mobile platform market given its synergistic importance to its other businesses and Windows Phone 7 Series (WP7 Series) announcement just reiterates that. It remains to be seen how WP7 Series platform will fare in terms of price points, hardware requirements, OEM support, developer and consumer reaction which can decide whether Microsoft can get the scale that is required to sustain a long-term smartphone OS. Microsoft will face a strong challenge from Google as both companies are targeting the same OEMs. Microsoft may position older Windows Mobile versions for low-end smartphone market but it remains to be seen how OEMs will react given more appealing nature of WP7 Series platform.

Android: Google and its partners executed very well so far and 2010 could be the Year of Android. Unlike Microsoft's WP7 Series platform, Android can also run on low-end chipsets which can increase its addressable market. Android and Symbian are the only mobile OSs that are targeting mass-market smartphone segment currently. This gives edge to Android to gain scale as handset OEMs push Android to feature phones. However some key risks like fragmentation and future Google moves that may cause friction to OEMs and operators will be watched closely. We also believe that the expanding size of the smartphone market should create enough opportunity for horizontal software platform players as Google and Microsoft currently lack high volume handset customers.

BlackBerry OS: RIM continued to gain with its market leading "Push" technology and security features. However, its web browsing and touch screen experience needs to be addressed. RIM already trying to fix the web browsing problem with new WebKit-based browser but touchscreens remain a challenge.

iPhone OS: Apple continues to win mindshare from developers and consumers alike and is well positioned to be a long-term player in the smartphone OS market. Apple's web browser is equally capable even if the trend shifts to web applications in the future. Apple may come under pressure from Android and resurgent Microsoft in the future but the growing size of the smartphone market should give enough room for iPhone OS to grow.

LiMo Foundation: Being a middleware platform and because of its governance structure, the LiMo Foundation currently lacks a direct relation with the developer community and currently depends on its operator partners for ecosystem. 52 LiMo-compliant handsets have been announced so far and 24 major global carriers are members of the Foundation. We believe that the LiMo Foundation's middleware platform is technically closer to Nokia's MeeGo and it remains to be seen how the Foundation will pursue its strategy given global OEMs are currently choosing Android.

Palm's WebOS: Despite seeming to have one of the best mobile platforms, Palm's limited geographical reach, and limited R&D budget could prevent the company from scaling as much as its competitors Nokia and Apple. Palm's lack of brand-awareness outside North America is not helping the matters. We believe Palm's lack of scale could hurt it in the future as its competitors become even stronger.

Samsung bada: Samsung bada's definition and market positioning remains still subjective given its kernel-configurable nature. It remains to be seen how Samsung's bada will keep pace with Android, iPhone OS, Symbian and others. Like Android and Symbian Samsung's bada also expected to target mass-market smartphones.

Qualcomm BREW Mobile Platform (BMP): We believe Qualcomm is positioning BREW as a low-end smartphone platform but it will face a stiff challenge from Android and Symbian as they are also trying to address the feature phone market. Qualcomm's BMP is also not supported by other chipset vendors but Qualcomm is expected to leverage its existing relations with operators and handset OEMs.

Despite the desire of OEMs to control their platforms, we continue to believe that the growing R&D costs to develop a smartphone OS and ecosystem around it could potentially force them to consolidate their efforts around licensable operating systems while also building OS-agnostic differentiating layers on top of that. Examples include Nokia (Qt / OVI), Motorola (Moto Blur), Sony Ericsson (UX), HTC (Sense UI), Samsung (TouchWiz) and LG (S-Class).

Strategy Analytics feels Marvell’s lack of exposure to high volume handset makers, lack of a visible long-term baseband product roadmap and missing technology pieces like RF transceivers will force the company to reconsider its position as a cellular baseband processor supplier. Marvell is a prominent player in application processor and connectivity market but a minor player in the cellular baseband market. Since acquiring Intel’s cellular business in 2006, Marvell has made limited progress in the cellular baseband processor market where as competitors Infineon, Qualcomm, and ST-Ericsson built scale during the same period. The company's total cellular revenues (including basebands, application processors, connectivity) are still less than one billion dollar.

Research in Motion (RIM) is Marvell’s biggest cellular baseband customer but Marvell is expected to lose to share to Qualcomm in the long-term. Qualcomm already supplies basebands to over 25 percent of the RIM’s handsets (mostly CDMA). Freescale also recently scored some baseband design-wins at RIM at the expense of Marvell although Freescale recently gave up its baseband efforts. Marvell’s other cellular baseband customers include Palm, Asustek, and some Asian ODMs. Most recently the company scored Ophone TD-SCDMA Android smartphone design-wins at China Mobile and we believe that most of the TD-SCDMA baseband IP belongs to China Mobile and affiliates. Marvell's competitors MediaTek, ST-Ericsson are also investing in TD-SCDMA and most recently Qualcomm also expressed its intention to compete for TD-SCDMA design-wins in China next year. We don't see how a niche market strategy can be successful for this R&D intensive technology.

The company's lack of RF transceiver products is likely to have an impact on its penetration in entry level and mid market handset segments where transceiver-baseband approach is appropriate. The lack of visible LTE roadmap could put Marvell behind its competitors Qualcomm, ST-Ericsson and Infineon. We believe that growing R&D costs to develop advanced communication IP could put pressure on Marvell to reconsider its long-term position as a baseband vendor.

We feel that Marvell could perhaps partner with companies like MediaTek or Infineon who lack high-end application processor technology. Marvell's application processors are already popular in the Chinese smartphone market and could be a good fit for MediaTek. However it is not clear whether these companies are interested in Marvell's XScale technology.

Sravan Kundojjala

Client reading: Baseband Processor Profile: Time for Marvell to Reconsider Its Baseband Position

Last week Nokia announced official Qt support for Maemo. The community work to port Qt to Maemo has been already underway and the official Qt port to Maemo is expected to take things to the next level. Nokia is betting on Qt because it provides them much more flexibility in terms of hardware and software platform adoption. In simple terms, Qt is an abstraction layer on top of underlying hardware and software. The plan is to replace current platform specific APIs with Qt APIs which almost covers commonly used functions. Nokia already announced Qt support for S60 / Symbian platform in October 2008 and the project is currently in Technology Preview phase. We expect Nokia's transition to Qt to be completed by late 2010 or early 2011. The Symbian Foundation is expected to replace its AvKon UI framework in favour of a Qt-based Orbit UI framework when Symbian^4, its fourth iteration, becomes available in 2011.

The platform abstraction layers / cross-platform technologies are nothing new in the cell phone industry as they promise to solve the important problem, fragmentation. The platform abstraction layers include Java, BREW, Flash, Silverlight and web technologies. Unlike other cross-platform technologies Qt promises consistency of native applications across different platforms. Nokia is betting on Qt because it can control the direction and we believe that owning the primary technologies used in its device portfolio is crucial for Nokia to maintain its margins. We observe that Nokia’s software assets including Maemo, Symbian, Trolltech and web browsing technology are all open sourced and the company is trying to control its growing software R&D costs by using open source software.

Our concern is that until late 2010 we won't see Qt based UI and application frameworks in Maemo and Symbian based commercial devices in fully fledged manner and this could leave room for competitors Android and iPhone to attack Nokia. Incidentally, for Nokia, the software transition started at a time when its competitors are agile and aggressive with their plans. Nokia's plans to switch to Qt in 2010-11 timeframe could delay developer's commitment to its smartphone platforms Maemo and Symbian. The current Maemo 5 OS used in the Nokia N900 uses GTK+ framework and Nokia is expected to switch to Qt in 2010. We feel that Nokia could have delayed the N900 launch until 2010 but this shows how desperate Nokia is to tackle new era competitors Google and Apple. We are also cautious about execution challenges for Nokia in this mission and if Nokia can demonstrate the value of Qt and excite the developer community then the company should keep its smartphone lead for a long time to come.

Sravan Kundojjala