I was invited to attend Samsung BADA launch event in London .. And here are my views.
At a number of recent events, Samsung executives have expressed their desire to be more aggressive in taking on market leader Nokia. Hence, I was more interested in the overall vision of Samsung and the direction it may take in the next three years. Considering BADA is an important part of that vision .. The event was significant.
A few initial thoughts:
a) The overall industry feedback to the event has been mixed .. I think some people actually expected Samsung demonstrate devices. That was not my expectation i.e. this event was pitched at developers for forthcoming devices. The outreach to developers is significant as I will explain below. If Samsung does not deliver BADA devices in 2010 (with developer applications), then they have missed their goals – but I see these two things as distinct i.e. the intent today is simply to get developers and launch devices in 2010. So, until such time as we see devices based on BADA, I will give Samsung/ BADA the benefit of doubt.
b) BADA is oriented towards feature phones and not smart phones. Hence, there is no direct conflict with Android(which is pitched to Smart phones). So, the target here is the Nokia S40 devices .. And that’s a large market both in advanced and especially emerging markets.
c) For handset manufacturers, creating a third party developer ecosystem is a matter of survival. The reason is: hardware will be increasingly commoditised, new entrants especially from China will reduce the costs of devices and also simply there are too many device manufacturers. Apps offer a way to avail revenue, to build brand and create stickiness for handset vendors. While that revenue may be shared with Operators, the iPhone has shown that it could be significant. Operators will look to device vendors to provide an ecosystem. The current revenue for Operators from apps is tiny(10 million to 20million USD for Operator portals including content such as ringtones). That will increase if the success of apps is replicated.
d) When I chaired the Mobile application stores event at CTIA , One of the key insights from the speakers many of whom already had successful apps is: The first in a category is the winner .. But then that category quickly gets many more(not One app for that .. rather 100 apps for that). So, as I commented then, a way to mitigate that risk could be to go for a new ecosystem which is also commercially viable(like the iPhone) since the same principle applies(first in category). Hence, developers could benefit merely by being ‘first in category’ on BADA or other ecosystems assuming that they take off later
e) I am a believer in the wider application store strategy See From Intel inside to appstore inside
With these two ideas in mind .. let’s see where the state of the industry is at ..
a) On one hand, we could see BADA as ‘yet another platform’. The first generation platforms like Java, Symbian and Windows Mobile were essentially operating systems or development platforms. Of that generation, only BREW was an ecosystem but not really successful. Android and the iPhone are second generation platforms which are more ecosystems than Operating systems. BADA is also an ecosystem – and hence it is far more than an operating system/first generation platform
b) In fact, BADA is the ONLY ecosystem pitched at feature phones .. and this makes it significant. No offence to the Nokia fan club, but there is no ecosystem for S40 devices so far as I can see(Ovi is pitched at Smart phones)
c) By ‘ecosystem’, I mean a more complete commercial and service model along with a developer platform. This includes discovery(appstores), billing, services(location, social networks etc)
Ecosystems vs. developer platforms
I have been more interested in ecosystems than in developer platforms. In that sense, any platform needs to have more than the SDK and its success will depend on the extent to which it creates an ecosystem.
Why is this important?
We are witnessing a fundamental shift to services. (After all, Appstores are Long Tail services). Operators have seen the success of the iPhone. The iPhone is an ecosystem. It lends to the Long Tail service model. However, that model has a cost when deployed on the mobile ecosystem(as opposed to the Web). So, Operators will look to ‘someone else’ to carry that risk and manage that developer ecosystem. Device manufacturers are a logical choice since services and apps provide an added incentive to the customer and a point of differentiation. Hence, the device vendor in future will attempt to sell to the Operator a mixture of device and third party services(apps). This is a win-win for all: Operators, device vendors, customers and developers. When viewed in that way, the BADA platform is significant and its biggest impact will be on Nokia(if it’s successful) – both in advanced and in emerging markets. This is because Nokia has(so far) not succeeded in its appstore strategy .. and also apps are needed to distinguish a device vendor from the host of cheap OEMs(especially potentially from China that could arise)
I am not that worried about the ‘vapourware’/ Bada is Nada argument since Symbian also is doing the same(and that’s not bad in itself) i.e. a forward positioning to attract developers is a valid strategy in my view as long as we see actual implementations within a reasonable time frame
Ovi could also become an ecosystem but still only for smartphones ..
As the Financial Times says in Nokia rearms for the next round of Smart phones – Ovi is also evolving. Planned new features include in-application payments, a redesigned user interface that makes apps easier to discover, and faster operation etc(the same services which BADA also announced). Ovi also claims one million downloads every day and while these include ringtones and pictures, Ovi is making an attempt to evolve.
The Ovi suite – which also includes music and mapping services – now has 80m active users, up from 54m in August.. The current Ovi strategy is a hodpodge(“jambalaya” as one Nokia exec described it), but the intent is to focus more on software and apps.
Nokia is working hard at making Ovi into an ecosystem. Nokia CEO Olli pekka kallasvuo , rightly sensed the change in the mood two years ago but Nokia got caught out by the iPhone which managed to create a successful services ecosystem first. Also, today the picture is bigger than the iPhone. For handset vendors, like it or not, apps are a way to gain revenue. According to the financial times, Nokia’s handset unit had an industry-leading 20.1 per cent margin at the level of operating profit in 2007, but it had slipped to 12.2 per cent in the second quarter of 2009. Apps are a way to bridge that gap
Ovi is being transformed though .. Nokia is rebuilding the Ovi appstore
When viewed in the above context, BADA does offer some benefits to developers. For one, it could offer a potentially larger market if it executes its emphasis on feature phones. Also, Samsung is playing it safe by the Operator .. when a member of the audience asked about VOIP, the response from Samsung was a polite ‘no’ since it impacts the Operator business. So, Operators may also be interested.
BADA has a number of interesting features like widget-based UI through TouchWiz, push notification and native support for flash. More interestingly, revenue share was 70/30 in favour of the developer with the Operator’s share coming from the 30%(remains to be seen how Samsung manages to execute that)
There are four abstraction layers for BADA : Kernel, Device, Service(Social network, Billing and Location) and Framework(APIs). The higher two (APIs and Framework) should be interesting especially services like Social network, Billing and Location.
a) I believe apps will be ‘Do or Die’ to the future of handsets for the reasons listed above
b) Operators will look to device vendors to provide an ecosystem.
c) There are currently no ‘appstores’ pitched at mass market phones. Hence, BADA is significant
d) Samsung is making some efforts to promote BADA including creating an ‘evangelist network’
e) Samsung’s desire to ‘work with the operator’ as opposed to create its own brand could be a strong proposition for Operators
f) Ovi received a hostile response from Operators. But later, Operators started making deals with Ovi. The recession was an important driver for this change of heart. So, I see that in future, Operators will have a choice of Ovi and BADA and also BADA could be for the feature phones.
In any case, this is good for developers. Hence, I am keen to see how BADA develops.
As usual, comments welcome