This has been the month of the handset. First, Google’s acquisition of Motorola Mobility, then HP’s effective exit from the handset business, and finally the sad news about Steve Jobs. These recent events kick off what I believe will be an accelerated pace of developments and re-shaping of the mobile device/platform ecosystem. Within the next 6-12 months, we will have a much clearer picture of the next-generation strategy and long-term viability of RIM, Nokia, and Microsoft’s mobile businesses. More broadly, expect additional acquisitions, partnerships, and participation of new players, thus further defining what the mobile platform world will look like, circa 2013-2015.

Quick Review

Let’s remind ourselves that there have never been more than two viable advanced phone platforms in the history of this industry. For most of last decade, it was Nokia and Blackberry. Neither Palm nor Microsoft gained meaningful traction (i.e. more than a 10 percent market share). The next phase was marked by the rise of iOS, initially in the consumer market, and more recently, in the enterprise. Android has become the second platform of the moment, for three reasons:

• Much skill. Continuous improvement has significantly narrowed the delta with iOS.
• Some luck. Verizon needed a counter to the iPhone for three years. Blackberry wasn’t up to the task, so VZW helped “make” Android.
• Unforced errors. RIM, Nokia, Microsoft, and Palm showed a sloth-like pace of product development compared to Apple and Google, along with institutional arrogance, and organizational malaise. This provided the opening that Android needed, and then exploited.

The numbers that tell the story most vividly are the past several quarters’ installed base vs. new sales. The shift of market and mindshare in the enterprise space is especially startling. CIOs’ heads are 60 percent iOS, 25 percent Android, and 15 percent Blackberry, based on my own informal survey. WebOS was never a contender and Windows Phone is the “keep an eye on it” job of a junior member of that CIO’s team. Call it handset climate change: we’ve gone from cold and rainy (Espoo, Waterloo, Chicago, Seattle) to warm and sunny (Cupertino, Mountain View).

So, What Now?

The next 12 months will be critical to the future of the handset business. Apple’s iOS has a firm hold in the consumer and enterprise space. Google’s focus with Android has been on developing product for multiple market segments, as it sees an opportunity to capture smartphone market share on a global basis, particularly from Nokia. Enterprises are starting to take Android seriously, but there’s still important work needed to meet key requirements, before enterprise decision-makers start buying Android or approving Android BYOD in large numbers. This leaves an opening for RIM to regain its luster and possibly for Microsoft.

In my view, the next few years of the smartphone/platform game will be decided by the answers to the following four questions:

1. How many OSs can be viably supported?

All the talk about “open” is great, but ultimately there are iOS developers, Android developers, Blackberry developers, Symbian developers, Windows developers, and … Next Page »

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1) 4G. 4G services will become available on a near nationwide basis in 2011. At its best (and what is called “4G” gets murkier every day), 4G offers a true mobile broadband experience. In order to be successful, 4G operators must have a comprehensive go-to-market strategy, with compelling devices, exciting and differentiated applications, and innovative pricing models.

2) Re-Thinking the App Store. It’s great that there are 300,000 apps out there on iTunes, and 100,000 in the Android market. But with so many options out there — and not a lot of real businesses being built — there will be greater attention to search, discovery, context, and personalization to deliver a more effective and monetizable apps experience.

3) OS Consolidation. The new Windows Mobile 7 phones are pretty good. But can the market support another OS? Add to that the struggles of Symbian (Nokia) and WebOS (HP/Palm), and Blackberry’s declining share, and something is going to give. Look for something blockbuster involving Nokia, Microsoft, and possibly RIM.

4) Content Distribution Models. We are in the early innings of thinking about how print and broadcast content and programming are going to be effectively distributed digitally, and to our “multiple screens.” Next year will see the introduction of some innovative new business models, but also continued battles between content owners and emerging distribution networks.

5) Mobilization of the Enterprise. This is something that we have been talking about for years, and it has been happening in baby steps. But in 2011, we will see corporate IT make significant investments in mobile, driven by the availability of 4G, compelling new products such as smartphones and tablets, a more open and cost-effective application development framework, and a maturing ecosystem of companies to help firms mobilize.

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