Ultra-low cost revolution Part 2: which platform wins?

In Europe, North America, and Japan, the major players in the smartphone market are Android and iOS; then, depending on the country, there will be minor to modest shares for BlackBerry, Symbian, bada, and Windows Phone. Of course, we always have to remember that the rest of the world is mostly feature phone territory. Smartphones haven't even surpassed 50% of the mobile device shipments worldwide, and beyond that, shipments and install bases are two different things. Feature phones still have an install base close to 70% of the mobile phone market; and, although the shipment numbers are in a free fall for Symbian right now, as of January Symbian still held 90% of the African smartphone market. So, even if the shipments are falling, the install base is still there.

BlackBerry also has a large segment of the market share in certain areas of Africa. In South Africa, BlackBerry holds 48% of the smartphone market, but the smartphone market is fairly small. Android makes up less than 1% of the market, and iPhone is less than .5%. The rest of the South African smartphone market is held by Nokia and Symbian, which is most likely to change.

Android has been the platform that has been taking over most regions around the world, and it looks poised to do the same in in Africa. Of course, Microsoft also wants to be part of that emerging market. This was why Microsoft created Windows Phone Tango to begin with. The trouble is, emerging markets like Africa and South America rely on ultra-low cost smartphones, and both school and Microsoft have moved past their platforms which run well on low-cost devices. Android 4.0 Ice Cream Sandwich, Android 4.1 Jelly Bean, and Windows Phone 8 are all designed to run on high-end devices, and simply won't work with older hardware. 

In fact, none of the major smartphone platforms can run on ultra-low cost smartphones right now. Apple doesn’t make products for low end markets. Versions of BlackBerry that run on low end devices are being phased out in favor of BlackBerry 10. Symbian is dying. Google has left behind Android 2.3 Gingerbread, which could run on low end devices. And similarly, Microsoft has left behind Windows Phone 7.5 which was designed for low end devices. So, it seems as though the only options for these emerging markets would be either use an outdated version of old platform, which would come with security risks and lack of support, or go with a less feature rich solution. As we mentioned last time, the Nucleus real-time operating system (RTOS) has tended to be that solution.

Of course, the Nucleus RTOS doesn’t offer the apps and features that we would expect from a smartphone platform. This means that options that we would use in order to connect with other people around the world may not be available, except possibly as a web app. And, if Nucleus or any other platform like it doesn’t have a web browser that’s up to par, that could severely limit the possibilities brought by the smartphone revolution. The closest option is Nokia's S40. 

S40 is the low-end version of S60, and is powering a huge amount of phones around the world, especially in emerging markets. There are a couple issues that keep S40 from being a real player in this discussion. First, it's really hard to call S40 a "smartphone" OS, it is really not much more than a "feature+" phone. Sure, there are apps, and a web browser, but there is no HTML5 support in said browser, and no 3rd party APIs to make those apps anything more than basic. Second, S40 is on a huge number of phones, and is getting shipped in the millions every month, but Nokia's focus has shifted. Nokia has already abandoned Symbian in favor of Windows Phone, so there's no guarantee that S40/S60 will continue to get support.

It is certainly possible that Google and Microsoft will once again adapt their new platforms for low-end markets, but the farther along we go, the more difficult that's going to be. With each successive iteration of Android and Windows Phone, as with any operating systems, the minimum requirements for the platform continue to rise. This will leave ultra-low cost devices farther and farther behind as we move forward, and it'll open up an opportunity for a competitor to move into what is the fastest growing market segment in the world. 

As we said before, Apple doesn't build for low-end markets, so emerging markets are going to have to settle for older Apple devices, if they are to get any Apple devices of all. Microsoft is likely to ride out Windows Phone 7.5 in emerging markets as long as it can and hope that hardware costs come down enough that Windows phone eight will be able to transition in sooner rather than later. BlackBerry already has a pretty solid base in emerging markets. BlackBerry is available in 40 African countries, and RIM has deals with 85 different carriers on the continent. So, even with the introduction of BlackBerry 10 fairly soon, it seems that BB 7 will certainly be a platform targeted towards emerging markets.

And, as always there is Android. Manufacturers like Huawei and Samsung are determined to increase footholds in emerging markets. As of this past March, Samsung held 10% of the sub-Saharan mobile phone market and had vowed to double that market share within a year. That doesn't necessarily mean smartphones, but given Samsung's history with Android devices, it's easy to assume that the company has the devices available that can be sold as ultra-low cost handsets. This will undoubtedly mean that the Android platform statistics that we always see will continue to have a fairly high rate of Android 2.3 Gingerbread, because these low-cost devices simply can't handle the newer versions of android. And, if the rate of smartphone adoption in emerging markets moves as quickly as analysts expect, that could mean that Gingerbread continues to see new activations far longer than Google would like, until hardware costs come down enough for newer versions to be pushed out. 

Of course, we would love to be proven wrong, and to see Google will rework the Jelly Bean code to be able to scale better to lower and devices, or see Microsoft do the same with Windows Phone 8, but that is pretty unlikely. Perhaps this will be an opportunity for platform like webOS to make a comeback, or perhaps Samsung plans to increase its market share in Africa by using bada, but only time will tell, and it's unclear if that would even be the best solution.

All we know for sure right now is that smartphone adoption is not going to slow down, especially in regions like South America, Africa, and Southeast Asia. So, there will need to be a platform to fill that space. The best solution would be to have an OS specifically designed for those markets rather than an older platform that has known security risks, vulnerabilities, and limitations, but it's unclear where that OS might come from. In the meantime, it seems inevitable that Android 2.3, BlackBerry 7, and perhaps even Symbian will be the platforms that build the quickly-growing smartphone markets in emerging regions, despite the security risks of Android 2.3, the limitations of BlackBerry 7, and the lack of support for Symbian.