An open platform for developers means your destiny isn’t controlled by Apple. It also allows other players in the platform stack (such as security software players and system management solutions) to enter. Proprietary interfaces can breed mistrust with the development community.

The Android Java-based application development environment is significant in my mind because it opens up a much larger community of developers, which is also one of your factors in the article. The learning curve for Apple’s Objective C based development environment is steep compared to Java. Most programmers today are Java programmers, too. Ultimately the platform that gets the most content wins and a platform that is open to the largest number of developers is more likely to succeed because of lower barriers to entry.

Finally divorcing the software platform from the hardware as Android has done gives consumers more options and the ability for the market to optimize on consumer interests.

Ted,
you make a good point around early stage companies. They are definitely more agile and can adapt faster to this diversity, which is an advantage against entrenched companies!

As much as I complain about having to port, fragmentation is actually helping my business.

In my opinion we are converging towards a bipolar market: Apple on iPhone OS and Everybody Else on Android. Cupertino will be able to successfully defend their positioning of “best overall user experience” by keeping a tightly knit integration between device and OS and by closely policing their App Store submissions. Everybody else will pool their R&D dollars behind Google’s open source OS, which will potentially dominate on the basis of having created the strongest ecosystem play.

The other players (RIM doesn’t have one OS, it has one OS per device per carrier… their development tools are infuriatingly bad, Symbian’s developers are jumping ship) will eventually cut their losses and follow HTC, Samsung, Motorola and join the Android alliance.

The question that begs to be asked, though, is: what would happen if there was a disruption such that mobile network operators were disintermediated from the go to market of devices, applications and services?

In a post-telecom world of ubiquitous wifi, femtocells, municipal fiber networks and “network neutral” pipes, which players in the OS space benefit the most? And is there room, then, for an OS-specific discontinuity?

An environment like that would probably settle the question of whether there is specific inner value in owning an OS for mobile devices or whether value can only be derived by an OS player that can get a slice of the subscriber pie.

I think the real solution is a very long-term capital gains tax rate – say 5 years – at 10% or less. And let carried interest continue to follow the underlying capital gains rate on the assets managed……
john

Best – John McNulty, Publisher , Private Equity Professional Digest