Microsoft + Nokia: Now We’re All Like Apple

Ten years ago, everybody in the tech industry — and I mean everybody — was convinced that the best way to dominate a technology market was to create an operating system and license it to a bunch of other companies. “The key to success is creating a standard,” said the experts. “If you write software for only your own hardware, you’ll never achieve the economies of scale of a licensed OS, and you’ll never be able to dominate the market without a wide range of licensees selling your hardware.”

The case for licensing seemed obvious because of the success of Windows. Apple had kept MacOS to itself, while Microsoft had licensed Windows. Microsoft won. Therefore licensing was the best way to go.

But then Apple transformed the phone market with the iPhone, and created the tablet mass market from scratch with the iPad. Suddenly the proprietary approach started to look a lot better.

Ten years later, the idea of an independent operating system licensed to all comers is a fading ideal. The two leading operating system licensors in mobile have now bought major hardware companies: Google with Motorola and Microsoft with Nokia. Both companies continue to license their software, of course, but clearly they don’t feel that’s enough. They need to also create hardware.

When you look at it in terms of tech history, this is a stunning change. I’m having trouble thinking of another industry that changed its basic assumptions so thoroughly in such a short period of time. I’m still trying to sort out what this all means for the rest of us, but here are some preliminary ideas:

Are they fighting the wrong war?  Since the experts were supposedly all wrong about licensed OS ten years ago, we should ask whether they might all be wrong again today. The standard assumption behind buying a hardware company is that by combining hardware and software you can produce the sort of fantastic user experiences (and fantastic margins) that Apple does. There are a couple of potential problems with that reasoning:

1. There already is an Apple. You can make a good argument that Cupertino has already used up most of the customers who are willing to pay extra for a value-added smartphone or tablet, and that the remaining customers are mostly buying on price. That creates the possibility that Microsoft (and the Motorola part of Google) will end up with the worst of both worlds: an Apple-like expense structure but with commodity margins. Google can afford that since it has the web advertising business to subsidize it. Microsoft, with restless shareholders and all of its cash cows under threat, has much less room to maneuver.

2. Does combining hardware and software really work? Other than Apple, how many integrated hardware-software companies have succeeded wildly in mobile? Let’s see, there’s Palm, BlackBerry, Danger... Apple starts to look like the exception rather than the rule. I start to think the real lesson is that no strategy will work if you execute it poorly. Perhaps Microsoft would have been better off fixing the flaws in its licensing model rather than totally changing strategy. But it’s too later for that, so we should ask why Apple succeeded where so many other companies failed.

Maybe it’s because Apple has a culture in which product managers, rather than engineers, take the lead in defining products. If that’s the case, Microsoft will need major cultural changes, and Google, well, forget about it.

Or maybe you just need to have a supernaturally brilliant CEO leading the whole thing. Which brings me to my next point...

Microsoft’s next CEO will need to be Superman. Here’s the mess Steve Ballmer will leave for his successor: 
–Windows 8 has failed to produce a turnaround in Microsoft’s gradual decline.
–The Surface tablets have more or less died in the market.
–The company’s just been through a massive top-level organizational change. Those things typically take a year to trickle down through the organization, as the lower levels of management get resorted and reassigned. That process will be disrupted while everyone waits to see if the new structure will stick with the new CEO (unlikely; new CEOs almost always want to change things).
–And now Microsoft needs to mesh the Nokia and Microsoft businesses. There’s a cultural challenge: Nokia’s is a collectivist Finnish hardware company while Microsoft is a dog-eat-dog hypercompetitive software business. There are also operational challenges. As I learned when I worked at Palm, it’s incredibly difficult to manage an operating system to please both your in-house hardware team and your licensees. They always want conflicting things. Microsoft claims it can both license Windows Phone and run Nokia. I hope that’s just bluster, because I don’t think it will work in practice.

It’s an almost ridiculously complex situation. Who could make all of it work? Who has an ego big enough to even try? To me, it feels like a job for a mad cartoon genius rather than a human being. Megamind would be perfect, or maybe Gru from Despicable Me.

Either one could do the job

I’m only joking a little bit. The CEO hire at Microsoft is going to be pivotal, and it’s difficult to imagine anyone who has the qualifications to make it all work.

Microsoft needs to find a new measure of success. In its presentation on the deal, Microsoft bragged about how it’s “outselling BlackBerry in 34 markets” (link). This is not the first time I’ve seen Microsoft use BlackBerry as its measure of success, and it needs to stop. It’s like bragging that you outran a dead guy in a marathon.

The conspiracy theorists will love this. Even before the purchase of Nokia’s phone assets, some Symbian die-hards had muttered that Nokia CEO Stephen Elop was a Trojan horse: a Microsoft exec sent to Finland with the hidden agenda of destroying the company’s value, so it could be snapped up by Microsoft. That’s certainly the outcome we got, so I’m sure the conspiracy buffs are boiling today. But for the record, I don’t think Elop was a Trojan horse — Nokia’s management was doing a very good job of destroying its value long before he arrived.

What happens next? There are some interesting shoes that might drop next. Now that we have three big hardware + software players, will the other mobile hardware makers feel pressure to copy them? In particular, will Samsung decide that it needs a different operating system? Samsung already has Bada OS, which it reportedly plans to merge with the Tizen project it's driving with Intel. Maybe it’ll feel that's enough. Will the Chinese vendors feel pressure to act? If they do, there aren’t many other operating systems they could buy. Maybe BlackBerry? Would the Canadian government allow that?

That’s my quick take, but it’s a complicated situation and there’s a lot more to think about. What do you think it means? I’d love to see your comments.

[Thanks to Adalbert for the correction on Bada.]


  1. Good article.

    Samsung already has it´s own operating system, Bada

  2. Thanks. You're right, and I fixed the post.

  3. I think for microsoft to succeed it has to be broken up into entities that can be better managed, I mean with the addition of Nokia there have like more than 100,000 employees!!! I mean that like the population of a town! I am not sure how they should be broken up like xbox or office or enterprise but I think it would be hard or next impossible to get all of them working together towards a common goal! Interestingly Microsoft has also purchased the ASHA paltform for mobile phones which to me seems like they are trying to capture low end market which is still up for grabs but is shrinking.

    This looks like a, grab your popcorn, the next few years are going to be fun!

  4. There already is an Apple, minus Steve Jobs, in a smartphone niche with falling margins.

    Google merely produces reference Android hardware. The dominance of Android reaffirms, that dominance in technology markets means creating an operating system and licensing it to a bunch of other companies. Microsoft, achieving that in PC's, doesn't necessarily mean it can do it again in other markets.

  5. Fantastic Article.

    What we're seeing in the market right now is a hurdle race where the turns are random. One unpredicted turn, and the whole lot of them, albeit one or two, are struggling to recover, only to be thrown off again at the next bend.

    However, I think what we're seeing here is less of a stab at "is this the right method?" and more of an evolution and I'll tell you why.

    Until Apple changed the world with the iphone, the tech market largely revolved around the business world, and in that world, producing a software standard across multiple hardwares was the best way to g, because it was cheaper.

    However, Apple proved that the consumer clearly values reliability an speed over price point.

    A unified hardware/software model is simpler to market and much less dangerous from a quality control perspective. It will allow Microsoft to be in control of its marketing and hardware, providing a higher level of quality. What Microsoft saw in apple was that it's success came from quality and that, I believe, shows in its move to change its business model and even in the choice of companies to acquire.

    In the end, I think the numbers speak for themselves. We saw Apple's model work, but it wasn't a model run on unification - it was a model run on quality control. I think if Microsoft can keep that in mind through these transitions, they have a shot at coming out on the other end of this.

  6. Nice article, thanks!
    Some comments from me:
    Apples are falling, because there is no more Steve-the-gardener.
    Google bought Motorola for the sake of IP to protect Android. And Google is capable of producing reference phones and tablets without Motorola anyways.
    MS approach with licensed OS worked well, for a decade, while everyone liked to play sysadmins at home. Nowadays, when everyone likes seamless experience Apple's approach proved to be better.
    Yes, comparing to Palms and Blackberries, Apple is an exception, but as we can see with Galaxy sequel, one can make plenty of cash with volumes.

    As a result I still see future for Lumias.

    As for SurfaceRT - it is quite good, but one has to understand it is 1st generation device, we have to wait and see how the market will accept 2nd gen Surface.

  7. When Windows dominated Microsoft drove events; today they are reacting to them. The success of iPhone and iPad allowed Apple to drive events in mobile for a time; increasingly they have become reactive - and actually quite slow at it! Google's reactions seem vague and occasionally contradictory; does anyone know what those dudes really want? Do they?

    In a jungle run by Rabbits and Scavengers the food chain becomes chaotic. Top predators give life in the jungle some shape. Just about the only dude who walks the walk these days is Stephen Elop. It makes you wonder - what if HE was running Microsoft?

    I give that option under 40%; but wish it would happen. We need some actual lions, not just Rabbits and Scavengers. Lions give the jungle some class.

  8. Nice analysis. I think the reason Microsoft keeps trying to play the mobile OS angle is the fact that the 2 dominant players have managed to create successful walled gardens. The money is in content sales, if you can monetize all of it like Apple does and Google tries to also do with some level of success (people hacking the OS create some leakage).

    Making Android devices will definitely be a margin squeezed industry, but if you can earn enough recurring revenue from every customer running your OS, the hardware margins are much less important. Thus the purchase of Nokia's smartphone business makes sense. This however comes loaded with the featurephone business, which has huge volumes, razor thin margins and shared production facilities, logistics & sales channel with the smartphone unit. It'll be interesting to see what MSFT decides do with that. I think this is what they need the Nokia brand for 10 years for.

  9. Microsoft's angle is clear. They must protect their Windows Phone business, and they might want to turn it into an integrated Apple-like business.

    Nokia's angle is less clear. The fact that they are selling their feature phone business too probably means that they see no way to make money in the phone business. Not in feature phones, and not in smartphones. As Nokia used to be quite good at making money in the phone business, I think that is the angle needed to solve the riddle.

  10. if Samsung is smart they are working hard on Bada right now. My bet is Google will "close off" Android the very moment that it makes sense to do so. But as long as it's open they still control market share.

    Regarding your enumerated problems:

    1. Apple is "value-added", but combining hardware and software doesn't inherently mean paying extra-- in fact it should be the opposite. Integration means greater efficiency, and no licensing fees would suggest a less expensive product, not more.

    2. Combining hardware and software has a greater chance of working than not. Microsoft could still screw it up and make a not so great product, but if they go proprietary they eliminate all the other licensees that would do an even worse job than they, and fracture the market like Android's, both in hardware configuration and UI inconsistency.

  11. 1. Samsung killed Bada already, and Tizen is delayed. For now, Android + TouchWiz is Samsung's platform play. It doesn't have full control, but until Google/Moto sell meaningful global sales volumes - which is years off, just to rebuild sales channels - it may not matter.

    2. I'm not convinced that Microsoft is buying Nokia because it wants to be like Apple - it does want to be like Apple, and that explains a lot of other things (Surface, the reorg, etc.) but not this, because Microsoft's deal with Nokia was working fine for Microsoft. The problem was that the deal was not working well for Nokia at all. Yes, volumes are increasing, but not fast/big enough, and profits were just not there. Motorola faced a similar moment, and Sanjay Jha conned Google into buying them for its IP. Elop was really methodical: he had locked Nokia into a deal with Microsoft for five years, so there was no chance to switch to Android now. Phones weren't working. So he spent his remaining cash buying back NSN. That, plus NAVTEQ, provided the means to exit the phone business entirely. Nokia represents nearly all the Windows Phone volume, so exiting the phone business would be disastrous for Microsoft. Buying Nokia is better than that scenario (proof point: the deal includes 1.5b Euro financing NOT dependent on the deal closing. If Nokia is going to continue pursuing Windows Phone, it needs cash for operations). Plus Microsoft can now completely control the marketing message, plus it gets a good deal on IP, plus Nokia is Finnish, so the whole thing can be done with cash that was stuck offshore anyway. But I don't think Microsoft really wanted to buy Nokia - if it had, it would have done so back when Nokia first switched to Windows Phone.

  12. Looks like Windows Phone is going to leverage Asha to go up against Android, and the iPhone 5C to capture the bottom 2/3 of the pyramid in Africa, Asia and South America.

    Regardless though, my guess is that the bottom 2/3 of the market will be captured by a mix of Chinese shanzhai makers, not the leading brands.

  13. I've come to the conclusion that the top three spots in smartphones are taken by Android, iOS and android, where little "a" android is the OS open source without Google's services and lbeing used as a framework by China Mobile, among others.

  14. Today; everyone is thinking about whether to do software only or bundle the entire experience in technology is the best direction for Microsoft;

    The problem with this is that you have already assumed that in order for Microsoft to survive it needs to be in the tablet and mobile business.

    I think that is the wrong question. The right question is what is Microsoft good at in a world demonated by tablets and mobiles and what is its value add.

    Microsoft has a history of continuing failures until it succeeds; and I think this is not one of them ( Windows vs Mac , Xbox vs PS) they normally just wait until their competition gets tired and they add a small value by making it a little better. However in this case neither Apple has any reason to get tired ( best product vision) , nor google ( most used platform to drive advertising);

    Therefore Microsoft is fighting the wrong war and will ultimately come out not knowing if they won battles or not.

    Instead it should become a company focusing on making the best pieces software regardless of platform and web and this way it can win the enterprise war forever while ensuring they are relevant in future( Office, Skype, Adobe?) using a locked in subscription model and tie up all the loose ends (work force, crm, erp).

    Bill Gates once said the best way to succeed is to spend a lot on capex and let revenues come in future without spending incremental costs directly correlated to revenues.

    Microsoft needs to move from OS wars and into best software war again to make themselves relevant.


  15. When the PC market was small, having multiple HW vendors use the same OS allowed a larger pool of end users to finance development of that OS, thus allowing more resources to be spent to innovate faster. An integrated vendor like Apple had less resources, but they could maintain better quality control.
    When the PC market grew the advantage of scale has diminished as the OS teams have reached saturation in their sizes. At the same time HW prices dropped, and consumers started being able to afford to pay attention to quality more than they did before. In addition as focused moved from PC to mobile, the aversion to poor quality became more pronounced.
    So it was the right strategy to have separate OS back then, and it is the right strategy to have integrated design now. There is no contradiction.

  16. If Palm had not licensed their operating system, and had instead iterated on one integrated device year after year, they could have been the ones who created the iPhone. They could have created the iPod if they had any idea what they were doing. They had all the pieces. But they were distracted by trying to be the Microsoft of mobile.

  17. "It’s like bragging that you outran a dead guy in a marathon."

    OMG, coffee all over my monitor!!!

  18. I wish you would have gone a little deeper regarding Danger, other than just mentioning them. Whatever happened to Danger, anyway? Oh yeah, that's right, Microsoft bought them, and then spent a couple years proving that they didn't know what they were doing in the phone space. At all.

    From Ballmer's smug mocking of the iPhone at its introduction, to their efforts with the Kin and the Zune, I think they've proven that the success that they enjoyed with DOS/Windows and Office were their apex, and it's all down hill from there.

  19. I'm not so enthusiastic about “ Now that we have three big hardware + software players…” and rather prefer, “Other than Apple, how many integrated hardware-software companies have succeeded wildly in mobile?”

    Google's Moto operation has potential, but if Moto were a free-standing firm, they'd have been written off the same way that Nokia has been, as being hopelessly off the cutting edge. There's no indication yet that Google got ANYTHING with the acquisition other than the cash and the set-top line that they spun back out. (The patent portfolio has been a spectacular black eye, not even a bust.)

    It seems more likely that the real reason is that competitive advantage, or the lack thereof, is striking in the industry. Apple has its ecosystem, first-mover advantage, logistics, smarts to negotiate hard with carriers and is exploiting iOS for every scrap of advantage/differentiation it can get.

    Google, by driving down the value of OSs, has shifted the game to scale and might, which have favored Samsung but won't do Moto any good. And Microsoft now has/is a failed firm; as Dediu points out at Asymco.Com, phone firms just DON'T come back from the dead. (I don't recall his justification for his 100% correctness of the empirical observation, but he could mumble “network effects” if he had to.)

    I'd say more that we are at the first intermission of The Incredible Commoditization of Smartphones, an amazingly short 6 years into the game. Apple knocked out WinMo and RIM as high-end competitors, and Samsung killed Nokia. But in the wings are dozens of BrandX (or small-a-Android) phones that won't pay Microsoft royalties (because they're effectively beyond the reach of IP law in China, India and Brazil and because there are no margins to cover $10/phone). I'd say Samsung is the least well-defended against the hordes, and when we get back to the show, we'll be watching their strenuous efforts to differentiate themselves from cheaper, local efforts that might enjoy some nationalistic sponsorships and will be willing to think they're smart because of rapid ramp-up thanks to selling at cost.

    During this act, Apple may—since it's an exceptionally savvily-run company—keep its multiple advantages, and stay profitable, while Moto and Lumia brands will eventually lose their allure as a way to sell something else profitable.

  20. So many wintards and fandroids STILL dreaming that Apple will 'go out of business' just so they won't be so embarrassed to be using a OBVIOUS copy, and criticizing, rather ignorantly, the original.

    PC failed because a PC is a PC is a PC. You only have ONE real choice when buying a computer. PC or Mac. That's it. Phone is similar, iPhone or Android (like a bad, but speced up copy, for geeks who think they are super smart but are not).

  21. "The case for licensing seemed obvious because of the success of Windows. Apple had kept MacOS to itself, while Microsoft had licensed Windows. Microsoft won. Therefore licensing was the best way to go."

    I'm not following. Who actually thought this, and why? Certainly no Mac user: Apple did license Mac OS for a while, and it almost killed the company. And the other PC operating systems of the 1980's (like CP/M) were also licensed and sold independently, and they did not become dominant. Clearly, this was not the only significant factor.

    In the 1990's, there were a couple other cases where companies tried to sell an entire PC hardware/software stack and failed, and then switched to software licensing (notably BeOS and NeXT), but they failed even after switching to licensing.

    Anyone looking at Microsoft in ~2003 as a reason why licensing an OS was the best way forward had to squint really hard to ignore every other consumer operating system in history. :-)

  22. Michael, as usual ... very insightful.

    I'd like to point out something, and somewhat disagree with you on one point: that licensing has worked or did work for some firms and Apple was the [successful] exception in integration.

    I believe Microsoft was the lone success in the licensing business, NOT because the licensing model is a good model (business wise or usability wise), but rather because of the specific Microsoft practices and shady deals and mere opportunities of that specific time period (never to happen again).

    Specifically, Microsoft wrangled the licensing model out of IBM's hands, using very specific business moves (mostly shady, illegal, and down right dirty) during the DOS era .... FUD was the highlight of it, as was vapourware. In fact, Microsoft's sole "innovation" and contribution to technology has been vapourware !!!! That domination, gave them ample opportunity to crush OS/2, Novell and other small players during the Windows era (this time stealing from and stabbing Apple).

    All of this was possible because Bill Gates was in the driver's seat, and he was an extremely shrewd and evil businessman (don't be fooled by his latest philanthropic cover-up). In fact Ballmer was the "mini-me" of Bill Gates for many years. And if you look at Google in the past 5 years, they have been playing Microsoft's strategy book from the 1990's down to the t (though they claim that they're not evil).

    I'd like to propose that licensing hasn't worked out for anyone OTHER than Microsoft !!! It didn't work for Unix (everyone rolled their own and the proprietary forks were the only successful ones). In fact, in the Unix world the most successful (business wise) were Solaris (Sun), HP/UX, IRIX (SGI), and IBM AIX. Everyone else lost ....

    So if we go back far enough, the only OS that was licensed and made a profit OTHER than Windows was Adobe PostScript !!! And that was because it was a monopoly ... in recent years, they've obsoleted that technology by PDF.

    All successful platforms of the 80's and 90's were vertically integrated .... other than Windows. Apple just happened to be the ONLY case of integration that was consumer-facing. Once again, "BILL GATES" .... NOT Microsoft ....was the lone exception here ....

    And that success will never be repeated again, because all the players have learned their lesson ... it's been put through the courts and the DOJ, so there is awareness, hence why Google couldn't even afford to charge for Android, even if it wanted to.

    I also believe that Google's licensing model, in and of itself is NOT successful ... that remains to be seen. They're indirectly generating revenue from it, and they're still in the RED for it .... they still make more money from iOS than their own platform.

    On another tangent, Microsoft DOES have a success story with integration, and that's XBox. I'll bet the impetus for this merger was that, they would repeat that success, but I don't think it'll work out the same way. Xbox as home-brewed (like Apple products) .... Nokia is a purchase, and much harder to integrate.

  23. good communication platform should be (1) efficient (2) highly integrated (due to complexity of both software and hardware, processor, TxRx, battery power etc), (3) cost per function justified and (4) security. non-integrated format will lack at least one of the above mentioned scope.

  24. Microsoft needs to find a new measure of success. In its presentation on the deal, Microsoft bragged about how it’s “outselling BlackBerry in 34 markets” (link). This is not the first time I’ve seen Microsoft use BlackBerry as its measure of success, and it needs to stop. It’s like bragging that you outran a dead guy in a marathon.

    Huh? The consumer space isn't everything. BlackBerry is very much alive and kicking in enterprise, which has always been MS' bread and butter.

  25. somewhat off topic - but it constantly amazes me that companies like Microsoft keep putting out PR 'positive spin' messages that are so obviously flawed.

    I just got an email extolling the virtues of developing for Windows Phone:

    'It has strong consumer momentum, too, growing at a rate 6 times faster than the overall Smartphone market according to our internal analysis of available data.'

    woo-hoo; Microsoft went from 3% to 4%; I'd definitely be better developing for them rather than Android who just went from 60% to 65% (numbers invented).

    Not to mention the always suspicious 'according to our internal analysis'

    Do they think we're stupid, or do they manage to genuinely swallow their own 'good news'. I'd genuinely love to know.

  26. There already is an Apple...

    That's right, just like there was a a Windows, a MS-DOS, a VHS and so on.

    Apple's formula is unique to Apple; unfortunately it's increasingly looking like it was unique to Steve Jobs. If Microsoft is to survive then it can't be by following someone else's recipe for success because there's always a shelf life on success - just ask any athlete or Formula One team.

    What the future world needs is a 'digital key' and Microsoft is probably one of the few companies big enough and credible enough to create it.

    A digital key would be an evolution of the smartphone, a kind of phone/car key/house key/digital wallet/id card all rolled into one with your settings and personal preferences for different environments in your life all included.

    Cars are nearly up to speed with this while smart homes are lagging behind in wide-spread adoption, not helped by the Global Financial Crisis. NFC is bringing the digital wallet closer and I'm sure Japan would love to be a test case for this concept.

    Such a device relies on the 'aspirational device, trickling down from the rich to the everyman" which worked so well as a business model for the iPhone and could be the solution to the problem of "when everything has a computer in it, everything can be hacked".

  27. The other "OS" in the race is the Web. Microsoft was able to Embrace, Extend and Extinguish when their competition was Netscape; this time they can't.

    Win 8 does attempt to be friendly to web apps. If MS can embrace the Web while adding value, they will have a business.

  28. I think you have misunderstood the Apple of today.

    Perhaps what you write about Apple was true 10-15 years ago. (Although, with all the mythology built around this company, who can really say?)

    These days, Apple is overwhelmingly a marketing business which sells particular types of luxury items to fashion conscious consumers. Whether it's an item which integrates software or, for that matter, overpriced watches or handbags, it's all the same.

    I expect there are still a few old relics in Apple who care about software and about achieving a holistic synthesis with hardware. There may be some who care about creating industry standards. There may be others who wish to create a leading platform which excites developers.

    However, they are merely regarded as 'useful idiots' by the marketing and finance people who really run Apple.

    I suspect that your problem is that, as a Apple alumni, you are fixated by past struggles, like the geriatric general who keeps re-fighting old battles in his head. The former Artist-in-Chief himself abandoned all that nonsense many years ago (as far back as the launch of the first iMac).

    I think you need to try harder to adjust to the reality of the situation; just let go of the past.

    Speaking of reality, did you notice how quickly the buzz from the recent launch has died down? That's a marketing disaster. And that is a very bid deal, since marketing is all this company really cares about. If Applie continue in this way, they will be doomed to bankruptcy.

  29. I think there are other aspects to be explored. Namely the role of free/open source software and commodity hardware. Whilst 20 years ago you could have made the claim that licensing your successful OS (i.e. an OS for which abundant 3rd party software was available) was the path to riches, that clearly turned out not to be the case for proprietary server OS/hardware vendors. Linux and cheap, well performing commodity x86 hardware came along and put the proprietary Unix vendors and their CPU architectures (MIPS, Alpha, SPARC, even Power) into perpetual decline. Sure there were some niches that survived but in general the once large markets are now gone or low margin, and the vendor are now service companies. Even if ARM starts growing in the server space, it will be commodity ARM-based devices.

    I think it is hard to see anything but the same happening for smartphones. It has more or less happened already. Hardware is maturing and rapidly becoming commoditised such that relatively small outfits can produce competitive mid-high end smartphones. Continued integration of SOCs will only make this easier.

    As margins on both the components device become smaller and smaller there will be less and less scope for anyone to (1) pay to license an OS or (2) expend resources developing a new OS and software stack, plus attract sufficient 3rd party developers to gain momentum if there is a "good enough" open source or free alternative available complete with significant 3rd party software support.

    Making andorid free and partially open source, and particularly the speed that got develops making apps was the move that ensured its success. Once, banks and airlines only made apps for iOS, now they all have Android apps too.

    Today non-Android, but linux-based OSs like Jolla can implement the Dalvik VM and run Android apps. Thus, Android OS could die, but the Dalvik VM based apps could keep living, just on top of a different Linux implementation.

    From a consumer perspective, if all you want is the apps that can run in the Dalvik VM, as long as the hardware is good enough, who cares who the device manufacturer is, or what implementation of Linux etc sits underneath?

    With Android commanding such a large market share, I find it hard to envision iOS remaining the exclusive home to apps that people want. Thus, Apple can continue to do what Apple does, and everyone else will take the "cheap and good enough" route of commodity hardware, linux kernel and Dalvik VM. Device manufacturers could make their own flavour of Linux+Dalvik but I can't see them succeeding at creating an entirely new ecosystem for developers to support.

    Access to hardware drivers will remain a problem for widespread adoption of non-vendor supported non-Android Linux+Dalvik VM OSs like Jolla.