Open is better than control
Recently, we got a nice treat at BBC. Nice place to try “an upper-class experience”. The food was great. The best part was the Open Bar in my opinion :) Thanks to our dear director. Seriously, let’s talk about Openness. Before that, allow me to nag one more thing first: Open Internet. It’s been an extremely bad year on Net Neutrality. Read When The FCC Kills Net Neutrality and search NN. gofccyourself, please.
In the last chapter, I talked about how Apple ignited the Smartphone Revolution. All things being equal, vertical integration is a common formula to tip a paradigm shift with unstoppable speed. However, if to go for the next 10x, the Open Platform strategy is the One. Android happened to be the one playing the strategy well. To be clear, let’s focus on facts rather than on moral debates. Hopefully, history may teach us something for the road ahead.
Don’t get me wrong, it almost always starts with visionary leaders creating 10x value. e.g. Ford on “Any customer can have a car painted any color that he wants so long as it is black.”, and Jobs on “back to basic”. But, no matter how successful, it is just a Product Strategy. That works great in the Bootstrap phase of the Paradigm Shift Life Cycle. It will take a Platform Strategy to go to the next level: Scaling. Open Platform is the most powerful strategy in terms of 3D: Diversity, Democratization & Diversification.
You call it Fragmentation, but I call it Diversity
Many criticize the Android Fragmentation issue. They are right. However, it comes with a bonus, called Choices. I don’t know about you, but for me having any choice is always better than no choice at all. Even if they may be “inferior” to the leading One in some measures. But at what price & position is one to judge? So, you may continue to call it fragmentation, I prefer to call that Diversity.
Open ecosystem
It is all about a Platform that can sustain an Ecosystem. If you agree Ecosystem is a good analogy for the industry, then Darwin’s theory should also be a reasonable analogy to get some fundamental insights, especially on variation and natural selection. Yep, you don’t need that if you are lucky in a static industry/environment or optima solutions are known. Fortunately, Smartphone is neither of them.
Diversity incubates innovations
A health ecosystem can be resistant to uncertainty and rapid environmental changes. In biology, Species Richness is a good measure of the health of an ecosystem. For example, QCOM’s Android Firsts lists a handful of OEM innovations way before Apple does. It is less about if each of them is a commercial success or not. It is all about trying something different, which may pave the way for the next big thing. When no one knows what that could be, the best way is to keep trying something new and trying as many as possible. An Open Ecosystem is very efficient in facilitating those “crazy” ideas at scale. BTW, kids also do biology or go green at least.
Democratization: Big Is Kind Of Beauty
In the mobile industry, the falling of titans has become a norm, e.g. Moto, Nokia, Blackberry & hTC. They all had their glory. It’s not necessarily a bad thing for consumers if there are more choices and better/cheaper mobile phones. Android as an Open Platform, enables any device makers to build and differentiate their products based on commercial products, Nexus & Pixel. Fundamentally, it puts a new spin on “the division of labor” in the whole Smartphone Value Chain. It is not just about 10+ companies contributing something (e.g. Pixel XL vendor list by IHS Markit ) to make a product. But also, each vendor can develop its part in parallel and advance on the same baseline/platform. It levels the playing field to bring Economies of scale to the whole industry (instead of a few companies) via competition. Whereas, Walled Gardens rarely achieve or even allow such things. Just try to imagine a world: any consumer can have a smartphone made by any company that she/he wants so long as it is made by Apple.
Life always finds a way
One “bad” thing of an open & diverse ecosystem may be: the businesses have to compete harder to survive. Sure, but on the other hand, a bigger pie is always better than a small one or just “A pie”, that only one can touch. It is not even the full story. The longer-term impact is the Economies of Scope. For example, a component vendor can use its cash cow business in mobile (which is very big and still growing) to find new ventures into other fields. This is a common growth strategy. And an Open Platform can make such expansion easier. For example, Android expands to many new fields already: Wear, TV, Auto, etc. Now even Chromebook runs Android Apps. The beauty is a vendor can reuse most of its talent and investment in Android on new ventures or opportunities.
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert.
