Entry # 9 20600331

My Opinion/Summary:

Google was now looking to start a cellular phone operating system. They had support from companies like T-Mobile but another company named Verizon snubbed Google’s plan completely. Verizon decided to go with another operating system named Android. Verizon is planning to introduce new phones in the United States with the Android based operating system. Verizon’s decision to not take Google’s new platform as their primary operating system for their phones was a very good business decision for them. Google has already become a mega giant in the internet field. For them to go into the cellular phone business would be a viable option. If the operating system was a success, that could be the step they use to make their footprint bigger in the cellular phone industry. If Google was able to do this, this would only make another competitor for Verizon in a market that is already saturated. For Verizon, this could pose a very large problem, with T-Mobile and Cingular already fighting Verizon for a market share in the cellular phone industry.
Not using the Google platform was also a great idea on part of Verizon for another reason. The operating system Verizon is going to use, LiMo, has already made plans and is in the production of making operating system that is compatible for their mid-grade and low-grade phones. LiMo is an operating system that is viable for their smartphones, so another platform would be necessary for those who would want consistency in all the level of their products that they produce. This is a great plan because customers who could only afford the lower-end phones could get used to using the same type of platform that the higher-end phones use. So moving up to the higher end phones would not be difficult for them, thus being able to keep already existing customers. If the customers knew that all the platforms were related and easy to use, new customers could also be drawn to Verizon over Cingular and T-Mobile.
These are the reasons why the choice of LiMo over Android was a very good business decision.


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Article: Verizon Snubs Google's Platform

The cellular giant is throwing its weight behind the Linux-based LiMo operating system, instead of Google's Android, for its mobile phones

by Jennifer L. Schenker

When Google (GOOG) revealed last November that it planned to develop its own operating system, called Android, for mobile phones, and had garnered the support of big names such as Germany's T-Mobile (DT) in an industry group dubbed the Open Handset Alliance, it sent shock waves through the mobile business. Speculation was that the search giant's move would reshape the landscape and aid Google's bid to extend its multibillion-dollar online advertising empire onto mobile devices.
But the mobile industry has long been reluctant to cede the heart of handsets to any scheme that furthers the business model and ambitions of a single company. Android is proving no different: Six months after the initial flurry of announcements from Google and the Open Handset Alliance (OHA) not a single operator has revealed concrete plans to introduce an Android phone.
While major operators don't rule out adding Android-based handsets to their offerings, some already expect them to be niche products. In that sense, they'd be similar to handsets powered by Microsoft (MSFT) Windows—which still amount to just 12% of smartphone sales some six years after they first hit the market—or the Apple (AAPL) iPhone, which for all its buzz may capture just 2% of the global smartphone market, analysts say.
Verizon Wireless Goes for LiMo
Now, in what industry experts describe as a major move, Verizon Wireless (VZ and VOD), the second-largest U.S. mobile operator, have dealt a blow to Google. On May 14 the company said it would throw its weight behind an Android rival created by an organization called the LiMo Foundation. "LiMo really is gaining substantial traction, while Android is increasingly looking a bit out on a limb," says Geoff Blaber, director of devices and platforms at CCS Insight, an independent British mobile consultancy.
Launched in January, 2007, by six mobile industry leaders, LiMo's technology is based on the open-source Linux operating systems and is meant to be an "open platform" that the entire mobile industry can use to power next-generation, media-rich phones that don't cost a bundle. LiMo's original backers included Motorola (MOT), NTT DoCoMo (DCM), NEC, Panasonic Mobile Communications, Samsung Electronics, and Britain's Vodafone, whose 252 million global subscribers make it the world's largest multinational mobile operator.
Verizon Wireless, which will take a seat on the LiMo board, brings the total number of members in the organization to 40. "We will support LiMo in our device line-up and in all our direct retail channels," says Rosemary Garavaglia, executive director for technology at Verizon Wireless. "From a major thrust standpoint, this is where we are putting our resources."
The involvement of Verizon Wireless is especially meaningful. The joint venture of Verizon Communications and Vodafone has created the most profitable U.S. cellular business in part by tightly restricting the selection of devices and applications allowed to run on its network. Over the past year, though, the company has begun shifting toward a more open model to help reduce costly support overhead. Early on, Chief Executive Lowell McAdam said Verizon Wireless was looking at Android (BusinessWeek.com, 12/3/07). So the embrace of LiMo is doubly significant.
No Support For Android
The company now says it will accept Android phones onto its network when they appear, along with any other devices that pass basic certification testing. But it will only provide customer support and services for products that are distributed through its official retail channels—and as of now, it has no plans to sell Android devices in its stores.
"This is not about 'against or for' anything," cautions Garavaglia. "But traction is important to us. The appeal of the LiMo initiative is that there is broad membership from the full [mobile] ecosystem and a number of devices already on the market."
The other draw for Verizon and other major operators around the world is LiMo's promise to enable a new generation of midrange and even low-end phones that can be more easily modified and upgraded to offer the latest whiz-bang features, especially those involving Internet services.
In today's environment, lower-end handsets (called "feature phones" in industry parlance) tend to use inflexible, homegrown software that's nightmarishly hard for handset makers and mobile operators to modify. On the other end of the scale, high-end devices (a.k.a. "smartphones") require serious horsepower to run adaptable but complex PC-like operating systems such as Windows—and thus remain too expensive for mass-market customers. Both LiMo and Android aim to span the gap.
170 Million Smartphones?
It's a big opportunity. Analysts figure the smartphone market being targeted by the likes of Apple, Microsoft, and London-based Symbian, which is backed by Nokia (NOK), will amount to about 170 million units this year. By comparison, unit sales of feature phones of the sort that could run LiMo or Android should top 300 million. By 2012, figures New York market watcher ABI Research, some 127 million mobile gizmos will be running some form of Linux, up from 8.1 million last year.
With Verizon's move, LiMo now looks to have the upper hand. "When it comes to traction in the market, commitment, road map, and software maturity, LiMo is a long way ahead of Google," says stock analyst Richard Windsor with brokerage Nomura Securities in London.
On May 14, LiMo also announced seven other new members: French mobile operator SFR, Korea's SK Telecom, chipmaker Infineon Technologies (IFX), French handset maker Sagem (SAF.PA), Norwegian software developer Siving Egil Kvaleberg, browser company Mozilla, and Red Bend Software, a developer of mobile management tools. U.S. chipmaker Texas Instruments (TXN) also recently joined. LiMo's executive director, Morgan Gillis, says the group is in advanced negotiations with other wireless operators and handset makers in Asia, Europe, and Latin America.
Hedging Their Bets
Vodafone already has introduced several Motorola handsets built on LiMo and plans to add others to its network later this year, says Guido Arnone, director of products and technology at Vodafone and vice-chairman of LiMo. And more than 10 million phones per year are expected to migrate away from a Japanese flavor of Linux to LiMo over the next two years, says Kiyohito Nagata, managing director of products and services at NTT DoCoMo, and chairperson of the LiMo Foundation.
To be sure, some companies, including DoCoMo, are hedging their bets. The Japanese operator also belongs to the Google-backed OHA, as do Motorola and some other LiMo members. More than 30 companies have joined the OHA, which aims to develop technologies for mobile services and technologies, with the Android platform serving as a first step. The OHA describes its target as a software environment including an operating system, middleware, user-friendly interface, and application programs.
The trouble is that operators say they are not sure to what extent the applications—namely Google's—can and will be separated from the operating system. Indeed, Vodafone Chief Executive Arun Sarin has said publicly that his company won't support Android until it knows exactly what Google plans to do with the data it can collect via phones. Operators aren't willing to cede information about their customers that Google could leverage for its advertising business, says CCI Insight's Blaber.
Google executives counter they're getting into operating systems only to ensure that an open-source mobile phone really goes forward. Eric Chu, Google's group marketing manager for Android, dismisses talk that the software isn't catching on. "We know there will be carriers and handset makers that are going to deploy it," he says. "The level of activity around Android has been extremely high."
$250,000 Prizes
As proof, he mentions the Android Developer Challenge, a contest to identify promising new mobile applications. Google already has received 1,800 submissions from 75 countries, two thirds of them from outside the U.S. Ten top winners will receive $250,000 each to develop their programs, while another 10 runners-up will each get $100,000.
Analysts predict that Taiwan's High Tech Computer (HTC), which does not have an operating system of its own, will be the first handset vendor to make phones incorporating Android, and that T-Mobile will probably be the first operator to offer the phone. But they predict that few devices will be on the market by the end of the year and that the first version is likely to be imperfect.
Christian Lindholm, a partner and director in the London office of Fjord, a strategic design consultancy who is credited with being the father of Nokia's Series 60's user interface, says Google may be underestimating just how tough it is to build a mobile operating system. "The integration of the hardware and software is ridiculously hard," says Lindholm. "To get a real proper user experience, you need a deep fusion between software and hardware."
Many of the same challenges face the LiMo Foundation. But whichever initiative first manages to produce a user-friendly Linux mobile operating system with global uptake will create a seismic shift in the industry. "These are big bets," says Lindholm. "Whoever wins is going to win massively."
With reporting by Olga Kharif in Portland, Ore.