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Vertical Mobile Software Stacks: Good or Bad?

by Sravan Kundojjala | Aug 24, 2010

It's hard not to see that mobile software platform players are positioning themselves as a one-stop shop to offer an integrated experience to their target customers. What this means is that more and more 3rd party functionality and apps are now built right into the core of the platform. This kind of software verticalization is good only as long as the core platform functionality outclasses the stand-alone 3rd party functionality. But the problem starts when a platform vendor packs an inferior solution into the core of the platform and limits platform flexibility. This could threaten that platform's long-term credibility too. For example, if a mobile software platform player is bundling their own browser, media player, and internet services with the core platform they should make sure that these applications and functionality are comparable to other best-in-class solutions.

There are couple of ways a mobile software platform player can avoid inferior solutions into its software stack:

• By acquiring 3rd party companies that provide superior functionality over the platform's core functionality

• By ensuring that their platform is flexible enough to accommodate 3rd party functionality integration

Now let's get back to some real world examples. Android has so far proven flexible enough to accommodate 3rd party innovations that are superior to Android's built-in functionality. For example, some OEMs replaced the built-in onscreen keyboard with SWYPE; other OEMs replaced built-in multimedia functionality with their own stacks; and some OEMs even replaced Google's built-in internet services. This is one of the advantages with open source platforms. However, the down side of this flexibility is that the platform's consistency is compromised resulting in delayed updates to consumers. If Google stops OEMs from customizing Android then the platform could potentially suffer from a lack of innovation as Google becomes the single source of innovation. Now let's take a contrasting case: Microsoft's Windows Phone 7 (WP 7). With WP7 Microsoft appears to be taking control of the platform experience by limiting 3rd party apps to replace core platform experience. It seems that Microsoft is building much of the 3rd party functionality into the platform itself which could limit 3rd party innovation. The downside of this approach is that Microsoft needs to be at its best to make sure that the platform's core functionality is superior to 3rd party functionality. Failing to do so could result in losing share to more flexible open source ecosystems.

This is definitely an interesting dynamic to keep an eye on as mobile software platform players increasingly try to integrate 3rd party functionality into the core of their platforms. Winners will be those who strike a balance between consistency and flexibility. There seems no clear winner in this aspect for now as many players are still in the process of building integrated mobile software platforms.

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