Wireless wars: Apple and Google take on the world
If the iPhone's popularity continues to spread with its imminent arrival in Europe and Asia, and if the first Gphone handsets win a large user base, developers may gravitate to those platforms just to save on costs. Compared with the computer market, where there are just three widely used operating systems, the handset industry is fragmented across roughly 40 different software platforms.
Mac software developer Craig Hockenberry has never been very interested in creating applications for cell phones. "It's a lot of politics, and less money" to be made compared with creating software for computers, he says, explaining that programmers have always been forced to bow to a litany of requirements set by wireless carriers, handset makers and other software companies.
With billions of people carrying cell phones, software makers large and small have long eyed the wireless market hungrily as the next big growth opportunity. Instead, they've found that the bountiful profit margins they've enjoyed creating software for computers and the Web don't exist in the mobile realm. While they rarely need to pay a computer maker or an Internet service provider when their wares are used on those machines and networks, software firms find palms extended at every turn in the wireless industry.
A developer who creates a mobile ringtone from a song may only receive 5% of the revenue from the sale of that application, with cellular providers grabbing a healthy cut of the proceeds on top of those that go to musicians and studios. If it's not the carrier, then it's the handset maker or the creator of a phone's software operating system. Or sometimes several of them extract an extra fee from application developers. "The ecosystem is not healthy," says Daren Tsui, CEO of mSpot, a mobile software firm that has chosen to partner with carriers to get its mobile music and video applications on cell phones. Those deals with six North American carriers have produced 2 million monthly subscribers. Yet despite his firm's success, Tsui says, "You've got the developing community basically starving."
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