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Smartphone makers to woo developers in Barcelona

Fri, 02/11/2011 - 7:55am
The shotgun marriage of Nokia and Microsoft's smartphone platforms puts software developers center stage at next week's Mobile World Congress and is likely to herald further consolidation.

Nokia and Microsoft, the global leaders in mobile phones and software, announced a wide-ranging strategic alliance on Friday that increases their chance of building an iPhone killer -- but it still looks only a slim chance.

"The mobile eco-system space has started its inevitable consolidation," said Al Hilwa, head of applications software analysis at IT research firm IDC.

Apple and Google's Android have seized the agenda in the lucrative smartphone market by attracting hordes of developers who make the small software applications, or apps, that make smartphones come alive.

Apple's iPhone was praised for its design when it launched in 2007, but it was its App Store that transformed the industry by allowing users to personalize their iPhones with easy-to-install games, shopping aids and business tools.

Total sales from all app stores are expected to triple this year to $15 billion, Gartner said last month.

"Most developers are doing Android and Apple; they don't want to do anything else, even if they are paid for it. It's going to be very, very difficult for the others," said Magnus Jern, chief executive of mobile software house Golden Gekko.

The open-source Android software platform, unleashed on the market just two years ago by Google, has already stormed to the top of the smartphone platform popularity charts, overtaking Nokia's Symbian at the end of last year.

Device makers such as Samsung, HTC and Sony Ericsson have embraced it as it offers features and functions they could never hope to develop on their own as quickly.

UPHILL BATTLE

Many manufacturers will also be trying in their own right to lure software developers at Mobile World Congress with special events laid on for them.

A consortium of telecom carriers, who have so far largely failed to profit from the apps boom, will also launch their own app store, named WAC, in Barcelona on Monday.

But it is an uphill battle.

A large survey of developers by Appcelerator showed last month that the majority of developers continue to focus on Apple and Android, although BlackBerry maker RIM and Microsoft are also growing in popularity.

The iPhone was the most popular platform, with 92 percent of developers saying they were "very interested" in it, followed by Android, with 87 percent. Microsoft and Nokia together mustered just 48 percent.

In addition to Google and Apple, there are around a dozen different smartphone operating systems, and more than 100 other firms trying to build a developer community around their own application stores.

"Companies have underestimated how hard it is," says David Wood, technology strategy lead at Accenture and ex-senior manager at Symbian.

"If the core product is good enough, the ecosystem will start to sort of form itself. If the product is really good, it's easier," he said.

CONSOLIDATION

Developers on Friday broadly welcomed the Nokia-Microsoft software tie-up, saying it would make their life easier.

"This will be a considerable relief for all developers, as it will answer the question, Which is the third platform to expand to?" said Christian Lindholm, a partner of the Fjord agency, which designs services for all leading mobile platforms.

"We have had this question multiple times in the past months, and there has not been a clear answer. Now it is clear, it is Microsoft."

But the fact that even companies with the scale of Nokia or Microsoft have been unable to attract sufficient developer attention alone makes further consolidation seem inevitable.

"The history of computing shows it has always consolidated to two to three operating systems," says Niall Murphy, chief executive of Ideaworks3D, which creates tools for developers.

"The question is, How many seats there are at that table and who is going to sit at them?"

Developers are increasingly worried about how they can succeed in the market.

In Apple's store, there are more than 300,000 applications, making it difficult for developers to stand out and make a living from software usually sold for $0.99 a piece, even though there have been more than 10 billion downloads so far.

"It's extremely difficult to build a business on $0.99 an app," said Scott Kveton, chief executive of Urban Airship, whose software is in more than 10,000 different applications.

"I think there will be fewer gold-rush stories, and they will be further between."

(Editing by Will Waterman)

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