Seminar on Mobile Business

Prof. Dr. Michael Breitner

Institute for Information Systems Research

LV 71407

Winter term 2006/2007

Market Development of Mobile Device Classes and Operating Systems

Supervisor: Tobias Brüggemann

Björn Semmelhaack 2224810 Donarweg 19 A 30657 Hannover bjoernsemmelhaack@web.de

Table of Contents 1. Introduction 1 2. Evolution of Mobile Phones in Germany 1

2.1. Mobile Device Classes 2 2.1.1. Cell Phones 4 2.1.2. Feature Phones 7 2.1.3. Smartphones 8 2.1.4. PDA 9 2.1.5. other Devices 10

2.2. Limitations of Mobile Devices 11 2.3. Market Share of Mobile Devices 12 2.4. Market Share of Vendors 16

3. Operating Systems 19

3.1. Premises of Operating Systems for Smartphones 19 3.1.1. Symbian OS 20 3.1.2. Windows 22 3.1.3. Palm OS 24 3.1.4. Linux 26

3.2. Market for Mobile Operating Systems 26 4. Conclusion and Future Trends (Views) 29 References 32 Appendix 35

I

Table of Figures

Figure 1: Generation of mobile networks 3

Figure 2: Total transmitted SMS in Germany 5

Figure 3: Market Share of Cell Phones 6

Figure 4: Evolution of Smartphone 9

Figure 5: Virtual PDA Keypad 10

Figure 6: Numbers of subscribers and market penetration in Germany’s

mobile networks 13

Figure 7: Number of UMTS Subscribers worldwide 14

Figure 8: Global Handset sales by Device Type 15

Figure 9: Unit shipments of "mobile terminals." 15

Figure 10: Top six vendors sorted by market share (%) 18

Figure 11: Top six vendors sorted by sales (in thousands) 18

Figure 12: Symbian OS v9.3 Architecture 21

Figure 13: Windows CE 5.0 Architecture 23

Figure 14: Mobilinux 4.0 Platform 26

Figure 15: Second quarter 2006 smartphone shipmets by OS 27

Figure 16: First quarter 2005 smartphone shipmets by OS 27

Figure 17: 2002 smartphone shipmets by OS 28

Figure 18: Technical Specifications of Symbian OS v. 9.3 35

II

Table of Charts:

Chart 1: Worldwide total smart mobile device market shares Q2 2006, 16

Q2 2005

Chart 2: Worldwide Mobile Terminal Sales to End-Users in 1Q06/05 17

(Thousands of Units)

Worldwide Mobile Phone Shipments and Market Share, 1Q 2004

(Thousands of Units)

Chart 3: EMEA total smart mobile device market 29

III

List of Abbreviations: 1G first generation 2G second generation 3G third generation 4G fourth generation EDGE Enhanced Data for GSM Evolution FIR Fast Infrared GPS Global Positioning System GPRS General Packet Radio Service GSM Global System for Mobile Communication GUI Graphic User Interface HSCSD High Speed Circuit Switched Data IPv6 Internet Protocol Version 6 IrDA Infrared Data Association IVR Interactive Voice Response MC Mobile Commerce / M-Commerce MMC MultiMediaCards MDA Mobile Digital Assistants MExE Mobile Station Execution Enviroment MMS Multimedia Messaging Service PDA Personal Digital Assistants UMTS Universal Mobile Telecommunications System UMPC Ultra Mobile Personal Computer RISC Reduced Instruction Set Computing SD Secure Digital Card SFIR Serial Infrared SMS Short Messaging Services VFIR Very Fast Infrared WAP Wireless Application Protocol WML Wireless Markup Language

IV

1. Introduction

Today we have sophisticated mobile phones, which have been developed within

50 years. Mobile phones play a major role in our lives; we are available at any

place and any time. They help users to do their work even if they are not in their

office by offering new features, which make mobile work capable such as internet

access, e-mail writing and mobile office applications. This paper shows the

development of the different mobile classes. First it describes the technological

evolution and the generations of mobile devices from cell phones over feature

phones to smartphones and Personal / Mobile Digital Assistants, and from Global

System for Mobile Communication (GSM) to Universal Mobile

Telecommunications System (UMTS). This paper defines mobile device classes

and illustrates the features for each of them. For several years, the market for

phones has been growing worldwide; on the one hand the growth in Germany

and on the other hand the worldwide growth is described. Of course, devices are

not fully developed by today and have still limitations, which will be described.

Each mobile device needs an operating system: this can either be a proprietary

one such as for cell and feature phones or a “real” operating system like Symbian

OS, Palm OS, Windows Mobile or Linux. These different systems as well as their

market shares and their future perspectives are explained in chapter 3.

2. Evolution of Mobile Phones in Germany

In Germany mobile phones were first engineered for the A-network. Today's

mobile phones have upgraded from the big car phones of the late fifties. The first

German radio communications network was the A-network which was in

operation from 1958 to 1977. The only calls possible at that time were those

going out which had to be arranged over a telephone switchboard. The A-

network had approximately 11,000 subscribers in 1970, a very restricted number

of clients since the terminal equipments were very expensive and moreover

extremely big. Almost the complete boot of a car was filled with the electronic of

these old phones. Another disadvantage was that the system was restricted to

Germany only. The A network was still kept in operation when the new B network

was put on the market in 1972. Now it was possible to call somebody out of the

car and to be called in return; an automatic switching took place. Although the

phones got a little bit smaller; they were conceived for use in the car mainly. The

1

system had up to 16,000 subscribers who could not only make a telephone call

within Germany but also in and to Austria, Luxembourg and the Netherlands as

well.

C-network, in use from 1985 to 2001, was also an analogue system like the

others before, but you had new services for example fax, e-mail and data

transmission. C-network belongs to the first generation, so called 1G. This net

had up to 800 thousand users.1

A to C-networks were used for business only but not for private needs, because

they were too big and too expansive for general public. While the first digital

network was implemented, the old analogue networks lost their impact and were

switched off in 2001.

Digital transmission technology was developed for the second generation (2G),

being optimized for voice transmission and able to use data transfer.

The most common standard in the world is GSM. While there are three different

frequency ranges, in Germany, we only use two of them: GSM 900 for D-net and

GSM 1800 for E-Net. GSM 1900 is used in USA and Canada. However this

generation was not able to receive or send data packets, that is the longer the

customer is online in the internet the more he has to pay for this service. This way

mobile devices have and even will become more powerful to manage new

challenges, such as mobile commerce or mobile business.

Turowski defines Mobile Commerce (MC) as “…jede Art von geschäftlicher Transaktion, bei der die Transaktionspartner im Rahmen von Leistungsanbahnung, Leistungsvereinbarungen oder Leistungserbringung mobile elektronische Kommunikationstechniken (in Verbindung mit mobilen Endgräten) einsetzen.”2

2.1. Mobile Device Classes

Mobile devices are defined by Turowski as “… alle Endgeräte, die für den mobilen

Einsatz konzipiert sind.“3 such as cell phones, feature phones, smartphones, and

Personal Digital Assistant (PDA) or Mobile Digital Assistant (MDA). These devices

have to fulfil the following criteria to be a mobile device which can be applied for

Mobile Commerce:

• mobility (devices can be carried, wherever a user wants to)

1 cf. Lehner, 2003 pp. 27-28 2 Turowski, 2003, p. 1 3 Turowski, 2003, p. 57

2

• availability (devices can be used at once; no long boot sequence)

• ubiquity (users are available at any time and almost any place)

• localisation (users can be located by GSM or GPS)

• identification (users can be identified by using their mobile devices)

Up to today three generations of mobile networks have been developed for

phones, getting started with the analogue first generation (1G).

The three generations of mobile networks deployed to date (1G, 2G, and 3G)

have been defined by their technical characteristics.4 These technical

characteristics are shown in figure 1. Beginning with 1G and ending with 4G the

new generation, which has not been established by today.

Etoh describes the generations of mobile telephony as follows:

“1G: Basic mobile telephony service 2G: Mobile telephony service for mass users with improved ciphering and efficient utilization of the radio spectrum 2.5G: Mobile Internet Services 3G: Enhanced 2.5G services plus global roaming, and emerging new applications”5

Fig. 1: Generation of mobile networks source: Etoh6

The first generation is analogue, circuit based, narrowband and is suitable for

communications only; so while mobile devices of that generation had no ability to

send or receive any data, those of the digital, circuit-based, narrowband second

generation could do so but with very low speed only. 2G based on GSM is able to

4 Etoh, 2005, p. 1 5 Etoh, 2005, pp. 4-5 6 Etoh, 2005, p. 4

3

download data with 9.6 kbps. The next enhancement was High Speed Circuit

Switched Data (HSCSD), generating transfer rates up to 115.2 kbps. From

generation to generation speed increases. The fastest up to now is General

Packet Radio Service (GPRS) - also called the “always on” technology - with data

transfer rates up to 117.2 kbps, the so called 2.5G. The pricing does not depend

on the time being online (connection orientated like 2G network GSM and

HSCSD) but on the data volume you are receiving or sending (packet switched).

The next level of development was Enhanced Data for GSM Evolution (EDGE), a

technology that reached 170 kbps and passed into the Universal Mobile

Telecommunication System (UMTS), so called 3G.7

UMTS can reach speeds up to 384 kbps in wide-area coverage and 2 Mbps in

local area coverage.8 3.5G bears two kinds of transmission: on the one hand

voice is transported over telephone circuits and data can be broadcasted over the

circuits as well as via internet and on the other hand voice and data can both be

transported via internet only (All over IP) with speeds up to 20 Mbps. This will

increase in the fourth generation (4G) with only All over IP and speeds up to 200

Mbps; even in a moving vehicle with a speed of 60 mph 100 mbps according to

Samsung promises.9

2.1.1. Cell Phones Cell phones are mobile devices using voice transmission at the beginning only

and belong to the 1G network or when also using data transmission to the 2G

network. The first generation of cell phones the 1G and the early 2G devices were

not able to send or receive any data over long distances per network, but they

could send and receive data per infrared connection in a distance of a few

meters.

In 1993, 30 companies founded the Infrared Data Association (IrDA) that

developed the first standard for infrared data transmission in 1994, the IrDA 1.0

also called Serial Infrared (SFIR). This standard should achieve data-transfer

rates up to 115.2 kbps. In 1995 it was updated to IrDA 1.1 also called Fast

7 cf. Lei, Chatwin, Young and Tong, Opportunities and Limitations in M-Commerce, in Wireless Communications and Mobile Commerce, Nan Si Shi (editor) 2004, p. 82 8 cf. Dholakia, Dholakia, Lehrer and Kshetri, Global Heterogeneity in the Emerging M-Commerce Landscape, in Wireless Communications and Mobile Commerce, Nan Si Shi (editor) 2004, p. 13 9 http://www.samsung.com/PressCenter/PressRelease/PressRelease.asp?seq=20060830_0000283497 [15.12.2006]

4

Infrared (FIR) with data transfer rates up to 4 Mbps. Last enhancement was made

in 1999, the Very Fast Infrared (VFIR) with speeds up to 16 Mbps.10

These devices had very small displays with a resolution of 90x65 pixels only, due

to which it was difficult to illustrate more than three or five lines of text, graphics

and colors. Their keypads are adequate for calling and for SMS typing but are

inadequate for typing long e-mails. Cell phone’s performance is sufficient for

principal calling functions but not for running any applications or saving any data

other than telephone numbers and proper names. Each manufacturer

programmed its own proprietary operating system that could not be changed by

the users.11

Such mobile devices are very rare in Germany today. Mobile Commerce can be

established with Interactive Voice Response (IVR) e.g. phone banking. The user

can call his bank and will be directed by a voice portal to make voice commands

or to make a request with the cell phone’s keypad. The next generation of cell

phones were capable to use data transmission, making it possible to send and

receive data via Short Messaging Services (SMS)12. From this moment on people

could not only communicate by voice but also via short messages. SMS are

transported via logical channels in the GSM-network and are limited to 140 bytes

or 160 symbols per message.13 These messages became very popular, see

numbers of SMS in Germany in figure below.

Fig. 2: Total transmitted SMS in Germany Source: Bundesnetzagentur14

10 cf. Roth, 2005, p. 109 11 cf. Wiecker, 2002, in Gora 12 cf. Turowski, 2003, pp. 61-62 13 cf. Roth, 2005, pp. 59-60 14 http://www.bundesnetzagentur.de/media/archive/1637.pdf [10.12.2006]

5

This SMS traffic bears huge opportunities for Mobile Commerce, for example for

SMS advertising or catalogue companies. Each time you receive an SMS you

could get information about new products which can be ordered by another SMS.

Today MC is of low importance in this area because on the one hand these

devices have no color screen to show relevant information and with such a poor

graphic-resolution are not able to illustrate graphics and pictures, which are

required for MC applications, and on the other hand there is only a limited number

of these cell phones left on the market.

Last devices of cell phones produced were equipped with Wireless Application

Protocol (WAP) to use the mobile internet, so called “Internet Enabled Phone”15 in

English-speaking part. WAP is a protocol or standardized way, in which mobile

devices that are connected to a mobile network interact with a server. WAP-able

phones cannot read normal HTML-sites, so receiving information must be

programmed in Wireless Markup Language (WML).16 Since these cell phones

were able to run basic applications based on WML-script, it was then possible to

submit new offers like buying tickets or to check stock-exchange prices. Using

WAP applications only makes sense with GPRS because of the higher data

transfer rates. Market share of these last 2G cell phones in Germany increased

from approximately one third to two-thirds, due to phones’ subsidization.17 The

shipment is shown in the following figure:

39,42

19,71

21,60

43,20

0,00

10,00

20,00

30,00

40,00

50,00

60,00

Quantity in mio.

Q4 2002 Q4 2003Time

Cell Phone "WAP"Cell Phone

Fig. 3: Market Share of Cell Phones Source: own illustration according to Bundesnetzagentur

15 Turowski, 2003 , p. 63 16 cf. Diederich, 2001, p. 76 17 cf. Turowski, p. 63

6

2.1.2. Feature Phones Feature Phones are normal cell phones that have been enhanced. Still having no

operating system, they have a proprietary system programmed by each producer

himself. These phones are improved in terms of their usability, size, talk time, and

standby time. They have new features like calendar function, address-book,

notepad, mp3-player, radio, camera, voice recorder, games and others more. You

can distinguish these feature phones into two classes:

Mobile Station Execution Enviroment (MExE) Classmark 1: WAP and

MExE Classmark 2: Java

Classmark 1 phones are able to use WAP applications and to show websites that

are transformed into WML. Classmark 2 phones are able to use WAP as well as

JAVA applications. 18

2G and 2.5G feature phones are equipped with the Java 2 Platform Micro Edition

(J2ME) Virtual Machine, a Java computer language, been developed for mobile

phones especially. This way, complex applications can be installed, saved and

run on these devices. By using this virtual machine it is possible to program

device-independent application development. With this standardization based on

the leading computer language for web applications a basic requirement for

economic development and wide spread of mobile device applications is created.

A mobile commerce application is, for example, downloading a game with your

phone based on Java for free. If you play the game you will have to pay either for

the whole game or for any reached level.19

Besides, SMS feature phones are capable to receive and send Multimedia

Messaging Services (MMS). MMS is a kind of e-mail for mobile devices. With this

technology it is possible to send not only text but also pictures, sounds and video

streams. MMS messages are not limited to a certain size like SMS are.20

The devices have color screens with a higher resolution than cell phones’

displays and therefore websites, pictures, mobile games, and videos can be

shown in a better quality than before. With these phones you are able to surf in

the internet and you can use many functions as if you were at home surfing with

your home pc. This way, for instance, if you are in a warehouse you can instantly

18 cf. Michelsen and Schaale, 2002, p. 50 19 cf. Turowski, 2004, p, 64 20 cf. Roth, 2005, p. 259

7

compare prices online and by doing so achieve better bargaining power and

decide whether to buy in this warehouse or online.

IrDA is a standard most feature phones have and also they normally have a new

feature for data transfer, they are equipped with Bluetooth. In the last level of

development in 2003 Bluetooth devices can send and receive data in a range of

100m with speeds up to 3 Mbps typically. In case of small devices like mobile

phones with less transmitter power a range of 10m is achievable. Bluetooth was

brought on the market in 2000, so even normal cell phones like the Nokia 6310

were equipped with Bluetooth but they could reach speeds up to 1 Mbps only.21

Most feature phones are equipped with a storage card for saving pictures, music

and other data.

2.1.3. Smartphones

The term smartphone is often used as an instrument of marketing therefore it is

frequently used in a misleading way for different types of mobile devices, for

example, from simple 2G devices with color screens to PDA with an integrated

mobile phone function.22

Smartphones are a combination of a mobile phone and PDA, used for voice

communication primarily and equipped with an operating system like Symbian,

Windows Mobile, PalmOS or Linux (see next chapter), so it is possible to develop

applications on a standardized platform such as JAVA and C++. In order to run

these operating systems smartphones possess more powerful processors. They

have features like address-book, calendar, memo, mp3-player, radio, camera (up

to 3 mega pixel), voice recorder, games, video streaming, word processor,

spreadsheet and others more. They are 3G devices and are capable of using

UMTS or GSM, depending on what is reachable in the area they are used in.

21 cf. Roth, 2005, pp. 130-133 22 cf. Turowski, 2004, p, 68

8

Fig. 4: Evolution of Smartphone source: http://www-lehre.inf.uos.de/mc/material/smartphones/einleitung_02.html

Smartphones can be distinguished into two types: One the one hand they are

equipped with an alphanumeric keypad for inputs. These phones are constructed

as a fold-away device, with a screen resolution of 320x200 pixels like Nokia’s

communicator. On the other hand, the devices are equipped with a touch screen

and are constructed as extra wide mobile phones. Inputs are made by tipping on

the screen that has a resolution of 200x320 pixels.23

Smartphones are becoming more interesting for users, because they unite

different devices within one instrument; people don’t need to carry a normal

mobile phone, a PDA, a camera, and an mp3player, but they have an all-in-one

solution. A smartphone’s screen size is smaller than a typical PDA screen. As a

result of the big colored screen, the strong processors, UMTS ,and all the

available functions, smartphones have a very high power consumption, so

batteries have to be charged often.

Another feature of Smartphones is that they can be used as a navigation-system

by running, for example, tomtom or Navigon software for navigating, and

combined with an external GPS antenna that can be connected to the phone via

Bluetooth.

2.1.4. Personal Digital Assistance (PDA) / Mobile Digital Assistance (MDA)

Due to its size that does not exceed a woman or a man’s hand and the fact that

you can hold it in your hand, a PDA is also called handheld. PDA have no wired

connection like normal PCs, so people can work with them while they are walking,

waiting, or standing. Other names for PDA are pocket pc, handheld pc, notepad

or organizer. PDAs possesses an operating system and are normally working with

23 cf. Michelsen and Schaale, 2002, p. 51

9

several processors, based on RISC architecture with up to 624MHz (Siemens

LOOX N 560), made by different vendors. These processors are powerful enough

to run complex applications like Microsoft Pocket Office or to play video clips.

Today PDAs are equipped with colored LCD-displays with more than 65.500

colors. Older ones had monochrome displays or greyscale displays only. Display

size varies from 2 inches with 160x160 pixels over 3 inch-displays with 320x320

pixels (Palm Tungsten T) to 3,5 inch-displays with 240x320 or 480x640 pixels

(Siemens LOOX N520 alternatively N 560). PDAs use up to 64 MB SDRAM for

mass storage (volatile storage) and have up to 128 MB Flash-ROM for

applications. Most PDAs can be upgraded with storage cards like

MultiMediaCards (MMC) or Secure Digital Cards (SD), so that the storage

capacity can be raised to more than 2 GB. Generally, PDAs dispose of IrDA,

Bluetooth and W-LAN. Typically PDA can run for more than 5 hours, before they

have to be charged, if the backlight is switched of. However backlight is on,

battery life will be much shorter.24 Nowadays all PDA possess a touch screen

display and inputs are made by tipping or writing on the screen with a stylus. Also

new virtual keypads are going to be developed by Virtual Devices, Inc., see the

following picture.

Fig. 5: Virtual PDA Keypad Source: www.virtualdevices.net

PDAs can be used as GPS navigation-systems; you can distinguish them into

PDA with integrated GPS receiver or PDA without integrated GPS receiver. The

latter have the opportunity to be connected to a separate receiver via Bluetooth.

An MDA is a PDA with mobile phoning technologies built in like T-Mobile MDA

Compact III. The other functions are similar to functions of a PDA.

24 cf. URL: http://www.mobilearn.at/technologie/endgeraete [30.11.2006]

10

It is very difficult to decide whether a mobile device is a smartphone or a MDA

because boundaries blur between these classes.

All devices mentioned above fulfill the five criteria of mobile devices -mobility,

availability, ubiquity, localisation, and identification-. The following devices do not

fulfill the criteria, but they are very interesting and might also fulfill these criteria in

the near future.

2.1.5. Other Devices Beside the mobile devices introduced above, there exist several devices on the

market at present such as wireless special devices, wireless webpads, E-Books

and Ultra Mobile Personal Computer (UMPC). Wireless special devices are

smartphones, in which other components have been integrated, for example, a

barcode scanner or components for patients’ survey. Wireless webpads are a

kind of PDA but with a screen size of a DIN-A4 page und a resolution of 800x600

or 1024x768 pixels like a normal monitor of a personal computer.25 E-Books by

iREX Technologies are used to save and show electronic books on a DIN-A5

screen with a resolution of 1024x768; that is a better quality than on monitor.

They receive data via USB connection or WLAN.26 UMPC closes the gap

between PDAs and notebooks. They look like a bigger PDA but they are

equipped with normal notebook technology and run with Windows XP. They have

features like WLAN, Bluetooth, 7 inch touch-screen-display, 40 GB hard disc, Intel

Celeron M processor with 900 MHz, USB and are capable to run approximately 3

hours.27 With a price of about 1200€ and with not up to date features, UMPCs are

too expansive to achieve a significant market share.

These devices are very rare today, so we have to await which devices will be sold

in a higher lot.

25 cf. Michelsen and Schaale, 2002, pp. 52-53 26 URL: http://www.irextechnologies.com/products/iliad/specs [11.12.2006] 27 http://presse.samsung.de/press_meldung.asp?id=1394&page=20&jahr=2006&kategorie=alle&suchwort= [11.12.2006]

11

2.2. Limitations of Mobile Devices At present “…mobile devices make it easier for the users to communicate and to

exchange information on the move, many of the users still get frustrated when

they try to carry out e-commerce transactions using their own mobile device.”28

Limitations of mobile devices are the result of being new and not fully developed.

Al-Hawamdeh describes the following limitations:29

• limited memory

• limited processing power

• different technologies and standards

• small keyboards and input methods

• screen size and color

• battery consumption

• simplicity of user interface

• stability and dropouts and connectivity

• voice recognition

Some of these limitations have been solved during the last years, for example,

new smartphones have stronger processors to run an operating system and

complex applications, and they are capable of play video-streams in high

resolution and colors, too. But the screen size is a problem even today; you

cannot enlarge the display as much as you want to, because the mobile devices

would become too big for carrying them around. Another problem is the battery

consumption, which is very high by high end smartphones, because of their color

screens, strong processors, and of course UMTS. These features need a lot of

power, but today’s batteries are not strong enough to energize the devices for a

long time. The development goes on and these limitations will maybe solved

within a few years.

2.3. Market Share of Mobile Devices In Germany the market share of mobile devices increased constantly from 1990

to 1998. But in the years 1999 and 2000 the market share enlarged rapidly,

because digital 2G devices were introduced on the market. These new phones

28 Al-Hawamadeh, 2004, p. 251, Usability Issues and Limitations of Mobile Devices, in Shi, Nan Si (ed.) 29 cf. Al-Hawamadeh, pp. 252-253, Usability Issues and Limitations of Mobile Devices in Shi, Nan Si (ed.)

12

were subsidized by Mobile Network Operators, with the objective of selling more

mobile phone contracts to the customers.

From 2001 to 2006 the market share increased constantly on an average of

7.02% each year. In the third quarter of 2006 the market penetration has reached

a level of more than 100%, so any resident from young to old should possess a

mobile device theoretically.30

In the year 2000 Forit forecasted an approximately market penetration of 90% in

2010,31 but these numbers were reached in 2005 already. This shows that mobile

devices play an important role for Germany’s residents even children have their

own cell phone. Detailed information is shown in the following figure, which

illustrates the number of subscribers and market penetration on basis of mobile

radio contracts in Germany from the years 1990 to 2006.

Fig. 6: Numbers of subscribers and market penetration in Germany’s mobile networks

Source: Bundesnetzagentur

It is assumed that this trend will go on for the next few years. Nevertheless the

numbers of contracts will be limited because not all people need two or more

mobile contracts, which does not mean that people can not own more than one

mobile device, for instance, a feature phone and a smartphone. 30 cf. http://www.bundesnetzagentur.de/enid/87e7fcd8a3ce20868c3ffff48b33c9cc,0/Marktbeobachtung/

Mobilfunkdienste_vw.html [25.11.2006] 31 cf. Dietrich, 2001, p. 26

13

At the end of 2005, 2.3 million subscribers were using UMTS. In the middle of the

year 2006, the number of subscribers increased to more than 4 million and by the

end of 2006, 9 million subscribers might use UMTS, according to Bitkom.32

Germany is one of five countries using UMTS successfully with growing numbers

of subscribers. The number of UMTS subscribers worldwide rose from 2.7 million

in 2003 to 16.1 million in 2004 and to 43.7 million in 2005. Every second UMTS

user lives in Japan. There were 22.4 million subscribers in 2005, followed by 9

million in Italy, 4.7 million in Great Britain, 2.3 million in Germany, 1.3 million in

France and 7.6 million in the rest of the world. 33

Fig. 7: Number of UMTS Subscribers worldwide source: Bitkom

It is assumed that there are at least more than four million smartphones sold in

Germany. The main role of mobile phones play the feature phones.

In 2005, Strategy Analytics “… estimated that feature phones will account for

around 50 percent of some 725 million mobile phone shipments this year…”34

So feature phones are the best sold phones today and will even be the best sold

category of mobile phones up to 2010.35 Figure 8 describes the handset sale by

device type in million. According it the major part of mobile phones was normal

cell phones with approximately 400 million units worldwide in the year 2001

followed by feature phones and smartphones. In 2010 more than twice as many

32 http://www.bitkom.org/de/presse/30739_40990.aspx [25.11.2006] 33 http://www.bitkom.org/de/presse/30739_37663.aspx [25.11.2006] 34 http://www.windowsfordevices.com/news/NS3328868025 [20.11.2006] 35 cf. http://www.windowsfordevices.com/news/NS3328868025 [20.11.2006]

14

phones will be sold, that is than 900 million devices. In the years 2005/2006 there

will be more feature phones than cell phones on the market.

Fig. 8: Global Handset sales by Device Type Source: Strategy Analytics, Aug. 200536

Following Gartner, smartphones will be the fastest growing class of the mobile

device market in 2006, with sales expected to double year on year. Gartner acts

on the assumption that the total shipments will represent more than 1 billion units

in 2009. Figure number 9 shows the forecasted shipments of mobile devices. 37

Fig. 9: Unit shipments of "mobile terminals." Source: Gartner38

Gartner’s statement contravenes to Strategy Analytics’ research. Whether or not

smartphones or feature phones will be market leader within the next few years is

not sure, but cell phones will definitely loose their importance. If at all, cell phones

might be sold with prepaid cards. I consider Gartner’s statement to be right, for

36 http://www.batterypoweronline.com/articles/PresentationsPDFs/Strategy%20Analytics.pdf [14.12.2006] 37 cf. http://linuxdevices.com/news/NS8804000399.html [20.11.2006] 38 http://linuxdevices.com/news/NS8804000399.html [20.11.2006]

15

not only businesspeople will use smartphones in the future but also young people

who want to own the latest generations of mobile phones with the latest features,

under the condition that those devices are affordable for this clientele.

2.4. Market Share of Vendors The biggest vendor of mobile devices worldwide is Nokia. Nokia produces voice-

centric devices (phones) only; they do not have data-centric devices like PDA. In

the second quarter of 2006, Nokia sold more than 9 million smartphones, 2.3

million units more than in the second quarter of 2005. Nokia is followed by

Motorola with shipments of 1.59 million devices, Research in Motion (RIM) with

shipments of 1.18 million, Sharp (1.16 million), Palm (1.13 million), and others

(4.85 million). Although Nokia sold more devices than in 2005, it lost a market

share of 7.2%, due to the rapidly increasing numbers of others vendors.39

Chart 1 shows the market share and the shipments of smart mobile devices such

as smartphones and PDA in second quarters 2006 and 2005. The growth rate of

55.5% of the total numbers of shipments shows the importance of smart mobile

devices that will substitute non smart devices like cell phones and feature phones

over the next few years.

Vendor 2Q06 shipments share (%) 2Q05

shipments share (%)

Growth Q2’06/Q2’05

Nokia 9,030,840 47.7% 6,695,800 54.9% 34.9% Motorola 1,586,870 8.4% 556,050 4.6% 185.4% RIM 1,183,430 6.2% 897,280 7.4% 31.9% Sharp 1,162,500 6.1% 29,840 0.2% 3795.8% Palm 1,131,120 6.0% 1,057,420 8,7% 7.0% Others 4,849,550 25.6% 2,949,210 24.2% 64.4% TOTAL 18,944,310 100.0 12,185,600 100.0 55.5%

Chart 1: Worldwide total smart mobile device market shares Q2 2006, Q2 2005 Source: Canalys estimates,

© canalys.com ltd 2005-200640

Chart 2 illustrates the shipments of all mobile phones and the vendor’s market

share worldwide in the first quarters of 2006 and 2005. The shipments amount to

224 million units in the first quarter. If we forecast these numbers of units to the

whole year, shipments of approximately 960 million could be possible. The market 39 cf. http://www.canalys.com/pr/2006/r2006071.htm [20.11.2006] 40 cf. http://www.canalys.com/pr/2006/r2006071.htm [20.11.2006]

16

increased by 23.8% within one year. Nokia is “…the favored brand in Western

Europe, Central Eastern Europe, the Middle East and Africa combined and Asia

whilst second preferred brand in the Americas.”41 Nokia has a market share of

more than one third, followed by Motorola with more than 20%, both vendors

were able to enlarge their market share. Samsung has a share of 12.5 percent in

2006, so it lost 1% within one year. LG and Sony Ericsson enlarged their shares

while BenQMobile, as well as others, lost market share.

Company 1Q06 Sales

1Q06 Market Share

(%) 1Q05 Sales

1Q05 Market

Share (%) 1Q04 Sales

1Q04 MarketShare

(%) Nokia 76,088.4 34.0 54,960.1 30.4 44,700 29,3 Motorola 45,518.6 20.3 30,143.3 16.7 25,300 16.6 Samsung 28,080.5 12.5 24,479.8 13.5 20,000 13.1 LG 14,508.5 6.5 11,464.2 6.3 unkwon unkwonSony/Ericsson 13,599.6 6.1 9,905.8 5.5 8,800 5.8 BenQMobile 7,867.6 3.5 10,209.5 5.7 12,800 8.4 others 38,378.2 17.1 39,829.5 21.9 41,100 26.9 TOTAL 224,041.4 100.0 180,992.2 100.0 152,700 100.0

Chart 2: Worldwide Mobile Terminal Sales to End-Users in 1Q06/05 (Thousands of Units) Source: Gartner42

Worldwide Mobile Phone Shipments and Market Share, 1Q 2004 (Thousands of Units) Source: IDC43

In my opinion Nokia and Motorola are “the” brands for mobile phones and all

other vendors are or little importance. Even in the future Nokia will be able to

enlarge their market share by using new technologies and because of it is high

brand awareness.

Figure 10 and 11 illustrate the market share and the shipments of the top six

vendors in the first quarters of 2004, 2005 and 2006. Nokia could enlarge its

market share from 29.3% to 34% within two years and the shipment increased

form 44.7 million units to 76 million units in the same time. Motorola as well was

able to increase its market share and shipments, but on a smaller level than

Nokia. Samsung lost market share but sold more units within these two years.

BenQMobile’s market share decreased from 8.4% to 3.5% as well as shipments

41 http://www.gartner.com/press_releases/asset_152911_11.html [ 18.12.2006] 42 cf. http://www.gartner.com/press_releases/asset_152911_11.html [18.12.2006] 43 cf. www.windowsfordevices.com/news/NS4127920865.html [30.11.2006]

17

did from 12.8 million to 7.87 million. Sony-Ericsson was capable to reach a

balanced growth in shipments, nevertheless it lost market share in 2005.

Nok

ia

Mot

orol

a

Sam

sung

LG

Son

y E

ricss

on

Ben

QM

obile

Oth

ers

1Q06 Market Share (%)

1Q05 Market Share (%)

1Q04 Market Share (%)

29,3

16,6

13,1

5,88,4

26,9

30,4

16,7

13,5

6,35,5 5,7

21,9

34

20,3

12,5

6,56,1

3,5

17,1

0

5

10

15

20

25

30

35

1Q06 Market Share (%)1Q05 Market Share (%)1Q04 Market Share (%)

Fig. 10: Top six vendors sorted by market share (%) source: own illustration according to Gartner44 and IDC45

Nok

ia

Mot

orol

a

Sam

sung LG

Sony

Eric

sson

BenQ

Mob

ile

Oth

ers

1Q06 Sales1Q05 Sales

1Q04 Sales0

10000

20000

30000

40000

50000

60000

70000

80000

1Q06 Sales1Q05 Sales1Q04 Sales

Fig. 11: Top six vendors sorted by sales (in thousands) source: own illustration according to Gartner and IDC

44 cf. http://www.gartner.com/press_releases/asset_152911_11.html [18.12.2006] 45 cf. http://www.windowsfordevices.com/news/NS4127920865.html [30.11.2006]

18

3. Operating Systems (OS) Mobile devices need an operating system to run complex applications, making a

mobile device more user-friendly and providing more features to the customers.

Being offered a one-in-all solution, people no longer need to work with different

devices.

3.1. Premises of Operating Systems for Smartphones Smartphones are bulk products; therefore they should not be too expensive. If the

OS has any problems, they should be solved before the phones are being sold,

since smartphones are high quality devices. This requires long testing in advance,

so that problems with the OS can be identified before selling the phone. Doing so

is much cheaper than to install a new OS on a sold phone and a well engineered

product is better for the vendor’s image, too. An operating system has to run

stably and reliably, it has to be robust and should be frugally concerning power

consumption and hardware resources. However already application developers

have to make sure that their applications save hardware resources and battery-

life. Mobile networks require fast response time, that is way an OS as to be very

quick, acting like a real-time system.46

The user interface should be efficient and intuitive in its use and should be varied

from vendor to vendor and from class to class. The application development

support should be high, so that users know how to get many good applications for

their smartphones.47

Unlike personal computers the OS should by no means need to reboot. The

kernel should be small in order to reduce system instability. Furthermore an OS

has to offer a high level of integration with communication and personal

information management (PIM) functionality as well as it should offer on the one

hand wide area networks such as wireless telephony and on the other hand

personal area networks such as infrared and Bluetooth. Multi-tasking should be

possible, too, that means that more than one program can be run at the same

time. OS for mass market should be an open system, so that third-party

developers as well can program applications.48

46 cf. Gerlicher, A. and Rupp, S., 2004, pp. 3-4 47 cf. Babien, 2006, pp. 9-10 48 cf. http://www.symbian.com/files/rx/file6383.pdf [16.12.2006]

19

3.1.1. Symbian OS Symbian has been established by the PSION Group in 1998 with share by Nokia,

Motorola, Ericsson and Panasonic (Matsushita) and became independent from

PSION. New members of Symbian became Siemens, Samsung and Sony-

Ericsson. All these partners are responsible for enhancement of the Symbian OS

today and for the time being. Prequel of the first Symbian operating system was

EPOC that was developed by PSION due to the fact that the old OS had no

support for input devices like a mouse.49 In 2000 the first mobile device equipped

with a Symbian OS, the Ericsson R 380, went on sale to the public followed by

the Nokia Communicator 9510 in 2001.50

“Symbian OS is a full-featured mobile operating system that resides in most of

today’s smartphones.”51

The premises on which Symbian OS has been developed were:

• small mobile devices

• mass market

• intermittent wireless connectivity

• diversity of products

• open platform for third party developers

Symbian OS is working with emerging standards, such as J2ME, Bluetooth,

MMS, SyncML, IPv6 and WCDMA (UMTS)52.

The latest release of Symbian OS is version 9.3 that is “…designed for the

specific requirements of advanced 2.5G and 3G mobile phones.”53 ”Symbian

combines the power of an integrated applications environment with mobile

telephony, bringing advanced data services to the mass market.”54 It supports all

kinds of data transfer, such as HSCSD, GPRS, EDGE, UMTS and furthermore

many applications based on different programming languages, such as C++ or

JAVA, can be started. Specifying all features of Symbian OS would go beyond the

scope of this paper, but Etoh describes the following features:

49 cf. Gerlicher, A. and Rupp, S., 2004, pp. 4-5 50 cf. http://www.symbian.com/about/overview/history/history.html [15.12.2006] 51 Babin, S., 2006, p. 1 52 cf. http://www.symbian.com/files/rx/file6383.pdf [16.12.2006] 53 http://www.symbian.com/files/rx/file7999.pdf [15.12.2006] 54 http://www.symbian.com/files/rx/file7999.pdf [15.12.2006]

20

“• rich suite of application services, including services for contacts, schedule,

messaging, browsing, and system control

• Java support

• Real time

• Hardware support, including different CPUs, peripherals, and memory types

• Messaging with support for MMS, EMS, SMS, POP3, IMAP4, SMTP, and

MHTML

• Multimedia, including image support, as well as video and audio streaming

• Graphics with a graphic accelerator API

• Mobile telephony, with support for most existing carriers and ready for 3G

networks

• International support

• Data synchronization

• Device management/ Over the Air (OTA) provisioning

• Security

• Wireless connectivity, including Bluetooth and 802.11b.” 55

Technical specifications of Symbian OS version 9.3 are shown in the Appendix.

The architecture of Symbian OS is illustrated in figure 12:

Fig. 12: Symbian OS v9.3 Architecture source: Symbian

Symbian is the leader of operating systems for mobile phones. It is owned or

licensed by the most powerful companies in the mobile phone market, so that the

Symbian OS can reach a mass market. Nowadays Symbian has sold more than

100 million of its operating systems to 250 network operators worldwide. It shows

that an increasing number of people is attracted by smartphones with the OS

55 Etoh, 2005, p. 195

21

Symbian developed. Sold units increased within a year from 8.5 million in the third

quarter of 2005 to 13.0 million in the same quarter of 2006. This is a year on year

growth rate of 52 percent 56

3.1.2. Windows

Windows Mobile 5.0 is the latest version for mobile phones like smartphones and

PDAs with telephony functions, such as MDA or XDA. Windows Mobile 5 based

on Windows CE 5.0. The very first version, Windows CE 1.0, was introduced in

1996 for small pocket PCs and for embedded systems, such as video-recorder,

but in English language only. Today it is a powerful real-time OS that can be

established for different platforms like PDA or smartphones. CE is a 32-bit system

with multi-tasking and multi-threading capabilities. It was not before version 3.0

was put on the market in 2000 that Windows Mobile became successful.57

Windows Mobile is an equivalent to Symbian OS; they have almost the same

features, such as WLAN, Bluetooth, WPA, SMS, Browser, Smartcard support,

IPv6 and other more.

Smartphones are not equipped with Microsoft Office Mobile that includes Word

Mobile, Excel Mobile, and PowerPoint Mobile; at present these applications are

available for PDA or MDA only.58 If you want to work with your mobile device all-

around using Windows Mobile it is necessary to buy a PDA or MDA in order to

have all the required applications, such as Office Mobile.

Versions of Windows for PDA and Smartphones at the beginning were called

Pocket PC and have been renamed in Windows Mobile in the mean time.59 Whilst

Windows CE or Windows CE.Net (since version 4.0) describes the real operating

system, Pocket PC or Windows Mobile describes the complete software based on

Windows CE, such as operating system, Graphic User Interface (GUI), standard

applications, drivers, and communication applications. Windows CE is similar to

normal desktop versions of Windows, so it is easy for users to switch from one

device to the other, as Windows CE has the same “Look and Feel” like a desktop

computer with Windows operating system. The whole system is very small

56 cf. http://www.symbian.com/news/pr/2006/pr20068610.html [16.12.2006] 57 cf. Reinelt, A, 2004, pp.15-17 58 cf. http://msdn.microsoft.com/library/default.asp?url=/library/en-

us/mobilesdk5/html/wce51grfSKUMatrixForWindowsMobile.asp [16.12.2006] 59 cf. Turowski, 2004, p. 67

22

compared to normal windows versions for computers. In the latest version it is

possible to play movie and audio files with Windows Media Player 10.x.60

Windows offers security, which allows separating the telephone-function from

other applications, to make the complete operating system more stable. This way

Windows can be used for smartphones or MDA. 61

Etoh describes the features as the following:

“• Support for small-footprint optimization

• Hard real-time kernel

• Robust memory management

• Advanced power management

• Open communications platform (such as TCP/IP, IPv6, and OBEX)

• Remote and system manageability (SNMP v2 Client, Device management

client)

• Standard support (such as UPnP, Bluetooth, XML and SOAP, and USB)

• Extensive storage file systems

• Purpose-built server services

- Core server support

- File transfer protocol (FTP) server

- Remote access/point-to-point protocol (PPTP) server

- File and print server support

• Security.”62

The following figure illustrates the Windows CE 5.0 architecture:

Fig. 13: Windows CE 5.0 Architecture source: Microsoft

60 cf. Roth, J., 2005, pp. 412-414 61 cf. Michelsen and Schaale, 2002, p. 59 62 Etoh, 2005, pp. 197-198

23

Windows CE is able to run different kinds of processor-architectures, such as

X86, MIPS, Advanced RISC Machine (ARM) and SH3. To make this possible the

OEM Abstraction Layer (OAL) separates the operating system kernel from the

respective hardware. Primarily the properties of the processor as well as the

memory- and power management are separated from the operating system

kernel. Drivers separate the peripheral devices like network, display or audio-

devices from higher operating-system-functions. The kernel undertakes the task

of doing the memory-, process- and thread-management. Further functions are

represented by own assemblies such as Multimedia Technologies, Graphic

Windows and Event Systems, Device Manager, and Communication Services

Networking.63

3.1.3. PalmOS Palm’s first device, called Pilot and later Palm Pilot, was put on the market in

1996. Several devices with stronger processors and more memory followed,

simply called Palms anymore. Palm produced black and white displays at the

beginning only but later they offered colored displays like competitors had done

before. The operating system Palm OS was enhanced from generation to

generation and nowadays it supports Bluetooth, WLAN and Internet Access. Old

Palm OS was built to run with Motorola processors family 6800, but these were

not strong enough. That is why Palm 5 (Garnet) was developed, a more powerful

device now running with ARM processors. In order to make the new PalmOS

compatible to the old applications, Palm Application Compatibility Environment

(PACE) has been integrated in the new operating system. Its task is to emulate

the old Motorola processor architecture. Palm OS was developed for PDAs with a

touch-screen and stylus as well as for those PDAs with a keypad. In version

PalmOS6 (Cobalt) another feature was integrated; now it was possible to phone

with a smartphone based on Palm.

Palm OS has the following tasks: starting and closing applications, script

identification, power-management, turning on the system for alerts like a wake-up

call, data management, and communication via TCP/IP over modem, wireless

LAN or over infrared and Bluetooth. It is possible to use third-party applications.

The hardware is separated by an abstraction layer from the residual system. Up

63 cf. Roth, J., 2005, pp. 415-416

24

to Palm OS 5, the operating system was developed as a single threaded system;

this means that it is not possible to run more than one application at a time. This

feature was integrated in Palm OS 6. 64

Etoh describes the following features for Palm OS 5:

“• Multimedia, including high resolution display, video, and audio

• Wireless connectivity, including 802.11b, Bluetooth, GSM, CDMA, and 2,5G

and 3G networks

• Security with different encryption algorithms and SSL

• Built in support for ARM processors

• PIM programs built in

• large collection of software and one of the largest software development

communities

• PC synchronisation.”65

Since Palm was founded “…40 million Palm powered devices…”66 have been

sold, whereas most of them were PDA without telephone-function.

While Palm plays a major role for PDA operating systems, it is not in case for

smartphones.

Palm OS bears three advantages compared to other operating systems:

• the highest number of third-applications is offered

• the total costs of owner ship are lower compared to windows

• and it offers great compatibility, for example, word documents can be

illustrated on the PDA in the same way as on a desktop computer

These are the reasons why Palm is very interesting for companies to use.67

In my opinion Palm would be able to sell more operating systems, if there was not

such a big competitor like Symbian, who happens to be the partner of the most

powerful phone-vendors on the market.

64 cf. Roth, J., 2005, pp. 406-410 65 Etoh, 2005, p. 197 66 http://www.palmsource.com/products/ [19.12.2006] 67 cf. http://www.palmsource.com/palmos/whyPalmOS.html [20.12.2006]

25

3.1.4. Linux Linux is an open system that is available for almost all platforms. Montavista is a

Linux operating system for smartphones, providing all necessary features. It

supports multi-threading, real time performance, a power management, very fast

start up, many kinds of networking like e-mail, Internet, Voice over IP, IPv6, and

use of many processors such as ARM, XScale. Mobilinux provides a very high

level of stability. The operating system can be adapted to the customers needs’.

The platform is shown in figure 14:

Fig. 14: Mobilinux 4.0 Platform source: Montavista68

Mobilinux is available with smartphones from Motorola, NEC and Panasonic.69

3.2. Market for Mobile Operating Systems The market for mobile operating systems is shared by Symbian, Linux, Palm OS

and Research in Motion (RIM). It is very difficult to find valid numbers of market

share; different analysts give different numbers so I will concentrate on the

statements made by Gartner Inc..

Symbian is the leader of the operating system market. Since its foundation,

Symbian has sold more than 100 million operating systems for smartphones.

According to Gartner, Symbian had a worldwide market share from approximately

71% in second quarter of 2006, followed by Linux with a market share of

approximately 19%, while Microsoft, Palm and RIM share the other 10 percent,

that is approximately 3.3% each.70

68 http://www.mvista.com/dswp/ds_mobilinux.pdf [22.12.2006] 69 cf. http://linuxdevices.com/news/NS8804000399.html [30.12.2006] 70 cf. http://www.unstrung.com/document.asp?doc_id=102926&print=true [18.12.2006]

26

71

19

3,3 3,3 3,3

Symbian Linux WindowsPalm OSRIM

Fig. 15: Second Quarter 2006 smartphone shipmets by OS source: own illustration according to Gartner Compared to 2005 Symbian, Microsoft and Palm lost market share to Linux and

RIM in 2006. In the first quarter of 2005, Symbian’s market share amounted to

76%, followed by Linux with 13.7%, Palm with 4.6%, Windows with 4.5%, and

RIM with 1.0%. In the same time period 8,417,030 smartphones were sold.

Forecasted to the whole year shipments of more than 33 million devices could be

reached in 2005.71

According to Montavista, they have sold more than 20 million Linux operating

systems for smartphones until today. Most of these have been sold in Asia, but

there is also an emerging market for Mobilinux in Europe and North America.72

76,2

13,74,6 4,5 1

SymbianLinuxPalm OS WindowsRIM

Fig. 16: First quarter 2005 smartphone shipmets by OS source: own illustration according to Gartner

71 cf. http://www.linuxdevices.com/news/NS8804000399.html [20.11.2006] 72 cf. http://www.mvista.com/news/2006/mobilinux41.html [30.12.2006]

27

According to ARC Group’s statement in 2002, Symbian had a market share of

60% followed by Palm with 22% and Microsoft with 6.6%. Microsoft should have

gained momentum and eaten into Palm’s share. In reality, however, Linux and

Symbian ate Palm’s share and Microsoft lost market share. ARC Group said that

Symbian and Microsoft would have similar market share of nearly 40% each, but

Symbian was able to enlarge its market share73, for they have powerful phone

vendors; on the one hand as owners and on the other hand as licensee. Microsoft

was not able to work with these vendors such as Nokia and Motorola for enlarging

their market share, instead, Windows lost share. Around 3.5 million devices were

sold in 2002 according to ARC Group, in contrast to 81 million devices in 2006,

according to Gartner74. Microsoft lost market share but shipments increased from

around 231,000 to 2.67 million.

6022

6,6011,4

Symbian Palm OSWindowsothers

Fig. 17: 2002 smartphone shipmets by OS source: own illustration according to ARC Group

Looking at Europe, Middle East, and Africa we see different market shares. Again

Symbian is the leader but Linux plays a minor role. Windows has a market share

of 16.9%, following Symbian on second place. Symbian was able to enlarge its

market share from 76.6% to 78.7% within one year (from third quarter 2005 to

third quarter 2006). However Microsoft lost market share amounting to 1.1%. Both

vendors were able to increase their total shipments, as it is an emerging market,

especially Middle East and Africa. Research in Motion with its Blackberrys was

capable to hold the market share of 3.5% but could also enlarge the shipments.

73 cf. http://www.3gnewsroom.com/3g_news/aug_03/news_3666.shtml [16.12.2006] 74 cf. http://www.gartner.com/it/page.jsp?id=496997 [16.12.2006]

28

Other Vendors like Palm or Linux have a share of 1% down from 1.8% and they

lost shipments in 3Q2006 compared to 3Q2005.

Company 3Q06 Sales

3Q06 Market

Share (%)3Q05 Sales

3Q05 Market

Share (%)

Growth Q306/

Q305 (%) Symbian OS 5,757,540 78.7 5,022,710 76.6 14.6Microsoft CE 1,235,130 16.9 1,179,530 18.0 4.7RIM 253,420 3.5 230,190 3.5 10.1others (Palm, Linux)

73,600 1.0 120,420 1.8 -38.9

TOTAL 7,319,690 100.0 6552,850 100.0 11.7Chart 3: EMEA total smart mobile device market source: own illustration according to Canalys75

4. Conclusion and Future Trends

This paper shows that the market for smartphones respectively for mobile devices is

an emerging one that will keep on growing within the next few years, although the

market penetration has reached a level of more than 100% in some areas, such as

Germany. Nevertheless it is for sure that the market in Asia (China and India) and

Africa will increase rapidly because of the high productivity in these countries.

Miniaturization will still proceed. Maybe in a few years mobile devices will change

their appearances completely and will be that small, so you can plug them into your

ears. Dialing will be done via voice transmission or telepathy and pictures and

movies are transferred to your brain directly without using your eyes but this scenario

will take time before its realization. Already today we have Ubiquitous Computing that

is computers or mobile devices which are all around us and making live easier for us.

As true for many things there is also a downside to miniaturization, if devices in

general keep getting smaller, the same is true for keypad and display will, which will

make surfing in the internet less comfortable and more difficult. A solution is already

offered by projecting the keypad onto a table or another underground that will

function as keypad. Visualization could be achieved in the same way, for example

the display content could be projected onto a wall in a much bigger size.

Furthermore developers are working on an electronic paper that can be used as a

screen, and when it is not used it can be folded and stored in a small pocket. They

75 cf. http://www.canalys.com/pr/2006/r2006102.htm [22.12.2006]

29

even develop new kinds of batteries that can fulfill the need of more power for these

smart devices, that is more and longer power could be achieved with a fuel cell.76

In my opinion there will only exist smartphones and PDA/MDAs (or a modification of

them) on the market in a few years. Devices will get more functions than today, so

that they combine several devices in one, such as telephone, address-book,

schedule, camera, videoplayer, mobile work station, navigation-system, mp3-player,

paddle and much more.

Today smartphones are used as simple cell phones and most of the features are

unused, so they are not bought because of functions but because of fashion.77

Maybe people would use more available functions, if the limitations had been solved.

New generations of networks will accelerate internet surfing by providing high data

transfer rates. The coming generation is 4G. It enables speeds up to 100 or 200 mps,

so voice and data are transferred all over IP, that means speech and data are

exchanged via internet. Although 4G is not available yet, the developers are

speculating about 5G which will be infrastrucureless; that means signals will be

relayed, via ad hoc networks, from handsets instead of base stations.78

Even in the future Nokia will be the biggest vendor for smartphones and thus

Symbian will be the market leader for operating system as long as Nokia uses

Symbian OS for its devices. But if Nokia would use for example Windows Mobile for

all terminals, this could cause a damage of market share.

It remains to be seen whether Windows will be able to acquire new vendors for its

product Windows Mobile and thereby reduce Symbian’s market share.

Worldwide, Linux has sold more than 20 million operating systems for smartphones

according to Montavista, nevertheless, in Europe they are not able to reach more

than 1% of market share until today. That is why they are unimportant in Germany

today, although they offer a good product that could sold better if Linux enlarged its

advertisement in Germany and other European countries. According to Montavista

there is an emerging market for them in Europe. Whether or not they can enlarge

their market share in the next few years has to be seen.

76 cf. Al-Hawamadeh, p. 253, Usability Issues and Limitations of Mobile Devices in Shi, Nan Si (ed.) 77 cf. http://www.itweek.co.uk/crn/news/2166345/pda-shipments-rise [19.12.2006] 78 cf. Dholakia, N. et al, p.14: “Global Heterogeneity in the Emerging M-Commerce Landscape”, in Shi, Nan Si (ed.)

30

Palm is being substituted by Symbian, Microsoft, and Linux, although PalmOS is a

resource-saving operating system and many applications are available for PalmOS.

Instead of selling PalmOS with Palm devices only, Palm should try to acquire

licensees that use PalmOS for their mobile devices. This way Palm, could increase

its market share.

As aforementioned it is an emerging market and it remains open, what kinds of

products the various vendors will offer and moreover which of these products the

consumer will buy.

31

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34

Appendix

Fig. 18: Technical Specifications of Symbian OS v. 9.3 source: Symbian

35