Open Source vs Closed Source Systems

INTRODUCTION

For many years, proprietary software has been the dominating business approach used by the commercial software firms. Industry giants like Microsoft proved this strategy to be successful, building their multibillion dollar empires based on the proprietary software platform. Over the past decade, a new business approach called open source model which involves contributors from around the globe to create, share and distribute software code for free had come into practice (Pal, N & Madanmohan, TR., 2002). Although the roots to this practice of sharing code evolved since early 60s, the widespread usage of internet and the technology developments in past two decades opened new opportunities for open source projects (CNET news, 1998). A number of Open Source Software (OSS) products such as Apache web server, BIND and SendMail have dominated their product categories ever since then (Pal, N & Madanmohan, TR., 2002).

In the past decade, several researchers (Wheeler, DA., 2007; Mockus, et al., 2000) have taken interest in studying how open source can be applied to modern business strategies. However, a concern exists that in this area of study that there is no substantial evidence that the practices followed are effective in the business environment (Bitzer & Schröder, 2004). For economists like Lerner & Tirole (2000), the altruism shown by commercial companies and programmers involved in an open source software project is surprising. They stated altruism hasn’t played a major role in any other industry than software. Several others like Freeman & Rogers (2008) and Goetz (2003) contradict this statement by illustrating altruism exist in any industry provided there is proper exposure of the problem towards the contributing community. But most of the researches surrounding open source model considered software industry as the base for their studies.

1.0 SCOPE OF THE PROJECT

1.1 Objective

This project work focuses on the study of the Open Source ecosystem (Android) how it differs from Closed source sustems such as those surrounding the iPhone. This project includes the study of the Android Market, (online mobile application store for Android users) application developers, and which factors developers consider for selecting a platform for application development. To understand business strategy development trends across Android and iPhone platforms, we compared the Android market with the iPhone App Store, the leading application store in current mobile market. Apple launched an online application marketplace called the “iPhone App Store” before launching iPhone 3G. Currently, this store has more than 195,000 applications. To match or surpass the success of iPhone App Store, Apple rivals such as Google and Blackberry introduced their own application downloading stores called “Android Market” and “Blackberry App World” respectively. The Android Market is similar to the

iPhone App Store or to any other application store; it boasts a catalog of applications, services and tools available for the user to purchase download and use. Today, the Android Market also has around 49,000 applications. Thus, the comparison between iPhone and Android application stores will help explain the new challenges faced by these two application stores, and also the demand for these stores in the near future.

This study will help understand why Android choose Open Source System and why Apple doesn’t, what determines their success, which large companies are directly involved in developing applications for Android, and which factors they consider for developing an application.

1.2 Experimental Procedures

This project is based on a semi-automatically collected application database and  surveys to obtain necessary information for proving the hypothesis.

(A) Website Data

Firstly, application data were collected semi-automatically from the Android Market and iPhone App Store (iTunes store) and other mobile applications related websites, for e.g., Androlib.com, iPhoneapplicationlist.com. This gathered application database includes a list of the application categories on both platforms, number of applications in each category, and application information for the selected categories.

(B) Interview Data

Next, we interviewed mobile application developers to understand and know their views about Android/iPhone platforms and the ecosystem. To get in touch with mobile application developers, we attended the mobile conferences where they gather to share their views.

(C) Survey Data

Lastly, all the relevant facts about application developers from the interview data helped us prepare a survey. This web-based survey was prepared and conducted using

Survey Monkey.

1.3 Resources Utilized

The main resources used during this project were our industrial advisor, our academic reader, Android and iPhone application database, interviews and surveys from mobile application developers.

2.0 LITERATURE REVIEW

2.1 Introduction of Literature Review

In order to achieve success in project implementation, the first step is to research and find information already available. During research, we found many articles related to our topic. This paper is based on the content from these articles. We have divided this section in four main areas:

1. Overview of the Open Source Operating Systems (Android).
2. Overview of the Closed Source Operating Systems (Apple IOS).
3. Fundamentals behind the Open Source Platform.
4. Introduction to the Smartphone.

2.2 Overview of the Open Source Operating Systems (Android).

Google has achieved something remarkable with its open-source Android operating system. SinceApple’s iPhonerevolutionised thesmartphonein June 2007, bringing touchscreens and a beautiful user experience to the masses, it’s been without a rival. Sure, there’s a small legion of BlackBerry fans, and a few Nokia die-hards, but the critical consensus up until about a year ago was that the iPhone’s achievements were peerless.

EnterAndroid. The free, open-source mobile operating system was introduced to consumers with theHTC Dream(also known as theT-Mobile G1) in late 2008, but didn’t start gaining steam until the release of theHTC Heroin July 2009. The Hero, armed with a custom user interface called “Sense” that HTC built in-house, gained rave reviews for its high-end specs and faultless user experience, and appeared on many critics lists of the best gadgets of 2009. The whispers began: Had Google managed to create a platform that genuinely rivalled the iPhone for the best smartphone experience around?

This success is starting to show in the numbers. In February 2010, Google announced that more than 60,000 phones with Android on were shipping each day. The Android App Market is also booming, housing more than 30,000 downloadable applications in March 2010, although that’s still comparably small when set beside the 185,000 or so Apple has in its App Store. But where once companies had to have an iPhone app, it’s now understood that they need to offer both an iPhone and an Android variant.

Manufacturers haven’t let the opportunity pass them by, either. At the time of writing, there are around 35 mobile phones, five tablet PCs, three e-book readers and a netbook available that come with Android installed — a total of about 43 devices. But that’s nothing compared to the amount of gadgets that are purportedly in the works. If you tot up the rumours, statements of intent, leaked documents and roadmapped products from manufacturers, you can add at least another 15 smartphones, 19 tablet PCs, two e-book readers and three more netbooks to the pile. When you combine the totals, you arrive at a figure of at least 82 Android devices either released or in development.

The platform has received four major updates since the HTC Dream launched with Android 1.0. Version 1.5 brought camcorder functionality and the ability to use homescreen widgets. Version 1.6 added voice search and a better Android App Market. Then version 2.0 revamped the user interface, added new, larger screen sizes, as well as navigation support in Google Maps. The latest update is version 2.1, which debuted on theNexus One– a handset built by HTC but to specifications dictated by Google itself. Android 2.1 brings additional homescreens, animated wallpapers and the ability to use voice recognition to type in all text fields — very useful if you’re in a situation where you can’t use an on-screen keypad, such as when driving. Other devices are starting to appear with version 2.1 as well — the Motorola Droid, known as theMilestone in Europe, recently received an update to 2.1, and HTC’s forthcoming Legend and Desire handsets come with it installed.

Oldhardware=nonewtricks

However, the new features available in 2.1 come with increased demand on the relatively weak processors found in most smartphones, particularly in the earlier Android devices. As a result, some handsets can’t run later versions of Android at satisfactory speed. Even in those that can, manufacturers have been exceptionally slow at rolling out updates to their device owners, with HTC still not having delivered any update above 1.5 for its Hero at the time of writing. It’s difficult to fault Google for wanting to update its core platform as fast as it can. The problem is that it’s going so fast that manufacturers can’t roll out updates to their own software at a speed to match.

The upshot for users is that early Android adopters are stuck on two-year contracts looking mournfully at all the fun that new device owners can get, with no knowledge as to whether they’ll eventually have access to the new features themselves. This isn’t anything new — in most cases other manufacturers don’t grant older gadget owners access to new features — but it’s tough on Android users in particular because the pace of the updates is so fast. A phone can be out-of-date within months of its release, and in some cases handsets are still arriving with Android version 1.6 installed.

App developers suffer, too. Many of Google’s home-grown applications — Maps, Earth, Goggles and Gesture Search — were initially only released for the 2.0 and 2.1 platforms. Some have since gained backwards compatibility to 1.6, but HTC Hero owners, running 1.5, still can’t use them. App developers have a tough choice to make: support as wide a range of phones as possible, or offer an app with superior features, but only to those running the latest Android builds.

Situationnormal: Allforkedup

So what can Google do about the problem? The company is stuck with four slightly different variants of its platform in the wild, and it’s got a splintered marketplace where one Android user can’t necessarily access the same apps that another can, and it’s confusing and frustrating for end users. The obvious way ahead is to try and force manufacturers to update the software on their devices.

Any device running 1.5 should be able to cope with 1.6, and a 2.0 device will manage 2.1. While that still leaves the problem of devices that can’t quite cope with the most recent updates, Google should be able to merge its four shards into two — a set of 1.6 devices and a set of 2.1 devices — simplifying the situation somewhat. However, that relies on the goodwill and resources of a diverse set of companies, and some of those will only have dipped a toe into the waters of Android, meaning that they might be less keen to start devoting significant staff time to mucking around with operating system updates.

So Google’s got another trick up its sleeve. Recent rumours suggest that the company, in the upcoming version 2.2 update, is planning to de-couple the various applications that run on the device from the operating system itself. The browser, email apps, contacts, input methods and various other components will be downloadable and, crucially, updatable through the Android market rather than needing to wait for a full OS update to be upgraded. When Google wants to update the Gmail app, it can just push a market update, rather than forcing customers to wait for HTC, Dell, Samsung or other manufacturers to approve it.

If Google fails to unify the Android platform, a future looms where Android is stuck in a series of ghettoes, with no guarantee that one Android user will be able to run the same apps as another unless they buy a new device every six months. That’s good news for manufacturers, but very bad news for Google and for consumers. If Google manages the transition successfully however, then a unified (or at least consolidated) platform could be easily updated by both Google and phone-makers, depending on whether the update is a critical security issue or a new feature in an application.

Time is pressing. The fate of Android rests on what Google does over the summer of 2010. Will the platform fall by the wayside, or will it instead grow to be the Windows of smartphones, carefully balancing openness to app developers with a superior user experience and mass-market appeal?

On past form, it seems foolish to bet against Google.

Let us also look at the SORT analysis for android:

Being a self declared Google and Android fanboy, I’m constantly reading and studying about cloud computing and the mobile marketplace whenever I have the opportunity. I’ve even begun the very first steps of beginning to learn programming Java for the Android platform, although this is a ‘free time’ endeavor which is going to take quite some time for me to get even the basic level of proficiency achieved.

2.2.1 SWOT Analyses for GOOGLE ANDROID

But one area where I feel comfortable in discussion and analysis is in the business realm, which is why I decided to do a basic SWOT analysis for Google Android. It is a tool used in strategic planning to evaluateStrengths,Weaknesses,Opportunities, andThreats involved in a project or business. A company’s Strengths and Weaknesses are generally internal, while the Opportunities and Threats are external factors. To spare most of the readers of this analysis, this SWOT is going to be a little less in depth than a typical SWOT analysis. However, it will be detailed enough to outline and discuss what I feel are the key items in each area of the analysis.

STRENGTHS

• The Google Brand-Google is one of the most well known and respected technology companies on the planet. The fact that they are behind the Android platform gives it credibility and viability in the eyes of potential partners, vendors, and developers.
• Device Selection-Unlike the Apple iPhone where you don’t have any options of hardware suppliers other than Apple itself, the Android OS is open-source and any hardware manufacturer who chooses to do so can use it on their handset. This gives consumers a great deal of selection from which to choose from while also decreasing the lead time to the use of the latest hardware and technological advances in mobile electronics.
• Competitive Pricing-The Android OS is very cost effective to develop for since it is open source and the licensing arrangements are very vendor friendly. Thus, handsets utilizing the Android OS tend to be prices very aggressively.
• Google application and services integration-The fact that the Android platform integrates so many of the Google services and applications into its base only strengthens its core capabilities and usefulness. Google items such as GMAIL, Calendar, Reader, Listen, and of course GPS and Maps to name a few integrate seamlessly with the Android OS and make it very simple for users to synchronize their data across platforms from the desktop to the cloud and mobile platforms.
• Open Source-The Android OS is built from a Linux base using the JAVA Programming language. You can go directly to the http://source.android.com website and find the information and source code you need to build a compatible device for Android. Additionally, Android is a core part of the OHA (Open Handset Alliance) which is a group of companies working together to develop Android as an open and free mobile platform.
• Google Assets-The Android team(s) has all the intellectual, economic, and influential resources of Google at its disposal to make it a dominant player in the mobile marketplace.

WEAKNESSES

• Multimedia Support-Unlike the Apple iPhone which has the enormously popular iTunes application and marketplace, Android does not have a central or cohesive source of multimedia material nor a centralized player. Although there have been some improvements in applications on the Android platform in this area, at this time there is no “the” place to go that comes even slightly close to what Apple can offer on this front. However, there are numerous rumors to what exactly Google has in store for a music service of its own to be released sometime in late 2010. Whatever it is, it needs to be extremely well executed to come close to what iTunes offers Apple iPhone users. The one large asset Google has going for it is YouTube, and their recent announcement ofWebM(VP8) could become a lever for multimedia influence in video delivery for Google and the Android OS.
• Reliance on hardware makers to upgrade-Apple controls the when and how iPhone users will get not only new hardware, but upgrades to the OS and core functionality. With Android, even when Google releases a new version of its OS, it has to wait for the manufacturers to thoroughly test and modify code to make sure it works properly on their specific hardware configuration. Google is addressing this issue as it has announced that it plans to implement more of the core features of its services into the Android OS itself instead of as applications, and to slow down the upgrade releases as the OS matures in the marketplace.
• Less Mature-Android is not as mature or as polished as the iPhone at this point. It improves with every release, but it hasn’t reached the same level of overall user friendliness in its interface that Apple has achieved.
• Lack of Enterprise Support-Blackberry and even Microsoft still get most of the support when it comes to Enterprise usage. Although both Apple and Google have made some inroads in this marketplace, Android has a very small market share here. It needs to continue to develop Google Apps and its integration abilities with Microsoft Exchange.

OPPORTUNITIES

• The Android OS has a “HUGE” opportunity to get into the Tablet and e-book reader platform market right now. It cannot afford to sit back and watch Apple dominate the tablet market and eat up the market share as it had done when it released the iPhone. To date, that is exactly what is happening as no major hardware ‘mover and shaker’ has released an Android based tablet which is a fantastic opportunity if it is executed properly. I want one NOW! There have been several minor releases of Android tablets over the last few months, but none of them are what I would consider a significant product. Either Google itself or someone such as HP, Dell, ASUS, or ACER need to release a killer Android tablet in order for it to gather any traction. These waters only became murkier when HP acquired PALM.
• Developing Countries-Google has a huge opportunity to develop inexpensive devices using the Android platform in developing countries. The licensing is extremely developer friendly and the upfront cost investments are significantly less than other platforms. The integration with so many of Google’s other free services is a natural fit in this marketplace.
• Developer Friendly-Unlike the recent activities of Apple which has alienated and ticked off much of the developer community, developing for Android is very open and developer friendly. Google needs to take this opportunity to help developers continue to monetize their efforts through improved advertising revenue models and app sales.
• Growth of smartphone market-The smartphone market is still very immature and there is still a huge amount of growth to take place over the next several years to decade. Google needs to continue to work hard to position itself with its cloud computing applications and services in support of the Android OS. The marriage of these two areas is key to the maintained growth rate and increased market share potential of the Android platform.
• Embedded electronic devices-The Android OS has huge potential to be a major player in the embedded electronic market as a dominate embedded operating system. With so many devices becoming embedded with smart technologies and connectivity to the cloud, the Android OS is primed to be a major winner there.

THREATS

• iPhone unleashed-If the iPhone is unleashed from the beaten down AT&T network and appears on other networks such as Sprint and in particular, Verizon, it could be a real threat to the sustained rate of future market share growth for the Android OS. A significant amount of potential smartphone customers said they would buy an iPhone if it weren’t on the AT&T network. (I was once in this camp, until I discovered the world of Android.)
• Apple dominance-Apples market share gives it a great influence over developers and old media companies who are dying for a revenue model that will work for them. The ever growing walled garden that Apple is building is a false panacea that the old media companies are holding onto with both hands-the ability to charge users for access to premium content. Apple’s recent changes in policy and functional restrictions make it the ideal platform to launch such a strategy and recruit the power brokers from this old model. Additionally, the “there’s an app for that” and I’m willing to pay for it behavior of Apple iPhone users is of great appeal to developers who see the dollar signs in this market. (I’ve yet to pay for an application on Android) This gives Apple influence over developers and makes their huge market share very difficult to walk away from, even when they adopt very unfriendly developer policies.
• Increased Competition-Obviously, companies like RIM and Microsoft are going to fight for their share of the market and aren’t going to just give up. In particular, the Blackberry platform which still has huge support in the enterprise market.
• Platform Fragmentation-This is a huge threat to the Android platform. Although I listed the numerous devices as a strength above, the risk of fragmentation is a real and significant one. This is why Google has recently put a lot of effort into developing ways to minimize this problem. Google does not want numerous custom version of Android to emerge or fork off from their core platform, which is something you see in the Linux distribution network. Google is developing a set of baseline standards for compatibility for its platform. Since Google controls the Android Market, it can maintain significant influence over device vendors to meet the compatibility requirements. If you do a little research on this topic, you will see that Google’s standards are fairly rigid, maybe more so than one would expect. Google also plans to adopt aonce-per-yearrelease schedule as well. None the less, managing this risk is a major and real threat to the Android platform.

So there you have it, my basic SWOT analysis for Google Android. One underlying issue I feel is worth noting is that Google does not have to dominate, and as much as so many of us would love to see it, it does not have to “beat” Apple in market share or any other core metric. The only thing Google needs to do is to make sure there is an open platform large enough in the mobile market for its advertising business. Let’s face it; Google is not about selling Android devices. Google is about search and advertising, and Apple’s closed system was a threat to that model which has become even more self-evident over the last six to nine months of Apple policies and maneuverings. Apple recently announced their own Ad network for the iPhone and iPad which could be viewed as a shot across the bow of Google which puts even more necessity on the Android platforms success. The clear advantage that Google has going for itself right now is that Apple (Steve Jobs) is either being indignant over what cloud computing actually does and means, or he truly doesn’t understand or hasn’t figured out how it’s suppose to work. Considering how intelligent Steve Jobs is, I find it highly unlikely that the second option is the reason, and that his stubbornness and willingness to maintain personal grudges as the likely culprit.

2.3 Overview of the Closed Source Operating Systems (Apple IOS).

If there’s one company that is the envy of the high-tech community these days, it’s Apple. Steve Jobs is hailed as a genius CEO and lauded for a string of hit products. Apple’s market capitalization is over $200 BILLION dollars currently, easily ranking it in the top 10 companies in the world by market cap, and just shy of Microsoft for biggest technology company.

Everyone wants to understand the secrets of Apple’s success and hopefully emulate them. The reasons given by people for Apple’s success are many. The following are a few of the arguments made:

1. 1. Vertical integration- Apple owns most of, if not the entire, technology stack for its key products, and thus gives it advantages over other less vertically integrated products.

NOTE: “Vertical integration” used to be called “being proprietary” and was given as the reason for Apple’s relative lack of success against Microsoft in the OS/PC battles of the 80s and 9os. But phenomenal success has a way of changing people’s minds.

1. 1. Making markets vs. addressing markets- Some claim that Apple doesn’t ask people what they need but gives them products they decide theywant.

Does anyone NEED an iPhone or iPad? Not really, but a lot of people seem to want them.

1. 1. The Cool Factor- Let’s face it, Apple does make “cool” products. Attention to design and detail-fit and finish as they say-really distinguishes Apple’s products from competitors.
   2. Entering markets after they’ve developed— Contrary to #2 above, some people claim that Apple doesn’t make markets but enters existing markets once they’re growing and takes advantage of latent demand.

The iPod was not the first digital music player and the iPhone was not the first smart phone, and the iPad is not the first portable computing device. In the case of the iPad, products like the Kindle and Netbooks actually paved the way for the market to accept small computing devices, and Apple’s iPad is riding that wave.

• Differentiated business models- whether it was iPod+iTunes or the iPhone+App Store, Apple innovates not just on technology, but on the business model. This makes it difficult for competitors to play catch up, let alone overtake Apple once it establishes itself in a dominant position.
• People care about the experience not technology— Apple has always been about the user experience, but for a long time, the majority of the market didn’t care about that.

 

The majority of desktop computer users cared about “techs and specs”. Now the tables have turned, and the majority don’t care about the specs, they care about the experience. The iPod, with it’s “1000 songs in your pocket” motto and iTunes which radically simplified purchasing music latched onto the experience wave, and Apple has been riding it ever since.

 

• Simple product offerings- Apple has a very clear and simple set of products. It’s easy to understand the differences between their products, product families and the various configurations. This makes it easy to buy an Apple product if you want to.

 

A lot of companies complicate things unnecessarily. How many iPhone models are there? How many Blackberry models are there? How many Nokia smart phone models are there? See the difference between Apple, RIM and Nokia?

The same is true for the iMAc, the iPod and the iPad. Granted, there are actually a number of iPod models (Nano, Shuffle, Touch etc.) but they are very distinct amongst themselves. This can’t be said for digital music players from other companies.

2.3.1 Apple Competitive Analysis:

Future Goals

Apple has been and continues to focus on what its competitors are doing in order to keep a competitive strategy. Steve Jobs wanted to create a brand loyal name and to also produce a personalized computer with many features that would allow your life to be easier. Apple needed to keep up with rapid price cuts of its competitors personalized computers that were based on other operating systems. They wanted to focus on the rapid technological advances in both hardware and software that would boost their computers performance and provide its own operating systems. By doing so, the iMac-personalized computer was introduced in 1997 and they were able to create the brand loyalty they were looking for. They want to continue to build the brand loyal name and keep giving the consumer what they want to make their lives easier.

Current Strategy

Steve Jobs has recognized that many of its competitors have been providing computers that rely heavily on other operating systems to run their computers. For example, Dell computers rely on windows XP, and many of their software products rely on other party’s. What Steve Jobs has managed to do is to incorporate its own operating systems, hardware, and software programs for its entire product line. The software that they have created would allow the user to edit videos, download and play music, edit pictures, etc. with all of their own products and applications. While other competition relied on outside companies introducing their own digital and distribution music product services, subscription services, and free peer-to-peer music services; Apple has created a way to counter the constant changing competitive market. They have done so by effectively integrating all three services that its competitors have to choose from by creating the iPod for hardware, iTunes for software, and iTunes Music Store for the third party distribution services. Apple has been able to eliminate its reliance on outside companies and to keep on creating specialized programs for consumers.

Another factor that has helped keep Apple’s future thriving is by introducing the Apple Store. Customers are now able to take their products into the store and have an apple specialist examine/work on the products that they are heavily invested in. Most competitors would have the consumer take computer/product to a tech department of a store or would have to send to a third party.

Assumptions and Capabilities – Apple has done a tremendous job of knowing and anticipating what his competitors are doing. Apple was able to develop its iPhone and music player technology into a mobile phone. The Rokr was the mobile phone device that was developed by Motorola. The device contained quality sound and included an advanced camera system. A version of Apple’s iTunes music store has been developed for the iPhone so users can manage music and can download other applications that Apple has to offer. An Apple consumer can browse the web faster than its competitors. These capabilities make the iPhone ideal for both business and travel. By knowing the competitors moves and capabilities Apple was able to perfect a phone that could offer more programs and applications than any other phone. The company was then able to then focus on the strengths and weakness of its competition and compare it to the products they provide. The company believes in the highest quality of products. These products will continue to provide what every customer wants and needs, a computer company that continuously makes life easi