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A value based framework for the smartphone OS war

Now that smartphones are becoming main stream, who will the winners be?  The debate rages around developer support, availability of apps, UI and more.  What is needed, however, is a framework to discuss in terms of which OS will have the most compelling value proposition for the consumer.  In the end, consumers buy devices, and it is their experience that matters.  And then you need to take into account that most consumers (apart from the most die-hard Apple or Google evangelists) could not care less about the OS, but buy phones for entirely different reasons.

First and foremost, we need to establish a common definition of value and what it is.  In this article, value is defined value as the Benefits the buyer receives over the Cost associated with acquiring and using the product.  Benefits and price will further have to be broken down, and especially benefits are hard to define as they can be specific to the individual. However, by focusing on some key benefits of what a smartphone brings to a user, it will be easier to break down the components that make those benefits stand out.

So what are the benefits of owning a smartphone? Well, by introducing another framework, Maslow’s hierarchy of needs, you can begin defining what the basics are: Connectivity (whether it is making or receiving a phone call, checking your email or your social networking sites), increase productivity (through email access, task lists, maps, etc) and entertainment/information certainly seem to be among the basic needs supplied by a smartphone. Going higher up in the chain, killing time seems to fulfill a slightly higher than the basic purpose, and then you move up to the higher principle such as the image of being an owner of a cool phone to be able to show off to your friends, to perhaps the highest of self-fulfillment which is the feeling that you are really ahead by having the latest device. People will naturally put different emphasis on different benefits, and surely there will be other benefits that will matter to people, but these benefits provide the necessary basis for analyzing the premise of what it takes to be a winner in providing these benefits.

The Smartphone Value Equation

The other half of the value equation is the price that you have to pay for the benefits. The most obvious price component is the actual cash outlay for the device itself. However, there are two other important elements in the price component of smartphone ownership: Service Cost entails what it will cost you to use the device, whether in racking up data charges, or spending on applications/services for the device.  Convenience cost has multiple facets, and deserves a further breakdown:

  • Ease of Use is strongly related to the User Interface (UI) of the device, and how well it interacts with 3rd party products (such as your computer), and also how easy it is to upgrade.
  • Discoverability relates to how easy it is for you to find services for the phone
  • Payment Capabilities is simply how easy it is for you to pay for services related to the phone

You could argue that some of these aspects are Benefits, as certainly smartphones are now being marketed as app devices, and the apps themselves are clearly benefits.  However, these components are really about how easy and available all these components are, not what they do for you.

Now that the components have been identified and the framework has been set, which player is best suited to provide the various components?  This is where I am asking you for help.  Two polls will be held to try and get the community’s opinion on the relative ranking of the various factors.  The first poll asks you to rank the Cost side of the equation. For an introduction and further background of the cost aspect, you may want to read this before you vote.

Read more about the cost side here.
Read more about the benefits here.

Posted in The Business of Mobile.

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