Abstract

Although Embracing the Android Platform, Telecom Operators' Involvement Differs

In North America, due to fierce competition between major operators, telecom operators see the Android platform as a means, other than iPhone and BlackBerry phones, to attract customers. For instance, Verizon Wireless has been engaged in active cooperation with Motorola and bundled its services with Motorola's Android phones. Aside from mobile phones, in light of the popularity of the iPad-like tablet devices, the major operators have been seeking cooperation with leading hardware vendors, in hope of attracting consumers by launching their own Android-based tablet devices. However, these operators are seldom actively involved in the design or development of Android services; instead, they mostly introduce Android devices and services through collaboration with software and hardware vendors.

The leading telecom operators in Europe are different from their counterparts in North America in that many European operators are multinational corporations and provide services in various European countries while boasting a dominant position or even a monopoly in their own country. With an adequate customer base, the European operators have more flexibility to develop innovative services for the Android platform. By opening their own application stores, the European operators seek to get rid of Google's control leveraging on their advantage of large customer base, so as to take control of the sales and profit sharing mechanisms of the application store.

Compared with their North American and European counterparts, the Asian telecom operators have been more aggressive in their Android involvement, not limited to applying the Android platform to tablet devices, digital photo frames, and digital STBs alone. China Mobile, for instance, has even applied a great deal of customization to the Android platform and constructed its own OMS platform and ecosystem, completely getting rid of Google's services. It can be observed that China Mobile, as one of the world's largest telecom operators, has made a departure from Google's original design and created its own platform services.

Tablet Devices Projected to Become Telecom Operator's Device of Choice in the Future

Reviewing the main demand for Android devices from the major telecom operators in the three regions, it is projected that Android-based tablet devices will become the mainstream product in major operators' next wave of device procurement due to the following reasons. First, the Apple iPad has recorded rapid increase in sales volume since its launch in April 2010 in the United States. 28 days after the launch, Apple had moved over one million units of iPad, selling significantly faster than iPhone which did not reach one million units until 74 days after the launch. As of June 22, 2010, iPad had sold more than three million units, and its sales has made many PC makers feel threatened, which also goes to show the popularity of iPad as a home multimedia entertainment device coupled with the iBooks App Store. In light of the popularity of iPad, various telecom operators have grown interested in Android tablet devices.

Furthermore, the major operators' data service ARPU (Annual Revenue Per User) remain relatively low, and they seek to boost the ARPU by offering devices with emphasis on content consumption. Observing the ARPU of major operators in the United States, Korea, and Japan, it can be seen that the operators in different regions all feature relatively low data service ARPU while the main revenue still comes from voice services. However, the operators in these countries are facing a common problem in recent years: that is, the growth of voice service revenue is limited and the operators have to rely on data services to boost the overall revenue. Judging from the rich variety of future applications in the 4G era, content consumption applications are expected to become even more popular in view of the large bandwidth enabled by 4G. It is projected that, accompanying this trend, there will arise the demand for diverse multimedia content transmission and a portable platform catering to the needs of content consumption. Therefore, it is expected that the tablet device, positioned as a portable multimedia platform, will become the mainstream product in the era of mobile broadband. Such devices have thus become the focus of attention for major telecom operators worldwide at present.

Appendix

Research Scope

This research focuses on the Android operating system, touching upon a wide range of applications, including mobile and data communications, tablet PCs, and consumer electronics. Companies analyzed in this research cover major telecom operators in North America, Europe, and the Asia-Pacific region.

Definition

Android

Android is a mobile device platform first promoted by Google and later developed by the Open Handset Alliance. Emphasizing a completely open principle, the Android platform has attracted software developers to develop applications for the platform. Moreover, open source also means that mobile device manufacturers can freely access and transfer the source code to their own products. Owing to the vigorous promotion by Google, the Android platform was eagerly anticipated upon launch.

The Android platform was designed with the Smartphone as its main application. As of May 2009, the already launched or upcoming Android devices were all mobile phone products, too. Even so, as an open platform, Android has attracted a lot of PC manufacturers seeking to port the platform to netbook PCs, MID (Mobile Internet Devices), and other mobile devices.

Glossary of Terms

List of Companies