Abstract

MIC Perspective

Professional Services Emerge, Service Values Not Widely Accepted Yet

Initially, since Android is open source and no licensing fees are charged, unlike other OS providers, Google does not offer technical support, training, and consulting services. As a result, software integrators seize this opportunities and begin to provide related services.

Software integrators offer various kinds of services, including project development, solutions, consulting, or testing certification. These integrators often specialize in certain technology areas. For example, integrators providing complete product development services or testing certifications are also the major integrators in mobile communications or embedded application areas.

Since a large number of Android-based products have hit the market, some chipset manufactures begin to provide reference design as well. Many vendors thus directly adopt and modify the solutions provided by chipset manufacturers or place product development orders with ODMs or OEMs, aiming to accelerate product release time and cut development costs. Since contract manufacturing business only generate moderate profits, it is observed that when encountering problems, instead of outsourcing the development project to platform service providers, ODMs or OEMs will try to solve the problems internally. As regards testing, many system integrators have their own testing personnel in order to save costs. Nevertheless, platform service providers are able to offer complete testing categories compared with the testing provided by the enterprises' themselves. Moreover, many of the testing services offered by platform service providers are conducted through automated tools, thus saving tremendous time compared with testing conducted by enterprises' internal testing personnel. However, automated testing will require higher testing costs, and even though service providers have high level of technology capabilities, only few branded vendors or system integrators outsource testing business to these service providers. Generally speaking, owing to the considerations of costs and industry model in the entire development chain, the values of service providers are yet to be seen.

Cross Platform, Cross Development Tool Capabilities Vital to Market Competition

With its popularity, shipments of Android mobile phones grow rapidly. Since Android is developed based on Linux, it has relatively good networking and network management capabilities. Moreover, Android has complete HMI (Human Machine Interface), so many vendors have ported Android to other mobile devices or networking products. For example, before Google launched Android 3.0, Samsung, Lenovo, ViewSonic, and many other regional branded vendors had released tablet devices running on Android 2.x version. Before the release of the Google TV platform, many vendors had developed Android-based connected TVs and STBs, such as the OESF (Open Embedded Software Foundation) of Japan. Each branded vendor has its own requirement for end products, and various end products also adopt different chipsets and require different peripherals and functions. For instance, if a vendor adopts different baseband chip and AP (Application Processors) from different providers for its mobile phone product, system re-modifying will be required. It can be seen that integration service providers have to be equipped with cross hardware platform development and consulting capabilities.

If a vendor has developed a set of application software that receives wide popularity, it is projected that the vendor will port the software to other system platform in order to maximize profits. As a result, many application software products have Android, iOS, Symbian, Blackberry, or Windows Phone versions. Platform service providers can either satisfy the clients' demand for product porting or provide development tools for related porting tasks. It is essential for service providers to be able to handle various OS platforms, and technology capabilities have become advantages in market competition. For vendors planning to foray into Android platform integration service market, it is essential for them to further strengthen their integration capabilities across hardware platforms and among system platforms.

International Integrators Have Advantages in Complete Development Project, Small- and Medium-Sized Integrators Focus on Application Software Development, Modifying

Currently, branded vendors seldom outsource entire device development because most of the branded vendors view Android-based products as strategic products. Major branded vendors even develop the products on their own. If a vendor needs to accelerate product development schedules, it will seek help from ODMs, OEMs, or platform integrators. When a branded vendor plans to release strategic product, it will also require high quality of the product. As a result, it is observed that branded vendors favor major international integrators, such as Wind River, MontaVista, and Noser, over regional or small-scale providers. Long-term experiences, technological capabilities, and various test case designs are required in the testing certification area. Since international major integrators have gained and accumulated much experiences and successful cases, it is observed that they are easier to win orders from branded vendors or system integrators. Platform integrators have to provide products that are almost completely developed to system integrators. Nevertheless, product development often requires considerable costs, and it is also difficult to calculate the profits to be generated. Since most of the platform integrators in Taiwan are relatively small-scale, they are less likely to invest in product development. As a result, Taiwanese platform integrators seldom receive orders for complete product design from system integrators.

As regards compatibility and further expansion of development tools and solutions based on reference design model, branded vendors and system integrators will choose products provided by international integrators as well, such as Myriad, Mobile Distillery, and Novell. Moreover, most of the major integrators also offer complete technical supports, reference document, and training services. These integrators are able to provide long-term product planning, helping clients to understand and consider future development and upgrade of the products. It is observed that most of the small-scale regional integrators are unable to offer product blueprints for the clients; as a result, when trying to win over orders from branded vendors or ODM or OEM clients, they have less advantages competing with international integrators.

Since application software development involves innovation and practices, and single software application is often small-scale, the size of enterprise is observed to play a relatively minor role in application development and software modifying business. Branded vendors or ODMs or OEMs also prefer to work with local partners, including small- and medium-sized developers. Many regional integrators are equipped with good technical capabilities and experiences in cross hardware platform development, so they can often land orders for software development or system modifying projects. It can be seen that regional integrators play an important role in software development and product tuning and modifying.

Considering the company scale, if Taiwanese integrators plan to foray into the platform integration business by focusing on complete product development project, testing certification, or development tool R&D, they are expected to meet challenges posed by international major integrators and face limited market development. Nevertheless, if regional integrators decide to emphasize on certain application software development, platform porting of certain products, and application performance tuning, with its technology expertise in certain area and established business ties, it is projected that they will be able to compete with international integrators. By doing so, Taiwanese integrators are expected to see further development.

Appendix

Glossary of Terms

List of Companies