Friday, February 26, 2010

Are Standards Good for Consumers?

Last week’s Mobile World Congress produced the interesting announcement that a number of industry members are joining together to form an industry association (Wholesale Applications Community, or WAC) dedicated to providing a common application platform for mobile phones. This, combined with Bruno’s thoughtful blog on Apple and Flash/Java got me thinking...

According to the announcement “The alliance's stated goal is to create a wholesale applications ecosystem that – from day one – will establish a simple route to market for developers to deliver the latest innovative applications and services to the widest possible base of customers around the world.”

It is interesting that this is an operator-led initiative; none of the major platform vendors (Apple, Microsoft, Google or Nokia) are currently involved in this. A simple interpretation of this could be that it is an attempt by the operators to reclaim the initiative as the services they provide are effectively commoditised with industry differentiation being provided by the mobile device platforms provided by Apple et al. These mobile device platforms provide the features that enable the rich ecosystem of applications which has created a whole new sub-industry. If the operators don’t get a piece of this, they will be consigned to building masts and sending bills until they go the way of the dinosaurs.

However it also raises an interesting broader technology issue: does the consumer benefit from this standardisation? Discussions about technology standards almost always invoke the example of VHS vs Betamax as the rationale for the consumer benefits of standardisation. However doesn’t standardising the application platform take away the ability of the device manufacturers to differentiate themselves by providing distinctive features? If the argument works for mobile devices, why not for laptops? Desktops? Servers? If it’s such a great idea, why did MSX fail?

To my mind the key difference is whether we are talking about functionality or content. VHS vs Betamax was important to consumers because they wanted a standard content delivery mechanism - as long as the machine could play the content, essentially the functionality of the machine was irrelevant. So standards for defining and delivering content are good for the consumer. (HTML is another good example of this.)

Standards for functionality restrict the features available to consumers, creating monopolies and stifling innovation. This is bad for consumers. Having a diverse market for mobile device platforms is therefore very much to the benefit of consumers. Standardising this platform would be bad for consumers.

By the way, in case no-one told the members of WAC, they are reinventing the wheel - they should check out Java.

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