KDDI, Japan’s second largest network operator, has announced it is developing a standard platform for handsets in collaboration with Qualcomm. The operator will require all its handset suppliers to use the platform, which includes everything from Qualcomm’s MSM chipsets to the BREW environment, middleware, OS and a suite of pre-installed applications. KDDI already provides its Common Platform Specification (KCP) to manufacturers, specifying the chipset and BREW, but this latest development will see the operator extending its requirements throughout the software stack.
Manufacturers will be encouraged to differentiate through design, user interface and accessories – areas where KDDI permits them to innovate outside the standard platform.
KDDI uses a CDMA2000 network and has a close relationship with Qualcomm. It is known for keeping close control over handset specifications, but this move goes further still, essentially removing any choice over the OS from the hands of the manufacturer. In return, KDDI will invest in research and development alongside its manufacturing partners.
The company believes it will reduce time-to-market and eliminate fragmentation. In a statement, KDDI said: “The Company aims to strengthen its cost competitiveness in the development of mobile phones, an industry characterised by the continuous advancement and ever-increasing complexity of its software.”
Toshiba and Sanyo will work in partnership with the operator to develop the platform and issue it to both existing and emerging handset partners.
The Japanese market has always been characterised by unique dynamics, enabling the operators to play a much greater role in handset specification than in Western markets. DoCoMo, for instance, took the decision two years ago to require its handset partners to use either Symbian or Linux for 3G handsets. It also licensed the Symbian OS, enabling the company to develop a tailored version for its manufacturers.
This latest move by KDDI highlights the difference in priorities between Western European and Japanese operators. While the likes of Vodafone, T-Mobile and Orange have adopted an OS-agnostic stance and concentrated their efforts on controlling the applications and interface layer, their Japanese counterparts have taken the opposite approach. User interface will be one of the few areas where KDDI’s manufacturers are allowed to differentiate.
Part of this can be explained by the more advanced mobile data market in Japan. There is a much greater focus on revenues derived from applications and eliminating fragmentation is therefore a key priority. This is one area where Qualcomm’s BREW has been very successful, providing an integrated and standardised platform to content and application delivery which works in the same way on virtually all CDMA2000 handsets.
It is also a question of resources. KDDI and Qualcomm will need to make a significant investment to develop their platform. It is unlikely any Western operator would be prepared to take on such a challenge alone and to do so via an industry consortium would be time consuming and a strategic headache.
There is also the question of strategic balance with the handset manufacturers, who traditionally have much greater freedom outside Japan. Sony Ericsson and Nokia, for instance, are major investors in Symbian, which is the dominant smartphone platform. They are unlikely to be willing to cater to the demands of a single operator when they have invested heavily in the economies of scale derived from Symbian devices.
While KDDI may derive some individual benefit from its decision, it will find it limits innovation and differentiation in the long-term.