Market Insight

Telefonica and Mozilla partner for HTML5 feature phone platform

February 27, 2012

Jack Kent Jack Kent Director, Media and Advertising

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Telefónica Digital and Mozilla joined forces to develop an HTML5 platform for feature phones. The Open Web Devices platform (OWD) was unveiled at the Mobile World Congress in Barcelona and is set to launch on feature phones. It provides an HTML5-based mobile operating system (OS) using Mozilla's Boot to Gecko Project (first unveiled in 2011) with the aim of smartphone-like features and capabilities to feature phones.

The platform runs on a Qualcomm chipset, and Adobe will provide authoring and application creation tools for the project. However no device manufacturer partners have been announced as yet.

Telefónica is open to partnering with other mobile network operators to promote the platform; however no partners have been announced. The platform was developed outside the Wholesale Applications Community (WAC), which is a consortium of operators, OEMs, and mobile industry players aimed at providing a unified global mobile app platform.

The Open Web Development platform is part of a growing trend to bring feature-rich content, previously the preserve of high-end smartphones, to lower-cost devices.

Nokia's latest Asha range of range of Series 40 feature phones also offers a number of  smartphone-like features (touch-screens, a better mobile browser, QWERTY keyboards etc) - with content delivered by its Nokia Store (formerly Ovi Store) application store. There is a clear market for content on such devices. Series 40 phones account for more than one-third of the 11m daily Nokia Store downloads. Nokia has made further moves to improve its feature phone user experience with the January 2011 acquisition of Smarterphone, a Norwegian company that offers a smartphone like OS for feature phones.

With a strong presence in Latin American markets where feature phones still dominate (smartphones accounted for 9.7 per cent of mobile subscriptions in Brazil in 2011), it makes sense for Telefónica to try to engage this audience with more advance mobile services, content and features. Such a strategy will help the operator increase data revenues as users consume more mobile content and services and make it easier to market smartphones in these countries once the average smartphone selling price comes down.

However, the Open Web Development platform does face a number of significant challenges:

The lack of an application and content ecosystem - Perhaps the biggest challenge facing any new mobile platform -- be it for high-end smartphones, or lower-cost smartphones and feature phones -- is encouraging developers to create content to make the platform attractive to consumers. An HTML5-based platform should make it easy for developers to create content, but Telefónica and Mozilla have yet to reveal how they plan to distribute and monetise mobile content and applications, either via an operator-led application store or otherwise. The size of the addressable market, the ease of development, and the ease of distributing, monetizing and marketing content are the primary concerns developers face when choosing which platform to create content for. So far, the OWD platform only addresses one of these issues - the ease of development. It will be difficult to encourage developers to offer content for an unproven platform given the growing power of Android. IHS Screen Digest expects Google's Android Market to serve more than 17bn smartphone downloads in 2012.

  • The rise of the low-cost smartphone - With the cost of entry-level Android smartphones falling rapidly, the window of opportunity for a feature phone service is likely to be small. While Android smartphones may not be able to reach the lowest feature phone price points - its audience will be growing far more quickly than the feature-phone installed base.
  • The lack of device manufacturer partners -With no device manufacturer partners yet announced, the platform will need the public backing of handset vendors soon if it is to fulfill its ambition of launching in 2012. With smartphones driving much of the growth in global handset sales (and much of this from low-cost handset Android devices), it could be a challenge to gain support for a platform aimed squarely at the low-end. Nokia, still the major player in the feature phone business, already has its own Series 40 devices, offering a well established range of content and services.
  • The need to work with other operators - Telefónica made the right call in developing the platform without partnering other operators, allowing it to bring the platform to market far more quickly than would have otherwise been the case. WAC, the most notable multi-operator apps and content initiative, has brought little to market in the two years since it was first announced. Telefónica will still need the support of other operators to make its platform a mass market opportunity, which cannot be guaranteed and could well slow down its progress given the patchy record operators have had working together.

 

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