Google, Apple: Two mobile software visions

When Service-now.com, a maker of software for corporate information technology departments, created a smartphone version of its product last year, it bucked a major trend.

Instead of creating an application that customers could download through an outlet like Apple's iPhone App Store or Google's Android Marketplace, the company built a customized Web site so users of many different devices could use the software via their phones' browsers without downloading anything. Tailoring software for the five big mobile-phone platforms—iPhone, Android, BlackBerry (RIMM), Symbian, and Microsoft's Windows Mobile—"would have taken five times as much work," says Service-now.com principal architect Pat Casey.

Service-now.com is hardly alone in discovering that the Web can be a more convenient place to host mobile applications than on devices themselves. The argument for Web-centric mobile computing got a boost this month when Google's vice-president of engineering, Vic Gundotra, told a San Francisco technology conference on July 16 that the Web, not downloadable apps, is the future of smartphones. "Over the next several years, the browser … will become the platform that matters," Gundotra said during a panel discussion.

Less Clout Ahead for Apple?

The weight that Google threw behind the online style of mobile software development isn't surprising. Much of Google's software, including applications for getting directions, creating documents, and sending e-mail, resides on the Web and isn't downloaded onto users' PCs or phones.

But if enough developers write Web-based applications that aren't exclusive to the iPhone or other devices, as Google hopes, Apple and other hardware makers could have less clout when it comes to keeping customers loyal to their platforms. The phone makers also could miss out on revenue shared with software makers when users download their applications. Apple declined to comment for this story.

"Suddenly, the browser is an application platform," says Jon von Tetzchner, CEO of Opera Software, which makes browsers for PCs and handheld devices and claims a 23% share of mobile-phone browsers, about equal to Apple's Safari, according to Web analytics firm StatCounter. Opera is improving its browser to run more types of mobile applications on more phones, von Tetzchner says.

Creating software for browsers gives developers a big advantage, according to von Tetzchner. It opens a potentially big new market for mobile apps: consumers with not-so-smart phones. Opera Mini, a stripped-down version of the company's browser, gives basic phones made by Nokia, Motorola, and others the ability to access Web sites and applications. Developers whose software runs in a browser can likewise gain quicker access to emerging markets, where phones are generally less capable of running specially designed applications stored inside them, he says.

Concerns About Security

Other companies have favored developing smartphone software for browsers rather than specific hardware as well. Wireless carriers including Vodafone have called for consolidating the number of operating systems in the market, and for a push toward more mobile Web development. In May, Vodafone worked with carriers China Mobile, Softbank (9984.T), and Verizon Wireless to launch the Joint Innovation Lab, an initiative to educate would-be developers of mobile widgets and share with them the proceeds of software sales. "We very much believe in the idea that the [mobile] applications of the future will be running inside the browser," says Pieter Knook, Vodafone's director of Internet services.

To be sure, Google has a stake in software downloads as a means to make phones based on its Android operating system more popular.

The company runs an app store called the Android Marketplace. And many consumers may have concerns about the security of mobile Web applications, which sometimes store personal data on remote servers. "I'd feel really uncomfortable if my entire contact list was in the cloud somewhere, rather than on my phone," says Jack Gold, an analyst at consulting company J. Gold Associates. "There are some things you want to take with you."

Google's promotion of Web-centric software development also serves its interests as much as those of users. The more smartphone users open their browsers to perform tasks, the greater chance they have of seeing Google's ads, which are strewn across the Web. "Google wants things open, but the reason they want things open is because that allows a lot more devices to get into their sandbox," says analyst Gold.

A Google spokeswoman says that continuing improvements to mobile browsers, such as the ability to store data about their surfing history even while the browser is closed, are giving developers a compelling alternative to the "native applications" that users download to their phones.

Bandwidth Constraints Get in the Way

Developers may be looking for a new approach to mobile software development. Since Apple introduced its App Store in July 2008, users of iPhones and iPod Touch devices have downloaded more than 1.5 billion applications, and developers have made millions of dollars selling programs and games through the store. But analysts say Apple is the real winner, and not just because of its 30% cut of App Store sales. "The whole purpose of the App Store is to drive iPhone sales," says Needham & Co. analyst Charles Wolf.

There are still roadblocks standing in the way of software developers flocking en masse to the mobile Web. Many types of applications, including graphics-heavy games, need to be stored on a phone to operate quickly and reliably, and to take advantage of common Web technologies like Adobe Systems' (ADBE) Flash. Mobile carriers' bandwidth constraints are also a factor.

Perhaps the biggest hurdle to mobile Web development is the most obvious: the success of Apple's App Store. It sells applications in a centralized, easily searchable location, and gives developers a relatively simple means to profit—two elements that proponents of the mobile Web have yet to offer.

Douglas MacMillan is a staff writer for BusinessWeek in New York.

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