February 24, 2012
The HTML5 Disruption Guide for Equity Investors

In my last post I spoke why developers like HTML5. 

Today I want to share some quick thoughts about which companies are stand to benefit from HTML5’s predicted disruption to the mobile industry, and which ones aren’t:

Native OS Owners: LOOSE
because it bypasses their control points like the app store approval and rev share arrangements:

  • Microsoft
  • Apple
  • Google (Android)

Web Search: WIN
because Web search is the main discoverability mechanism of (HTML5 and all other) web sites, not the app store. Note, that Google can crawl into an HTNL5 app (but not a native app) and highly optimize discoverability! 

  • Google (Search business)
  • Microsoft (Bing)

Handset manufacturers: LOOSE (but not equally)
because they are commoditized and become deliverer of exchangeable boxes:

  • Apple*
  • HTC
  • LG
  • Sony
  • Fujitsu
  • Panasonic 

*don’t believe me? Just make a side by side comparison of the Facebook app on the iphone vs the, say, Samsung Galaxy. It looks exactly the same, except that you may suddenly start to like the larger screen size of the Samsung and not care so much over their Android bloatware… Content differentiation has disappeared and hardware features become more predominant. iphone is good at them, but not necessarily the best!

Low Cost Handset Manufacturers: WIN
All those who do well in low cost (through scale and/or supply chain management) could see a relative gain of market share over the other OEMs:

  • Nokia
  • Samsung
  • Mediatek

Content owners: WIN
Of course, with a commoditized hardware and delivery platform, the premium through differentiation moves to content owners:

  • Facebook
  • Google (services)
  • (Simple) Games (Zynga etc.)
  • News (CNN, FT, NYT)**
  • Video (Youtube, ESPN, CNN, Netflix, Hulu)

** You may argue that news outlets are the big losers of anything related to the Internet. However, they already so disrupted that the spread of HTML5 on mobile may actually give them a lift from their miserable position now. Just look at some of the earliest and most aggressive adopters of HTML5: The Financial Time and The Economist.

Network Operators: WIN
Not being a slave to Apple any more will feel a win to every operator. They have much more leverage again and are no longer being chocked by the native OS owners — a war they even participated in and lost big time in the end (think Limo, WAC, imode, ophone, etc.):

  • Verizon
  • Vodafone
  • Telefonica
  • Deutsche Telekom
  • China Mobile
  • DoCoMo

Disclosure: I own a minor position of AAPL and VZ shares.

10:03am  |   URL: http://tmblr.co/ZTlN9wGyajmZ
Filed under: HTML5 
February 22, 2012
HTML5 is Developer’s Darling

In follow up to my post on the mobile OS wars last week I want to share some more thoughts on HTML5.  

This is likely to be a redundant stance among many opinion leaders in the Valley, when every day another supportive report is coming out, but nevertheless I think I can weigh in and provide a view additional points to help people evaluate the chances and speed of adoption.

Last week I argued that HTML5 is here to stay and win mostly because

  • HTML5 vs native apps has become more and more indifferent to end users (Facebook, FT), but
  • HTML5 apps have massive benefits for app developers

Let me introduce a framework I use to determine why developers (which I consider the pivotal stakeholders for the establishment of an ecosystem, or failure thereof) choose one development platform over the other:

1.  Installed Base <- This is really the proxy measurement for #2-10

2.  Easy Distribution (Access, Discoverability, Wide Reach) 

3.  Monetization (Payments, low %age rev share, different revenue sources) 

4.  Portability (No fragmentation, version compatibility, ideally only one) 

5.  Easily deployable (Immediacy, no approval/censorship) 

6.  Rich APIs (access to device functions, inter-app communication) 

7.  Stable platform (not buggy, infrequent updates) 

8.  Free Tools, Good Support (Productivity) 

9.  Trained workforce (ease to hire someone) 

10.  A Platform with future (Career)

If you use this framework on the native OSs you can see why iOS is the winner, with Android a close second in terms of developer preference.  You can also see, on a side note, why I think MSFT will have a hard time, because it looks much more like the failed WebOS than the native winners to app developers:

A developers evaluation of a native mobile OS

Now, how does this compare to HTML5?

An app developer's evaluation of HTML5 vs a popular native OS

HTML wins over iOS.

So if my thesis holds that app developers are pivotal for the success of an ecosystem, user experience of HTML5 is equal for most apps (not games, but most, including heavyweight Facebook), then my money is clearly going to be on HTML5.

What that means for investors I am going to write about in my next post.

11:41pm  |   URL: http://tmblr.co/ZTlN9wGu80vq
  
Filed under: HTML5 
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