Today, when browsing OSnews, the following sentence caught my eyes in a comment by Tony Swash: “In general almost nobody is actually making any substantial profits in the new mobile device markets, which is very surprising given it’s size and growth rates”. I found this way of putting things interesting because as far as I know, this has actually been a long-time trend in the cellphone market, which is fairly easy to explain but might have worrying consequences for the future of computing as a whole. In this post, I shall develop this point.
The cellphone buyer mentality
Even if today some like to talk about the “mobile device revolution” and how it’s changing the computing market, one should not forget that this recent development is just a logical step in the evolution of the cellphone market. For years, cellphones have had cameras, media players, user-installable third party applications, and primitive web browsers, and the fact that this technology has recently gotten more mature and received much more public awareness should not make us forget that this market still has a long history, in which some clear trends can be seen.
One of such trends is the shared sentiment, among the majority of cellphone buyers, that those devices are a cheap, replaceable and disposable commodity used to access a cellular network. Just think about how much care your typical relative puts into choosing a phone. When the main use of these products is to communicate with others, it’s mostly the network than matters, because there are really only minor differences in the way various phones will handle text and multimedia messages, phone calls, and more modern communication media such as e-mails and the Web.
In fact, the cellphone market tends to take a uniform shape so easily that finding a good device with unique characteristics such as a good camera, a physical keyboard, high-quality games or a good battery life can only be done at the price of a long hunt within reviews and shops.
Of course, there are some people which are ready to spend so much effort choosing a phone. But these are generally people who are not interested in cellphones in general, but in technological jewelery as a whole. They will buy devices such as PDAs, netbooks/ultrabooks or very expensive cellphones because they are amazed by the power of these little things, have very specific use cases that can only be addressed by a few devices, or just want to show off with cool tech.
When people have these kind of motivations, you can make them spend a fair amount of money for devices, including highly expensive phones like Apple’s iPhone or Samsung’s Galaxy SIII, but the very fact that the cellphone market is so boring and uniform suggests that they do not form the bulk of it. And then again, evidence shows that it’s difficult to make lots of money out of a disposable human-network interface.
Beyond cellphone sales numbers
Outside of profitability matters, a more serious problem is that when people are not interested in what they buy and consider all things to be equal, the industry easily discourages itself and goes into a race to manufacture the cheapest crap at all cost.
We have already seen it with traditional personal computer form factors, where vendors such as Acer manage to sell $300 laptops that will overheat in less than an hour of heavy use, are equipped for inadequate hardware for the OS which they sport, and come with lots of junk pre-installed software that eats power without a good reason other than bringing enough money to the vendor for him to afford selling hardware at such a low price. In the cellphone market, Samsung and LG are particularly skilled at this, but overall pretty much everyone is doing it unless they cater to the enthusiast market described above.
These things sell because they are cheap and buyers, which are just as apathetic as vendors, won’t care about anything but the price. In a self-fulfilling prophecy, it appears to most people that cellphones suck, computers in general suck, and since there is no helping it one should just buy the cheapest/prettiest model available and be done with that.
I don’t know if any company’s communication services actually tries to fight this mentality, but if so, one thing is for sure: it’s not working. To the contrary, this cellphone buyer mentality is increasingly spreading towards other realms of computing, such as software.
What about software?
It used to be that cellphone software, such as J2ME games, was treated with about as much respect as cellphones as a whole, meaning, none. Who could imagine spending more than a few dollars in something that is just used for toying in the bus? Who could even want something more sophisticated than a commuter toy on a cellphone?
As it turns out, even if cellphone capabilities have improved, this sentiment of people towards cellphone software hasn’t changed a bit. Many highly advanced cellphone applications are provided free of charge, and those which aren’t are extraordinarily cheap, to the point where one can safely say that there is no way any mainstream mobile software developer can recoup development costs through sales alone. With Android, Google even provide a whole mobile OS at no cost, funding themselves off third party devs’ revenue and increased advertising space…
There is no evidence suggesting that this attitude towards mobile software is going to change anytime soon. In fact, as of now, this business model is so “healthy” that it is currently spreading to other realms of computing. With tablets, computer OEMs are trying to bring cellphones’ user interfaces and business model to more capable computer form factors, while commercial desktop OS developers are quickly taking their products in a similar direction.
Unless something unexpected comes in the way, I would expect the consumer computing landscape to have moved to a fairly unified cellphone-like business model in no more than 10 years. At which point it would become increasingly harder for software developers to charge a reasonable price for their creations. Perhaps people who develop professional software could manage, though, since companies tend to be a bit less cheap about tools than people.
Which leads me to the question asked in the title of this article: what is the difference between customers expecting software developers to sell their software at loss and pirating software altogether, other than the first one being legal and the second one being illegal? In both cases, the whole reason why the problem exists in the first place is that people can’t bother enough about software to pay a decent price for it. In both cases, the problem causes developers to resort to clumsy kludges such as ad-funded software or “freemium” strategies in which basic functionality is free but advanced one is non-free.
One has to wonder why we can’t we just tackle this problem more effectively than by resorting to DRM or legalizing privacy invasion. If we consider another area of law for a second, beating the shit out of your annoying noisy neighbor is illegal, but it is mostly an education-enforced moral barrier, and not law enforcement, that prevents the average person from doing it. Couldn’t we figure out why this barrier doesn’t exist in the case of asking software developers to resort to dysfunctional business models?
A possible action that could help increasing the “moral value” of software would be to try increasing children’s awareness of the complexity of software development and multimedia content creation by having them try it out early on. Sure, doing that would require that we give up on the idea that computers are magic boxes which one can use without any knowledge of their internals, but I believe there is sufficient evidence out there that this is a bad idea to begin with…