From a consumer perspective, a mobile operating system has to offer certain experiences to be considered a viable option. Many of the challengers to iOS & Android have painfully learned this. The most important mobile services are maps and app stores, so consumers can use these devices to navigate, search around them based on location, and to leverage all of the sensors and capacities of the phone. Beyond these, there are also a variety of secondary and tertiary mobile services including communication, games, media, cloud backup, and more. All of these have one thing in common, however: they are massive web services at their core.
Controlling the critical mobile operating system services creates outsized value for companies — independent of who owns the underlying platform. Google arguably has the biggest advantage through its Google Mobile Services (GMS) suite which are anchored by Maps & the Play Store. On Android it uses this advantage to require inclusion of secondary and tertiary Google services as well as to dictate product design requirements in its interest in exchange for giving partners a license to the core GMS suite. This is a tremendous leverage except for places like China, where there has been a proliferation of alternatives for key mobile operating system services.
While there have been a handful of investments in new mobile operating systems (startups such as CyanogenMod and Xiaomi which are based on Android while Windows Phone, Firefox OS and Tizen have all been built from scratch by large companies), there hasn’t been as much focus on competing with GMS. It is hard to imagine a startup viably competing with Google’s offering in maps or app store. Larger companies such as Amazon, Yandex & Microsoft (with Nokia), are starting to do this, but it’s very expensive to directly compete in these core mobile operating system services.
For a while I’ve been curious if there were other ways to compete with GMS but never found anything convincing. That is, until Facebook bought Whatsapp. I’ll get the disclaimer out of the way: I own Facebook stock, I’m a former Facebook employee, and I’m a current happy user of Facebook.
Back to Whatsapp and Facebook…it turns out that a great way to compete with GMS is not to compete head on with Google, but to control other critical points of the mobile operating system experience. With the shift to over the top communication apps a new critical mobile operating system service is emerging. Specifically, Facebook is now in a position to offer a preload of “Facebook Mobile Services” (FMS) that includes Whatsapp, Instagram, Paper, Messenger, and other Facebook apps and services. Combined, these apps represent an emerging mobile communication suite that is so core to the mobile experience, it puts Facebook on par with Google in terms of leverage on the Android ecosystem.
Further, it appears that Google is not in a position to limit Facebook’s influence on the Android ecosystem via its key control point of GMS. Facebook might be the only non-Chinese company in this position right now. Over time Facebook could require inclusion of their own social app store, zero rating for their applications or perhaps even require a revenue share per subscriber in exchange for a license to “FMS”. So while Google bear hugs Android via GMS, Facebook can bear hug Android+GMS through its own mobile services suite.
This is a big deal.