Platform Competition: Are Device Ecosystems Expanding?

Innovation drives our daily lives. Whether it’s driving an automatic car or experimenting with 3D printing, there are always new life-altering advances happening in the tech world. Typically, the companies who initially produce these great advances dominate the industry. However, healthy competition between brands often leads to even greater technological advances. This also rings true for the PC, mobile, and home entertainment industries.

It All Began with a PC

Microsoft built an empire around its Windows platform, and has completely dominated the PC industry for the past 25 years. Many tech pundits expected Microsoft would segue their ownership of the industry into the mobile world, but they didn’t branch out into the mobile technology sector until after the craze had begun. According to the Verto Analytics Device Ecosystem 2014 Report, at the end of Q4, only seven percent of smartphones were run on a Windows or other platform, with Android and iOS making up the remaining 93 percent. This is due perhaps to Microsoft’s focus on the PC industry being so defined.

As Internet users, many of us have lived through the PC revolution and have gradually evolved from desktop to laptop, and subsequently to mobile phones and tablets. Technology has grown to be a facet of everyday life, and having a device on-hand to surf the Web has become increasingly valuable. With more than 4 billion people using a mobile device in 2014, we are truly living in a mobile world.

Figure 8: The table below shows that approximately one in 10 U.S. Internet users (11 percent) are running a Mac platform, while the remaining 89 percent of users run Windows or another platform.

The mobile device explosion began with the birth of smartphones. Only five years ago the market was notably more fragmented with five competing platforms including BlackBerry and Nokia’s Symbian. Today, the market is more concentrated, with two key players dominating the mobile platform market – Apple’s iOS and Google’s Android.

Figure 9: The table below showcases the spread between iOS, Android and other mobile platforms with the user base being almost evenly split between Android (51 percent) and iOS (42 percent) in Q4 of 2014

Given that there are a large variety of devices, consumers have many devices in use, each capable of performing a set of separate and overlapping functions. With market maturity and an ever-expanding user base, Apple and Google will no doubt attempt to grow their ecosystems by introducing wearable technology, smart TVs, connected vehicles, and more all in an over-arching attempt to attract new users and exceed the expectations of their existing user base.

Home Entertainment Market

The mobile market continues to advance with the help of its two largest competitors, while the home entertainment industry stands with multiple competitors such as Nintendo, Sony, and Xbox. Whether these devices are streaming video content or are the larger-than-life screens presenting it, the home entertainment device market remains fragmented with no obvious dominating platforms at this time.

Gaming is a long established niche of the home entertainment market. In 2014, three of the seventh-generation video game consoles (Xbox 360, Nintendo Wii and Sony PlayStation 3) were replaced with upgraded models (Xbox One, Nintendo Wii U and Sony PlayStation 4, respectively). Currently these three seventh-generation consoles hold the top number of users and will likely remain on top for a while. However, two of the three eighth-generation consoles (Xbox One and PlayStation 4) are predicted to outsell the Nintendo Wii U, as it has struggled to gain momentum and increase its user base, despite launching a full year ahead of its rivals. Will Microsoft’s Xbox and Sony’s PlayStation go head-to-head for the lead in the home entertainment industry?

Future Outlook

No large changes occurred within the PC and mobile market in 2014, leaving it fairly unaltered. But, the home entertainment device market is still evolving and will likely lose some of its fragmentation in 2015. Given the continuous cycle of growth in the technology industry, it is only a matter of time until changes within the platform positions eventually occur. New innovations typically lead the industry and open the doors to healthy competition, creating groundbreaking products that consumers love. Whether it is in the two-player mobile market, the one platform PC industry or the ever-fragmented home entertainment field, we can expect emerging competitors with innovative platforms to engage and entice us all.