Ecosystem lite – Pledge of allegiance

KaiOS works better than Android at the lowest end.  

• Google is having another crack at social networking and an important part of its success could end up being dependent on KaiOS, the feature phone OS that has risen spectacularly from the ashes of Firefox OS.
• Google’s first attempt to compete with Facebook in social networking was Google+ which failed badly and is now a media sharing offering that no one really uses.
• Consequently, I think that its pretty safe to say that in developed markets, barring a major change in how social networking works, Facebook’s position is unassailable.
• However, in places like India and Africa there are still millions of users who have yet to pledge their allegiance to one digital ecosystem or another.
• The value of these users to the digital ecosystems is only a tiny fraction of the value of users in developed markets, but there are so many of them that, in aggregate, they represent an opportunity worth pursuing.
• This is why Google has been installing WiFi in railway stations in India and has now launched a new service that serves as a Q&A board for local information in India.
• The app (Neighbourly) is extremely simple and does not allow full sharing of photos and videos but instead focuses on the sharing of text-based information.
• There are many groups on Facebook that serve the same function, but I think that Google may have a shot here given some of the latest trends happening at the very low end of the market.
• For the last 4 years, the feature phone market has been in decline as cheaper and cheaper Android has been able to replace it.
• In 2017, this trend began to reverse and strong growth has once again returned to this segment (Counterpoint Research) that was I considered to be declining to zero.
• The main reason for this was the availability of a new user experience launched in India in January that has already taken 15% share of the market.
• This experience is called KaiOS and is effectively a feature phone operating that offers what I would call ecosystem lite.
• The main culprit is JioPhone that that features KaiOS which has proved to be wildly popular taking a lot of share from Android at the very low end.
• The reason I suspect is that although Android can be made available at these price points, the hardware specification is too low to offer a decent user experience.
• In addition, I think that the demand of these users in terms of services is much less sophisticated meaning that a simpler solution is good enough.
• Because KaiOS does not have to compete at the high end, the software has been optimised for simpler functionality meaning that it performs better on very low specification devices.
• Furthermore, many of these users will not be demanding sophisticated Digital Life services but instead will be happy with a more limited set of options.
• Hence, as long as the main services are offered, addressing the very long tail which is critical in other markets is less important in this segment.
• KaiOS is also fortunate in that JioPhone has created enough volume and noise such that developers are now moving to make their apps available on the device.
• This is something that Mozilla never managed to achieve which was a major reason why the platform failed in its original iteration.
• Google’s core apps are already available and Facebook appears to be quickly moving in this direction.
• Hence, I suspect that going forward, efforts to address those users that have yet to join a digital ecosystem will need to take KaiOS into account if the momentum continues.
• KaiOS has finally managed to get some momentum but I think that steady execution and a move to address Africa will be required to keep it.

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