Mobile is eating the world

There is incredible opportunity for monetising mobile software, but challenges still remain

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Mobile is eating the world Jamie Longmuir, Director of Software Monetisation at Gemalto
By  Jamie Longmuir Published  September 20, 2015

Venture capital firm Andreessen Horowitz recently proclaimed that “mobile is eating the world” — and it’s not hard to see why. Demand for mobile software is at an all-time high, with Android and iOS completely dominating the mobile OS market. In fact, Android’s sizeable market share accounts for more than 80% of smartphones and 60% of tablets worldwide.

The growth in the Middle East region is being fueled by Apple’s iOS and Google’s Android. According to IDC, these two platforms alone account for over a whopping 95% of smartphones that have been shipped in the first quarter of 2015. Devices which feature these particular operating systems have witnessed an increase in shipments by 67% year after year. Android presently enjoys 80% of the Middle Eastern market’s volume, with iOS representing around 17%. In Africa, however, the statistics are 89% and 7%. Android is mostly dominant in the low to mid-priced bands, while iOS is predominantly found in the $450-plus price category. The resilient progress in the region’s smartphone market is mainly being driven by the rise of low-priced devices that are powered by Android.

Almost half of all the smartphones shipped across Africa (45.1%) in Q1 2015 were priced below $100, while almost 75% fall under $200. Low-priced smartphones are also having a substantial influence in the Middle East, with the $100 to $200 price range accounting for the market’s largest share, said IDC. Samsung, Apple, and Huawei are the top three smartphone vendors in the Middle East, together accounting for above 65% of market share.

Due to its open nature, Android is the obvious choice for ISVs and device manufacturers looking to develop industrial gear. The low-cost, customisable operating system is expected to have a massive impact on the IoT — a fact that hasn’t gone unnoticed in the industry.

Following the general trend, the MEA market witnessed a massive 58% increase in the shipment of iOS devices in Q4 2014 compared to Q3 2014. Android shipments increased by only 3.8% over the same period, while Blackberry OS continued its declining trend after a temporary increase in Q3 2014, according IDC’s Q4 2014 Handsets Tracker.

The mobile phone user penetration in the Middle East was 94% in 2014 and is expected to grow to 96% by 2017. Throughout 2014, nearly 80% of internet users worldwide were expected to access the internet from a mobile phone, rising to 90% by 2017. The plethora of smartphones and tablets allow users to carry out an immeasurable number of “data-fuelled” tasks from watching movies to video conferences on the go. With the UAE’s mobile penetration rate at over 200% and more than 16.8 million active mobile subscribers as of June 2014, these statistics are expected to escalate by Expo 2020. The amount of data used monthly by each active smartphone will increase substantially from an average of 0.8GB in 2014 to approximately 5GB by 2020.

Tech giant Google is already leveraging Android’s open-source code and has built dedicated operating systems for Android Wear, Android Auto, and Android TV, across all verticals. Microsoft, too, wants to get in on the act. Rumour has it that the Redmond-based company is considering adding Android support to its Windows mobile platform.

Yet, despite these overwhelming votes of confidence, traditional B2B ISVs are still taking a cautious approach when it comes to Android adoption. Their concerns over IP theft, reverse engineering, and unauthorised usage, while legitimate, can easily be overcome by implementing a professional software monetisation solution. Protecting one’s intellectual property has the added advantage of preventing revenue loss, which should be a motivating factor for any ISV.

Software protection

When it comes to security, many ISVs opt to do it themselves using the free code obfuscationtools in the Android NDK. Some use Native C to make reverse-engineering even more difficult, as it provides important functionality and valuable logic. However ISVs choose to protect their code, it can be tricky finding a flexible and secure licensing solution for Android that’s also capable of turning software into cash.

The solution would be to deploy a comprehensive IP protection and licensing experience that can encrypt each ISV’s library separately, so hackers will not be able to devise a common crack method. Sensitive data such as configuration files should also be encrypted and licensed separately, so only protected APKs with a valid licence can decrypt and open them. This level of protection is recommended for a number of industries, for example eLearning, which often requires video content encryption.

The fact that many Android devices don’t come with standard USB ports makes the need for flexible and secure software licensing all the more important. A solution that’s capable of cross-locking a machine’s fingerprint with its unique device ID is considerably more secure.

Licensing experience

With IP protection taken care of, ISVs will want to ensure a smooth licensing experience, which would enable a number of flexible licensing models such as perpetual, duration, expiration date, and execution counter. A good licensing experience will eliminate the need for node-locking, decouple software licenses from physical hardware and reduce monetisation risks for vendors provisioning software and enforcing licence compliance in virtualised environments.

Of course, managing disparate licenses across multiple OSes can be complicated and stressful. By unifying their back-office, ISVs can streamline this experience with no additional effort or investment. A good licensing experience will enable ISVs to have full control on how many licences are running, and have complete visibility into the usage of their software, which can be used for billing purposes or business intelligence.Although it’s too soon to tell whether mobile is, in fact, “eating the world”, the industry is evolving and security needs to evolve right alongside it.

Jamie Longmuir is director of Software Monetisation at Gemalto.

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