Robert Pogson

Recent numbers from IDC for shipments of smart phones reveals that after HTC and Samsung, the top growth leaders, “others” is right in there with 147% growth in Q1 from last year. This shows the diversity of the smart phone industry. There is a basic operating system widely used, Android/Linux, and there is wide competition on price/performance/software. This environment is good for everyone.

Compare that with the way things have been going in “PCs”. M$ makes a ton of money and everyone else gets by with tiny margins. That other OS has been the standard but because M$ controlled it and forced everyone to sign up and pay “protection money”, no one is doing well except M$. With Android/Linux, the cost of software to the manufacturers is so little the barrier to entry is gone and because a huge lump is not paid for software the manufacturers can concentrate on hardware, form-factor and promotion. It’s just a better way to supply IT.

In Q1 2011, these manufacturers were going flat out designing, building and promoting their own products instead of M$’s. They were working for themselves and their customers, not for a parasite/slave-master. Everyone in the system is doing what they do best and profiting from their efforts.

The world designs and makes better software more efficiently than any single corporation. The Linux organization makes the hardware-abstraction layer and manages computing resources. Google designs the GUI and provides a virtual machine in which portable software runs. Thousands of developers produce software for the “app stores”. ARM designs the CPUs and ARM’s licensees customize ARM’s modular designs as they see fit. The smart phone manufacturers pull together material from dozens of industries and integrates the whole system. The system works and everyone does their best, makes a good living and there is no tax on the OS.

I believe we will have a similar system for more general computing sooner rather than later and the detour ARM has made around the wintel monopoly is the key. The whole world can run, examine, modify and distribute software without messing with competition. Now that this has been implemented with ARM on mobile stuff it will be implemented on ARM on stationary stuff and x86/amd64 stuff on servers and clients. It’s all good. FLOSS works.

A runner can run at top speed for a short time before readily accessible resources are depleted. The same is true of the IT industry. The small (not-so-)cheap computers are selling so fast that suppliers of components are going flat out and may deplete inventories by June. Such is the rumour.

Whether it is true or a ploy to raise prices we shall see. In the longer term production capability will increase but that takes time. This shortage could impact the ramp up of small cheap computers or it could accelerate that ramp as the small computers use less resources to make. You can make a lot of smart phones for the resources depleted for one netbook or desktop. The shutdown of nuclear power in Japan is worrisome but China can take up the slack eventually.

I would bet that the net result of the current situation is that the small cheap computers will increase in popularity taking a bigger bite out of Wintel. Intel is hedging its bets with Atom but M$ is caught out for a year or so, long enough to fall behind the tide of Android/Linux.

Apple may already be feeling the pinch.