Cyanogen: Disruption Around The Corner?

Mobile is eating the world. The platforms (i.e. iOS & Android) empowering this trend have revolutionized by making mobile devices smarter with abundance of mobile driven apps and services satisfying plethora of use-cases. In doing so, these platforms (e.g. iOS, Android, Windows and so forth) have transformed into ecosystems with ‘closed’ software and services looking to gain complete control of the users. We are reaching a tipping point where the very horizontal mobile internet enabled apps, networks and services companies residing over the top of these platforms or within these ecosystems have started to create their own stickiness factors where most of the users are now spending their digital lives in.

The platform switching costs have started to disappear with ubiquitous availability of these horizontal apps and services across platforms and commoditized hardware. We are entering an era where these internet companies are getting bigger and much more important. The ecosystems players such as iOS or Android continue to be quite closed in a sense as they try to compete against these OTT players itself creating a big divide within the ecosystem. This offers a big opportunity for much more open and industry neutral platforms such as Cyanogen, Firefox or Sailfish to support these horizontal OTT players which will be key in the Big Information era partnering with third party software and services.

Players such as Apple, BlackBerry are differentiated but comes integrated with closed software and services. Players such as Amazon or Xiaomi are also quite closed when comes to platform play to drive their own software and services built on top of AOSP. Google Android while supports “open hardware” has moved towards commoditization and is less open when comes to pushing its own software and services through Google Android. Tizen, Firefox are still in very nascent stages but more tending commoditizing hardware, software and services

Every quadrant has a leader, Apple is winning the bottom-right, Microsoft the bottom-left and Google Android the top-left but the top-right quadrant is where the next disruption lies and there are two emerging platforms trying to gain traction here: Cyanogen and Jolla’s Sailfish.

Open vs Closed OS framework

We have analyzed the mobile platform landscape in detail and what is the present and could be the future potential of the players in the top right quadrant. In our series of reports, we have analyzed the two-year old platform Cyanogen, which is a very interesting company with growing momentum and traction.

Cyanogen has built a highly customizable commercial OS, Cyanogen OS built on CyanogenMod which can be pre-loaded by OEMs on smartphones hardware globally. Cyanogen OS will offer deeper integration with third party services along with the company’s proprietary features and services. Currently, Cyanogen OS is licensed free to device makers. A key differentiation from “Google Android” is that Cyanogen OS plans to offer alternative 3rd party core services to GMS. To date, Cyanogen OS has shipped with GMS on commercial devices but we could see more customization and partnerships moving forward.

E.g. OnePlus One the popular smartphone launched globally and shipped almost one million units in 2014 across 30+ countries globally actually included GMS or India’s number 2 smartphone brand Micromax’s subsidiary YU’s Cyanogen powered Yureka smartphone also included GMS to cater the local needs.

Striking key partnerships with Qualcomm will help Cyanogen joinng the QRD program and help trickle down the price-tiers. Furthermore, securing decent rounds of investments over time is helping Cyanogen build on its vision to become a strong contender for an alternative  to Google Android.

The mobile industry is at a very interesting juncture where players such as Cyanogen or Jolla Sailfish can create significant value banking on its vision by becoming a “highly open, customizable and neutral” platform player rather than a somewhat closed & competitive ecosystem player like Apple or partly like Google. Think Cyanogen as AirBnB of smartphone industry which could change how the smartphone industry landscape will look starting next decade.

Detailed analysis on the current mobile platform landscape and Cyanogen’s potential as a disruptive platform is available for Counterpoint clients and can be downloaded here. If you are interested in receiving a copy of this report, please let us know.