Scot Finnie: What needs to change in the mobile market

Suppose you had to choose between your "sit-down" computer (such as a laptop) and your smartphone. I think I know what most of us would keep. Smartphones have become indispensable. They have also become status symbols -- the cachet of certain brands and models of mobile products is matched only by designer clothing, cars and a few other types of goods.

Naturally, a product that we've decided we can't do without is going to be profitable for its maker. Unsurprisingly, the tech company with the largest market cap, Apple, derives its largest revenue stream from two mobile devices: the iPhone and the iPad.

Nonetheless, mobile is a dysfunctional industry.

For starters, look at the complexity. The mobile market features a triad made up of device makers, mobile platform providers and wireless carriers. Then look at how each of these operates.

Competition in a free market should drive down prices, but that's not happening in the U.S. mobile market. At full retail, the device makers charge an arm and a leg for products that are underpowered, have little memory and come with anemic batteries. Proprietary platforms, such as Apple's iOS, continually add new features and functionality that eliminate interoperability with competing products and platforms. That's an utterly self-serving model. The top wireless carriers exert too much control over device makers and platform providers and bind end users to two-year contracts with steep monthly charges.

The pace in this market is frantic to the point of distraction. Product cycles are so tight that the marketplace is baffled. Network providers have far too much influence on hardware design and, in the case of Android, too much leeway to customize software. Android's widespread adoption was greatly aided by the fact that Google made it open source, but the fragmented array of options could be the platform's undoing. The user experience isn't the same from device to device and, perhaps more importantly, from app to app. Like the device makers, Google needs to stop iterating Android so frequently and become a leader, not merely a software provider.

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