Everyone who hasn’t been hiding under a rock for the past few years knows that Google Inc (NASDAQ:GOOG)’s Android and Apple Inc. (NASDAQ:AAPL)’s iOS operating systems rule the roost in the mobile market. Even a company as huge as Microsoft Corporation (NASDAQ:MSFT) has struggled to gain a foothold in the mobile phone market attempting to take on these two behemoths, BlackBerry Ltd (NASDAQ:BBRY) TSE:BB) is floundering and struggling to survive, and even an acclaimed handset such as the HTC One has struggled to obtain a significant market share.
It takes a truly massive entity to even have a chance of competing with the major players in this industry, and there doesn’t really seem to be much of a challenge on the horizon for Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) in the foreseeable future. With the iPhone 6 due to be launched in the fourth quarter of this year, and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s Galaxy S5, which runs off the Android OS, expected six months beforehand, the two big smartphone manufacturers continue to dominate the industry and win the hearts of consumers.
Apple vs. Google new contender: The China operating system
But a new competitor to Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) has emerged recently from an unlikely source. And mirroring the general economic theme of a battle between East and West which will be a significant facet of the twenty-first century, this rival has emanated from China. A brand new mobile phone operating system has recently been unveiled in China. This new OS, named quite simply China Operating System or COS for short, is intended to provide serious competition to iOS and Android.
While consumer electronics rarely goes hand in hand with government involvement in the Western world, the COS system is actually an initiative which has been backed by the Chinese government. As China attempts to reshape its economy and change the overwhelming emphasis on cheaply producing products for the Western market, such initiatives are seen as being particularly important by the Chinese establishment, as they enable economic diversification.
China has already witnessed near neighbor Japan build a very formidable economy largely on the back of hi-tech industry, and while Japan has floundered a little in recent years, it is clear that the Chinese are keen to learn lessons from the last few decades of Japanese industrial expansion.
Mobile ecommerce boom
And it is clear that the mobile marketplace has become an increasingly significant industrial sector in the last few years. Research reported on by The Guardian newspaper in the last few days indicated that mobile phones and tablet computers are now used for nearly 6% of all retail sales in the UK. Ecommerce is now a trillion dollar industry, and the growth in this sector is being driven by the increasing popularity of smartphones and tablets.
Television advertisers have long since recognized this, and now whenever we see people, particularly young people, using computing technology in adverts, it is ubiquitously tablet computing and smartphones that is depicted.
Thus, the Chinese government is clearly trying to piggyback onto this trend and develop an operating system that can truly compete on a global level. But is this remotely realistic? There are several factors to consider with regard to this, but the most obvious that may stick out like a sore thumb to readers in the United States and Britain in particular is the notion of a successful IT project including the involvement of a government.
Certainly in the US and the UK, government-based IT systems and projects are not known for progressing with the serenity and inevitability that the tide meets the shore each day. Both countries have witnessed a catalogue of disastrous and almost amusing – I say “almost” as we ultimately pay for them – IT system cock-ups related to public sector institutions that would leave anyone who hasn’t taken leave of their senses to conclude that if you want to get a serious IT project done, don’t involve the government on any level.
The Great Firewall of China
Perhaps the same doesn’t apply to China, though. While the country is ostensibly run as a market economy, the reality is that the influence of the state permeates every area of life in China. This isn’t a cliché or a stereotype; it’s a fact. One only need bear witness to the so-called Great Firewall of China to understand that the government has a fundamental relationship with the way that technology operates, develops and is deployed within the borders of the world’s most populace nation.
And this will be a major issue for COS. What sort of restraints are the Chinese government going to impose on it? How will this play in the international market? And are Western consumers really likely to switch allegiance when such question marks exist? The reality is that though ambitious proposals are being made with regard to COS, this operating system is much more likely to be primarily aimed at the domestic market, at least for the foreseeable future.
This would leave plenty of potential for the OS to become established before being seriously launched in the West. After all, China is a nation of one billion people, and local technology typically performs extremely well in East Asia. For example, Microsoft Corporation (NASDAQ:MSFT) has greatly struggled to develop a market share for any of the Xbox consoles, with Japanese consumers in particular favoring products proffered by local firms Sony Corporation (NYSE:SNE) (TYO:6758) and Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974).
While COS is unlikely to gain a worldwide following for quite some time, the move to develop a Chinese-centric mobile operating system does indicate that China has serious intentions of penetrating the tech marketplace. The progress and reception of the China Operating System will certainly be something to keep an eye on once it is released.
