WIP October newsletter: Subsidy or developer competition?

Jumping into my second newsletter I asked around what you wanted from a newsletter… and here's what came back:

Thibaut @ WIPJam on a Boat

  • “Amazon style” reading recommendations

If you like SXSW and will join us at the Big TX Android Barbecue
You will like the $3B Contest : Save the Music industry…

If you want to attend WIPJam @ Sprint DeveloperConference
You might want to win tickets for the Sprint Developer Conference

If you read Caroline on WAC
You will surely have fun with our new initiative the API catalog

If you liked How much does it cost to make an app?
You will like Mobileapps2.0 : our series on changes in application development lifecycles

If you wanted a Free Nokia Developer Summit ticket 
You will want an
NDS Qt Session Summary and the Calling All Innovators contest

If you enjoyed  Wireless Industry Piracy : WIPJam on a Boat (Sep 29). Free! 37 countries!
You will enjoy 
WIPJam @OSIM (London Oct 20). Free! 45 operators!

  • An occasion to step back and reflect. Quite a lot happened this month… but you said you liked
  • Short. So I'll stop here! But as you want things
  • Posted as a blog. You can find the rest of this post here:

Thoughts for the months … Fuelled and inspired by…. OTA /  music hackdays / nokia developer summit / momo global summit and all the time spent in our new office which despite the trips is not that unsignificant.

The hheme for the month is subsidy or developer competition!

As Nokia announced  their $10M Calling All Innovators contest (see above), tweets and articles start flourishing talking about Nokia buying developers. Let's  put things in perspectives:

  • Samsung Bada $2.7 Million contest for expected 10 millions in 2010 (Announced in Barcelona)  sold that's $0.27 per phone going for software developers in the long tail…
  • Nokia giving $ 10 Million for 50 millions expected devices that's $0.2 per phone on par with the Samsung contest.

It sounds like we have here is actually more of a normal practice.

But the real question should probably be  : How significant  to spend $0.2 on the long tail compared to other costs ? Especially software or content costs …

Say you purchase a company, have a team of 400 dev working on an operating system which sells a few million phones in its first year.  Is it really $0.2 a phone? Just do the math… And that's nothing compared to all other software licensed to go on the ROM (see Vision Mobile 100 Million club for a better perspective on things). That's much more than $0.2 a phone yet no one talks about the money spent there being a subsidy to Oracle, Adobe, Skype…

Is Nokia subsidising the long tail?  

Yes in a sense but in this case what would you say of semiconductors supporting the development of open source operating systems? Subsidies or business sense?

What would you say of angels fostering a roster of startup companies? Subsidies or innovation spread betting?

This kind of investment is very much a reflection of the growing importance of the long tail in customers' choices, as exemplified by a comment heard at Mobile Africa from a Kenian developer asking Nokia to have more local content on their phones just like the Samsung Wave had.

One could probably object on the suitability of competitions as a way to invest in an ecosystem… but that's another debate altogether probably much more suited for a discussion in Brussels than on this blog.