The mobile services industry as an innovation ecosystem - inherently flawed?

The mobile Internet was the major buzz word in Scandinavia during the dot-com boom in the late 1990's. Extending the appeal of Internet services to a terminal that the user has more or less at hand every hour during day and night seemed and still seems like a no-brainer, especially as the number of subscribers in the mobile world is vastly larger. However, both native applications developed by third-party developers and a lot of fancy services created by operators, for example video telephony, have failed to establish the vibrant ecosystem of innovation that characterizes the Internet. Basic services such as voice and SMS still prevail, with the latter even being the inspiration for Twitter (albeit with up to 140 instead of up to 160 characters long messages).

What's the explanation for the very slow development of mobile services? One could be that it's an iterative (again) development in figuring out how to best use the specific UI of mobiles. That users prefer to communicate via SMS instead of video telephony is puzzling, but when taken into account that SMS actually allows for a lot more bandwidth than only the 160 characters due to that we share a context that a conversation takes place within, this starts to make sense. Danish author Tor Nörretranders calls this exformation in his brilliant book "The User Illusion". Add that video telephony in fact places extensive demand on the bandwidth and frame rate in order to be a tool for humans to read the tiny "microexpressions" of the face. Demands that turn the ordinary term of videoconference into telepresence, as demonstrated by the high-end Cisco solution.

But the specific characteristics of the mobile terminal as a platform for new services should not be an obstacle in an efficient innovation ecosystem. Here, Michael Mace, a former VP at Palm, describes in "Mobile applications, RIP" why the mobile industry is not a friendly environment for developers of mobile applications. Mace (together with Elia Freedman) basically puts it down to the developers business model, that the combination of the proliferation of operating systems together with increasing marketing and sales cost for reaching the end customers makes profitability from mobile application development too hard. Instead, Mace forecasts that web applications will replace native applications for mobiles. Mace's general theorem that he says applies to any computing platform is:

A platform that is technically flawed but has a good business model will always beat a platform that is elegant but has a poor business model.

Also, this will leave the mobile operators to be a bit-pipe player as the fixed broadband operators, with fewer options to differentiate strategically, thereby running the same race as everybody else (not a good strategy according to Michael Porter)