Web browser-maker Firefox takes on smartphone powers Apple, Google

SAN FRANCISCO Sun Feb 24, 2013 10:48pm IST

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SAN FRANCISCO (Reuters) - Mozilla, makers of the popular Firefox Internet browser, is preparing to challenge Google (GOOG.O) and Apple's (AAPL.O) grip on smartphone software.

A new Firefox operating system for mobile devices is set for a July release after winning the backing of 13 wireless service providers around the globe, including Spain's Telefonica, China Unicom (0762.HK) and America Movil (AMXL.MX).

Mozilla is betting there's room for a software developer-friendly mobile platform alongside Apple's and Google's Android, which together power the majority of mobile devices on the planet.

The new software is based on open Web standards and is capable of operating on devices with much lower hardware requirements than today's existing crop of smarpthones, according to Mozilla.

Because the Firefox OS is open-source and Web-based, third-party developers will be free to sell mobile applications without needing to share revenue with Apple or Google.

"There's a strategic imperative for the industry to have another OS that really is open and supports choice and competition," said Mozilla's Senior Vice President of Products, Jay Sullivan.

Mozilla will showcase some of the first hardware devices based on that software at the Mobile World Congress, taking place in Barcelona this week. Among the brands that have signed on to make devices based on Firefox OS are South Korea's LG (066570.KS), China's ZTE 000063.SZ and Huawei HWT.UL.

Unlike Google and Apple's operating systems, which are built from proprietary technology, Firefox OS uses the HTML5 standard that Web services are built with. That means anyone familiar with Web programming can create Firefox OS apps.

Whether a smartphone built on Web standards can deliver the kind of performance that consumers expect remains to be seen. Facebook famously stopped using HTML5 to develop its iPhone app last year, with Chief Executive Mark Zuckerberg saying the technology couldn't deliver acceptable quality and calling a decision to use HTML5 for its app one of Facebook's "biggest mistakes."

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Mozilla, a non-profit organization, also faces stiff competition. Google's Android software, which the company distributes free to phone vendors from Samsung (005930.KS) to HTC (2498.TW), had roughly 70 percent share of the worldwide smartphone market in the fourth quarter, according to industry research firm Gartner. Apple, which created the smartphone market with the 2007 launch of the now-iconic iPhone, had a roughly 21 percent share of the market.

"The real barrier here is not necessarily a technical one, it's scale," said John Jackson, an analyst with research firm IDC. Mozilla will need to attract large numbers of consumers and app developers if it hopes to avoid the fate of previous mobile operating system hopefuls, such as Palm's WebOS, now owned by Hewllet-Packard.

But "the world's computing experiences are going mobile and when they get to the mobile environment, they're happening on a platform that's controlled by either Apple or Google," said Jackson. "There's a universe of content and service providers that have an interest in seeing a more neutral platform materialize."

Mozilla will initially look to compete in so-called "emerging economies" in Latin America, Eastern Europe and Asia, where many people still use older phone models and have yet to upgrade to more expensive smartphones that feature touchscreens and high-speed Internet connections.

The first phones will be available this summer in Brazil, Columbia, Poland, Venezuela, Serbia and Spain.

The first Firefox OS phones that Telefonica will offer this summer come with a wholesale price of $100. The price that consumers pay for the phone will vary in different markets and depend on whether the phone is offered on a pre-paid basis or comes with a service contract, a Telefonica spokesman said.

Telefonica will eventually offer higher-end Firefox OS phones, and plans to offer Firefox devices in all 25 countries that it operates in by the end of 2014. (Reporting By Alexei Oreskovic; Editing by Bernard Orr)

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