a16z Podcast | Searching for Mobile's Third OS

Market Context and Opportunity

• Kurt McMaster argues that current mobile innovation is stifled by iOS and Android functioning primarily as shells for their own proprietary services rather than open platforms.
• With mobile computing expanding from a few billion to over 6 billion users globally, McMaster predicts significant room for a third or even fourth operating system.
• Existing non-Apple/Android efforts (e.g., Tizen, various Chinese Android forks) are characterized as closed systems with poor execution that fail to drive genuine innovation.

The Core Problem: Closed Ecosystems vs. Open Platforms

• Service Integration Limitations: Current OS structures prevent core services (like AI and machine learning) from accessing the device kernel, limiting their ability to scale and compete with deep system-level integration.
• Startup Vulnerability: AI and data-heavy startups are currently forced to rely on acquisition by Google or Apple to survive, as they cannot thrive as standalone entities without root-level access.
• Developer Constraints: Developers are restricted to sandboxed applications rather than creating integrated OS-level services that can offer new SDKs and APIs.
• Historical Precedent: McMaster notes that companies like Facebook and Amazon attempted to build phones specifically because they recognized their exclusion from deep OS integration in the current incumbents.

Cyanogen's Strategic Position

• Open Source Foundation: Cyanogen aims to evolve its OS from a user-modified Android version into a platform allowing developers to build core services rather than just apps.
• Timeline for Impact: The company anticipates unique user experiences will emerge within the Cyanogen ecosystem over the next 12 to 18 months that do not exist on iOS or Android.
• Localization Strategy: Unlike the one-size-fits-all approach of Apple and Google, Cyanogen plans to deploy localized software stacks for specific geographies (e.g., Indonesia, India, Brazil) integrating dominant local services like BBM.

Global Trends and Emerging Markets

• Innovation Source: McMaster asserts that true innovation is currently originating in mobile-first emerging markets (China, India, Russia, Brazil) rather than mature markets like the US.
• Hardware Commoditization: Rapid hardware improvement in emerging markets is driving prices down to $140 for octa-core LTE devices, challenging the "premium" value proposition of Apple and Tier 1 OEMs.
• Disruption Theory: Citing Clay Christensen, McMaster predicts disruption will come from the low end, where high-margin incumbents (like Apple) cannot effectively compete with $50–$140 devices that offer comparable experiences via software optimization.
• Apple's Future Risk: Apple's market share is projected to become negligible in growing emerging markets where $100 devices with superior local integration will be the first computer for billions of users.

Future Vision of Computing

• Invisible Tech: The long-term vision involves "core services" fading into the background, becoming transparent and automatic based on context (location, time, environment) rather than requiring manual selection.
• Brand Evolution: Future brand identification will shift from specific design languages to the quality of integrated experiences and billing relationships.
• Software-First Innovation: McMaster argues that successful mobile platforms must be driven by software companies, as the core of mobile value is now shifting from hardware manufacturing to software-defined innovation.
• Differentiation: A viable third OS must offer distinct, imaginative experiences rather than merely replicating existing app ecosystems with different skins, a failure that plagued Nokia and BlackBerry.