Odds of succeeding in mobile software market are extremely low. You have a better chance of winning a state lottery than seeing your company create a mobile soft product that gains wide acceptance. If you're a startup thinking about going into that area, don't! One of the rules of startups should be: "Thou shall not waste time trying to write mobile software apps". But, alas, every month, some people jump into it and some investors who should know better fund them.
Even with all the VC money, recent history is full of startups that tried and failed in mobile soft market. Successes are almost non-existent and those that are still alive, are zombies. Stay away from walled gardens... you cannot win. You cannot rule somone else's sandbox. The networks are their property and they hold all the keys. Even if you win the lotto and you enter their network, they can boot you and lock you out anytime they wish. And they will.
Good point about the carriers controlling everything. But will they really be able to keep it up? Suppose an internet provider wanted to block certain services, for example, they could try to force you to use their house search engine instead of Google. It seems likely that people would avoid that internet provider.
The problem with mobile carriers is I think that people are not aware of what they should expect - they are not aware that they are denied the functionality "X", so they are not complaining to the carriers. But suppose one of the carriers would block for example Twitter, wouldn't people start to notice?
Tides are changing though. Take a look at VoIP and Wi-Fi equipped cell phones. The combination scares the HELL out of the carriers. But market pressures are leaving them no choice but to accept this is what users want.
Then there's WiMAX and the other "last mile" broadband initiatives. Carriers are no longer the only ones who hold the key.
Its not a matter of if mobile devices will be the viable application development platform, its a matter of when and how. Startups attacking these issues and their investors are not wasting their time.
"Take a look at VoIP and Wi-Fi equipped cell phones."
Oh, I have. Big problem with those is that WiFi is treated as just another carrier channel and you still have to figure out how to install your software on a closed-off cell phone. First of all, carier are very picky about what they allow on their networks. They will tell you that they do that to protect their networks from malicious software and to protect their consumers' phones from draining their batteries too quickly.
"The combination scares the HELL out of the carriers. But market pressures are leaving them no choice but to accept this is what users want."
They're not scared. They're just playing the embrace, extend and extinguish strategy. Recent announcement by T-Mobile and UMA support shows what game their playing: http://gigaom.com/2007/05/03/t-mobiles-wifi-cellular-summer/
MetroFi deployments have been a failure so far. Earthlink has stopped responding to RFCs from cities. They realized that no one is willing to pay for WiFi. That means that free wifi spots are going to be the norm in the future. Problem is that these wifi spots are not very reliable and the range is awful. Look at the popularity of EVDO as an example why (metro)WiFi has been a disappointment so far.
"Then there's WiMAX and the other "last mile" broadband initiatives. Carriers are no longer the only ones who hold the key."
You still need spectrum for WiMax. Which startup has $100mm to buy some spectrum for WiMax?
"Startups attacking these issues and their investors are not wasting their time."
I'm not saying it's an impossible problem but what I am saying is that your chances of success are very low indeed. You have a much higher chance of success by making your software work over open networks such as Internet than trying to crack a walled garden.
Even with all the VC money, recent history is full of startups that tried and failed in mobile soft market. Successes are almost non-existent and those that are still alive, are zombies. Stay away from walled gardens... you cannot win. You cannot rule somone else's sandbox. The networks are their property and they hold all the keys. Even if you win the lotto and you enter their network, they can boot you and lock you out anytime they wish. And they will.
More here: http://opengardensblog.futuretext.com/archives/2006/06/opengardens_wal.html