KaiOS is taking on the iOS-Android mobile operating system duopoly by carving out a niche within the low-cost end of the mobile market.
The roots of KaiOS can be found on the career path of engineer Sebastien Codeville, who is now CEO of California-based KaiOS Technologies. Codeville joined Chinese electronics firm TCL in 2010 to grow its Alcatel Mobile business in the U.S. Not long after, software company Mozilla, best known for its Firefox browser, started developing a mobile operating system. It launched the platform, called Firefox OS, in 2012. TCL supported it, and developed a low-cost smartphone to run on it.
Firefox OS ultimately could not compete against Apple’s iOS and Google’s Android, and was dissolved in 2015. Another would-be challenger to the dominant mobile operating systems, Microsoft’s Windows 10 Mobile, met a similar fate earlier this year, as have other aspirants. But TCL kept working on its Firefox OS phone. Codeville, by then Vice President, Products and Programs for North America at TCT Mobile, TCL’s subsidiary, saw potential and pitched the idea of a standalone company. “This is the way KaiOS was born”, he said.
KaiOS differs greatly from iOS and Android, as it is a web-based “light operating system”, designed for low-cost feature phones. This affects how it is perceived by users. In Codeville’s view, Firefox OS failed because it entered the mobile market as a smartphone platform. It was automatically compared to Android, and proved disappointing to users who were accustomed to smartphones.
Instead, KaiOS invites comparison to so-called “dumb phones” at the lowest end of the mobile market. Most of their users have never owned smartphones. “We bring them something that is much better than the 2G feature phones they currently own”, Codeville said. “So when you look at user satisfaction, they're really happy because they see this as a step up.” Thus Firefox OS paved the way for KaiOS. The new company even brought in talent from Mozilla as well as TCL.
According to the Economist, KaiOS powered 30 million devices in 2017 and another 50 million in 2018. The company expects it will power another 70 million this year. KaiOS is especially well-positioned to meet demand from emerging markets. Rapidly growing Reliance Jio, the Mumbai-based network that has disrupted the local mobile sector with low-cost 4G data plans and heavily subsidised phones, uses KaiOS software in its JioPhones. KaiOS has also signed deals with networks such as Orange and MTN in Africa, and looks to expand in Latin America and the Middle East.
Google invested $22 million in KaiOS last year, as it is much more interested in giving its advertisers access to people in emerging markets than getting users onto Android smartphones. Chris Lane of research firm Bernstein believes the smart-ish phones that use KaiOS will persist in India as long as Jio continues subsidising them. This cannot go on forever. While KaiOS is taking market share from Apple and Android and growing rapidly, it depends on users being willing to accept fewer features for lower prices. This approach could become obsolete as smartphones become cheaper.