It does honestly seem like Google stumbled into a goldmine. Google basically set out to create the Sidekick 2.0 (I don't really get the constant "Android started as a Blackberry ripoff" claims, when there are much more obvious Danger roots). I really don't see Page/Brin/Rubin in a room in 2006, rubbing their hands together thinking they were going to shock the world. It seems more like the Google guys were big Sidekick fans and saw the chance to work with Rubin for relatively cheap. But they kept their options open, made a lot of cautious small bets rather than going all in. They didn't make the iPhone, no, but they placed themselves in a position where they could react to iPhone. By being open to the opportunity and a lot of luck, they essentially became the only choice a monster sized industry had in the face of huge disrupting new competitor.
Google often get slagged for the unfocused, perpetual beta thing. But laser focus is overrated. For example, given the choice of only picking Chrome OS or Android, a laser focused Google would have never gone Android. Overall I think it is much better to admit the future is unknown, and be prepared (especially for a large company with Google-sized resources).
It's more like Google's stumbled onto a gold mine that's already been looted:
Google makes $5-$10 per Android phone, maybe 10% of what it's partners make. That's about the same amount as Microsoft makes off each Android phone and is perhaps 1/50th of what Apple makes off each iphone.
Even worse it turns out that the half empty gold mine is on public land and any crazy old coot can waltz in and start mining themselves:
Android won their "empire" by being the only credible licensed iphone clone in 2009. The real question is whether this empire is going to be of the Han/Roman/Windows variety as so many commentators assume or will it be a short lived dynasty like the Qin/Napoleonic/Netscape variety.
I'll put my money on a Three Kingdoms scenario playing out. Why do I think WP 7 has a ghost of a chance when everyone's done nothing but dismiss them? Let's review:
Android phones started shipping in Fall 08. However they really didn't have any traction until Fall 09 when Verizon started pushing the Droid. And it wasn't until Froyo phones shipped en masse in Summer 2010 where Android started to dominate carrier shops.
In the same way WP7 launched buggy, incomplete and lackluster in late 2010. It had no traction for it's first 3 quarters. Lately though we've seen a mature OS update released on a 2nd generation of phones that were designed for it.
More importantly Microsoft has made no secret of it's desire to buy market share with retail subsidies. And it will certainly be buying this market share at Android's expense. How much they're willing to lose buying this market share isn't clear but if it's anything like the money they've plowed into Bing that's a lot.
Don't forget the $1/year market value of a GPS probe.
I work for TomTom who's been battling for years to collect GPS probes so that they could provide the best HD traffic.
Google recently announced their Traffic layer which magically offered almost similar quality with full world-wide coverage all made possible by their thousands and thousands of free Android GPS probes.
Just a small reminder that there might be more hidden benefits of Android.
Google has other agendas than profiting from the sale of phones. They have an application store, a music store, a movie store, and a book store, for starters.
They also have an ad business which gets to safely live on the most popular smartphone OS without real risk of it being shut down for competitive reasons.
They have a massive lever with which to move other projects as well. They have millions of users of their maps program on mobile, for example. They get voice search data. They get people doing searches. They get many more Gmail subscribers. Soon those millions will be nudged toward using G+ because it comes on their phone and offers some nice benefits.
As for whether or not Android is here to stay, there's a measure of user lock-in just like there is with the iPhone. You already have your applications and media that you have paid for.
And according to most everyone, their latest version of the OS is a marked step forward, bringing Android's weak points up close to parity with iOS while continuing to build upon the relative strengths that have been there for the past few major releases.
Microsoft may gain traction with their phone and ecosystem, but I'm not sure why that's any reason to forecast that Android will go the way of Netscape.
The future is Open Source. That's why Microsoft has no place there. Also don't be fooled by how much money is made where. Money is just a tool; one of.
"They didn't make the iPhone, no, but they placed themselves in a position where they could react to iPhone."
Exactly. They set themselves up so they could quickly react to disruptive change in the smartphone market. The iPhone happened to be what came along.
Most people don't understand what an impressive accomplishment this is. Let's look at how long it took for some other smartphone competitors to release their response to the iPhone:
Palm took two years (and started over from the ground up).
Microsoft took three years (and still doesn't have traction).
Nokia took took four years (and then threw it away).
RIM still isn't there yet (next year?).
And Google? They took one year. They clearly were doing something right.
BTW, props for remembering Danger. So many people don't in these discussions and (for someone who was working with smartphones back then) it is incredibly frustrating.
Cheap all depends on the ultimate value. I remember when people scoffed at the spending/fundraising that Facebook was doing. They'll do 4.5ish billion in revenue this year.
Android enjoyed a 2.5x growth rate in revenue over the last year. If that continues for a few years, your formula will seem pretty cheap.
On the motorola acquisition, it's fairly hard to calculate what it saved Google. Will the patent portfolio they picked up save them billions in settlements/legal costs? Quite possibly.
Saw this before. The key words are....annualized and revenue.
They did not report mobile quarterly figures or costs and profits.
But. we can extrapolate:
$2.5 Billion annualized == $625 million quarterly mobile revenue.
Elsewhere in the earnings report:
$10 Billion total quarterly revenue
One of the costs broken out was TAC (Traffic Acquisition Costs,) -- these were $.25 for each $1 of revenue.
Assuming that TAC costs are consistent across mobile and non-mobile that means:
quarterly mobile revenue - TAC == $470 million
ANAICT, Gross margins were 40% of revenue - TAC
quarterly gross mobile profit == $188 million
No figures were given, so let's assume that 50% of mobile comes from Android phones (50 % from iPhones and all other smart phones)
quarterly gross mobile profit from Android == $94 million
No direct expenses/costs were given for mobile, Android development, etc.
If we assume Google has 10 people on the Android team @ $100,000 each, per year (Pay, office, equipment, benefits, etc.) or $.25 million per quarter
That would leave:
Android quarterly profit before taxes == $93.75 million
Obviously, these are just SWAG estimates (and I hope my math and logic are correct) -- but they are an attempt to put in context the headline of this article"
---------
Google announces $2.5 billion in mobile revenue/run rate == $93.75 million Android quarterly profit after taxes (30%)
$93.75 Million quarterly profits from Android is peanuts. Apple earns more selling smart covers.
First of all, you're not counting growth. Smartphones sales have been up 74% in Q2 2011 since the same quarter last year, while PC sales have had only a 2% growth. The smartphones market is about to explode.
Also, as I said in another message - because Androids do have a good share of the market, if Apple switches to another search provider, they'll be technically and from a brand perspective at a disadvantage (people say google it for a reason). Because of Android, Apple simply cannot create customer expectations in terms of the search engine used, like they did with other issues (e.g. Flash), quite the contrary I've seen people bitch about the lack of proper integration with other Google products.
And you know, Apple was thinking about switching to Bing. They haven't. You should really be adding the search traffic Google makes from iOS too ;)
Because that's what Android is about: control / keeping the competition focused on anything else but Google's Search. Quite a genius move if you ask me.
Personally owning, several androids in the family as phones and tablets, I am thankful to Google for pushing open source to a proud leader. All manufacturers may freely use it and may offer newer phones. I wish I will be able to play more with Android the way I do with my Linux, as soon as Nexus like devices become commonplace. Thanks Google.
Maybe a silver mine, but definitely not a goldmine. Apple is still taking home the lion's share of the profits in mobile, which the author of the article rather ignores.
I'm sure Android is much more to Google then the Android Market place.
Like iOS device, it's also creating an ecosystem of devices/service. How many people now have gmail accounts, and are searching through google then before they had Android devices?
Google hopefully understands (don't see any indication they don't) that they are getting a channel to market directly to users as well as obtain new users. This system gives them a platform to directly compete in a variety of media markets, now as a content provider in addition to their ad model.
To me, it's completely clear that Google's plan for Android is much broader than the Android marketplace. Google's had a reputation for neglecting products in the past, but even despite that, they would have focused far more resources on the Android Market and angled it differently if that were their focus of Android.
Google wants to create a platform that will dominate all mobile devices for years to come. Cell phones (and, more recently, tablets) are just one aspect of that. They want a standard OS for any small-scale device. In their vision of the future, your coffee maker, refrigerator, and laundry machine may all use an Android-based platform.
This is one of the reasons why they are perfectly happy with Android being used for cheap smartphones which are really just amped-up feature phones. They don't want to be seen as elitist, the way that Apple tries to market itself as high-end. They want to have high-end products, sure, but it's equally important to them that they cover the range of that spectrum.
I don't know if they had exactly this in mind when acquiring Android, but by now, it seems clear to me that this is their goal.
But Google's profit margin on Android is probably better, if you consider it as "revenue from app sales + revenue from Android mobile search + app licence revenue - cost of development"
Apple has that pesky hardware business eating at the margins. They are a very, very efficient manufacturer, but hardware margins are always less than software (especially search, which might be the most profitable business ever in terms of margin).
(Also, don't forget Google makes a huge amount off mobile search on iOS devices).
There's huge opportunity for android, just look at what's happening with the amazon market, that should give you an idea of how android can be re-invented and sold to a world-wide user base. Plus the more affordable equipment. Of course this means there will be more crappy versions of it, but that's exactly what happened to windows and the pc.
I don't understand why I keep hearing this mantra so often - it's completely off-base.
Android is clearly a goldmine. The goldmine is the incremental search revenue Google gets from controlling the Android platform. Why do you think the search volume on mobile is a hockey stick at Google? Literally every single android device has a dedicated search button on it; iOS devices do not. Which device do you think has higher searches per user? The incremental search volume (and search ad revenue) is enough to justify the entire Android investment.
More importantly, without Android, Apple had the ability to lock out Google from mobile search by changing the default search provider to non-Google. The lost revenue if Apple changes its mind and Google is locked out of mobile search? There's your 2nd goldmine.
The argument that Android is not a money maker is like the argument that Gillette selling razors below cost is bad idea. At the end of the day both Gillette and Google make a tons of money off selling something that isn't exactly the main product, but is peripheral to it. In Gillette's case it's razor blades, in Google's it's search.
Well iOS used to have a much larger user base, but Android has almost caught up, and will even surpass it. But depending so much on iOS so far is exactly the reason why Google needed Android.
I too think that launching Android, more than anything, was a defensive (if not desperate) move. Apple would have locked Google out of mobile search sooner or later.
And that makes Android's success even more amazing.
The profits obviously aren't as simple as x widgets cost y dollars to produce and sell at price z (might change with the impending Motorola acquistion) and it is probably never going to be known strictly how much Android makes. But if you think Google can't convert half a million new Android phones a day into money, you haven't been paying attention to Google at all.
The fact that Apple makes a lot more profits than Android manufacturers is nearly of no consequence for Google. Microsoft managed just fine as Gateway and others crashed and burned.
Microsoft sells Windows licenses for money. Google gives Android away and hopes to generate ad revenue from people searching on those devices. Not a very apt comparison.
I think this blind faith in Google to be a bit weird.
I still find unbelievable they can make that much money just with ads – I do believe they do, it just befuddles me – on a phone it's even harder to display them and in fact you don't see as many in the mobile web, are we really sure that Android is profitable? Maybe it's not yet and they're still trying to find the business model for it. Maybe it will never directly be, it will just serve as measure to not be excluded from the mobile world and keep competitors (not derogatory) from eating into Google.
> I still find unbelievable they can make that much money just with ads
I do as well, and wish there were more research available on internet advertising. I'm sure a few companies at the top of the pyramid make money, but everyone else (IMNSHO) is taking money out of their left pocket and putting it into their right pocket (A buys ads on B, B buys ads on C, [...] Z buys ads on A; in the end, a zero-sum game).
I'm sure we'll be shouted down, but you're not alone in your opinion.
I'm sure a few companies at the top of the pyramid make money
This is absolutely, completely untrue. One of the reasons internet advertising is so popular is because its effectiveness can be proven - advertising companies can show how people exposed to ads buy at a higher rate. The improvement in rate can be calculated exactly, which shows the advertiser exactly how much they should spend.
There they promoted a new product in one market exclusively online, and did no promotion in the other market. Sales in the promoted market were 11% higher than the control.
Don't believe it? Try it yourself - I wanted to understand it better, so signed up for an affiliate account and did some Facebook advertising. It worked quite well - I was able to make around $15 for every $1 spent (obviously this was a very specific market segment).
"The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies that are responsible for selling 86% of online advertising in the United States."
Aside from anecdotal evidence (your returns of 15:1) I haven't found any long-term studies done by independent researchers that prove internet advertising is any more effective than other forms of advertising, if it's effective at all. The only real accomplishment internet advertisers can lay claim to is training the general population to never even glance at the left / right / top / bottom navs on a page.
In general, the poll results and comments in another recent thread on HN on ad blockers (http://news.ycombinator.com/item?id=3324709) seem to support my theories about how ineffective internet advertising is. I'd be interested in seeing some untainted long-term research on this subject.
I've personally suspected for a long time that advertising was in for a huge disruption. Either people will realize they're not getting the value they think they are or some company will realize that 10% of what Google makes is still a ton of money and undercut them heavily. Then all these business plans that rely on "give it away and make it up with ads!" will fall on their ear.
No one doubts that Android is a complement to Google's business but fundamentally if the app store developers can't make money then it's largely pointless.
iOS is the place where people like 37Signals can thrive.
Android is the place where people like Facebook can thrive.
They've got a market of millions of people who don't buy anything, but click ads occasionally. Android should team up with AdBusters because on the Marketplace everyday is buy nothing day.
To Google the Marketplace is necessary only because the availability of a marketplace is the norm. Android enables them to have control over the next generation of mobile phones, in which we now have 3 possibilities:
1) Apple switches to another search provider, in which case iPhones will have a functional and brand disadvantage as Google Search is both good and a synonym for searching on the web
2) Apple does not switch to another search provider, in which case mobile searches are dominated by Google, as iOS and Android represents a majority
3) Android ends up on 90% of all smartphones, like Windows, making whatever Apple does irrelevant, even if Apple continues to enjoy the highest margins in the industry
You're clearly not seeing the forest from the trees.
They estimated Android downloads to be 6.7 billion about 2 weeks before Google announced there had been 10 billion downloads. That isn't very accurate.
They explicitly compare their estimate of 6.5 billion Android downloads with 18.5 billion iOS downloads. Free downloads are included in both cases (but the Android estimate is way, way out)
(Edit: To make it doubly clear, I'm implying that their estimate of revenue share shouldn't be trusted either)
Yes, I read the article, I believe they stated that it was an estimate. Perhaps their estimation methods are conservative. Perhaps Apple provides better data than Google upon which to make estimates. Perhaps the timing of the data leads to more accurate estimates for Apple. You can't simply say that because one estimate was wrong that everything else shouldn't be trusted. (Well you can say it, but there's no logical basis that underpins the argument) Perhaps they estimated the downloads based on sales, who knows. A week before Google released their data the estimate was useful, now it isn't because we have better data, that's simply how life goes.
In the business of selling apps I'd much rather I went to market underestimating the size of the market than overestimating it. To me, one more download is one more client to support with no revenue upon which to service it. I guess if I developed for the Marketplace I could have 40% more freeloaders than anticipated. Awesome, just what I needed, more expenses and the same rev.
I'm not in the business of cheerleading mobile operating systems, I'm in the business of selling stuff. (To be fair, I do cheerlead Apple because people can't buy my stuff on Android, perhaps the market is changing and I'll have to adapt, but once my stuff is available on both platforms, I really wouldn't care what people use)
I'll be ecstatic when the marketplace is at a billion a year but I think that's a bit off at this point. App Store vs. Marketplace is like Google vs. Bing for traffic, if you're a huge site you'll see 15% of your traffic from bing, but if you're a smaller player you'll see 99% from Google. Likewise when doing SEO work I don't care about bing because it doesn't drive traffic for me like Google does. On the other hand I use Bing for SEM because it has cheaper CPCs with a better conversion rate.
Worse, it is an estimate of sales to date of the two markets. The Android market was seriously immature until around a year ago, and it has been exploding since (from a personal perspective, the number of apps worth buying has increased exponentially in the past couple of months). Most recent anecdotes seen on here and on other development boards have found similar current sales rates across Android and iOS. If I'm making an app now, it is meaningless that for three years iOS held a huge headstart.
There are a couple of platform zealot prats rambling on with their standard, dated anti-Android nonsense in here. It is disheartening that they haven't been carpet bombed into the hellban so many voices of reason end of enduring.
Every user having their searches funneled through your search engine. Tight integration with your e-mail service, your video sharing service and your VOIP service. Much, much more.
Millions of people conducting their lives through your product is definitely not 'worthless'.
> Every user having their searches funneled through your search engine. Tight integration with your e-mail service, your video sharing service and your VOIP service. Much, much more.
iOS currently has all of that except the VOIP, FWIW.
I'll downvote you because I think you're missing the point.
Android makes Google $2.5B/yr (that's a run rate, up from $1B this time last year). Google's total run-rate is about $35B by comparison.
Given that it's in land-grab mode, I imagine they are re-investing like crazy in Android-- they realize that the dominant smartphone operating system has a lot of market power. As an example, Microsoft makes more on Office/Server stuff than they do on Windows.
tl;dr Comparing a dominant operating system (Android to a hardware company that grudgingly made software (Nokia) isn't really valid.
It does require a step back to realise the magnitude of change: Google have managed strumble into Microsoft's position in phones.
On the surface, that's both astounding and completely unexpected.
Google put itself into that position by being a neutral 3rd party that manufacturers could trust coupled with a realisation that most phone manufacturers were great at hardware but terrible at software.
The outcome is that the companies who didn't see software as their competency and were willing to drop their OSes (Samsung, Motorola, HTC) have reaped the benefits while companies whose strengths were based around their software being slightly better than their competitors (RIM, Nokia) have fallen behind.
> Google have managed strumble into Microsoft's position in phones.
Yes and no: they have a similar marketshare, but Microsoft had marketshare and money. Google only has the marketshare (and in a limited fashion at that, since implementors "improve the experience" pretty drastically) and get little to no money out of it (likewise for a number of their implementors, too).
And implementors are anything but locked in, as Android holds little software primacy. It does have a lively store, catching onto iOS's, but Android is not "essential", and so far I've not seen any critical software running on android and android only. This means with a little business acumen and some software investment (note that they usually fail at both, but...) most Android implementors can get away from Android pretty fast. And in fact most seem to keep hedging their bets (apart from Moto anyway), either by having WP handsets as well (HTC) or by keeping a ready and used "internal" OS (Samsung's bada)
It's really just very very early for the smartphone market, and Android is the fastest growing mobile OS. Its potential is more like 20x bigger user base than it has now. They will be able to make a lot more money than they do now from Android.
Where are you people getting this "Android makes no money for Google" perception from? Android makes money for Google in exactly the same way all of their other products/services make money: Advertising.
That's the beauty of Google's spaghetti-at-the-wall approach, isn't it? To me, it's kind of a refreshing, child-like approach to things, with an investigative curiosity and implicit acknowledgment of an ignorance of what will become important.
While I think Larry Page's new focus on focus is great, and I think most of their products are getting better because of it, I do get a bit scared that it comes at the cost of the explorative nature of the company in its youth.
Agree so much. Android is a perfect toy Google has developed to disrupt the established players and stopped a 1984-like future in mobile. Neither Blackberry BES nor Apple's single-device behind a walled garden were for me; and Thanks to Android I have choice.
The thing is, they rigorously weed out non-working ideas and use the time and energy saved to apply extra polish to the working ones.
The result is products that are just about as close to perfect as it is possible to be in an imperfect world.
I see nothing like this sort of selection pressure going on at Google; accordingly, shoddy architectures like Android not only make the cut, but go on to be Really Big Things if they're good enough to accumulate network effects. Kinda like Windows and Office.
I don't think that Android's success is relative to the iPhone- in many ways, it's a greater reflection of the failure of Nokia and, to a lesser extent, Blackberry.
To explain: Apple generally tends to be happy making more expensive, premium products that command a smaller section of the market. They're happy to sacrifice greater market potential to do so- like not allowing carrier customisations, making multiple models, etc. They've compromised this somewhat for the iPhone (they clearly didn't want to have carrier-subsidised handsets originally, for example) but it has worked out for them in a huge way. Still- historically, the ubiquity of the iPhone is in some ways atypical for Apple.
Nokia, on the other hand, has always been more than happy to play ball with the carriers. They should be where Android is now- the ecosystem with a ton of different phone models, carrier-bundled apps, cheap phones and a huge market share. If they had played their cards right Google might still be relegated to teaming up with Apple on mobile. But Nokia left the market wide open- Apple compromised a little to move into the space but Google saw the gap and went for it 100%.
Android is crushing Nokia not because of the cheap phones - but because it can scale from cheap to expensive, from featured to luxury. A cheap Android phone, like LG Optimus One gives you partly the look and feel of an expensive smartphone.
In contrast, Nokia's featured phones with Symbian on them are great for their cost, but they do feel cheap. And an expensive smartphone with Symbian on it still feels cheap.
I don't think that Android's success is
relative to the iPhone
I disagree. The iPhone is probably the biggest reason for Android's success. It first started when Apple decided that an AT&T monopoly was worth it. And it happened in Europe too - in my country only Orange was originally selling iPhones, until iPhone 4 came out.
Like in a bad movie when an old dude sitting on its porch says "a storm is coming" ... carriers and phone makers began freaking out and saw in Android THE alternative. It is a good alternative. And while Apple may have a huge network of stores, it cannot compete with the distribution network of multiple vendors.
>It first started when Apple decided that an AT&T monopoly was worth it.
I think that's an astute point. I wanted an iPhone but was on Verizon. So I eagerly snatched up the Droid, a phone that was actually better in many ways than the iPhone of the time. There must have been hundreds of thousands like me.
I'm not saying that the iPhone is anything other than an unqualified success, but the idea that Apple didn't really want that market share anyway seems a little off.
Apple seemed quite happy to have 70% share or whatever it was with iPods. They've also offered cheaper models whenever they needed to to try and address more of the market -- for example, the iPod Shuffle, or the free-with-contract iPhone 3GS. The Apple TV certainly wasn't priced only to appeal to the high-end market.
I think the article makes quite clear that it is primarily Nokia and RIM that have been devastated, but I don't think it's all inappropriate to look at the way Android has been successful at pulling share away from these companies as something that they have done better at (from a market share standpoint) than Apple.
> I'm not saying that the iPhone is anything other than an unqualified success, but the idea that Apple didn't really want that market share anyway seems a little off.
It's more that they didn't want the damage to their core brand caused by the measures needed to gain that market share.
You will never gain majority market share with a premium device in a market that is essentially "everyone". (Obvious exception is if there is no premium price tag associated with it, but not the case for the iPhone, at least here) There will always be a huge number that go for the budget device. Releasing a budget device will cause a large number of people to judge your product and your brand by that device. How many people judge Android by devices such as the Xperia X8 or Wildfire S? These phones are budget phones compared to the heavyweights like the Xperia Play, and for the manufacturers to be profitable with these budget phones, serious compromises had to be made. Because of this, many people associate Android with the laggy, low res, constantly running out of memory experience of these phones rather than the phones that are actually trying to compete with the iPhone head on, like the Galaxy Nexus. Not something you want to do if your entire brand is based around being a premium item.
Not to mention that if you release a budget item, it is going to take some sales from the premium version as some users settle for "good enough". The continued sales of the 3GS are actually a good example of this. At least that has the stigma of being old at this stage, but if Apple released a new budget device and a new phone in the vein of current iPhones every year, how would that affect the sales of the (more profitable) traditional iPhone?
Of course, the reason it made sense for Google to do so is that they didn't have the expectation from their customers of being a best of brand, premium item. This meant that they couldn't really break straight into the high end market easily, but it also meant they didn't have a reputation to uphold. If the iPhone 5 was a usability disaster, I'd imagine that'd make Apple's customers more skeptical of future Mac purchases for example. A bad Android phone won't hurt Gmail on the other hand. Indeed, customers might blame it on the manufacturer, and still buy a Android phone as their next phone. On top of that, the budget end of the market is a lot more flexible (what's cheapest this week?) than the winner take all nature of many high end markets (This is a lot of money. What do other people already own?), so when you're later to the game, I'd imagine that end of the market is easier to break into.
I don't think that's the whole story. This could also be a PR spin.
Google said later very often they feared an Apple monopoly on the smartphone market and Android is there to prevent it. Also Schmidt hates Microsoft to the bone and is happy about everything that hurts them.
What makes Google appear unfocused is their long time thinking, they don't care if something integrates in another product only 5 years later.
I bet the Google Car and Google Maps integration will be perfect and they also create 3D models of their environment what fits in Google Earth.
Coincidence? I don't think so, these 3 incredible smart guys have all day to think about that.
Imho Android has been successful because, until recently, it had no competition. Android came around at a time when the increasing complexity of building and maintaining a proprietary software stack was forcing handset builders to essentially become software companies. Android gave them the option to return to doing what they did best. Nokia and RIM tried to maintain their own stuff and suffered heavily for it.
I think that Android's success is due to its business model, not the quality of the software itself. The Android team should take care to not become the next Netscape.
1) distribution agreements and good relationships with hardware makers trumps quality - that's how they've beaten Apple and IBM (OS/2 Warp, launched in 1994 was better than Windows 95 and compatible with DOS and Win 16)
2) worse is better, a lesson they themselves took from Unix - timing is more important, you can always improve later
3) operating systems are natural monopolies - if you win the market of low-end PCs and keep growing, you'll eventually take over the whole market
If anything, I fear Google is the next Microsoft. I hope not because I love Android.
On the other hand, there was no concept of "rooting" your Windows installation, and the idea that you could only run apps approved by Microsoft would have caused immediate outrage and accusations of anticompetitive behavior. It's amazing how quickly Apple has been able to shift the Overton window, to the point where there's barely any reaction to Microsoft requiring approval for Windows 8 Metro apps.
Thank god for that - however Microsoft was pretty open for its time, as being a pure software company and letting computer makers to bundle your OS was the exception, not the norm.
Android gave them the option to return to doing what they did best.
Did any of them take that option? The first thing I do when I get a new Android phone is to re-image it with what Google provides. Samsung and HTC have shown that all the hardware makers can do is write crap software to replace the working software they got for free. And then never ever even think about updating it or fixing the bugs.
Most handset makers already had large software departments at the time they made the switch to Android. I guess they needed to give them something to do? Either way, ZTE and Huawei seem to do pretty well with near-AOSP roms.
I wonder how different the market would be had Apple not given AT&T exclusivity. Honestly, I think Android still would have done well, but does anyone think the exclusive deal with AT&T hurt Apple in the long run?
i'm not sure "hurt apple" is the right way to put it, as i see it pretty much everybody who wants (and can afford) an iphone has one. apple hasn't lost anything yet because of the deal.
the exclusivity deal allowed android to gain a foothold, but i don't see android as a competitor to iphone, just an alternative. people who buy android phones are people who don't want an iPhone and probably wouldn't have bought one anyways.
I disagree. I wanted an iPhone but couldn't get it because I was on Verizon.
I also happen to be someone who influences my friends and family on technology. When Android turned out to be a great experience, I told other people. Now my mom, sister, sister's boyfriend, both brothers-in-law and their wives, and my mother-in-law are all Android users.
Every single one of those people would have purchased an iPhone if Android wasn't around.
Not a straightforward scenario. Doubtful most other carriers were willing to make the same deal AT&T made at the time (no customization, etc.). People were waiting in line for iPhones to begin with, so they would have to have had different manufacturing, etc. Apple could have probably even released a Cocoa Stack or something to run the iOS ui on any Android phone out there and gobbled up a huge market, but Jobs wanted total control, and seeing Apple's current profitability, it's hard to realistically predict a better move than the ones he made.
FD: Until a couple of weeks ago I owned no Apple products except a very old ipod nano someone gave me years ago. I'm no fan of Apple, but it seems unrealistic to second-guess the success they had for the last decade.
Like someone mentioned above, I do not think it "hurt" them. I think it limited them a little. Think about what it was like before the iPhone came to Verizon. There were a lot of people praying that it would because they simply would/could not make the switch to AT&T. That limited the reach of the iPhone a little. Not everybody is willing to switch their provider just for one phone.
Well, that counterfactual implies a world where the carriers don't have a stranglehold on the market and the ability to cripple or deny service to hardware and software they don't like. In that world Android would be better off as well; phones wouldn't have unremovable bloatware or disabled functionality, and they'd get updates in a timely manner.
Google mantra of do no evil is at the heart of this success again. I really admire that they've kept it open source and not followed their competitors in creating ridiculous policies such as taking a cut of e-book sales, policing for adult content, banning all apps that interact directly with the hardware or try to do things outside of their limited API, etc.
I really hate that motto since it's so good at blinding otherwise intelligent people. It has nothing to do with anything. Google's polices aren't "good" and Apple's aren't "evil". They're both engaging in trade offs. Apple can make sure every user has a nicer experience at the cost of some freedoms. Android offers more freedoms at the cost of some people having ridiculous battery life, trojans stealing people's credit card numbers every so often, etc. Google has taken the exact same trade off that MS took back in their day.
Actually, Apple certainly doesn't follow the do no evil thing much like Google does. If you have any instances of Google doing such malicious things like Apple is doing, I'd love to be informed (also will help remove my misgivings):
Apple isn't doing any "malicious" things if you're talking about "lock down", app store and so on (the lawsuits are a separate issue).
And Google has done it's share of things; claiming to be for net neutrality but not really being when they saw a way to profit, claiming to pull out of China on "moral grounds" but not actually doing so until they got hacked, the lock-in-raise-price strategy of their for-pay platform, etc. The motto is meaningless, it's only there to sucker people and it's pretty embarrassing that it works.
They haven't kept it open source, strictly speaking (ref. Honeycomb). Their naivety has left them dangerously exposed on patents, the recent CarrierIQ debacle is an example of the dangers of Android's openness, and any worthwhile app in the Android Market is hacked and re-submitted as a free app before you can blink an eye. Google's not making money from Android, and neither are developers*. That's not even starting on the security vulnerabilities, or the fact that Google's business model is based on a premise of invasive personal data-slurpage to sell more ads.
Granted, that's a generalization. But it makes the point.
Why so negative looking? All releases except for Honeycomb have been opensourced allowing for a number of custom roms used on millions of devices (cyanogen, miui) which is more than can be said for other platforms. The openness of Android apps allow for applications and innovation not possible on the iphone or other devices (custom lock screens, homescreens, NASA's phonesats). The CarrierIQ debacle involved all major phone developers including Apple (prior to iOS5), BB, Nokia as well.
Granted, that's a generalization. But it makes the point.
I will agree with you on the patents, but as far as the security is concerned that's just security through obscurity, which isn't any better.
As far as making money is concerned I don't see the reason why? Android has a good market-share, a good marketplace, and it even allows for in-app purchases. What's stopping them from making money here?
From an IP perspective, do you think Android is legal? From Java, to multi touch, to design aesthetics. Is Google doing to the OS industry to what they did to the news paper and media industry where IP is considered 'obsolete'. And a silent emperor sits over the valley of chaos?
I'm mainly playing devil's advocate here. But many, if not all, of google's empire is based around curating other people's IP, including Android.
Much of the IP Google does have is kept server side, safe from competitors.
But the legal issues are real, and I imagine many of the downrates of my previous comment was of either google developers or people within that eco-system.
Why did Microsoft take so long to make Windows Phone, and why does it legally appear safe? And how is that related to Android?
But don't get me wrong, I love Google for search and web apps, just not operating systems that, to at least me, seem slightly trojan in nature.
It would have been interesting to see if Android turned out the way it did, if Google's CEO was not on the Apple board. I'm not implying anything, other than that I find that really interesting. There are so many little things about Android like that, that this article also leaves out.
You can just come out and say what you think, no need to hide behind "finding that interesting" and "devil's advocate". I happen to disagree that Android/Google in general steals IP, but it is better to say what you mean to have a real discussion.
Well I find that the Microsoft 'embrace, extend, extinguish' sounds more like Google today. When was the last time Gmail had introduced innovative features, there is still much improvement to be done. Chrome browser is by far the best, but when they get the market share, I imagine we will see improvements and innovations come to a slow as well.
But sure, let's talk about how Eric Schmidt was the Apple board during the development of the iPhone. That is fascinating. How could that not have influenced the only competition to the iPhone. That seems suspicious to me, as no other company besides Google anticipated it.
So let's talk about the design similarities between Android and iPhone.
These topics are fascinating.
So Microsoft, Apple, and Oracle are all claiming that Android violates their products, while Google, before this, had no patents regarding OS. That is also fascinating.
The only reason why Android is 'open source' is to make it more difficult for litigation. And I don't think a company that develop's open source should be able to place ads on it, as to me, that is still 'selling' the software.
"9. Accepting Warranty or Additional Liability. While redistributing the Work or Derivative Works thereof, You may choose to offer, and charge a fee for, acceptance of support, warranty, indemnity, or other liability obligations and/or rights consistent with this License. However, in accepting such obligations, You may act only on Your own behalf and on Your sole responsibility, not on behalf of any other Contributor, and only if You agree to indemnify, defend, and hold each Contributor harmless for any liability incurred by, or claims asserted against, such Contributor by reason of your accepting any such warranty or additional liability."
So someone please help explain how this is possible:
From Reuters Nov 9, 2011:
"Google Inc will continue to offer support to firms using its Android system that are involved in legal disputes, its executive chairman Eric Schmidt said on Wednesday, as the Internet giant looks to cement alliances in the face of toughening competition."
The way I am reading the Apache license says that Google should not be giving support to OEMs? Am I reading this part wrong? "However, in accepting such obligations, You may act only on Your own behalf and on Your sole responsibility, not on behalf of any other Contributor" I'm not the best at reading law, so I would love some insight.
First off, you are reading it wrong. But it doesn't matter.
Google owns the copyright on Android, so the Apache License has no relevance to their activities. Licenses are a way of limiting the restrictions levied by copyright law; they give you more freedom than you would otherwise have. If you otherwise have more freedom than a license grants because you are not bound by copyright law, you ignore the license. It's meaningless.
I haven't contributed any code to the Apache-licensed parts of Android, but I assume that you assign copyright to Google when you push your code. That means that Google continues to own the copyright on the whole codebase, and you have copyright on your contributions.
The license says Google is not obligated to offer support, accept liability, etc. to anyone who uses the code. Google is, of course, free to do more than that for certain users (like Android OEMs) if they want to.
What did Google embrace, extend, and extinguish with Gmail? You can still connect to it with any standards-compliant MUA to download messages, and you can send messages to it like you would send messages with any mail server. Every user can talk to the rest of the Internet, and every user on the Internet can talk to Gmail users. So there is no extension or extinguishing going on; it's just another mail host that is functionally identical, from a standards perspective, to any other. You happen to also get a nice web interface for free.
Compare this to Exchange, which is its own system with a special client and special server. Good luck using offlineimap to sync your Exchange inbox.
But sure, let's talk about how Eric Schmidt was the Apple board during the development of the iPhone.
When Eric Schmidt was on Apple's board, he did not attend any meetings related to the iPhone, and then eventually resigned. He also got Android through buying an outside company, which did not sit on Apple's board.
So let's talk about the design similarities between Android and iPhone.
You press a picture of the phone when you want to make a phone call, and then your voice is transmitted over the cellular phone network to the person you're talking to? Icons are pictures of things? You can send and receive text messages and email from the phones?
Ultimately, any phone is going to be very similar to any other phone, because they are both phones.
And I don't think a company that develop's open source should be able to place ads on it, as to me, that is still 'selling' the software.
Interesting thought. When you write your own open source software, don't put any ads on it.
But it's worth pointing out that Google doesn't put ads in Android. Some providers even switch the search engine that Android uses from Google to Bing. The point of open source is freedom; if someone wants to make money with it, you can just delete that part. And people have done that with Android.
Google often get slagged for the unfocused, perpetual beta thing. But laser focus is overrated. For example, given the choice of only picking Chrome OS or Android, a laser focused Google would have never gone Android. Overall I think it is much better to admit the future is unknown, and be prepared (especially for a large company with Google-sized resources).