Monthly Archives: March 2011

Today’s motion is that only Google will win big from the success of Android.

Peter believes this is true

Google is an advertising company.  That’s a fact.  All of their free services are platforms for driving additional revenue through advertising.

Android is their open source smartphone operating system, the sole purpose of which is to generate more click-throughs on Google Ads.  Let’s not beat around the bush; Apple, Microsoft, HP and RIM want to deliver the best smartphone ecosystem that they can.  Google want to deliver the best ad platform they can.  The two may intersect, but Android isn’t free out of the goodness of Google’s heart and it is based on a fundamentally different business model from those other well-known smartphone manufacturers.

So who benefits from Android?

The end user?  Well, yes, there’s no doubt that Android phones are pretty good to use.  I’ve recently bought one, partly so that I can see what the fuss is about and partly because I’m a developer and want to target Android simultaneously with iPhone. However, the need for manufacturers to differentiate their product in software as well as hardware has led to a huge variety of Android variants with new UIs such as MotoBlur and HTC Sense.  This, along with an OS update strategy that has left many devices behind the curve has led to a fragmented software ecosystem where even simple games such as Angry Birds (it may be fun, but it’s not sophisticated) can’t guarantee they will work on every device out there.  Fragmentation is bad for customers and expensive for developers; the Android marketplace is huge, but conspicuously lacks the kind of ambitious console-grade games that you see on iOS (there are some, but they are few and far between).  Fragmentation isn’t going away.  If anything, it’s getting worse.

Manufacturers?  Android looks like a quick win for hardware guys, but there is massive downward pressure on their margins as competitive new Android handsets launch on an almost daily basis.  The Orange San Francisco is 80% of an HTC Desire at 30% of the price.   Android will drive big revenues, but tiny profits.   Steve Litchfield, presenter of the ‘The Phones Show’ regularly rails against HTC’s build quality, citing poor speakerphones, dodgy hinges and mediocre cameras -  but the only way HTC can make money from Android is to ruthlessly cut corners with the hardware to try and recoup any margin they can. Apple can build premium phones AND make big margins  because you can’t get an iPhone from anyone else.  Nokia understood all of this – going with Google to replace their ageing Symbian OS would have seem them engaged in the same ‘Race to the bottom’ that other Android manufacturers face.  With WebOS newly snapped up by HP, licensing Windows Phone 7 – which isn’t free – was their only option.  In Stephen Elop’s own words; “There’s something happening there. There’s no denying that. [But] our sense was differentiation could be a pretty big challenge. The risk for commoditization would increase dramatically.”

Google?  In 2011, each Android user will generate $6 in ad revenue for Google.  In 2012, that will rise to an estimated $10 – and it won’t end there; Google will expect to make ever more increasing ad revenues per customer, which means you will be clicking on more and more ads.  It’s a billion dollar business right now, and Google have made it clear they expect it to be a $10 billion dollar business before long.  To Google, you are a walking consumer of advertising.

They are the big winner here.

Shaun believes that this is not true

It is hard to see just Google winning big from Android in the long run. The companies that currently support the Android ecosystem are not stupid and will not pour millions of pounds into a platform just because there are few alternatives. I could now contradict myself and say that there are no alternatives available, but my point still stands. Everyone benefits from Android; without it there would be a serious lack of competition in the market and the fact that it is the only platform offering consumers a variety of hardware designs should not be discounted.

When you look closely at Android, and even closer at the competition, it is clear that the smartphone industry without Android would be a very different place indeed, and potentially a lifeless place dominated by one company and one platform.

Please take a moment to vote in the poll below- the result will be published tomorrow.

Today’s comment of the day comes from Bob- “Funny thing about “time wasting”, it’s all perspective. Is playing a waste of time? Could be considered that way, but it’s actually very valuable. Besides relieving stress it lets our minds work at different things and can often expand our horizons. I have found that playing various puzzle games helps me be a better problem solver, which is a big part of my job.

The unfortunate thing is that in order to have play time, whatever that is, we end up with less sleep rather than being able to do less not-play time (whatever that is), have the play time, and still get enough sleep. There just aren’t enough hours in the day.

Another thing I realized or decided on was that I enjoy playing with and using my iPhone/iPad/MacBook, even if there isn’t a specific task or project involved. What’s that saying – it’s the journey that counts. Well, this is part of making my journey much more enjoyable, if a little less wide awake.”