“Google is building Android not so they can make great mobile devices and sell them to consumers,” Kyle Baxter writes for TightWind. “Rather, they are making them for these two simple reasons: (1) to disrupt Apple’s growing dominance of mobile devices, both so Google doesn’t have to rely on Apple for access to their users and to eliminate their paid-for application model; and (2) so Google can control the mobile industry and thus secure advertising from it.”
“This helps explain some puzzling moves by Google. For example, Android’s market may not be terrible in comparison to Apple’s App Store for paid applications just because Google hasn’t yet finished it; rather, discouraging paid applications on the Android platform is in Google’s interest,” Baxter writes. “If users won’t pay for applications, what will developers use to make money from their applications? Advertising. And Google conveniently owns one of the largest mobile advertising providers, Admob.”
“Moreover, why would Google be so willing to empower network providers by giving them so much control over Android?” Baxter asks. “Because it means wider adoption of Android, and as more Android-based devices flood the market, the hardware manufacturers themselves are increasingly irrelevant. As Android spreads, and the differences between different devices decrease as a result, there will be less competitive differentiation between manufacturers—consumers will, like they do in the PC market, shop based more on price than on who makes the device. At that point, hardware will be commoditized, and building a mobile device business based on a different OS than Android will be incredibly difficult. Profit potential will shift from selling actual devices (where margins will be small) to providing services for those devices—quite convenient for Google, who’s in the business of making web services and providing advertising.”
Baxter writes, “Android isn’t an attempt to build the best mobile platform and sell it on its merits; it’s a play to control the vast majority of the mobile market, secure eyeballs for Google advertising and eliminate any threat to Google.”
Full article – highly recommended – here.
MacDailyNews Take: Moles like to burrow everywhere; insidious creatures.
[Attribution: Daring Fireball. Thanks to MacDailyNews Reader “Dave G.” for the heads up.]
One can only hope that a lot of people get to read theses articles so that they can make informed decisions before investing on a platform.
Sorry for the typo! Sausage fingers syndrome.
And as usual, gullible consumers everywhere lap it up despite its imperfections and justify their decision based on cost rather than functionality or that they do not want to be a follower (ie. Apple) but a rebel without a cause (or a clue)…or the best yet, that Apple factories exploit young chinese kids and pays them starvation wages and makes them work 30 hours a day).
@Crabapple
I totally agree, but I’m afraid not enough people will read and understand…
GAH! I hate companies like Microsoft and google who make every thing the same 🙁 it makes me want to cry knowing that the mobile stuff will go the same way the pc stuff did :/
The article is total bull crap based on watching too much covert action and scifi on television.
Yep. This makes a lot of sense. It is also a handicap because the products will always be second or third place.
Like most industries, over time, there will be fewer and fewer players.
Apple, as the innovator and the quality product should do well. I see a battle between Microsoft and Google over the second place position. Microsoft has a big disadvantage because their model requires them to charge for the software.
Does this surprise anyone? I thought Google pretty much admitted that releasing Android was to stem the onslaught of Apple iOS devices and to secure there place on the handset for advertising and search?
Consumers settle for less and claim that it is more. This explains the first 20 years of Windows.
Unfortunately, it is not just that people do not understand, it is that they do not care. I believe that a large portion of people using mobile devices see them as just that – a device. For them, a smartphone is a smartphone and they really do not care to think about anything beyond that. Apple products appeal to this group, but they basically will lap up whatever is in front of them or is the cheapest, sometimes fixating on the marketing aspect of a particular feature (but this has a 8 MP camera instead of a 5 MP! Nevermind the chip or lens…).
Smartphones ARE going to become a commodity and, while Google Android is certainly for that, this has more to do with the fact that mobile phones are commodity devices.
Let us also not pretend that Apple is not engaging in some of the same ends (Ad $ and collecting aggregate information), though of course they start by designing great hardware and a great system.
Its like designing a database, you need a broad solid foundation from the get go, you cant keep adding layer later on a shaky foundation. Apple does things methodically and with long term insight that is sound and unrivaled. Google cannot gain or attain Apple’s expertise, historical experience and skills, because they are not and engineering or real software company.
Since the iPhone and it’s new mobile platform line of devices are far more than mere phones and are used comprehensively as personal computing devices that integrate seamlessly with all other personal computers and computing environments, it’s imperative to focus on the whole platform and it’s foundation. That means tight oversight, reliability and predictability.
Enterprise, professional and mass adoption of Apple’s mobile devices will prevail, based on a track record that speaks for itself – Apple’s is solid and unrivaled.
the worst is a wanna be hacker geek nerd thinking they are superior for toting around an android. yea.. u r s0 1337.
fuckin patsies.
G@@gle’s also good at spying. They have connections with NSA / CIA. Bet on it.
Giving away a stolen OS (IP) for free to undermine Apple is not significantly different from when Micro$oftopoly began giving away Internet Explorer to undermine Netscape’s navigator. It’s an anti-competitive bid to destroy the business model of another company, to control the development of the market space and to drive future business into their existing business streams.
So where does Enterprise (ad free) Gmail fit in? This article doesn’t answer that.
Baxter is correct, except his points are out of order.
Google primarily wants to be the advertising gorilla, and secondarily to muscle out any challengers, which include not only Apple’s ecosystem but also Facebook, Microsoft, eBay, and any other .com on the planet.
I only wish Apple would find a way to profit by protecting consumers (and the burdened internet as a whole) from annoying ads, rather than jumping on the frickin’ bandwagon to deliver more unwanted content to people who already pay access fees/subscriptions to get on the web in the first place.
You know capitalism has run amok when ever visible surface of every man-made object is covered with ads.
The original article points out but does not resolve the problems Google is having with Android monetization namely : OEMs are loading and sometimes locking down the phones with Bidu, Bing and Yahoo and using private app stores. Apps are also supplanting search in some cases. Also a person looking at an ad on their mobile is not looking at an ad on their desktop/laptop simultaneously so the pageview gain for Google is zero (only gain is when mobiles EXTEND the time people spend on the internet for example now they can browse on their mobile when they walk around but the gain is not as large as people think).
Google has about 20% of mobile ad market (if you exclude search), about the same as Apple.
Google says it’s going to make a billion a YEAR on mobile ads. Apple made 8 billion plus on iPhones alone last QUARTER (not counting iPod Touches, iPads, App Store, iTunes music, movies etc and iAd sales which adds more billions). Apple already makes 30-50% of worldwide phone (including dumb phones) profits.
When Android was announced in 2007 Google was larger than Apple in marketcap, today Apple is 100 billion larger (306 b vs 194 b approx). Since their PEs are about the same, that shows Apple’s revenues have grown much faster than Google.
Apple has Google as default search on iOS and Macs which shows that it’s not worried. Android seems more of a threat to Microsoft.
“yea.. u r s0 1337.”
That sums up a lot of Android users alright. The rest of them are just dumb.
‘droid fan: “But Android is open!”
me: “What does “open” mean?”
‘droid fan: “duh, duh, um… it’s just better!”
Android users get what they deserve.
Pitiful article, whether true or not. Advertising is a cancer that is eating your young (and your own brain) at this very moment.
Yes, Google… the new Microsoft.
Who said, or tried to claim, that Google wasn’t evil???
I agree. From the Google “Business” perspective he is spot on but from the “Consumer” or user point of view, Google will never have complete dominance and at some point will limit out.
Take for example cars, if the consumer was not part of the equation we would all be driving low cost POS but, we don’t. Some can and do decide to go beyond the cheapest models or manufacturers and select a better quality/experience even if the cost is more. Some may say, “what’s the point, it gets you from point A to B all the same”. True but, I for one CHOOSE to drive something a little nicer, more reliable and more satifiying to the driver then just some POS.
Yes, he is correct but the model Google uses, while great for some, has a short life span and will ultimately fail.
Ask Microsoft how that model is working for them.
Google had such good potential and talent, they had Apple’s complete trust an will, how could they have forsaken all of that for such a cutthroat ethic..?
Apple: Sell hardware to consumers
Google: Sell consumer’s eyeballs to advertisers
“(1) to disrupt Apple’s growing dominance of mobile devices, both so Google doesn’t have to rely on Apple for access to their users and to eliminate their paid-for application model; and (2) so Google can control the mobile industry and thus secure advertising from it.”
1) I don’t think it’s that blatant. A lot of companies are targeting the mobile market because it is fresh and there is a lot of potential for making money there. It’s not about thwarting Apple any more than it is about thwarting any other company. It’s just that Apple is the elephant in the room right now.
2) Every mobile player, including Apple, is out to gain as much control as possible over the market(s) they’re in. Jobs runs the numbers at Mac events regularly. Sites like this one brag about Apple’s numbers. So just because you don’t like Google doesn’t mean you can criticize them for trying to gain market share when Apple is doing the same thing. You may say their goal is to provide a better user experience…but I’m sure Android developers and Windows Mobile developers have that same goal in mind in addition to grabbing as much of the market as possible. So get real.
While Android may be hampering iOS now, originally it was meant to stifle Microsoft from leveraging its desktop platform into mobile, and setting mobile standards that would favor Microsoft over others. Seems ludicrous because Microsoft is such a fail, but you do realize that the hardware spec Google chose was exactly the same as the hardware spec for WinMo, with that same ram limitation, initially.