“Google doesn’t want to sit around while its Android ecosystem becomes ever more fragmented,” Parmy Olson reports for Forbes. “It’s apparently looking at ways to exert more control, Apple-style, of Android smartphones by having a say in the creation of their processors.”
“Google has been talking to chip manufacturers about building smartphone processors that are based on Google’s own designs, according to a report in The Information,” Olson reports. “The report didn’t specify which chip manufacturers Google was talking to, but Qualcomm, MediaTek and Samsung are the biggest vendors for Android phones. Qualcomm is the most ubiquitous, MediaTek is focused on lower-cost Android phones and Samsung’s Exynos chipsets go into its own devices.”
“It’s hard to see Qualcomm agreeing to this sort of partnership with Google, since ceding control over design would start to commoditize its business and make it harder to differentiate from other chip makers,” Olson reports. “Google wants to make Android more competitive with Apple’s iOS ecosystem, which has been gaining market share over the last year while still-dominant Android has declined slightly.”
MacDailyNews Take: The “still dominant” Android, with its 8 percent profit share. Apple’s iPhone owns 92% of smartphone industry’s profits.
“Google is looking at chip designs that would allow Android phones to feature virtual and augmented reality services, along with more powerful sensors, according to The Information,” Olson reports. “Google also appears to want future Android chips to support cutting-edge sensors. Some might seem redundant now but are likely to get more use in future, such as sensors that measure distance to help enable virtual-reality environments.”
Read more in the full article here.
MacDailyNews Take: Alphabet Inc. is giving Microsoft a run for its derivative money.
Here’s what Google’s Android looked like before and after they saw Apple’s iPhone:
Android fingerprint sensors aren’t as secure as iPhone’s Touch ID – August 10, 2015
Former Android VP: Apple’s iPhone 6 is ‘the most beautiful smartphone ever built’ – October 28, 2014
Before iPhone, Google’s plan was a Java button phone, Android docs reveal – April 14, 2014
How Google reacted when Steve Jobs revealed the revolutionary iPhone – December 19, 2013
Apple to ITC: Android started at Apple while Andy Rubin worked for us – September 2, 2011
Copy cat stole a rat put ot in his Sunday hat.
Good luck catching up with Apple’s few year lead inchip design, moles.
The Forbes report starts off by talking about Google “… having a say in the creation of their processors”, but later says “… building smartphone processors that are based on Google’s own designs”.
There is a huge difference between designing chips themselves and asking a company to design chips optimised to cater for certain needs, but leaving them to do the actual chip design work. The article does not make it clear which option is being considered.
Whoever actually designs these chips, this move may end up backfiring on Google. At the moment, Android phones are built from a variety of components and a given manufacturer can make choices in order to make their phone better, cheaper, faster or with certain special abilities. That enables them to differentiate their models from rivals. If they all end up using the same Google chip, then it becomes much more difficult to meaningfully differentiate your product other than by price.
Driving prices down works well for Google because they need to have as many Android phones out there as possible and cheap Androids make that more likely. However a race to the bottom destabilises the manufacturers and erodes their profitability. If the manufacturers cannot make a good living from building Android phones, they will choose to exit that market.
I don’t find it too far-fetched that they copy Apple’s entire business model and give up on the whole “open” thing. What’s stopping them? They have a lot of money banked.
They’re not going to get my money anytime soon though.
Well then, I guess MS gets my money on mobile…
There goal it to make everyone buy the chip design from them, and make a nice profit from it. All they have to do is change the OS to require it.
My impression was that Google wanted to create a reference design that other chip makers would have to measure up to or exceed to make full use of future Android OSes. They are simply drilling ‘deeper’ in the stack for the Nexus line to make it the ‘gold’ standard in the Android device universe. This in no way reduces rivals to use just one chip and prevent differentiation. It simply creates a working baseline that Google has finer control over for the improvement of future Android HW.
Wouldn’t this be more difficult for Google to achieve since they derive little to no profit form Android handset sales? If they plan on a loss leader model, I hope they go ahead with the plan. Many things can go wrong with loss leaders.
Yes, I’m a cynic, suspicious and maybe a conspiratorialist, but Gaggle “looking at ways to exert more control” which includes chip design allowing “more powerful sensors” just makes me a little uncomfy. Written about another company, it would would seem like tech advances serving the user, but w/ Gaggle’s history, I can’t help but think it’s tech advances (for Google) into the user’s privacy.
Frito Lays and Pringles is looking forward for a very long contract with Alphabet.
Just as Google intends to get into Apple kitchen with specialized processor hardware, Apple should consider getting into Google’s kitchen with a search engine. A little tit-for-tat wouldn’t hurt Apple at all and would put a bit more competition in Google’s open court. At least investors will see Apple isn’t simply sitting back and coasting along in just one business. I’m sure they’d like to see Apple start chipping away at Google’s strengths. I know I would certainly like it.
Qualcomm already looks like it’s getting a bit weak in the revenue department. They may be willing to do anything to keep the money flowing in even if they have to relinquish some control. They’ll still have the rest of the Android business to build their own processors for.
Major profit share or not, Apple is still seen by Wall Street as getting its ass kicked in terms of market share and it’s being valued as such. Most of the articles I see are mostly about Apple LOSING market share to Android which seems to be quite significant to investors as it continues to impact Apple’s stock value. There’s nothing wrong with copying especially if it gives a company an advantage like it did Google to almost immediately dominate all smartphone market share in a matter of a couple of years.
I might be alone in my thinking, but Apple has a pretty poor track record when it comes to web services (look at MobileMe and .Mac). I think they should leave search to those who do it well. Maybe give DuckDuckGo some financial backing.
As for market share, I really don’t care what Wall Street thinks. Sure, I’d love for AAPL to have a P/E that they deserve, but not at the expense of profit margins and/or marginalizing quality. Let all the Android makers kill each other for the scraps and continue with their current course of action makes much more sense to me. As long as the profits keep rolling in and we continue to receive dividends, who cares what Wall Street thinks.
Exactly. They need to go back to how Steve treated Wall Street. Ignore them.
Before iCloud all Apple really offered were disparate web services first with iTools, Mac.com, and then MobileMe. They only really got serious since they decided to get off their butts and actually design a web platform (iCloud) which debuted only 4 years ago.
The other companies in the web services game have the infrastructure in place… Apple is still building theirs out. But they have been on a pace that out runs everyone else and along the way they’ve managed to install and build their own electrical power plants keeping their data centers 100% green. It’ll take time, but iCloud will eventually rival all other services. These things just don’t happen with a snap of your finger, regardless of how much money you have.
First they thought they were car designers.
then they thought they were optometrist.
Now they think they are chip designers.
Google should stick to selling our personal information, it’s what they do best.
I don’t see how this solves the fragmentation problem. Android’s fragmentation problem is due to the fact that the carriers, not Google, decide when their customers’ phones get OS updates. And the carriers have little incentive to spend the effort needed to distribute the updates, because they’d rather their customers buy new phones.
Perhaps by having finer control over the components going into the Nexus line (pretty much the working reference models for Android) Google hopes to push other OEMs to creating better, more consistent HW for Android devices. While this may not help fragmentation in the near term, I think it will make shrink the number of differences between future high and low end Android devices.
BFD Google: Your single, prime priority is SECURITY.
That means NO MORE FRAGMANDROID. Focusing on a single CPU architecture is only one step.