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Android is a Success, but for Whom?

11.23.2010
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There is no arguing that the market share of devices built on the Open Source Android operating system is impressive.  The Android platform, judged by adoption, is a success.

But who are the winners?

Google, who is spending the money to develop and market Android, obviously hopes to gain from their effort.  While they do not sell Android, they support it to foster more traffic to Google and the web in general, which will, in theory, sell more ads.  When asked about the ad revenue from Android, CEO Eric Schmidt said: "Trust me that revenue is large enough to pay for all of the Android activities and a whole bunch more."  Google’s Jonathan Rosenberg estimated Google's Android related revenue at $1b annually.  However, this revenue is all indirect.  Would Google be just as well off if the smart phone market were entirely iPhone devices defaulted to use Google and YouTube?

But Android is beginning to be used in ways that would appear to be neutral or negative to Google.  Rumors swirled in early September that Verizon was replacing Google Search with Bing on all of its Android phones.  Those were followed up quickly with denials, stating that Bing would not be used on ALL Android phones, but that it would be the default on some.  So Verizon is shipping some Android phones defaulted to use Bing search.  Also, Google competitor Baidu is reportedly working to build Android powered smart phones with all Google references replaced with Baidu.  Neither of these uses will drive revenue, direct or indirect, to Google.  These examples illustrate Android's openness.  No one, not even Google, can control how Android is used.

I believe Android is, and will continue to be, a success for Google.  The various other uses of Android do not diminish the value of the normal uses of Android.  The existence of Android certainly provides a better situation for Google than a smart phone market dominated by Apple and Microsoft alone.
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Published at DZone with permission of Eric Daugherty, author and DZone MVB. (source)

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)

Comments

Andrew McVeigh replied on Tue, 2010/11/23 - 3:51am

However, this revenue is all indirect. 

I don't think the revenue from Android is all direct by any means. They charge the handset manufacturers for access to the early builds, which apparently can be up to 6mths in advance of the public repository.  it's a good model -- the handset manufacturers have money and are prepared to pay to get ahead of the competition:  http://www.visionmobile.com/blog/2010/04/is-android-evil/

Zqudlyba Navis replied on Tue, 2010/11/23 - 6:59am

Android is evil, but it's the lesser of the alternative smartphone platform evils.

Andrew McVeigh replied on Tue, 2010/11/23 - 9:55am in response to: Zqudlyba Navis

Android is evil...

I don't know.  I think the controls they have placed on the system are clever rather than evil.  plus as an app developer the lack of them giving some freedoms to the handset manufacturers doesn't bother me.

Casper Bang replied on Wed, 2010/11/24 - 3:18am

Huh... given that there's no cost associated for consumers nor handset manufactures, I'd argue those are the ones Android is successful for. If Google gains a secondary avenue for ads, it would also appear as if Google themselves would call Android a success. Those who stand still, die. Google clearly does not stand still!

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