James Allworth wrote a report where he says that Google might have armed their own enemies. As I was curious (having just bought an Android device) I read the report and had to think about what it was saying.
Before I dissect his arguments lets do a quick run through of what he is saying:
But Google may regret thestrategic choices that have led to this victory over Apple. To achieve the "win," Google may have unwittingly created and trained a mercenary army of hardware manufacturers, willing to sell themselves to the highest bidder—whether that be Google, Baidu or Bing.
A large part of Google’s future will rely on advertising revenue driven by mobile devices, which is likely a key reason why Google decided to go into competition with its one-time ally, Apple.
But Google might soon find the many third parties it has relied on to battle Apple have instead become a much greater threat than Apple ever was.
The first signs of trouble brewing came out of China. Earlier this year, when Google looked like they were going to withdraw … So they started to look for replacements to Google’s services. The open-source nature of Android made that possible. More recently, Baidu, the internet search engine that has successfully challenged Google for ownership of the Chinese market, has taken an even bolder approach. It’s reportedly in negotiations with a number of smartphone manufacturers to remove all references to Google, and replace them with Baidu.
The problem is that because Android is open source it is possible to remove all references to Google. Removing all references to Google means no revenue to Google, hence more revenue to those that modify.
Open Source Model
To this day it amazes me on how people get the Open Source model wrong. The Open Source model is not one where you make money with the Open Source. The Open Source is a foot in the door.
Take IBM as an example who was producing commercials like these in 2000.
10 years later and IBM is still a big supporter of Linux and making money with Linux. The real thing to notice is how they are making money? And that is by offering Linux on IBM hardware, and the services around their Linux and their hardware.
Thus the real question to ask, what is Google trying to achieve with Android? Before I answer that question I want to compare to talk about the iOS (Apple) business model.
The iOS Model
We can say what we want, the iPad and iPhone has been a raging success. The success of the iOS ecosystem is due to its presentation and its usability. The iOS echo system can be structured as follows:
iOS is the gate keeper for App 1, and App 2. But iOS goes further than that in that iOS sandboxes App 1 from App 2. If you as a user want to introduce your own services then it is up to the overlords at Apple on whether you can or cannot. Ironically had Microsoft introduced such a heavy handed gatekeeper into Microsoft they would have hauled into court.
Thus far software developers are playing ball and developing for the iOS infrastructure. But again they are the mercy of Apple overlords. Plenty of apps have been rejected, such as porno. I am not going to wave the flag for porn, but I will say if somebody wants to download and watch to their hearts content so long as they are adults and nothing doing any illegal its their business.
The newest most interesting example of exerting controls on the iOS system are:
- Game social nets
- And with iOS 4.3 newspapers
The market has voted with their dollars and said they like this. But I wonder for how long. I keep thinking like teenagers they eventually rebel and want more control (a’la jailbreaking). But even now jailbreaking is becoming harder and harder. Once jailbreaking becomes nearly impossible (probably with iPhone 5) I will argue that iPhone sales will dramatically drop off the cliff.
The Android Model
Android being an open source operating system cannot impose restrictions on what applications are being run, and how they are being run. It is like how many operating systems run today on the desktop.
The Android operating is structured as follows:
Google is taking a big gamble on Android and it could backfire on them like this Harvard Business Review is saying. But I am willing to bet it will work just like how Linux could have backfired badly on IBM.
I know personally I completely regret the iPhone. With its lock down and restrictions I have a bad taste in my mouth. On the other hand my iPad being less restricted (thought still quite a bit) is more bearable. Though comparing that my Samsung Galaxy Tablet I am amazed at the freedom.
Many might argue that the individual freedom is not that important. But I actually argue that it is as witnessed by the Microsoft Kinect camera. Microsoft originally did not want any hackers much like Apple. But has quickly retracted and welcome hackers.
Where are the iOS innovations? The neat toys? I am not talking about silly addons. I am talking about the geek projects? It is those projects which will cause a paradigm shift and make Apple look very very old.
Ironically because of Apple’s personality the Kinect people avoided them.
Yet the initial meetings hadn’t gone so well. Obsessed with secrecy, Apple had already asked Beracha to sign a stack of crippling legal agreements and NDAs.
He shook his head. Why didn’t he want to do a deal with Apple? No need. The technology was hot. He could sell it to anyone.
“Apple is a pain in the ass,” he said, smiling.
He did sell it to anyone, namely Microsoft! And there are people now hacking and doing neat and interesting things.
The key here is can Google give you the best experience with your Android or Android related device? And here the answer is YES! So long as Google does this and knows this it does not matter that Google Android might not be the official label on the device.