Google’s Android And The Path Not Taken

by John Kirk   |   May 16th, 2013

Yesterday, Google held its I/O keynote address. Ben Thompson of “stratēchery” has written an excellent article entitled: THE ANDROID DETOUR. I highly encourage you to take the time to read it. I’m going to re-state and build upon his thoughts here.

1) In 2007, Apple introduced the iPhone. Google’s then CEO, Eric Schmidt was a member of Apple’s board and an honored guest at the iPhone presentation. It appeared that all was right with the worlds of Apple and Google – Apple was going to do its hardware thing and Google was going to do its services thing and a new era of mutually beneficial cooperation was about to begin.

2) In 2008, Google introduced Android – a direct competitor to Apple’s iOS – and the Apple/Google alliance quickly began to unravel. Schmidt soon left Apple’s board, Steve Jobs later vowed to go “thermonuclear” on Android and the Apple/Google alliance was over almost before it had begun.

3) It’s clear that pre-iPhone, Google was initially aiming Android as a Blackberry and Microsoft Mobile competitor, but as soon as the iPhone appeared on the scene, Google’s Android focus dramatically shifted. Assuming that competing with Apple was the right strategy, Google should be given all the credit in the world for pivoting as rapidly as they did from their original plan to creating a legitimate iPhone competitor.

4) As an aside, I also give Microsoft lots of credit too. When the iPhone initially appeared, Microsoft didn’t foresee the danger it posed. But soon afterwards, they not only recognized the danger but they acted and acted decisively. They took the radical step of abandoning Windows Mobile altogether and initiating their new Windows Phone 7 platform. It was a bold move, but as history as shown, it was one year too late. Windows Phone 7 (now 8) has never gotten any traction and it languishes in third place, just above the rapidly fading Blackberry OS.

5) I think I could make a pretty compelling case that Google should never have made Android a competitor to Apple’s iOS. By doing so, they destroyed a promising alliance and, perhaps, took a long, long, detour down a path that they never should have taken. But that’s all moot now. We’ll never know how that alternative reality would have played out, so there’s little point debating it.

6) What can’t be debated is the effect that Apple’s iOS and Google’s Android have had on the incumbent smartphone competitors. Palm and WebOS were wiped out. Blackberry was devastated. Nokia was humbled. Microsoft Windows was abandoned and replaced by Windows Phone 7.

Pundits often frame the smartphone/tablet wars as a battle between Apple’s iOS and Google’s Android, but in reality, those two operating systems – with Apple descending from above and Android rising from the below, crushed the existing smartphone competitors between them.

comscore-q1-2013

There is little proof that Android has ever made any significant income for Google, but if the destruction of their enemies was Google’s aim, then there is no doubting that the Android strategy was eminently successful.

7) Google’s I/O keynote barely even mentioned Android or any kind of hardware at all. If there was a common theme, it was about service unification between Chrome and Android.

Instead of an updated Nexus 7 tablet or a new Chromebook model, Google spent three hours during Wednesday’s keynote to discuss services and feature upgrades for both Chrome and Android.

If I could describe #io13 in one word it would be “unification”. Same features, services, UI and experiences on Chrome and Android. ~ Kevin C. Tofel

I think that Ben Thompson is spot on with this analysis:

“Services are where Google excels, and it’s where they make their money. It’s why they make the most popular iOS apps, even as their own OS competes for phone market share.

Apple, on the other hand, makes money on hardware. It’s why their services and apps only appear on their own devices; for Apple, services and apps are differentiators, not money-makers.”

“Apple invests in software, apps, and services to the extent necessary to preserve the profit they gain from hardware. To serve another platform would be actively detrimental to their bottom line. Google, on the other hand, spreads their services to as many places as possible – every platform they serve increases their addressable market.”

8) The battle for mobile is over. Apple’s iOS and Google’s Android reign as a duopoly and Microsoft and Blackberry hang on by the skin of their teeth. Google is free to put its web services on Android and iOS and to ignore the Blackberry and Windows 8 operating systems. Android has ensured that Google’s services are freely accessible on the only two operating systems that matter. The Android strategy was a success although, perhaps, at great cost. Google’s I/O keynote is living proof that Google is now re-focusing on their original mission of dominating web services.

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?
  • steve_wildstrom

    Excellent analysis as always, John, but I think you give Microsoft a bit too much credit. Ballmer’s dismissiveness of the iPhone wasn’t just the usual Ballmer bluster; as best I can tell, that feeling was pervasive throughout the company and it caused Microsoft to be extremely slow in perceiving and responding to the threat.

    In particular, Microsoft was very slow to realize what multitouch would mean to mobile. As late as the fall of 2009. after the iPhone 3GS, the Android G2, the Palm Pre, and even the unloved BlackBerry Storm had shipped, Microsoft released a new version of Windows Mobile (6.5) with no support for multitouch displays. If Microsoft had acted with alacrity, they could have shipped Windows Phone 7 in 2009 and had a chance. The delay was critical and now poses an existential threat to Microsoft’s consumer business.

    Palm died because it lacked the resources to compete effectively and because HP totally bungled the acquisition that might have saved them. Microsoft and BlackBerry have no one but themselves to blame.

    • http://twitter.com/snookasnoo Idon’t Know

      Somehow Microsoft managed to miss both the internet and smartphones.

    • def4

      Many people in large companies, especially senior managers actually believe quite a lot of the BS that make discerning observers roll their eyes.

      Larry Page really believes Google is a force for good, just like Vic Gundrota really believed they were saving the world from the tyranny of Steve Jobs by ripping off iOS.
      Ballmer and Gates really believe that tablet users are suffering because they just aren’t getting enough Excel in their lives.

      I know it sounds crazy, but it’s true. The self deception is seen as required to maintain discipline and some baseline level of morale and that eventually leads to dangerous levels of alienation and denial.

      • Rich

        I think your last paragraph is probably an excellent analysis of Microsoft’s problem.

        Steve Ballmer was yelling “Not gonna happen on our watch” when it had already happened on his watch.

    • John Dingler

      That you refer to a single company Microsoft as “they,” means that you should refer to the failing group of Microsoft and BlackBerry as “it.”

      • steve_wildstrom

        You are technically correct. In American (but not British) English, companies are regarded as singular. So it’s “Microsoft is …” But using plural pronoun is idiomatically acceptable and sounds a lot more natural to may ear.

      • Rich

        In the US, a single company is referred to as “they,” and if we’re talking about more than one company, we also say “they.”

  • def4

    The final outcome seems reasonably fair, certainly better than what we had in the PC era.
    While personally I am still a bit sore that Android snuffed out more innovative and exciting products like webOS and MeeGo, it’s pretty clear from the outcome of the Samsung trial that an iPhone clone was not avoidable.

    All things being equal, I’m more comfortable with a fragmented open source Google platform being dominant than with a Microsoft one. That’s what would have happened without Android.

    • Jurassic

      def4: “it’s pretty clear from the outcome of the Samsung trial that an iPhone clone was not avoidable.”

      Actually, the opposite was proven. In the trial, Samsung was found to have knowingly and purposely infringed both Apple’s hardware design, as well as many patents for Apple’s software.

      It would have been easy for Android in general, and Samsung’s hardware design and custom interface, to have avoided these infringements. You mention webOS and MeeGo as good examples of “more innovative and exciting products” that would have stood on their own without infringing Apple’s IP.

      The route taken by Google and Samsung, and the legal consequences they exposed themselves to, were eminently avoidable.

      • def4

        What legal consequences?
        Except for the stupid unforced error of burning a good chunck of cash on Motorola, neither Samsung nor Google have suffered any setback remotely comparable to how much they gained by copying Apple.

        Both companies that copied Apple the fastest and closest are in dominant positions and will be raking it in for the foreseeable future.

        • Hosni

          Samsung lost in California. A new trial will be held to define damages, and appeals now pending could result in an injunction against sales of Samsung’s iPhone clones. When the process is concluded, Samsung will pay royalties to Apple for every clone that it manufacturers.

          Google squandered more than a good chunk of cash … $12.3 billion is one hell of a lot of money, and accompanying it is the humiliation of being recognized as the biggest idiot in the industry plus whatever legal costs and penalties the EU imposes on the company for using phony patent claims to gain an unfair competitive advantage in the marketplace. There is a good chance that Google Maps will be banned from Germany in the relatively near future (for copying Microsoft patents), and could conceivably face the same treatment elsewhere in Europe and the US.

          Having said that, I agree with your comment that Samsung and Google haven’t suffered in proportion to their ill-gotten gains. The connection between their bad behavior and their just rewards will shorten considerably after patent laws in the US and Europe have been refined to address the smartphone/tablet market. That transition is occurring now, so future new products by Apple will be better protected than iPhone & iPad were. IMO.

          • def4

            Unfortunately, all of that is mostly wishful thinking and very little reality.
            The chances of getting an injunction against a Samsung phone are very slim. And even if that happens it will be so late that it won’t apply to any currently shipping products.

            The law is designed to benefit society overall, not just those who contribute innovations. The standards for stopping rip offs are quite high because they are designed only to ensure the innovator is not crushed by the copycats.
            Apple makes lots of money selling lots of iPhones so there will be no injunction.

            All other consequences, past, present and future are minor headaches that are easily digested as costs of winning the enviable positions Google and Samsung currently hold.

          • Hosni

            @def4 -
            None of my earlier comments represented wishful thinking on my part, because I am only reporting what I read. Apple has applied to the court to include the Galaxy S4 to the new damages trial, so your belief that the California patent suit would not apply to “any currently shipping products” is uninformed. Obviously we read different things.

            Your interpretation of the philosophy behind patent & copyright law is fanciful … by which I mean fabricated. The laws outlawing bank robbery were also written to benefit society overall, but don’t permit a person to steal modest amounts to feed their family or to perform other charitable acts. If laws were written the way you describe, they could never be enforced. You point out that “Apple makes lots of money,” but Apple’s earnings from selling iPhones has nothing to do with an injunction being granted. Zero. If you can post even one link FROM AN EXPERT to support the theory or other claims in your second paragraph, I will gladly retract my statement.

            If the costs of losing in court are “easily digested” by Samsung and Google, I don’t know how you explain Google’s $12 billion largely wasted purchase of Motorola to obtain patents that it (wrongly) believed it could use to block Apple from enforcing its iPhone and iPad patents.

            Since the courts continue to deliberate in the various ongoing patent cases and neither of us know the outcome, your claim about the minor magnitude of the cost is simply an uninformed prediction. What we know for certain is that Samsung lost the California trial, damages are still being computed but could exceed $1 billion when all is said and done, and the methodology used to compute those damages will be applied to other infringing devices sold by Samsung over the past year … probably including the Galaxy S4.

          • def4

            Apple has requested that the Galaxy S4 be added to the trial that should start a year from now. Even if Apple convinces the judge to include it (not a certainty by any stretch), Samsung will have sold over 100 million units and introduced the successor before the trial even starts.
            So even the ideal case for Apple is too little and too late to hurt Samsung.

            What you call my interpretation is not mine, but the only interpretation that matters: Lucy Koh’s.
            Please do your own googling to find out why she refused to issue any permanent injunction after the verdict.

            The courts have exhibited a revoltingly patronising attitude, treating the dispute as a trifle and the parties as squabbling children that should be cajoled into settling their differences and leave them (the adults) to deal with more meaningful matters.
            I don’t see any way for serious and decisive action to be taken as long as this attitude holds.

          • Rich

            I think the people who run Google are not adolescents but people for whom the life of the intellect is the only one that exists. Therefore they may miss things that are obvious to everyone else, like not seeing that a product selling for 3 times the competition but doing less (the Nexus Q) wouldn’t be a big seller.

  • http://twitter.com/Twitteninja Zargh

    I think Google/Android’s “shift in focus” is somewhat overstated, since their MO of not building one phone, but building a factory for producing phones (as a conduit for their services) has remained constant throughout the projects lifetime. Their concentration was on building a modular stack, not on any particular UX.

    When iPhone/iOS brought a whole new interaction model to the table, all Android had to do to adapt was to swap out its homescreen app and change the design of the menus due to the aforementioned focus on modularity. It was just another parameter among others for their factory, which is why the first phone (T-Mobile G1) had a kitchensink of inputs.

  • Rich

    I still think BlackBerry will end up in 3rd place in the market.