Google is trying to reign in Android with a new program called Android Silver according to recent reports. There are pros and cons to this strategy, however. I believe Google is trying to control something that inherently can not and does not want to be controlled — Android.
There is a paradox about stock Android that is fascinating. It is the purest and best manifestation of Android. My favorite Android devices always tended to be Nexus devices. However, the Nexus program was really a developer program not a consumer one. The goal of the program was never to sell in masses to mainstream consumers. It was for developers to experience the best of Android and to use a model to get them thinking about how to take advantage of the platform with their apps.
What Google fails to realize is one of the primary reasons for Android’s early attraction from OEMs was because they desperately wanted an alternative to Microsoft. Google came in with a solution and provided this one. Which was why early OEMs like HTC adopted it even though it was still very early. The other thing that struck a nerve with OEMs was the opportunity to differentiate with Android. Microsoft offers virtually no customization of their software which means vendors who ship Microsoft software can differentiate through hardware only. All the software looks the same. Imagine how boring it would be to walk into a retail store and see lots of rectangles all running the exact same software look and feel? There would be little differentiation.
OEMs were attracted to Android early on because they allowed enough customization for their products to stand out. Forcing OEMs or creating a new class of device where the software looks the same across all vendor hardware is a step backward not a step forward.
Mature markets value differentiation. This is why a parking lot in 2014 looks very different than a parking lot from 1955. Differentiation is one of the most sustainable strategies a company can invest in. If Google is successful at creating a new premium class of device, yet those premium Android devices all have the exact same looking software on them, we will have the sea of sameness all over again just like we had, and still have to a degree, with the Windows PC market.
This environment favors the ones who stand out. Google would be better off working with their vendors to create sustainable strategies for differentiation. The challenge for Google is that one of the ways every partner wants to differentiate is through services, which is Google’s cash cow. Remarkably, Google’s success with Android was strategic for them but has also put them at odds with the inevitable way this market plays out for their partners — shifting from hardware margins and profits to services margins and profits. History teaches us the value chain always shifts from hardware then to software then to services in horizontal/modular ecosystems. This happened with Microsoft PC ecosystem and it will happen with Android in smartphones.
Which leaves you in an uncomfortable position if you are an Android vendor — deeply tied to Google and their services for your future success. Your partner is actually your primary competitor.