Tag: google

How Apple is Cornering the Market in Mobile Devices

I have been speaking with various vendors of tablets lately and more than once, the topic of Apple “iPodding” them has come up. iPodding basically refers to the fact that although Apple has had the iPod on the market for over 10 years now, they still have over 70% of the MP3 portable digital music player market. This fact is giving many of the tablet vendors nightmares. Although they see this tablet market as a very large one and believe there is room for multiple tablet vendors given the potential market size and potential world wide demand, they know very well that Apple has done a great job in cornering the MP3 player market with iPods and are afraid that Apple could do the same with tablets.

And even though Apple has not cornered the market in smartphones, all are amazed that Apple had record iPhone sales last quarter and realize that Apple has just started selling iPhones in the Chinese market and could be expanding to other BRIC (Brazil, Russia, India, China) countries too. And many of the smartphone vendors are certain that Apple will bring out a lower cost iPhone at some point and get very aggressive in emerging markets within the next two years. An even harder fact for them to swallow is that when it comes to smartphone profits, Apple takes about 75% of all profits made in cell phones.

While all of them think that they can compete with Apple when it comes to hardware, and maybe even software, what they all pretty much know is that the secret to Apple success is that they have built their hardware and software around an integrated ecosystem based on a very powerful platform. And it is here where their confidence level lags and the “iPodding” fears raise its head. And to be honest, this should really concern them.

Apple is in a most unique position in which they own the hardware, software and services and have built all of these around their eco-system platform. That means that when Apple engineers start designing a product, the center of its design is the platform. For most of Apple competitors, it is the reverse; the center of their design is the device itself, and then they look for apps and services that work with their device in hopes that this combination will attract new customers. In the end, this is Apple major advantage over their competitors and they can ride this platform in all kinds of directions.

For example, when they were working on the iPad, they already had in place the iTunes content store and since all were based on the iOS platform, it was pretty straight forward for them to now build the iOS iPad Apps environment that easily sat on top of this already existing software platform. Of course, the iOS app platform already existed for the iPhone so all they had to do is to create an apps toolkit to take advantage of the new screen size they now had with the iPad.

We will see this same concept repeated when they eventually release anything for the TV. The current Apple TV product is a good first step and is also based on this iOS platform and eco system. But let’s say they design an actual TV; the platform is already in place for them to tap into it and indeed, the center of design for any future TV is the platform itself.

For a lot of vendors, they had hoped that Google’s Android would deliver to them a similar platform to build on, but to date that has not been the case. The various versions of Android only complicate things for the vendors and the software community and in essence they really don’t have a solid unified platform to build anything as powerful as Apple’s iOS architecture. As a result there is a lot of fragmentation in the Android marketplace. This is more than problematic and has been at the heart of Android failures in tablets thus far.

And I am not sure Microsoft’s new Windows 8 platform will deliver what they need either. The key reason is that Windows 8 is still based on a PC Centric OS and this is being extended downward to tablets. At the same time, they have a Windows OS for their smartphones that share no code and no app base. In the end, it delivers at best splintered apps and a non-unified ecosystem even if all the devices have the same Metro UI. I believe this OS has more of a chance to challenge Apple then Google’s Android will, especially in tablets. But the lack of a powerful unified platform that the vendors can really design around and support, along with vendors own quests to differentiate, could cause this approach to have a hard time competing with Apple too.

The bottom line is that when it comes to competing with Apple, it really is all about the platform. And at the moment, I don’t see anybody creating a unified and powerful enough platform that comes close to or is equal to what Apple already has in the market. That is why Apple is cornering the market in mobile devices today and why it could continue to grow its user base WW at the expense of their competitors. Based on marketing material on Apple’s own website, I would say they understand this as well.

Google Play: What Game is Google Playing?

With the news today that Google is re-branding the Android Market as Google Play, I am forced to wonder what that says about their strategy. Is playing all Google is really focused on? I also wonder if this branding is not more confusing to consumers than the clearer Android Market brand.

I don’t disagree that what they are doing to unify their store per-se is a bad idea. I am only questioning the branding behind it and what having something loosely called “Play” says about Google’s strategy. If nothing else I think it makes it clear that Google with Android is 100% focused on consumers. Something that I somewhat disagree with especially given the BYOD trend within corporate IT. If Google devices, or at least a large percentage of them, are not even options for IT to support than it will preclude consumers who need IT support from buying them. Granted that is not everyone but it is certainly a healthy fraction.

As I stated, unifying the different elements of their store is a good idea. I am just not sold on the branding and whether or not it is more or less confusing to consumers. I thought Android Market made a lot of sense and was clearly differentiated from other stores or services on other platforms.

This also takes Google one step closer to browser based computing paradigms we have been watching. Now that the Google Play is becoming increasingly more browser based as a part of the experience, it opens the door to more hardware agnostic experiences. I can already access my Google music through any browser regardless of my hardware and now books and perhaps in the future apps build for Android may be accessed and perhaps even used in this strategy.

I have often said that in the future we won’t install software or services we will simply access them. Perhaps Google’s strategy with Play is in line with my vision.

Why Google Must Commit To Hardware

With the Nexus One and their recent purchase of Motorola, Google has more then signaled that they will soon be in the hardware business in a big way. And the recent rumors that they are building a 120,000 square foot consumer experience testing center on their campus suggest that they will test their own hardware along with partners products in order to create and deliver devices that are truly optimized for their Android and Chrome software.

This move is of course controversial since it means that they will be in direct competition with their customers and partners who back Android and Chrome. However, I don’t think Google has any choice but to go in this direction if they have any hope of gaining ground on Apple and try to stave off an imminent threat from Microsoft via their Windows 8 cross-device Metro strategy.

One of the facts that is becoming very clear to the industry at large is that Apple’s lead in hardware, software and services is a mammoth one. They are selling over 5 million Macs per quarter. The iPhone continues to be a hot product and while Android has gained much ground in units shipped against the iPhone, Apple is taking as much as 74% of all the profit in this space. And the iPad holds well over 80% of the tablet market share and this will be the case through this year too. And many of my research colleagues predict that even in 2015, Apple will have at least 60% of the tablet market.

But the key to Apple’s success is no secret. They are where they are because they own the hardware, software and services and combined they give Apple a significant advantage over their competitors. And while that too is no secret, what is not understood well by the outside world is that they architect their devices around their services. The best example of this is with the iPod. While the hardware itself is the profit center for Apple, it was the music service that was the critical component that made the iPod take off. From a hardware perspective, they architected it around the music service, which means they designed the iPod software, user interface and hardware dials so that they were optimized to deliver a great portable music experience.

The same goes for the iPhone and the iPad. It is the services that drive the final UI and hardware designs and since Apple controls the entire eco-system, they can be assured that they deliver to their customers a unified and easy to use experience with their products.

Now consider the plight of the middleware software vendors like Google and Microsoft. What they bring to the party is a critical component of any final product via the OS. But both companies architect from the inside out, or only at the software level and then hand this off to their vendor partners who must now design their hardware around the software and hope the design can be optimized for the OS they have been handed. And from Google and Microsoft’s standpoint, they can only influence and hope so much that their hardware vendors will get it right.

Historically speaking, Microsoft has done the best job of creating strict technical guidelines that hardware vendors can follow, but Google’s approach to Android design is pretty much a moving target. Vendors have told me of all kinds of problems they have had getting strict hardware guidelines from Google for building Android devices.

Microsoft’s model worked for PC’s. But I don’t think this model will continue to work with this new world of mobile devices. What seems to be happening now is that in both the Windows and Android camps, controlling how the hardware vendors use these operating systems is much more difficult as hardware vendors strive to try and differentiate themselves in the market place. In many cases that mean’s hardware and software UI tweaks that go beyond what these companies give them in the way of an OS which then potentially delivers various forms of fragmentation.

At some point, not controlling the entire hardware, software and services delivers diminishing returns to both of them and sooner or later they will find that the old PC model of creating an OS and giving it to vendors to propagate will not work. In fact, I am seeing that understanding starting to become clear to both Google and Microsoft as they stare up at Apple running away with all of the profits. Apple’s model works. Using the old PC model will not work in this new world of mobile devices.

This is why we are seeing so much hardware activity at Google and I expect to see similar branded hardware strategies evolve at Microsoft very soon. While they can hope that their partners can utilize their software to create great hardware and services, at some point they have to realize that putting their trust in their vendor partners to deliver their vision is a crapshoot.

Indeed, they may only have a real chance to catch Apple if they take control of the hardware, software and services and the sooner they realize this, the sooner they can control their individual destiny’s.

Google Officially Owns Motorola–Now What?

US Regulatory agencies along with the European Union approved Google’s acquisition of Motorola today. This acquisition, although initially positioned for Motorola’s patents, could very well cause quite a bit of change in the mobile landscape.

I wrote a column back in August on all the reasons why Google Should Buy Motorola. To my surprise five days later Google actually did buy Motorola Mobility, Inc. As a part of my work as an analyst we do future scenario planning and that column was a theoretical analysis of a scenario we could see playing out.

My main logic was around how difficult it is in mature consumer markets to be a hardware only company and thrive. I was convinced that over time Motorola would face financial struggles and would need to be bailed out or go out of business. Google was my logical choice to buy them in that scenario. The patents and other points were timely but icing on the cake.

There are some strategic elements of this deal that whether or not were clear to Google at the time could be very interesting. Assuming Google does not sell the hardware business at some point in time, which would be sealing Motorola’s fate, I see two directions Google can take with Motorola’s hardware business.

Attack the High End

Right now the point needs to be made that Motorola hardware is the ONLY hardware brand which is committed to Android only. Every other partner of Google with Android also ships or will ship Windows Phone and perhaps something else as well in the future. It is also no secret that the Android ecosystem is broken and fragmented and needs to be fixed. I went into depth on that last month in this column.

Because Motorola is the only handset and tablet brand that is Android only, Google could turn Motorola hardware into the flagship, premium, hardware and Android experience. Android devices need more differentiation in order to compete in the sea of sameness which is Android devices. Google could focus on heavily differentiating Motorola hardware and focus on the high-end, premium part of the market. Perhaps Motorola hardware could become the Nexus line of devices, and used as the flagship “hero” Android products.

Attack the Low End

The other thing Google can do with Motorola is attack the low-end part of the market and practically give Motorola hardware away for free. On this point it is key to note that Google is a services company. Any and all hardware that Google cares about exists only to give consumers access to Google’s services. Therefore, it is within Google’s strategic interests to get as many Android devices out there as possible. One way to do that is to give away, via heavy subsidization, handsets and tablets in order to make up lost revenue elsewhere.

As it stands today Android hardware is just one piece, and not even a big piece, of Google’s revenue stream. Google makes a lot more money elsewhere and does not necessarily need to make money on hardware. It is more important that they get that hardware to as many consumers as possible.

Motorola could become the entry-level brand with the Droid brand or some other “fighter” brand going after the lower end, entry-level, cost conscience part of the market.

Not Competing with Partners

The biggest concern many have with Google owning Motorola is that it sets Google up to compete directly with their partners. If they focus on either the high-end or the low-end, they could then focus on helping their customers compete on different playing fields.

This could perhaps work best if Google choose to go after the low-end for example. This would then give Google the ability to figure out how to help their Android partners better differentiate themselves from the sea of sameness and compete in the higher end of the market which allows for more favorable margins.

It will be fascinating to watch how this all plays out. We believe going vertical meaning single companies owning hardware, software, and services (like Apple does) is a disruptive trend. This is not easy but strategically could protect from market volatility. Now that this deal is official Google has a number of company defining decisions in front of them.

Do Apple Competitors Make Bad Products?

I often engage in discussions with the financial community on matters related to tech for their portfolio management. One of the things I was asked in a recent conversation intrigued me. The question was around why Apple seems to be dominating their competition with such a limited product portfolio mix.

Tim Cook continues to emphasize with each investor, earnings, and public event that Apple’s laser focus is to continue striving to make the best products on the planet. Given that Apple seems nearly unstoppable, it appears their strategy is working. And it does make you wonder what Tim Cook’s statements about Apple continuing to focus on making the best products and Apple’s dominant position (especially with iPhone and iPad) says about other products on the market.

So the question thrown at me was “Do Apple Competitors Make Bad Products?” In light of Apple’s continual progress forward and other companies’ struggle to keep up, this is an interesting question. The answer is simply that many Apple competitors make very good products. I happen to like quite a few of them. The problem—for competitors—is that Apple makes exceptional products and perhaps more importantly, extraordinary experiences with those products.

To dive into this deeper, three fundamental points need to be established…

Apple Has More Competition Than Anyone—Yet No True Competitors

When you think about Apple’s vertically integrated business strategy of having a dedicated hardware business, software business, and services business, you realize that Apple competes toe-to-toe with almost the entire tech industry. Yet no company competes toe-to-toe with Apple.

What I mean by that is Apple competes directly with hardware companies, meaning people who make notebooks, desktops, all-in-ones, smartphones, tablets, and set-top boxes to a degree.

They also compete with those who make software, particularly in operating systems, but also in core apps. They compete with Microsoft at an OS level and at an Office level with Pages, Keynote, Numbers, etc. They compete with companies who make media management and creation software like Adobe, or ArcSoft etc, with iMovie, iPhoto, etc. They compete with Google with Android. The list could go on.

They also compete with services companies. iTunes and iCloud as a service competes with a host of online services providers from email, to calendar, to movies, music, storage and backup etc. Google and Microsoft again are competitors here along with a long list of others.

They compete to a degree with retailers. Apple retail competes with Best Buy, Wal-Mart, Target, Staples, etc. Note that Apple doesn’t compete on all levels with these retailers, but we have to acknowledge there are some crossovers.

When you look at the sum of their businesses, because of their vertically integrated strategy, it is not quite obvious the large list of competitors Apple has all over the industry. Yet the reality is that no other company has such a tightly integrated vertical strategy as Apple. So my first point is that at a fundamental level, Apple doesn’t actually have any true competitors who compete with them on every level they way they do with the rest of the Industry. This, at its core, is what sets them apart.

Granted we could debate that with Google’s acquisition of Motorola, they have all the parts on paper to compete with Apple toe-to-toe, but for the time being I still consider that a stretch.

Apple’s “Works Better Together” Philosophy

What is truly unique about Apple is the relationship that all their products have with each other. It is as if each product was made for the other, yet alone each one is still a solid standalone product. We call this the “Works Better Together” approach. It means that your products or “consumer end-points” can work fine as standalone products, but work even better as a comprehensive whole. In concept this sounds like a no-brainer, but the reality is that Apple’s vertically integrated approach is essential in executing this strategy.

Too many companies who make consumer products organize their business units to compete for PNL. Sometimes even worse than competing for PNL, they work as a silos and never have a clue what the other business groups are working on. This makes it extremely difficult for a company to create a “works better together” portfolio even if they have all the parts to make it work.

By developing this strategy as a part of the “iDevice” ecosystem, Apple benefits by creating a user experience that is not related to simply one device, but to the entire Apple ecosystem. This and more is what we mean when we talk about the Apple ecosystem being sticky and creating consumer loyalty.

Technology as Art

Lastly, Apple has a culture that is completely unique, which is another part of the reason for its success. Steve Jobs in his many keynotes has pointed out that Apple’s approach to products is that they are at the union of liberal arts and technology. And nobody in the industry so far has been able to match Apple’s eye for design.

What this means is that there is an added dimension of design and technology as art that influences the thinking of those who work at Apple. This group is like a passionate team of artists who happen to turn their art into technology.

This is the major reason that Apple emphasizes simplicity. Steve Jobs has in many keynotes and demos said that Apple’s various products “just work.” What we must not forget is that creating technology products that are simple is no trivial task. Simple solutions require sophisticated technologies. Apple knows this better than anyone and it has oriented itself to succeed at just that.

So it is not that Apple competitors make bad products. Their hardware competitors and OS competitors make good products. It is simply because of their vertically integrated model, paired with a works better together product philosophy, coupled with incredible execution, and a hardware as art design strategy, that Apple simply makes exceptional and extraordinary products.

Which is why one can argue that they truly do not have any real competitors.

Why The Android Update Alliance Was Doomed From the Start

When Google announced the Android Update Alliance, an initiative to bring each new Android OS release to all devices in a timely manner, it was well-intentioned but doomed from the start.

Jamie Lendino over at PC Magazine had a great column called “Google’s Android Update Alliance is Already Dead.” I recommend a read of this column in order to get some more context from the handset OEMs and carrier quotes on the subject. The reality is that this alliance was flawed at a fundamental level from the beginning and was destined to failure.

There is an important element to understand about this industry and it comes down to two types of strategies to bring devices to market. The first strategy is a direct to consumer product development approach. This is the strategy most closely followed by Apple, due to the fact that they have their own retail stores and control their own retail presence. Both of those strategic points in Apple’s favor are strengths at a competitive level. In this strategy the end consumer is your customer, they are the ones you are attempting to sell directly to. When a more direct to consumer strategy is employed, a more limited product mix is possible.

The second strategy is a channel strategy. This is the strategy that many take by order of necessity. In this strategy, although devices are made for consumers, the customer is actually the channel, or the retailer and carrier. Device manufacturers actually create products specifically for the channel in the hopes that the channel can sell them to consumers. Device manufacturers are not guaranteed that the channel will sell their device or give them favorable margins on devices sold. Because of this fact, device OEMs must create a device menu in order to give many different channels the opportunity to sell different devices. The other key point in a channel strategy, is that the channel (whether it be a retailer or a carrier) is not interested in selling two products that are too similar to each other or target the same market segment. This is why we see such a heavy device mix in carrier retail for example. I empathize with companies who have to employ a channel strategy because it is very hard and very frustrating–and also very political. However, employing a channel strategy engrains in a device OEM what I call a “ship-and-forget” mentality. This is at a fundamental level why the Android Update Alliance was destined to fail.

This mindset is unfortunate but necessary to employ a successful channel strategy. Companies that make a menu of devices to sell to the channel need to move quickly to the next batch of devices and commit existing development resources to this new batch of devices.   This makes supporting legacy devices more difficult due to most of the engineering always having to move to new product development. There are fewer resources, and less priorities frankly, for legacy devices because almost all the focus is on the future not the past. This again is fed by the business model of those who are selling to the channel which yields low margins but requires high volume.

It is also partially Google’s fault because they put updating and supporting devices in the hands of the OEMs. Often this is because the OEMs have changed Android slightly in order to differentiate their handsets, therefore said OEM is responsible for the engineering to get their legacy devices up to speed. It is hard to side with one or the other on this issue. Of course if no one changed Android and left it stock, it would be easier to update quickly. The only problem with that is that there is VERY little differentiation in that world and any differentiation is limited to hardware. This is the sea of sameness I talk frequently about and in the past it led to spec battles and very little innovation.

If you want to see the sea of sameness in action, go to a big box retailer who sells PCs and look at the wall of Windows machines, all running identical software thus the only difference is in hardware. Hardware differentiation alone would be a boring future.

The channel strategy that is employed by many in the industry is a simple truth about how this industry works. It has its plusses but it also has its minuses. Vendors must differentiate, but they also have to cater to the channel. The channel, and horizontal operating system solutions create this sea of sameness due to the nature of the business model.

Everyone from the OEM, to the channel (retailer and carrier), as well as the software platform (Google) have to align for the good of the ecosystem if this is to get any better. The only problem is from what I see so far they are still more dis-aligned than aligned.

So although it was well-intentioned, the channel strategy and lack of Google’s own committing of more resources to assist OEMs is what keeps the Android OS unity a pipe dream.

Why It’s All About the Digital Ecosystem

My firm, Creative Strategies, has been talking extensively about what we call the digital ecosystem for over 10 years now. As we have been analyzing the technology industry and the underlying fundamentals that make it work, we have been trying to think about this from the vantage point of ecosystems. We believe that products are better as a part of a solution and in this ecosystem view-point, products are not islands but part of a solution (or ecosystem). This view works in every segment of the market as it is universal.

So what do I mean by digital ecosystem?

Based on the Merriam-Webster definition of an ecosystem I’d like to submit this definition for a “digital ecosystem”.

“the complex of a community of digital devices and their environment functioning as a whole”

A complete digital ecosystem consists of hardware, software, and services. All play a particular role in the ecosystem in order for it to function as a whole. Based on the design of the hardware, the function of the software, and the services provided, ecosystems can target specific parts of the market or the market as a whole. Microsofts’s XBOX is an example of a hardware, software, and services solution targeted for a specific part of the market. The point is that all three components are necessary for a holistic ecosystem.

The important thing about ecosystems is that they create dependencies. These dependencies can lead to consumer loyalty. They, however, can also lead to consumer revolt. Microsoft, Google, and Apple are out to create ecosystems that drive loyalty. In my opinion, companies like Comcast create ecosystems that lead to revolt since I would prefer a better TV service and integrated solution.

Our conviction is that over the course of the next few years, consumers will consciously begin to make decisions about products based on whose ecosystems they desire to be a part of, or the ones that work better for their life or environment. The hardware, software, and services will be important but more importantly, consumers will commit to and invest in ecosystems.

As it relates to personal computing, there are three main companies who enable ecosystems today. They are Microsoft, Google, and Apple. Microsoft and Google are more horizontal, where Apple is more vertical.

The history of the technology industry informs us of a fascinating value shift. This shift begins where value is initially in hardware, then as the market matures it moves to software and then eventually to services. I would argue that this value shift is more significant with horizontal plays than with vertical plays. This is important to keep in mind as we look at each ecosystem.

Microsoft, Google and Apple all think about ecosystems differently, which is why I choose to look at them separately.

The Microsoft Ecosystem
As I pointed out in last weeks column, I believe Microsoft thinks more like an operating system company than a software company. This is not always a bad thing and in this case, thinking in terms of enabling a platform is a good thing. What is important is how that platform enables an ecosystem. Microsoft has been relatively strong as it relates to desktops and notebooks. If you are not Apple and you need to ship an OS for a desktop or notebook, Microsoft is your best choice.

Where Microsoft has been weak with regards to personal computing is in the area of services. This is not to say they don’t or can not think like a services company. In fact XBOX Live is, I believe, the best service for gamers out there hands down.

Microsoft has been strong in enabling hardware and software for PCs but needs to strengthen that strategy as it relates to smartphone and tablets. Microsoft and Google both need to invest in helping those in their hardware and software ecosystem differentiate and make money.

In this new era of truly personal computing, being led by devices like smartphones, and now tablets to a degree, Microsoft is well behind Google.

The Google Ecosystem
Google has been fascinating to watch. I believe that Google, unlike many businesses, thinks first like a services company and then works backwards. What I mean is that while Apple and Microsoft think more from a hardware and or software viewpoint first, Google thinks first and foremost like a services company.

In this mindset, it becomes pretty clear that, unlike other companies in this industry, Google exists to make money for no one else except Google. They may say this is not true but their actions prove that it is. Google wants to extract value from all hardware, while using software (like Android) only as mechanism to connect to their services, which is how they make money.

For Google’s ecosystem to strengthen, they need to figure out how to work better with hardware manufactures in order to create a unified ecosystem AND invest in helping others make money. If they do not do this, their ecosystem becomes unsustainable and could someday be void of life.

The challenge that the horizontal platform strategy brings is that it makes it harder for hardware players in the ecosystem to differentiate. Both Google and Microsoft enable what I call the “sea of sameness.”

In a world where consumer preference and choice is prevalent, a lack of differentiation is the slow kiss of death.

The Apple Ecosystem
Apple on the other hand stands out clearly from the pack due to their vertical approach. By owning and controlling all the major parts of the ecosystem, the hardware, software and services, they are in the drivers seat when it comes to emphasizing value.

I stated the historical observation earlier of how value moves through the ecosystem cycle. I believe, because Apple is vertical, they can keep value in hardware longer–or perhaps indefinitely– where other hardware players in other ecosystems can not.

Unlike Google and Microsoft, Apple doesn’t enable a hardware ecosystem for anyone other than themselves. I view this as a strength, but I know many who view this as a weakness. When it comes to software, although they own and control the OS and a few “core apps,” they do a great job enabling the software community to add value to their ecosystem.

Apple is strong in hardware and software but like Microsoft they need to get better at cloud services. This is where the true stickiness of any ecosystem will lie.

Ultimately the biggest opportunity is to create an ecosystem that is simple and convenient to be a part of. This will drive product after product loyalty and keep consumers invested. And, if people eventually choose a product based on ecosystems, then any company dealing with a product needs to make sure they can deliver true consumer value throughout the entire solution if they want to keep their customers happy.

The key to building a stable ecosystem is to create value for everyone involved.

Apple iCloud Shortcomings Provide a Competitive Opportunity

Apple iCloud launched two months ago to huge fanfare and punditry. It’s no surprise given the huge future opportunity with the cloud. Also, it was a big deal for Apple given their past online endeavors had been so unsuccessful that even Steve Jobs issued out one of the few apologies Apple had ever made. In that case, it was about MobileMe. Two months in, Apple has done an admirable job, but it’s clear if they don’t plug some holes, competition has the ability to swoop and and deliver a much more user centric, comprehensive solution.

iCloud Problem #1: Lack of video sync
Unlike photos with Photostream, iCloud will not sync videos taken off of an iPhone and sync to a consumer’s iPad, PC, Mac, or Apple TV. So that last minute winning basketball score…. you are out of luck. Lose the video? Oops… With advanced and mainstreamers users already embracing video this is a huge hole that will be be filled by someone. Bandwidth isn’t an excuse because there’s certainly enough of that over WiFi at home or the business. This is a hole that Google could easily fill in that they get video via YouTube. And with Apple owning both ends of the pipeline, they could even develop a proprietary CODEC that shrinks and expands the files minimizing bandwidth even over WiFi. Microsoft certainly has the capability given they own the PC market and with Live Mesh could provide an solution that never touches an external server.

iCloud Problem #2: Fractured productivity pipeline
Unlike photos, iCloud requires significant user intervention to sync documents, presentations, and spreadsheets between iOS devices and PCs/Macs. If a user creates a document on an iPad and wants to pull it into Pages for Mac, the user is required to download from iCloud.com. After changes are made on the Mac, the user needs to drop it back into iCloud.com. Seems like syncing documents folder on the Mac and PC would have been a whole lot easier. Again, an opportunity for Google Docs and Office 365 from Microsoft.

iCloud Problem #3: Lack of on-line photos
Unlike Google Picasaweb and Yahoo Flickr, iCloud provides no way to go online and view, download, and share pictures from a web browser. This is a very basic feature that is surprising in its absence. Microsoft Live Mesh and Windows Live service can easily fill in this gap.

iCloud Problem #4: PDFs are books, not documents
For most consumers, PDFs are intended to be files intended to be uneditable documents. They are so pervasive that even global governments use them as standard document formats. How does iCloud treat them? As books, of course. In Apples war with Adobe they have crossed the line and have sacrificed the consumer in the process. This is easily addressed by Google and Microsoft.

Filling the Gap
Many companies can fill the gap opened by the lack of iCloud comprehensiveness, timing, and completeness. They fall into two categories; niche plays and comprehensiveness plays.

From a comprehensive standpoint, there are three options, Google, Microsoft and an OEM. Google and Microsoft solutions are straightforward, but the OEM play is a bit complex. Google and Microsoft can build cross platform smartphone, tablet and desktop apps that keep everything in sync. Google already has many desktop apps, with Picasa 3 already filling the comprehensive photo sync role to Picasa Web. Microsoft already has a comprehensive solution with LiveMesh and Office 365 but need to provide more robust smartphone and tablet integration. OEMs like HP, Sony and Dell could either build their own infrastructure or partner with companies like Box, Dropbox, or Sugarsync to fulfill that need. They could also partner with Microsoft and Google as well, but sacrifice some level of integration and control.

The niche players are in the market today, companies like Sugarsync, Box, Dropbox and even Evernote. Essentially, a consumer looking for a specific, non-integrated solution can look to these players today to provide cloud sync. While they aren’t always integrated into an end to end pipeline into the apps, they provide a solution today, and maybe even tomorrow who don’t want to get locked into a solution. Most sophisticated and experienced users will actually prefer this approach as they understand the complexity and see the downside to being locked into an app environment. Probably many reading this blog in fact.

Microsoft, Google, and Independents Fill the Gap
I believe Apple is rolling out online, integrated services as fast as it can, prioritizing what it believes consumers will want first. Services hasn’t been Apple’s core competency, as Ping and MobileMe highlight this. It’s on a slow pace which will let Microsoft and Google edge into a market leading position, regardless of Apple’s prowess in phones and tablets. Microsoft will leverage their ~95% share in PCs and Google will leverage their market share advantage in smartphones and search. The big question is, can Apple accelerate into an area rife with competition in an area which isn’t it’s core competency?

Gaming AMD’s 2012 Strategy

AMD intends to pursue “growth opportunities” in low-powered devices, emerging markets and Internet-based businesses.

There’s an awful lot of mis-guided analysis wafting about regarding AMD’s new strategic direction, which the company says it will make public in February. This piece is to help you (and me) sort through the facts and the opportunities. I last took a look at AMD’s strategies earlier this year, available here.

Starting With the Facts

  • AMD is a fabless semiconductor company since 2009. The company depends on GlobalFoundries and soon Taiwan Semiconductor to actually fabricate its chips;
  • In its latest quarter, AMD had net income of about $100 million on $1.7 billion in revenue. Subsequently, the company announced a restructuring that seeks to cut costs by $118 million in 2012, largely through a reduction in force of about ten percent;
  • AMD has about a 20% market share in the PC market, which Intel says is growing north of 20% this year, largely in emerging markets;
  • AMD’s products compete most successfully against rival Intel in the low- to mid-range PC categories, but 2011 PC processors have underwhelmed reviewers, especially in performance as compared to comparable Intel products;
  • AMD has less than a 10% market share in the server market of about 250,000 units, which grew 7.6% last quarter according to Gartner Group;
  • AMD’s graphics division competes with nVidia in the discrete graphics chip business, which is growing in profitable commercial applications like high-performance supercomputing and declining in the core PC business as Intel’s integrated graphics is now “good enough” for mainstream buyers;
  • AMD has no significant expertise in phone and tablet chip design, especially the multi-function “systems on a chip (SOCs)” that make up all of today’s hot sellers.

What Will AMD CEO Rory Read’s Strategy Be?

I have no insider information and no crystal ball. But my eyebrows were seriously raised this morning in perplexity to see several headlines such as “AMD to give up competing with Intel on X86“, which led to “AMD struggling to reinvent itself” in the hometown Mercury News. I will stipulate that AMD is indeed struggling to reinvent itself, as the public process has taken most of 2011. The board of directors itself seems unclear on direction. That said, here is my score card on reinvention opportunities in descending order of attractiveness:

  1. Servers —  For not much more work than a desktop high-end Bulldozer microprocessor, AMD makes Opteron 6100 server processors. Hundreds or thousands more revenue dollars per chip at correspondingly higher margins. AMD has a tiny market share, but keeps a foot in the door at the major server OEMs. The company has been late and underdelivered to its OEMs recently. But the problem is execution, not computer science.
  2. Desktop and Notebook PCs — AMD is in this market and the volumes are huge. AMD needs volume to amortize its R&D and fab preparation costs for each generation of products. Twenty percent of a 400 million chip 2011 market is 80 million units! While faster, more competitive chips would help gain market share from Intel, AMD has to execute profitably in the PC space to survive. I see no role for AMD that does not include PCs — unless we are talking about a much smaller, specialized AMD.
  3. Graphics Processors (GPUs) — ATI products are neck-and-neck with nVidia in the discrete graphics card space. But nVidia has done a great job of late creating a high-performance computing market that consumes tens of thousands of commercial-grade (e.g., high price) graphics cards. Intel is about to jump into the HPC space with Knight’s Corner, a many-X86-core chip. Meanwhile, AMD needs the graphics talent onboard to drive innovation in its Fusion processors that marry a processor and graphics on one chip. So, I don’t see an AMD without a graphics component, but neither do I see huge profit pools either.
  4. Getting Out of the X86 Business — If you’re reading along and thinking you might short AMD stock, this is the reason not to: the only legally sanctioned software-compatible competition to X86 inventor Intel. If AMD decides to get out of making X86 chips, it better have a sound strategy in mind and the ability to execute. But be assured that the investment bankers and hedge funds would be flailing elbows to buy the piece of AMD that allows them to mint, er, process X86 chips. So, I describe this option as “sell off the family jewels”, and am not enthralled with the prospects for success in using those funds to generate $6.8 billion in profitable revenue or better to replace today’s X86 business.
  5. Entering the ARM Smartphone and Tablet Market— A sure path to Chapter 11. Remember, AMD no longer makes the chips it designs, so it lacks any fab margin to use elsewhere in the business. It starts against well-experienced ARM processor designers including Apple, Qualcomm, Samsung, and TI … and even nVidia. Most ARM licensees take an off-the-shelf design from ARM that is tweaked and married to input-output to create an SOC design, that then competes for space at one of the handful of global fab companies. AMD has absolutely no special sauce to win in the ARM SOC kitchen.To win, AMD would have to execute flawlessly in its maiden start (see execution problems above), gain credibility, nail down 100+ design wins for its second generation, and outrace the largest and most experienced companies in the digital consumer products arena. Oh, and don’t forget volume, profitability, and especially cash flow. It can’t be done. Or if it can be done, the risks are at heart-attack levels.

“AMD intends to pursue “growth opportunities” in low-powered devices, emerging markets and Internet-based businesses.” One way to read that ambiguous sentence by AMD is a strategy that includes:

  • Tablets and netbooks running X86 Windows 8;
  • Emerging geographic markets, chasing Intel for the next billion Internet users in places like Brazil, China, and even Africa. Here, AMD’s traditional value play resonates;
  • Internet-based businesses such as lots of profitable servers in the cloud. Tier 4 datacenters for Amazon, Apple, Facebook, Google, and Microsoft are a small but off-the-charts growing market.

So, let’s get together in February and see how the strategy chips fall. Or post a comment on your game plan for AMD.

The Real Reason Google Released an iOS Gmail App

Last week, Google re-released their much maligned iOS Gmail application. It includes a few features over and above the photostandard iOS email app, but nothing that is really exciting the wide swath of users if “number of stars” is any indicator. To boot, many have argued that the Gmail app actually removes features from standard iOS email platform. So the question is why did Google really launch Gmail application for iOS?  There’s a lot here beneath the surface.

Gmail App for iOS

Gmail for iOS adds the following functionality over the standard iOS email client:

  • Ability to see one entire thread on one screen
  • “Important” and “everything” distinctions similar to the Gmail.com website
  • Report SPAM
  • Full message text search
  • Labels
  • Visual addressing.  See the addressee’s avatar.

Net-net this brings it more in-line with the full desktop client.  One could say it detracts from the experience:

  • Tiny, unreadable text size depending on email source
  • Lose fast access to other email clients like Yahoo or Exchange
  • Slow initialization unless already opened

 

It’s About a Entry Point to Other Google Services

Sure, Google will improve and tweek the experience to improve the app, but why did they develop it in the first place?  First, imageit’s about Google services and getting user to them from an iOS environment……. and advertisements. Think about this… what are the four most likely places Google could derive revenue from.  And when I ask that, I mean the first entry into the revenue stream or the starting point:

  • Search
  • Maps
  • Email
  • Social media

 

Once a user reaches this entry point, then Google can “cross-sell” them into:

  • Shopping
  • Books
  • Videos
  • Music

 

It’s About Micro-Segment Profile Development

Most importantly, mail provides one of the riches data sets from which to build ad profiles.  Google indexes every email you send and receive and from it builds micro-profiles about you. The better the profile, the better the ad targeting, the IMG_0899higher the CPM and CPC.  All of this means more money for Google.  If users get lured away from Gmail, Google loses this.

Wrestling For Inside Control

Google is already the leader in search and maps and has the preferred placement on iOS, but Gmail is just one of a line listing of mail options. This becomes a problem for Google in that now Apple and iOS become the control point for users. Furthermore, what happens if users get more comfortable with iOS mail and even worse, iCloud email? None of these is good for Google and Google will keep wrestling with Apple until they can get the inside edge.

The iOS and Android Mobile Web Disparity

There are two interesting data points released that I think is worth asking some questions. The first comes from Net Applications and it plots out mobile web browsing OS share by platform. The full chart is below.

What strikes me in this chart is the clearly dominant iOS platform when it comes to mobile web browsing over all platforms. It needs to be pointed out that Net Applications is tracking iPhone, iPad, and iPod touch but also all Android phones and tablets. We know there are now well more than 250 million iOS devices in the market so there is a clear lead in volume over Android. However, at the same time we know that Android is growing explosively fast. Even with the Android explosive growth it seems that Android customers are still not nearly as heavy web browsers as iOS consumers.

One other point on the Net Applications chart is that since it does contain iPad, and we know iPad is rapidly climbing the charts with web browsing share on its own, then we need to also look at a similar chart without iPad. That is exactly what StatCounter provides us with.

In the chart below we see a picture of web browsing OS share with only hand-held devices, so not including tablets.

This shows a very close picture of iOS to Android hand-held only browser share but still showing iOS in the lead. Still interesting that iPhone and iPod touch account for more web browsing than all Android smartphones in the market. So again it appears that even with hand-held devices iOS consumers browse the web more than Android consumers.

I have a few observations.

First iOS is a superior web browsing experience. Having used both platforms quite a bit I can attest to this fact that the web browsing experience on iOS is better than on Android.

Android consumers are using more apps than browsing the web. This has come back true from many of our Android consumer interviews. They use more of the native apps for search, Facebook, Twitter, etc and conveyed to us that general web browsing is less of a use case for them. This again will vary between power user and average consumer, but still true in a general sense.

iPad is poised to become one of the most dominant web browsing platforms. I have not been shy in proclaiming how touch computing and the tablet form factor is the computer for the future. I’ve also stated that in my opinion web browsing is better on a tablet than on a PC. When we look at the Net Applications chart, which includes iPad, we see how wide the gap with iOS is when the iPad is counted in mobile web browsing. This is an incredibly significant trend and one that should concern Google.

Overall all Google still gets a serious chunk of revenue from iOS devices when it comes to mobile search. The fact that in iOS 5 consumer can change their search engine preference should concern Google greatly.

Every company in mobile search needs to understand this data. It demonstrates how tablets are not only more than a fad but how important they are to the mobile web of the future.

[Other Good Articles VIA BGR, Fortune, SlashGear,GigaOM]

Why Google and Microsoft Hate Siri

As I watched Andy Rubin’s interview at the WSJ D Asia conference I became highly intrigued by the comments he made about Apple’s Siri. Rubin told Walt Mossberg “ I don’t believe your phone should be an assistant…Your phone is a tool for communicating,” he said, “You shouldn’t be communicating with the phone; you should be communicating with somebody on the other side of the phone.” (

Here is a link to the interview if you haven’t seen it.

And then Microsoft’s Andy Lees, when questioned about Siri said it “isn’t super useful.” At the same time, he noted that Windows Phone 7 has a degree of voice interactivity in the way it connects to Bing, and thus harnesses “the full power of the internet, rather than a certain subset.”

What are these two guys smoking? They both seem to miss the fact that Apple has just introduced voice as a major user interface and that its use of voice coupled with AI on a consumer product like the iPhone is going to change the way consumers think about man-machine interfaces in the future. I wrote about its impact on future UI’s last week and believe that it is just the start of something big.

I have two theories about their response. One is based on jealously and one that is future driven, based on what Siri really will become very soon and its ultimate threat to their businesses. The first has to do with the fact that both companies have had major voice UI technology in the works in their labs for a long time. In the case of Microsoft I was first shown some of their voice research back in 1992. In Google’s case people in the know have told me that they have had a similar project in development for over 7 years. And in both cases they are way–way behind Apple–especially in Siri’s AI capabilities and speech comprehension technology.

Interestingly, for even Apple it has taken a long time to get their voice technology working correctly. In fact, in the early 1990’s, I spent some time with Kaifu Li when he was at Apple working on a speech and voice recognition technology called Plain Talk. At the time, he was considered one of the major minds on this subject and when, after a short stint at Silicon Graphics, he joined Microsoft, one of his key projects was working on speech technology for them. Of course, if you know about Kaifu Li, you know that he left Microsoft to go to Google and was the subject of a major lawsuit between Microsoft and Google because Microsoft thought he would disclose to Google too much of what Microsoft was doing when he joined Google.

Microsoft and Google, especially since they had the mind of Kaifu Li working on various projects while he was at these companies, cannot be too pleased that Apple was the one to actually harness voice and speech comprehension ahead of them since both have been working on similar technologies for quite some time. You can bet that if they were the one’s announcing a breakthrough voice technology they would be touting it as loud as possible. Instead they are downplaying it and to be honest, making real fools of themselves and their companies in the process.

But the real reason these two companies hate Siri is because of what it will become in the very near future. In case you haven’t noticed it yet, Siri’s voice technology is actually a front to some major databases, such as Yelp, Wolfram Alpha and Siri’s own very broad database. But what it is really doing is serving as the entry point for searching these databases. So, I can ask Siri to find me the closest pizza joint and it quickly links me to Yelp, then to Google maps. On the surface this might look good for Google and Yelp since it ties them to these third-party sites that get the advertising revenue from this search. But what if Apple owned their own restaurant recommendation service and mapping system? They could divert all of these ad revenues to themselves. Here is an obvious prediction then if that is the case. How long do you think it is before Apple buys Yelp or Open Table and MapQuest or a similar available mapping service?

How about searching for autos? Ask Siri where the closest BMW dealers are. It comes back and shows you the three or four BMW dealers within a 25 mile radius on a Google Map. But what if it could also tie you to Edmund’s database and instantly give you ratings of their cars, and dealers running specials? Or perhaps you are looking for an apartment in Hoboken? Ask Siri about available apartments in Hoboken and someday it could perhaps link you to Apartment Finder and while they might not need to own this database, Apartment finder would be Siri’s preferred first site to “search” for apartments and Apple would get a share in ad revenue from these searches.

Indeed, it is pretty clear to me that Apple has just scratched the surface of the role Siri will play for them in driving future revenue. At the moment, we are enamored with its ability to enhance the man-machine interface. But that is just the start. Siri is actually on track to become the first point of entrance to “search” engines of all types tied to major databases throughout the world. And it will become the gatekeeper to all types of searches and in the end control what search engine it goes to for its answers.

For this to work for Apple, they need to start acquiring or at least developing tighter revenue related partnerships with existing databases for all types of products and services. And then make Google or Bing the search engine of last resort for Siri to use if can’t find it in its own or its partner’s databases at Apple’s disposal. Oh yeah, and tie all of these searches to their own ad engine and drive as much of Siri’s “search” to one’s they have a revenue share deal with or own.

Yes, Siri is an important product for enhancing our user interface with the iPhone. But Siri is in its infancy. When it grows up, it will be the front end to all types of searches conducted on iPhones, iPads, Mac’s and even Apple TV. And, if I were Google or Microsoft, perhaps I too would be playing down the impact of Siri since they know full well that it is not just a threat to their product platforms, but to their core businesses of search as well. In fact, they should be quaking in their boots since Apple is taking aim at their cash cow search businesses with their technology and could very well impact their fortunes dramatically in the future.

For Apple’s investors, the call for them to start paying dividends on their cash hoard is too short-sighted. Instead, they should be encouraging Apple to start buying up as many databases and services they can and begin the process of entrenching Siri’s role as the first line of offense when searching for a product and service and get the search ad revenue from this for themselves. I believe that if they do this, they could probably add another $3-$5 billion in quarterly revenue to their already healthy business model within three years, as search becomes another profit center for Apple.

So, don’t think of Siri as just a voice UI. Rather, think of it as the gatekeeper to natural language searching of diverse databases and search engines that Apple will link to an ad model that I believe will eventually make Apple the third major search company in the world someday.

Android and iOS: Two Very Different Philosophies

In this column, I in no way intend to say one of these platforms is superior to the other. I simply want to explore how they both represent completely different approaches to software and user experiences.

We have to start with a fundamental agreement that we live in a free world and support a free market. In this world consumer choice is the most powerful market driver. Competition brings choice and choice is very good.

Therefore, consumers are free to choose whatever products in hardware, software, and services they so desire. Companies compete in an attempt to create features that appeal to consumer segments, interests, and preferences. Certain features in hardware, software, and services will appeal differently to different people. There is nothing wrong with that, as I said it is very good.

The Android Philosophy
At this point we must point out that Google is a services company. It is for this reason that we should expect a different hardware and software philosophy. As I continually point out in our analysis of Android for clients, Google is a services company and all hardware and software is to Google is simply a front-end to access their services.

Android was created for the primary reason to help consumers access Google’s services on non-PC devices. Hardware for Google is just the physical object needed to run the software that is designed to access Google’s services.

Google starts with a services mindset and philosophy then works backwards on how best to make those services as broadly accessible as possible.

Google is also an engineering company and engineering companies historically struggle with making innovations accessible to tech lay-people.

With all of that context, what Google has done with Android is impressive. Those who get excited about technology for technology sake get very excited about Android. Google and Android engineers regularly show some very visionary and perhaps “ahead-of-their-time-technologies.”

This is not to say that tech lay-people can’t use Android. Many do, however, I would argue that those who have a tendency to tinker, customize, and tweak their hardware themselves, get the most excited about Android.

Android’s challenge is to take many of these forward thinking things like, face recognition, fully customizable UI, flexible widgets, Android Beam (features found in Ice Cream Sandwich), etc, easier and compelling for every day people to use.

The iOS Philosophy
Apple on the other hand is a software company, who also cares deeply about making their own hardware. Apple is on the cusp of adding robust services to their ecosystem but unlike Google they approach everything as a hardware and software company not a services company. Services to Apple are a means where to Google services is the ends.

To Apple, making innovations accessible to the masses is the underlying theme of all their hardware, software and now services philosophies. This is why they may not always be first with certain features but it is clear that if they don’t offer something the market wants out of the gate they will certainly add it and make it simple to use.

Apple’s target with their products is those to whom technology is mostly foreign. Meaning not a core and central part of their every day lives. This is why when they release new products they only focus on certain features. The features they focus on solve tangible and every day needs and strike emotional chords with consumers.

For example, when they launched the iPhone 4, they could have touted any number of features, instead they just demoed FaceTime and that was enough. It spoke for itself and showed consumers the value of the latest feature.

Apple’s goal is to make technologists out of people who never cared about technology before. Their desire is to provide these consumers with sophisticated solutions that are extremely simple to use. I can’t stress how difficult this is but it is something Apple does extremely well.

As I stated in the beginning, these two approaches represent just that–two different approaches. To each his own is the critical point I want to make.

I am in the privileged position to get to provide opinion and analysis on all the platforms on the market. To some consumers where I influence buying cycles, like friends and family, I am comfortable recommending Android devices; to others, I recommend iOS.

Where this really gets interesting is with the generations who grow up with technology, some call them “Digital Natives.” I watch my kids, for instance, who are perfectly comfortable jumping back and forth between my iOS and my Android devices.

This next generation will grow up incredibly technical and tech savvy. Because of that, their demands and expectation of next generation personal computers will far exceed anything we can imagine today.

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The 30 Percent Solution

 

Blogs are unforgiving. The entire world can see that I expected the highlight of Apple’s iPhone 5 introduction last week to be a kumbaya love fest between Apple and Facebook. Facebook is number one in mobile social media apps. Apple is number one in smartphones and tablets. Yet even after 18 months, there was no official Facebook app for the iPad.

So, other than the fact that there was no iPhone 5, and that no one at the Apple event even mentioned Facebook, let alone invited Mark Zuckerberg up on stage, my blog post was … well, pretty much in English.

But today, Facebook finally announced its Facebook app for iPhone and iPad.

According to the blogosphere, the hangup was caused by “negotiations” over who would be allowed to make money from apps sold by developers through the Facebook platform on the iPad. (You know, the developers who sell apps like Angry Birds, Hipstamatic, FarmVille,  weather, etc.)

Apple’s standard deal is: We take 30 percent, bitch.

Thirty percent on all paid apps, on all in-app purchases, and on subscriptions.

(Google has a variant on this revenue model for its own developer ecosystem: We take 30 percent but we’re not evil, bitch.)

Facebook sees that Apple and Google are rolling in clover, so it tells Apple it wants to create a separate revenue platform for mobile apps called Facebook Credits, and it wants to build it into Facebook apps that run on the iPhone and the iPad, which would bypass the Apple 30 Percent Bitch system and send that money directly to Facebook.  Negotiations must have gone something like this:

Apple: ”You know what we think of Facebook? We own the operating system and you don’t, and just to make that point absolutely clear we’re choosing Twitter over Facebook as the social layer of the iOS 5 operating system. We have more than 200 million registered users on the iTunes store and we have their credit card numbers, and we make buying apps completely smooth and painless and frictionless, and Facebook doesn’t.”

Facebook: “Oh yeah? Well, in that case, we’ll develop our app for HP’s new TouchPad. How do you like them apples?”

Apple: [30-day pause] “And how did that work out for you?”

Facebook: “Never mind. But we still have the most popular social platform in the universe, with 750 million users, and the only third-party Facebook apps you’ve got now on the iPhone and iPad basically suck. Even so, more than 250 million people use Facebook on a mobile device today.”

Someday I'll be remembered for this.

Apple: “True, but don’t forget, we have ‘Ping.’”

So it appears they have reached a compromise: Apple gets 30 percent, bitch, on all Facebook for iPhone and Facebook for iPad apps developed for the iOS operating system. Developers who want to create apps for Facebook on the Web, in HTML5, must use Facebook’s virtual currency, Credits.

Folks, what we have here are the latest salvos of a global war to create a new type of currency for online transactions, one that will rival cash and credit cards. Microsoft wants to be a player. PayPal (a division of eBay) wants to be a player. All of the mobile phone companies want to be players. When I walk down University Avenue in Palo Alto to get a cup of coffee, I pass what seems like 50 online payment startups that want to be players. The market for mobile apps and virtual goods sold through social networks and app stores is huge, and hundreds of millions of people are already opening their virtual wallets.

The Apple-Google-Facebook mobile app revenue models appears to be evolving along the Mastercard, Visa, American Express models. Developers who want to sell apps or virtual goods online can choose to whom they want to pay, except that the bites are larger by an order of magnitude. Apple wants 30 percent, Google wants 30 percent, and now Facebook wants 30 percent.

Aside: Will you trust Facebook Credits as your medium for buying things online? Google Wallet? A couple of months ago the marketing and advertising firm Ogilvy & Mather commissioned a survey on which brands consumers would trust with their money. It looked like this:

 


 

Anyway, I’m so glad that Apple and Facebook have decided, at last, to “friend” one another. I wonder how long they’ll stay friends?

I think this is going to be a very interesting battleground. But hey, I’ve been wrong before.

 

Does Google Need a New Strategy with Android?

 
I believe Google is coming to a cross roads with Android. The reality is that we live in a software world. Hardware design is nice but software is what makes our devices useful.

Steve Wildstrom wrote an article asking the question about whether Android was a mistake for Google. I don’t believe Android is or was a mistake for Google, however I do believe they need a more hardware centric strategy.

Several things have happened and are continuing to happen around Android that leads me to believe a better strategy can be employed.

The first is that companies, Amazon namely, have taken what Google created as a base OS in Android and fully customized it stripping all benefit to Google.

Originally Google encouraged this idea of customization of Android for vendor differentiation. However things changed as Android began to become more popular and enginners realized scaling a truly open platform would be difficult.

At the turning point for Android, which I believe was 2.2 or Froyo, Google began to attempt to control Android more tightly thus making it harder for hardware partners to customize Android and differentiate their products. Google began to promote and encourage a non-customized version of Android to their hardware partners. Their Nexus line of devices are the evidence of what Google wants to see happen with Android hardware. Namely that the hardware is good but the software all looks the same.

Those who make Android hardware whether they be tablets or smart phones are longing for Google to help them differentiate their hardware. Because of the many restrictions Google is putting on Android devices get lost in the sea of sameness.

Because of that vendors like Amazon, or entire countries like China, have taken the basic Android code and made it their own completely separate from Google’s version of Android.

This is important because Google created Android as a software front end to their services. When a company takes the basic code but strips it from using Google’s services, the custom implemenation loses all benefit to Google.

The other market development that could impact Android is vendors seeking their own software solutions. An example of this is what Intel and Samsung are backing with Tizen. I am skeptical of Tizen however the fact that a key Android partner, like Samsung, is putting resources into a solution other than Android is not a good sign.

So What Should Google Do?
What Google needs to do, and I think they need some serious help to do this, is to figure out how they can work with their hardware partners to differentiate their Android solutions but still utilize Google services.

Now in the case of Amazon even if Google had an Android differentiation startegy I don’t think Amazon would have used it. Amazon is also a services company.

The rest of the market however would benefit from a Android strategy that allowed for differentiation but also still tightly integrated Google’s services. I don’t believe we will see this kind of solution in Ice Cream Sandwich, where Google allows for heavy customization. This is a real issue that Google needs to address with coming versions.

I’ve wrote extensively about product differentation and I will continue to but what we have right now with Android is the sea of sameness. That needs to change if companies want to stay in business.

This same problem exists for Microsoft but that is for another article.

Recommended Reading:
Dear Industry: Dare to Differentiate

Applesauce

 

The Wall Street Journal: “More fizzle than pop.”

The Los Angeles Times: “An evolution, not a revolution.”

The Washington Post: “It wasn’t exactly blowing my mind.”

FoxNews.com: “Lunch-bag letdown.”

Business Insider: “A huge disappointment, or just a regular sized disappointment?”

Analyst Roger Kay: “Underwhelming.”

 

People, please. There’s nothing wrong with evolution. Without evolution, we would still be apes. (Insert your own snide comment here.) Apple obviously thinks the new iPhone 4S is evolutionary. Otherwise Apple would have given it a new name, like, say, Shebang, or Razzmatazz, or maybe even Five.

Tesla
Lotus

But Apple’s new iPhone 4S is the same old iPhone 4 in the same way that a new Tesla Roadster is the same old Lotus Elise. Physically, they’re both sleek and sexy. Under the hood, though, the new model is revolutionary.

Not because of the dual-core processor. Other smartphones already have dual-core chips. Dual-band world phone? Faster upload and download speeds? Fancy camera and high-def video? Others have been there, done that.

No, the iPhone 4S is revolutionary because of Apple’s software, specifically iOS 5, iCloud, and Siri.

Disclaimer: I have not reviewed the iPhone 4S and have no idea if it works as advertised beyond the boundaries of Building 4 on Apple’s Cupertino campus. Apple stresses that the Siri personal assistant software is still in beta mode, even now, a week before the iPhone 4S goes on sale. But if the software does work in the real world, it’s a change as profound as replacing gasoline with electricity.

What is the future of the personal computer interface? Voice and gestures, not keyboards and mice.

Apple patented the capacitive multi-touch interface it introduced with the original iPhone. It included a gyroscope in the iPhone 4, transforming gameplay but also opening the way for new gesture controls. And now, with Siri (and backed by the new A5 and digital signal processors), Apple has added natural language voice control to the computer in your pocket.

Hello, Siri?

Remember the scene in one of the Star Trek movies where a bemused Scotty tries to control a 20th century computer by talking into a mouse? Seriously, does anyone doubt that our grandchildren will operate computers by voice?

Yes, Android phones introduced voice commands a while back. But from the day when Steve Jobs first walked through Xerox’s Palo Alto Research Center (PARC), Apple’s true genius has been to seize nascent technologies and make them so simple and elegant that they catch fire. Did Apple invent the MP3 player? No. Did Apple invent the mobile phone? No. Did it invent the portable game system? Negative. Did it invent the tablet computer? Nope. The music store? Uh-uh.

So, what are the best-selling MP3 players and game players and mobile phones and tablets and music stores in the world today? (SPOILER ALERT: iPod, iPod Touch, iPhone, iPad, iTunes Store.)

Did Apple invent the television? Wait, that’s likely to be the subject of a future column.

In my view, we’ve just seen a revolutionary shift from mobile phones to mobile personal assistants.

What’s on my calendar today? What’s the weather? What’s traffic like? How many calories in this bagel? Remind me to stop to buy coffee on the way home. Read me my mail. Send a message to Ben and Tim telling them I’ll be late to the office. Play this morning’s National Public Radio podcast. What’s the stock market doing now? Call my wife. Let me know when Steve gets to the office. Schedule a lunch with Dave and Kelley for tomorrow. When is Laura’s birthday?

The Siri software “understands” conversational language. It “understands” context. I am unaware of any other voice command system on any other smartphone that reaches this level of competence.

Add this to the intelligent ecosystem of iOS 5 and iCloud – comprising hundreds of new features, all of which make their debuts with the iPhone 4S – and it’s difficult to understand the griping and grousing that followed Apple’s announcement yesterday.

Was it also disappointing that Apple dropped the price of the original 8GB iPhone 4 to $99 (with the usual two-year mobile carrier contract)? Or that it dropped the price of the iPhone 3GS to free? Or that it priced the iPhone 4S at $199 and up? Those were evolutionary changes, too, but if I am Nokia, and my cheapest dumb phone is now the same price as Apple cheapest smartphone, my business plan just got sent back to the drawing board. Ditto Google-Motorola, now that the price bar for state-of-the-art smartphones has been set at $199.

The iPhone 4S is still the thinnest and snazziest smartphone in the world. Okay, so it doesn’t have a four-inch screen, and it’s not shaped like a tear-drop. (Darn, I was hoping I’d have to go buy all-new iPhone accessories.) It does not have built-in near-field radio communications, which prevents me from using it to pay my toll when I board the subway in Seoul, since that’s about the only place I’ve seen that accepts NFC payments. Has anyone seen NFC payment terminals here in the States?

And speaking of NFC, is your mobile phone carrier so trustworthy and transparent that you would trust it handling your daily purchases? Would you trust AT&T as your bank?

Which leaves me to conclude that the biggest cause for pundit, analyst and fanboy disappointment with the new phone is that your friends and co-workers won’t be able to tell that you have the new iPhone 4S just by looking at it, obviating its value as a status symbol. Here’s an idea for a cheap upgrade: Paint a big number “5” on your iPhone case, and they’ll never know the difference.

10-4, Good Buddies

It’s official: Apple will unveil the iPhone 5 on Oct. 4.

But it is widely expected that they’ll make an announcement for the iPad, too:

Last week, Facebook CEO Mark Zuckerberg said Facebook would probably introduce an iPad app at some point. I suspect “at some point” means Oct. 4. And the Facebook iPhone app, which kinda sucks, deserves a refresh at the same time.

But wait: Aren’t Apple and Facebook wary of each other? Apple tried to launch its own social networking system last year. Remember Ping? And Apple is well aware that Facebook will soon have ONE BILLION USERS who don’t really care if they access Facebook on an iPhone, an iPad … or an Android phone, an Amazon tablet, an HP TouchPad (er, nevermind), a toaster, an Xbox, or an Etch-a-Sketch.

Facebook currently has 800 million regular users, and 350 million of them tap into Facebook on a mobile device, even though the mobile Facebook apps kinda suck.

Yes, Apple and Facebook are wary of one another. But they share a common enemy:

Oh, hi, Larry.

And, as the ancients so wisely noted, “The enemy of my enemy is my friend.”

Mobile is the future; Facebook lacks a strong mobile platform, which Apple can provide.

Social is the future; Apple lacks a strong social platform, which Facebook can provide.

Google is the enemy; Android competes against Apple’s iOS and Google just bought a mobile phone maker (Motorola Mobility for $12.5 billion), and Google+ (the fastest-growing social network in history) competes against Facebook, and everywhere Apple and Facebook want to go, Google is there waiting for them, licking its chops.

So, I expect Facebook to “friend” Apple, and vice versa, at next Tuesday’s events. And that, to me, is far more interesting than the incremental improvements we expect to see in the iPhone 5.

Intel and Google – Who Needs Who?

Android is very popular and has made great inroads in the market in smart phones (with more than 50% share) and is beginning to pick up traction in tablets as well with a plethora of new devices due out shortly. But Android itself has not always been that good a performer, and some of the SW choices Google has made while developing the various versions have been troublesome.

It is clear Android can use some assistance in optimizing the code and user experience (one of the primary reasons Google is buying Motorola is for its engineering talent that has had a major positive impact on the design and tuning of Android). But Google needs assistance in improving future versions of Android, and has a broader vision for Android than today’s phones and tablets.

Although not well understood, Intel is one of the largest SW companies in the world (they have many thousands of SW engineers). It has a unique ability to make SW and particularly OSes run extremely well and have been doing so for many years, and not just with Windows. It is a leading provider of development and compiler technology. While Intel won’t necessarily help Android run better on ARM, it can certainly make Android run great on the Intel architecture. It is already well down this path with the Android code porting and optimization work it’s been engaged in for some time.

But Google has greater ambitions for Android than powering current mobile devices. Google ultimately wants to be a leading OS provider across the board and on many form factors, including on the x86 platform powering PC and PC-like devices, and competing with Microsoft and Apple. This is an extension of Google’s “service in the cloud” strategy with clients powered by Android and Chrome and productivity apps being “optimized” for its own environment.

So the relationship between Google and Intel is key to both their long term strategies. It’s a win-win relationship if done right. It’s quite conceivable that by the time Intel is through optimizing Android code, it will run substantially better on its chips than on ARM. But any help Intel provides Google for Android reliability and performance optimization on x86 will most likely also help it running on ARM since the efforts will be repurposed, and this ultimately helps Android on ARM as well.

The bottom line is both companies actually have a great deal to benefit from a close relationship. Intel gets to show of its upcoming devices for mobile form factors running a highly optimized (for its chips) version of Android. And Google gets a path to higher end systems and optimized code to access its services. And users get choice and a more compelling experience. So there really are no “junior partners” in this relationship. Both have much to gain.

How Google Can Learn From Microsoft

There has been some interesting commentary around how different the approach between Microsoft and Apple is as it relates to their developer conferences.

It is certainly true that these two companies approach them differently but as Steve Wildstrom points out in his article on why Microsoft’s approach is more open than Apple’s, it is because of the more complex ecosystem Microsoft has.

Microsoft has many vendors, who build a wide variety of product configurations based on their software. Because of that it is very important that Microsoft be open and clear with all in their value chain so that the appropriate plans can be made.

With that in mind and after reading Steve’s article I can’t help but think about how very different Microsoft’s developer and partner strategy is from Google’s.

With Microsoft they are out there talking to OEM and ODM partners early, actually working with them to make better products and tune their systems to work with Windows 8. And oh by the way they are doing this and have been doing this well over a year in advance of their product.

Now Microsoft and Google have almost identical partner ecosystems. They both rely on hardware companies to bring their software to market. Yet Google does not talk to their partner ecosystem until much later in their development. Unless of course you are one of the chosen few to go live with the latest Google release you are almost kept entirely in the dark.

That may be entirely fine for Google but that puts your hardware partners in very difficult positions because they plan their hardware and make design plans with the ODM’s at a minimum of 8 month’s out.

I can’t tell you how often I hear from OEM and ODM vendors who express their frustration with Google on how they work with their hardware “partners” around Android.

Because of this and because Microsoft takes a much more partner centric strategy with their software, I am hearing a great deal of excitement from around the industry for this next release of Windows. It appears that the vast majority of those who make PC’s and tablets are going to rally around Microsoft for this next release.

That of course does not ensure its success, my only point is that by working with partners early in the cycle it gives them a more confident feeling and approach to supporting the Microsoft ecosystem.

The level of secrecy that Google employs around Android literally makes zero sense. It would be one thing if Android was light years ahead of anything on the market in terms of an OS but the reality is it is not. I’m sure we can debate this all day but I see no value in Google keeping hardware partners in the dark as they do, and all it does is rub key partners the wrong way.

Google should learn from Microsoft on how to take a true partner centric approach to their development of Android and treat all who desire to ship Android as partners and not keep them in the dark until the last possible minute.

Google’s Purchase of Zagat Proves They Are A Content Company

As a serious foodie and a fan of Zagat’s Restaurant guides, I was rather intrigued by the fact that Google has decided to buy this popular product. Tim and Nina Zagat have worked tirelessly for decades to create what has become one of the best restaurant guides available. And to us foodies, they are rock stars.

Now, Google has bought them to presumably serve as the cornerstone of their local services and almost overnight they have become a serious competitor to the likes of Groupon, Yelp and Open Table in the local markets for offering specials for local dining.

But this move is important for another reason. For a long time, Google has denied that they had any interest in being a content provider. But this purchase suggests just the opposite. Sure, Zagat can be used as a vehicle for offering deals but Zagat content and the legion of personal restaurant reviewers becomes a powerful model for Google to add even more related content and tie it to their search engine and localized social services in the future.

In fact, it most likely will serve as a model for what else they do in content. What is interesting about the Zagat guides is that they, in a sense, were one of the first real social networking products. They started out only in print, but recently moved much of their guide online. They tapped into the interests of a particular crowd-people who wanted to review their meals and the eating experience and then allowed them to rate them using a Zagat dedicated rating system.

This same idea can be used anywhere there are people of like minds who want to connect. This can be applied to broad areas of interest such as sports, news and finance, but that may not be where they go with this. Instead, as the Zagat purchase may suggest, their content play may be a more focused vertical one for other areas of like-minded individuals, such as those with hobbies, specific things to sell around these hobbies and any other interest group where content and commerce can be applied to their search engine and a local scene.

While Google may somehow spin this to say this is not a content acquisition and that they are still not a content company, I beg to differ with them. To me this signals a strong interest in finding ways to add content perhaps in not conventional ways to their product mix and use “content” of various sorts to bring more people into their various Google properties.

Google-

 

Does anybody use Google+ any more? That seems to be the question floating around these days.

The Goog, the Bad, and the Ugly

The Google+ project made its debut two months ago and by the end of its first month had a user base of 25 million worldwide, becoming the fastest-growing social media network in the admittedly short history of social media networks, according to the digital business analytics firm comScore. Almost immediately afterward, Experian Hitwise, an online consumer behavior and marketing consultancy, began reporting that Google+’s rate of growth was slowing, and that the average amount of time Google+ users spent on the site was declining. Then the otherwise respected website GigaOm trumpeted the dubious results of a “voluntary sample of more than 10 million Google+ users” that purported to find “that a whopping 83 percent of Google+ users are currently classed as inactive.”

People are asking if Google’s flagship social media service is destined to follow the trajectory of Google Buzz and Google Wave. People are wondering if social media fatigue is a factor. For me, it’s privacy fatigue as much as anything.

The Sage

But back to the question: Does anybody still use Google+? As often is the case, I find myself in total agreement with Yogi Berra: “Nobody goes there any more; it’s too crowded.” Millions of people use Google+. Millions more are waiting to get in. But I don’t go there anymore.

My enthusiasm for Google+ was never great to begin with, and it diminished after Eric Schmidt, Google’s chairman, explained that Google+ is really an Internet identity service with social media elements.

Schmidt, according to a transcript of a Q&A session at the Edinburgh International TV Festival, said that Google+ is “an identity service with a link structure around your friends.” In other words, it’s a product that helps Google sell ads more effectively by gathering information about its users. To that end, Google+ does not allow anonymity. It has a “real names” policy and requires users to provide traceable personal information. “It’s central for Google to have such a service,” Schmidt said.

We'll see you ... later

Asked how Google can justify requiring real names if doing so puts some users at risk, especially in unstable political climates, Schmidt said, “Well, the first comment is that Google+ is completely optional. In fact, many, many people want to get in. If you don’t want to use it, you don’t have to.”

By its own admission, Google developed Google+ as a more effective way to gather personal information from users and their friends that Google can then use to target advertisements more profitably.

Here’s what you signed when you signed up for Google+:

“By submitting, posting or displaying the content you give Google a perpetual, irrevocable, worldwide, royalty-free, and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through, the Services.”

“You agree that this license includes a right for Google to make such Content available to other companies, organizations or individuals with whom Google has relationships for the provision of syndicated services, and to use such Content in connection with the provision of those services.”

I’m taking Eric Schmidt’s advice: I don’t have to use it.

How about you? Has Google+ become an important part of your social life online?

Google+Moto: “Like a Python That Swallowed a Minivan”

Michael Mace, who knows more about mobile computing than just about anyone around, is deeply skeptical about Google’s purchase of Motorola Mobility. “Either Google’s worldview will dominate and ruin Motorola, or worse yet the Motorola worldview will infect Google,” he writes in an insightful post on his MobileOpportunity blog. “Google with Motorola inside it is like a python that swallowed a minivan.”

Mace, now CEO of Cera Technologies, knows whereof he speaks, having held executive posts at Apple, Palm, and Palm’s ill-fated OS licensing spin-off, PalmSource.

One big problem he sees is Google’s lack of experience in  hardware: “Speaking as someone who worked at PalmSource for its whole independent history, an OS company always believes that it could do a better job of making hardware than its licensees.  It’s incredibly frustrating to have a vision for what people should do with your software, and then see them screw it up over and over.  The temptation is to build some hardware yourself, just to show those idiots how to do it right. I think maybe Google just gave in to that temptation.”

The full post is well worth reading.

Updated: Motogoo: The Damage to Google’s Bottom Line

Update 8/16: The market seemed distinctly cooler to the Google-Motorola Mobility deal the day after, with shares falling 3.27% to 539. And Standard & Poor’s downgraded GOOG from “buy” to “sell” on concerns about the impact of the Motorola deal. Here’s Peter Kafka’s take at All Things D.

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Whatever benefit the acquisition of Motorola Mobility brings Google in the long run, it definitely would wreak havoc on the company’s financials in the short term.

Motogoo logoFor the year ended Dec. 10, 2010, Motorola Mobility (MMI) had gross revenues of $11,5 billion compared with $29.3 billion for Google. But MMI’s operating income was just $76 million or 0.7% of revenues, compared with $10.4 billion or 35.4% for Google. MMI ended the year with a net loss of $79 million, while Google has a net of $4.2 billion or 10.3%.

During the crudest sort of combination–real pro forma financials for the combined company will be much more complicated–absorbing MMI would have knocked 11 points off Google’s gross margin and 4.3 points off its net.

Financial markets don’t seem overly concerned about this. Google shares fell 6.54 or 1.16% today in a generally up market. Despite the damage to the income statement, the acquisition will have minimal impact on Google’s balance sheet. The company won’t have to take on any debt to pay for the deal and MMI, which was spun off from Motorola only a year ago, would bring no significant debt to the marriage.

Of course, if Google continues on its recent growth path, the financial impact of the acquisition won’t last long. The real challenge will be melding two companies with vastly different  cultures and histories.

Google: Set Top Box King?

Largely overlooked in the initial reaction to Google’s proposed $12.5 billion purchase of Motorola Mobility is the deal’s potential impact on the cable set top box business. When Motorola split the company in two, the decidedly un-mobile set top box group (formerly General Instrument) went to the Mobility unit. The U.S. market for set top boxes for cable and cable-like services, such as Verizon’s FiOS, is split between Motorola and Cisco (the former Atlanta Scientific.)

Motorola set top boxThe cable box has been a huge impediment to the development of really practical systems to get internet video onto living room TVs. Motorola and Cisco build the boxes their cable provider customers want and that means very limited integration with the internet. In the view of the cable companies, Facebook and Twitter are fine, but Netflix and Hulu most certainly are not. And while it is possible to build a CableCARD-equipped device that allows customers to receive both cable and internet TV on a third-party box, resistance by the cable companies and the failure of the Federal Communications commission to enforce its own rules has resulted in a minuscule market for these products.

Google TV is a great example of a product that was choked by the set top box monopoly. The closest Google could come to integrating cable into its supposedly comprehensive service was to use a ridiculous and antiquated device called an IR blaster to let the Google TV unit control the set top box. IR blaster-based products have been around for years, but have never won favor from consumers (for one thing, at least in my house, the little IR sending units keep falling off the cable box.)

So what would Google do with its new presence in the living room if this deal goes through. It could simply follow the Motorola course and go on making the set top boxes that cable operators want, but that seems profoundly un-Googley. Or it could strike a new course, offering the first mass-market home entertainment united that fully integrate cable and internet services. That could revolutionize the business–or drive all the cable operators to Cisco, which has never shown much inclination to rock this particular boat. My bet is that Google will at least try to build the product that Google TV should have been in the first place.

Why Google had to buy Motorola

At the end of the year, when I made my predictions for the New Year, I stated that I believed Google would buy Motorola Mobile. And last week, Ben wrote here in Tech.Pinions about why he thought Google should buy Motorola. We had no inside information on this. But as we have studied how a complete eco system of hardware, software and services are critical to the success of a company bringing out tablets and smart phones, it became pretty clear to us last year that Google, at some point, was going to have to buy a hand set maker if they really wanted to control their destiny and the destiny of Android.

With today’s acquisition of Motorola Mobility group by Google, Google has now closed the loop on building out and controlling an entire eco system of hardware, software and services. With it they can now drive Android in the direction they see fit and innovate in all three areas. Like Apple, they now own the hardware, software and services and can become an even greater force in the future of mobile products.

In his comments on the acquisition, Google CEO Larry Page stated that part of the reason they did the deal was to also gain access to Motorola’s patent pool.

This could have an impact on the suit against Motorola as a starter.
And depending on the patents, it could also help them in the multitude of legal suit against Android out there as well, although it is not clear how much Motorola Mobile has that would related directly to these other Android suits.

But as important as this is for Google and Motorola, it is highly problematic for Google’s partners. Now HTC, Samsung and other licensees will be competing directly with Google/Motorola. And this leaves a lot of big questions on the table. For example, Google uses a lead partner with major new versions of Android. We assume it will now always be Motorola? If so, how does that affect the other licensees?

And, although they claim Android will continue to be open, just how much of an inside position will Motorola Mobility have over the competitors? I have already fielded multiple calls from clients who license Android who are, how do I put this, “concerned” about this news.

I believe that the major fall out from this is that there is now room for a third mobile OS to come out that would give vendors a broad solution they can use without having to compete with Google/Motorola. If I were Microsoft I would be touting Windows Mobile as an alternative.

However, here is a more interesting suggestion. If I were HP and Todd Bradley, I would immediately license the Palm Web OS as an alterative. This is by far the best Mobile OS besides Apple’s IOS on the market and it could become of great interest to Android licensees who feel threatened by this move by Google.

There are still a lot of other questions about this deal, like how will they deal with two distinct cultures and who drives the future of Android given Motorola’s greater experience in mobile then Google has?

But no matter how this turns out, we will mark today as the day that the mobile world changed forever as Google has begun to rewrite their history again.

Further Reading:
Why Microsoft WILL Buy Nokia

Also Read:

Google: Set Top Box King?