Is Android in trouble?

[Commodus]

Android is the most successful mobile operating system ever, by every measure except profits. It is not dying by any means, however that profits issue undoubtedly gives Google pause. It seems like no one except Samsung can consistently make money with Android, and Samsung profits are falling significantly. Other players like Huawei and Xiaomi are profitable, but they use AOSP mostly. It is almost like Google has re-created the Windows hardware ecosystem except without the part where the OS maker rakes in huge profits.

Google pulls in billions in revenue from mobile ads, so I wouldn't say it's a wash. It's just a very indirect model.

With that said, you're right that this is teaching Google the same lesson that Microsoft learned: when you give up control of the hardware, don't be surprised when it inevitably spirals out of control. OEMs are rarely interested in pushing the same agenda as OS developers, and competition usually devolves into a price war when you don't have unique software. Just ask Microsoft. It let Windows PCs fall into a spiral of ever cheaper, ever crappier products, and by the time it was desperately asking OEMs to up their game to compete against superior Apple- and Google-powered machines, it was too late.

That's why Apple isn't freaking out that it "only" hovers around 18-20 percent of the smartphone market. It might never get a majority share, but it has a genuinely unique experience that's relatively safe from race-to-the-bottom competition. Samsung doesn't have that luxury -- no matter how many billions it pours into marketing campaigns, it's still Just Another Android Vendor. All it takes is another Android rival with comparable quality and a better price to undo years of leadership.

 

[Anon_lawyer]

Google pulls in billions in revenue from mobile ads, so I wouldn't say it's a wash. It's just a very indirect model.

That's what Google has always said, but I am starting to wonder. Does Google actually make more profits from ads served to an Android device instead of an Apple device? Perhaps with a similar usage pattern, but Apple users tends to spend significantly more money on purchases from their mobile devices. Obviously Apple could always try to lock Google out of their devices, so it makes sense as a defensive play, but in terms of incremental review I would be curious to see what the (undoubtedly top secret) numbers say.

 

[Bryf50]

I have to say, I'm struggling to justify upgrading from my G2. It feels as fast as any of the latest phones in general use, the screen is very nice and high enough res, the battery life is solid, I don't play a lot of games but any that I've tried have run well. I feel like phones are quickly reaching the "good enough" level that PCs did a few years ago.

 

[Commodus]

That's what Google has always said, but I am starting to wonder. Does Google actually make more profits from ads served to an Android device instead of an Apple device? Perhaps with a similar usage pattern, but Apple users tends to spend significantly more money on purchases from their mobile devices. Obviously Apple could always try to lock Google out of their devices, so it makes sense as a defensive play, but in terms of incremental review I would be curious to see what the (undoubtedly top secret) numbers say.

I don't think Google minds that much. Android was initially meant to give Google a hedge, to make sure that carriers and hardware makers didn't restrict internet access and prevent people from seeing its ads. Even if iOS generates more ad revenue, Android still contributes something to Google's overall revenue and offers a safety net if the cash flow from a given source ever drops.

 

[olds]

I have the S5 for work and my personal phone is an S4 and is out of contract as of this week.

Looking at the upgrade possibilities and nothing strikes my fancy. I am disappointed that the S6 has no SD card support but I am a little intrigued by the "Edge". I don't follow phones enough to know what's good in the Android line.

I've never used a Windows phone and I am not an iPhone fan.

Except for battery life, my S4 is fine. So I am kinda, "meh". I may root the S4 and continue to use it for a while to see if something comes out that tickles my fancy.

 

[Anon_lawyer]

I don't think Google minds that much. Android was initially meant to give Google a hedge, to make sure that carriers and hardware makers didn't restrict internet access and prevent people from seeing its ads. Even if iOS generates more ad revenue, Android still contributes something to Google's overall revenue and offers a safety net if the cash flow from a given source ever drops.

I agree, mostly. It just seems to me that the way Google built the Android ecosystem, there is a lot less profit in the whole ecosystem compared to other platforms. That may not matter, long run... but it does seem like a weakness.

 

[WelshBloke]

I agree, mostly. It just seems to me that the way Google built the Android ecosystem, there is a lot less profit in the whole ecosystem compared to other platforms. That may not matter, long run... but it does seem like a weakness.

If android didn't exist how much access to iOS do you think Apple would give Google?

 

[Subyman]

Google pulls in billions in revenue from mobile ads, so I wouldn't say it's a wash. It's just a very indirect model.

With that said, you're right that this is teaching Google the same lesson that Microsoft learned: when you give up control of the hardware, don't be surprised when it inevitably spirals out of control. OEMs are rarely interested in pushing the same agenda as OS developers, and competition usually devolves into a price war when you don't have unique software. Just ask Microsoft. It let Windows PCs fall into a spiral of ever cheaper, ever crappier products, and by the time it was desperately asking OEMs to up their game to compete against superior Apple- and Google-powered machines, it was too late.

That's why Apple isn't freaking out that it "only" hovers around 18-20 percent of the smartphone market. It might never get a majority share, but it has a genuinely unique experience that's relatively safe from race-to-the-bottom competition. Samsung doesn't have that luxury -- no matter how many billions it pours into marketing campaigns, it's still Just Another Android Vendor. All it takes is another Android rival with comparable quality and a better price to undo years of leadership.

Also consider that Apple's margins are twice what other manufacturers pull in per phone and you have Apple making 40% of the market's profits. In fact Samsung and Apple make nearly 100% of the market's profits because MS actually lost money and HTC brings in dismal operating profits.

Apple doesn't want the market that can't afford a phone they can make money on.

 

[Commodus]

If android didn't exist how much access to iOS do you think Apple would give Google?

Probably a lot more. Apple has been reducing its dependency on Google largely due to a broader policy set in motion by Steve Jobs several years ago. He saw Android as a "betrayal" because Google was not only a key iPhone partner, but had its CEO on Apple's board. After all, why would you trust key parts of your software to a company that was bent on undermining your core business, and may have even planted a Trojan horse?

I wouldn't say that withdrawal has always been wise (Apple Maps shouldn't have launched until a year or two later, if that) or that Jobs was completely right, but I don't think Google entirely realized the consequences of its have-your-cake-and-eat-it-too approach.

 

[Anon_lawyer]

If android didn't exist how much access to iOS do you think Apple would give Google?

I don't think we need to ask, we can just look at the original Iphone. In 2007 it launched without any third party apps except Google maps. It didn't even have an app store for a couple years. At the time Apple and Google were viewed very much as partners. Apple had essentially no web services at all, and Apple largely pushed Google services on the Iphone. Eric Schmidt sat on Apple's board! This partnership was one of the main reasons Steve Jobs was so pissed about Android, he thought Google stabbed Apple in the back. Thermonuclear patent war and all that. Apple gave Google plenty of access, right from the start.

Now maybe, probably even, Apple would have eventually started building its own web services anyway. But we know it didn't start that way.

Meanwhile, I still can't help but think that Google could be in just as good a position in terms of market share if they had started off charging a substantial license fee for each Android device. And they quite plausibly could have made tens of billions of dollars in profits over the past five years that way.

 

[JeffMD]

This thread should have died when OP argued against buying a cutting edge android because of lack of SD card support, and then turned around and though the Iphone 6 was a good buy, even though it has no SD card support either.

So no.. android.. an OS that is free and on more phones then ever, is not in trouble.

 

[WelshBloke]

...

...

That's fine until Apple decide that they want to provide that service and then prevent you from competing because there's now a native app that does the job.

Relying just on Apples sufference for the sole existence of your business would be a bad, bad idea.

 

[Commodus]

That's fine until Apple decide that they want to provide that service and then prevent you from competing because there's now a native app that does the job.

Relying just on Apples sufference for the sole existence of your business would be a bad, bad idea.

True, it wouldn't have been an easy situation for Google, either... but the company's decision had repercussions not just for its presence in iOS services, but in its attempts to attack Apple elsewhere.

That move reinforced Jobs' belief that Apple had to avoid dependence on other companies whenever possible, and that meant either choosing truly independent standards or developing its own tech. That's what led it to embrace HTML5 and utterly reject Flash on mobile... and that effectively killed Google's attempt to use Flash as a competitive edge for both Android and Chrome.

Remember that period in 2010 when both Adobe and Google were trying to portray Apple as some Orwellian dictator for daring to insist on real web standards instead of making itself a slave to Flash? Yeah. In the end, the two had to backtrack on just about everything they did. Flash on Android was killed off (mercifully, since it was a piece of crap), and Google had to back off from embracing Flash in Chrome.

 

[mrochester]

True, it wouldn't have been an easy situation for Google, either... but the company's decision had repercussions not just for its presence in iOS services, but in its attempts to attack Apple elsewhere.

That move reinforced Jobs' belief that Apple had to avoid dependence on other companies whenever possible, and that meant either choosing truly independent standards or developing its own tech. That's what led it to embrace HTML5 and utterly reject Flash on mobile... and that effectively killed Google's attempt to use Flash as a competitive edge for Android and Chrome. Remember that period in 2010 when both Adobe and Google were trying to portray Apple as some Orwellian dictator for daring to insist on real web standards instead of making itself a slave to buggy, insecure Flash? Good times.

Yeah I remember the days when the fandroids bleated on about how great android was because it supported flash. It's funny looking back how wrong they were.

 

[senseamp]

Overall ecosystem is OK, but I think high end Android is in trouble. Prices need to adjust to the sub $400 range.

 

[JeffMD]

Android hardware is higher than $699 iphone
Android hardware sells for $649
ANDROID IS IN TROUBLE! IT NEEDS TO BE CHEAPER!

What ever

 

[WelshBloke]

That move reinforced Jobs' belief that Apple had to avoid dependence on other companies whenever possible, and that meant either choosing truly independent standards or developing its own tech.

Jobs was a control freak anyway. He was quite happy to cozy up if he saw an advantage but would equally drop other companies for fairly trivial reasons.
You can't blame Google for not wanting to rely on his whims.

Remember that period in 2010 when both Adobe and Google were trying to portray Apple as some Orwellian dictator for daring to insist on real web standards instead of making itself a slave to Flash? Yeah. In the end, the two had to backtrack on just about everything they did. Flash on Android was killed off (mercifully, since it was a piece of crap), and Google had to back off from embracing Flash in Chrome.

The fact that Apple actually managed to kill off flash on the mobile side sort of proves my point really.

 

[JeffMD]

The fact that Apple actually managed to kill off flash on the mobile side sort of proves my point really.

It was not a single handed feat, but I will praise apple for at least being the first to get their foot out the flash door. The fact that flash was a mess of exploits every week did not help them. Also one of the biggest users of flash, youtube, expanded beyond flashes supported formats and capabilities (and eventually, performance).

Saddly java is getting the same way. A lot of support has dropped from them due to performance and security issues which is very sad considering just how useful having one piece of code work on all platforms is.

 

[Commodus]

Jobs was a control freak anyway. He was quite happy to cozy up if he saw an advantage but would equally drop other companies for fairly trivial reasons.

You can't blame Google for not wanting to rely on his whims.

Oh, for sure, he was over-controlling at times, and Google wouldn't have wanted to put all its eggs in one basket. I just suspect that Google is having a twinge of regret because it's still heavily dependent on iOS for mobile ad revenue (Goldman Sachs estimates 75 percent of it), but it's driving that key partner further away, not bringing it closer. And like it or not, Jobs did teach us a thing or two about the value of independence at a company. If you lean heavily on a partner's work for your own success, it's just a question of when you get screwed, not if.

To tie it all back, Google is probably regretting its earlier laissez-faire stance on Android -- it was counting on OEMs to promote its services, but some of Android's biggest manufacturers either purposefully avoid Google services most of the time (see Xiaomi and other Chinese OEMs) or have tried to duplicate them with in-house rivals (Samsung). Programs like AndroidOne, the lack of customization for Android Wear/Auto/TV and licensing deals with the likes of Samsung are all about trying to rein in manufacturers that were using Google's "freedom" against it.

 

[dawheat]

Oh, for sure, he was over-controlling at times, and Google wouldn't have wanted to put all its eggs in one basket. I just suspect that Google is having a twinge of regret because it's still heavily dependent on iOS for mobile ad revenue (Goldman Sachs estimates 75 percent of it), but it's driving that key partner further away, not bringing it closer. And like it or not, Jobs did teach us a thing or two about the value of independence at a company. If you lean heavily on a partner's work for your own success, it's just a question of when you get screwed, not if.

To tie it all back, Google is probably regretting its earlier laissez-faire stance on Android -- it was counting on OEMs to promote its services, but some of Android's biggest manufacturers either purposefully avoid Google services most of the time (see Xiaomi and other Chinese OEMs) or have tried to duplicate them with in-house rivals (Samsung). Programs like AndroidOne, the lack of customization for Android Wear/Auto/TV and licensing deals with the likes of Samsung are all about trying to rein in manufacturers that were using Google's "freedom" against it.

I do disagree with your stance on where Google/Apple would be in a world without Android. IMO it would have been the height of incompetence for Google to let another company dominate the mobile space and be dependent on the whims/decisions of that company.

Without Android, I don't think it's a stretch to say Apple would be in a dominant hardware position today. The Windows phone effort - too late and too little - would hardly be in a better spot and honestly, it's not a space a start-up can compete in as mobile devices have become so complex.

If your only source of revenue is data analytics and resulting ads, and the dominant mobile player could simply drop your services piecemeal or all at once, you're putting yourself at enormous risk. What leverage do you have if they start replacing your services with their own.

Sure, the Android effort accelerated the efforts of Apple to offer their own services, but Apple is far too smart to let such lucrative and core areas remain third party indefinitely.

 

[poofyhairguy]

Oh, for sure, he was over-controlling at times, and Google wouldn't have wanted to put all its eggs in one basket. I just suspect that Google is having a twinge of regret because it's still heavily dependent on iOS for mobile ad revenue (Goldman Sachs estimates 75 percent of it), but it's driving that key partner further away, not bringing it closer.

Jobs has long been dead and the lawsuit fighting is pretty much settled. I think Apple driving Google away has paused for now, we will see what happens later this year. If Apple renews the search contract instead of moving to Bing or Yahoo then we know. An Apple under Jobs was PISSED at Samsung, modern Apple still asks them to make chips.

To tie it all back, Google is probably regretting its earlier laissez-faire stance on Android -- it was counting on OEMs to promote its services, but some of Android's biggest manufacturers either purposefully avoid Google services most of the time (see Xiaomi and other Chinese OEMs) or have tried to duplicate them with in-house rivals (Samsung). Programs like AndroidOne, the lack of customization for Android Wear/Auto/TV and licensing deals with the likes of Samsung are all about trying to rein in manufacturers that were using Google's "freedom" against it.

They did seem to brag about in the keynote that Android Wear updates would come directly. I do think they made some decisions early on that has fragmented the Android market somewhat today. That really isn't a genie they can put back in the bottle though, and who knows if Samsung would have gotten this far on Android without the ability to make Touchwiz.

 

[Commodus]

Jobs has long been dead and the lawsuit fighting is pretty much settled. I think Apple driving Google away has paused for now, we will see what happens later this year. If Apple renews the search contract instead of moving to Bing or Yahoo then we know. An Apple under Jobs was PISSED at Samsung, modern Apple still asks them to make chips.

The lawsuits are done, but the independence streak definitely remains. It's just that the company tries not to cut its nose to spite its face. You probably won't see a Maps-level debacle again, and that could include keeping Google as a default search engine. However, Apple is definitely trying to shy away from using Google any more than it has to. Spotlight on iOS and Mac uses Bing, for example, and the company's marketing avoids Google when it makes sense.

They did seem to brag about in the keynote that Android Wear updates would come directly. I do think they made some decisions early on that has fragmented the Android market somewhat today. That really isn't a genie they can put back in the bottle though, and who knows if Samsung would have gotten this far on Android without the ability to make Touchwiz.

They do push Android Wear/Auto/TV updates directly, although we're starting to see some problems... witness how the Watch Urbane is still the only Android Wear device with the latest features. I can't help but feel that Google is kicking itself, at any rate. It shouted "Android is open! Open open open!" in the early days, but it you can tell that it wishes things were more closed. Not that Google would shutter AOSP entirely, but it might have stricter requirements for including Google services and tighter control over OS updates.

Openness can be a good thing... it's just that it's not the cure-all that Andy Rubin thought it would be. You have to exert Apple-like control in some areas if you're going to get the results you want. Otherwise, you end up with partners who'll gladly snub you when they can (like Samsung or Xiaomi) or drag expectations down.

 

[MrSquished]

They do push Android Wear/Auto/TV updates directly, although we're starting to see some problems... witness how the Watch Urbane is still the only Android Wear device with the latest features. I can't help but feel that Google is kicking itself, at any rate. It shouted "Android is open! Open open open!" in the early days, but it you can tell that it wishes things were more closed. Not that Google would shutter AOSP entirely, but it might have stricter requirements for including Google services and tighter control over OS updates.

Openness can be a good thing... it's just that it's not the cure-all that Andy Rubin thought it would be. You have to exert Apple-like control in some areas if you're going to get the results you want. Otherwise, you end up with partners who'll gladly snub you when they can (like Samsung or Xiaomi) or drag expectations down.

while i agree with you on one hand, on the other hand letting android loose the way they did brought us the iPhone 6 and 6+. Companies had the freedom to go big and they did, and apple became a follower in that regard. So on one hand I do agree Google wished they had some tighter control over the OS and I guarantee that they envy Apple somewhat in that regard, but on the flip side, it did encourage some innovation. So much so that Apple felt the need to follow - not just with size but also with other features like *gasp* choosing your own keyboard, etc...

 

[Commodus]

while i agree with you on one hand, on the other hand letting android loose the way they did brought us the iPhone 6 and 6+. Companies had the freedom to go big and they did, and apple became a follower in that regard. So on one hand I do agree Google wished they had some tighter control over the OS and I guarantee that they envy Apple somewhat in that regard, but on the flip side, it did encourage some innovation. So much so that Apple felt the need to follow - not just with size but also with other features like *gasp* choosing your own keyboard, etc...

Yeah, it's a give-and-take. It's just important to note that the grass isn't necessarily greener on the Android side. The core of the thread is whether or not Android is in trouble, and there are some significant problems that came from (and in some ways, are inherent to) Google's strategy.

 

[Red Storm]

Android is not in trouble. I'd say it's better than ever and improving.

Same goes for iOS.