One Android to rule them all
+8* ThoughtsPublished November 29, 2007 at 3:27 pm 2 CommentsGoogle’s Android demo video has been ranking top of YouTube for a week after its launch (1.3 million views and counting). Sergey Brin is also introducing it in the “Android Talks” group. As the excitement is quieting a bit, we’d like to share some thoughts we had on this newcomer in the mobile space.
To make it short: Android is an open source mobile OS that directly competes with Windows Mobile, Symbian, etc. The main difference with the above OS is that Google worked from start at including it within an ecosystem.
It might sound unprecedented, but aside from the open-sourcing, it is more or less what NTT DoCoMo did in 1999 when launching i-mode. Taking costs away from manufacturers and developers, having better technical roadmaps and a system that simply works. But this is not the main point.
The main point is to see what are the implications for other players in the value chain. Until now, three groups have been fighting over revenue share, forgetting about creating a market first, those three groups are:
- Telcos
- Manufacturers
- Content people
You could almost say “Three Kingdoms“, as they were all at the top of their respective chain. None could dominate the others.
The move from emryonic mobile Internet towards an ‘open Internet’ shows two things:
- Telcos and manufacturers failed at developing a compelling and healthy mobile Internet ecosystem. Fortunately (?), it was a closed system and nobody could do much about it.
- Both are unlikely to secure a better position in an open environment, where the fixed Internet comes to mobile.
And just like Microsoft turned IBM into a maker of plastic boxes, then Yahoo turned AOL into a pipe provider, we think that Android is in a good position to turn Telcos into pipes and handsets makers into almost pure device people. Of course, the openness of the system does give a chance to all, but honestly, who knows better about Internet and service platform business than Google? If you have 10 services on your Android phone, it is likely half of them will come from Google, just like half of the software regular people use on PC come from Microsoft.
To illustrate the situation, imagine there is one soccer player, one rugby player and one volleyball player. They all want to play their game but cannot convince the others and don’t offer anything to get started. Then Google comes and say “look, I bring basket ball and a ring”. Now all play basket ball, but of course there is only one Michael Jordan.
Overall, we see numerous benefits for the ecosystem – which has been a terrible failure pretty much everywhere outside Japan and to some extent South Korea (though the market is almost entirely dominated by carriers) – but it is unlikely carriers and manufacturers will know how to play the game.
At a “Mobile Internet Conference” in Beijing this week, the first of its kind organized by China Mobile (and invitation-only), Eric Chu from Google presented Android and the Open Handset Alliance for the first time in China. We asked him “who is going to make money and how” and his answer was “manufacturers are going to reduce their costs and sell more handsets”. Sounds good, huh?
Of course it was quite impossible to give a better answer as nobody proved any business model yet, and it is totally unclear how the people developing services are going to monetize them. Best would be to pay using some Google-powered Paypal-like money probably, but this is still somewhat far away to be rolled out globally. So… good luck to Android, and more than ever, good luck to telcos and manufacturers, the future might be even tougher than you think.
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