Google is not an internet search firm. It’s a broker of advertising inventory.
Google makes money by building inventory (i.e. white space on web, print and radio) and auctioning off inventory to advertisers. Search is merely the means to create a boundless amount of inventory and attract billions of eyeballs to it. All Google products including Docs, Maps, iGoogle, Gmail, GTalk and News Alerts are strategies to increase the amount of inventory and attract more eyeballs.
The Android operating system for mobile phones is no different. It’s a platform for building and channeling inventory, much like a web browser. In fact we could say that Android is similar to a browser on steroids, in that it allows developers to easily build any connected handset application anywhere within the mobile user journey, and within those create more inventory.
So why is Google spending more than 200 man years building a complete operating system, instead of building just a browser for mobile phones or even a downloadable application, like an on-device portal ? Because browsers on mobile handsets are used for a tiny percentage of the time, probably less than 5% of the time the user spends on their phone. 95% or more of the user journey is taken up by the contacts application, idle screen, main menu, calendar, inbox and settings. In parallel, with Android, Google is addressing the need of handset manufacturer for an operating system they can control (it’s licensed under APL2), that’s low-cost (it’s free), that reduces time to market for variants (see the declarative XML UI framework and developer platform). Plus, Android is backed by Google, a heavyweight vendor who can support OEMs during launch of multi-million units.
What’s so special about Android ?
Android is different to other OSes, including Windows Mobile, Symbian/S60/UIQ, the Linux variants and proprietary OSes (Nucleus, EMP, BREW, etc) in several ways:
– The declarative XML UI framework enables developers and handset manufacturers to rapidly develop the user interface for new applications.
– The Android SDK is an environment for building connected applications. Every application (including dialler, idle screen, SMS, contacts, etc) can consume and produce content. Every application on Android is a Web 2.0 citizen.
– The Android source code will be licensed under the Apache 2.0 license, a non-copyleft license which allows handset manufacturers to modify the source code without being forced to share back their modifications. This is in complete contrast to GPL v2 and GPL v3 which is a copyleft license (see our white paper); Sun applied the GPLv2 license to its Java ME implementation, which is the reason why not a single handset OEM is using it.
– Android allows developers to program against the familiar Java SE library of APIs (the desktop version of the Java libraries), which is much broader and more powerful than Java ME, the mobile version. Much like SavaJe (now Sun’s Java FX Mobile), Android is a Java SE -like platform built on a Linux kernel, but more importantly one where the Java platform is deeply integrated with the underlying Linux support package. In other words, the Java SE-like platform is a native application platform for Android phones. Symbian may arrogantly dismiss Android as yet another Linux initiative, but the breadth and depth of Java APIs is something Symbian never managed to get right. And unlike the FX Mobile platform, Android has several OEMs who are planning to build handsets on it.
– Android is not only a departure from Java ME development model, but also away from Linux development. Funnily enough, operators like Vodafone and Telefonica who have committed to supporting Linux as a prefered platform would not be counting Android in. (thanks Guy!).
– Android uses Dalvik, a ‘proprietary’ (non-Sun-endorsed) Java virtual machine which means that Android developers can use Java SE APIs, while Google does not have to pay any royalties to Sun for TCK certification, as they ‘re not claiming this is a Java environment. As Stefano writes, Google doesn’t claim that Android is a Java platform, although it can run some programs written with the Java language and against some derived version of the Java class library. This is slap in the face of Sun.
– Google is paying developers $10 million to write applications for Android, which is a smart move to motivate developers especially when no phones are out yet. It’s worth noting that $10 million exceeds the yearly marketing budget of most operating system vendors.
The Open Handset Alliance (OHA) is formed by an array of complimentary participants; operators (covering US, Europe, Asia, Japan and Latin America), handset OEMs covering all global regions (including HTC, the second-biggest smartphone OEM after Nokia), as well as hardware and software vendors covering complimentary constituents of a mobile handset.
So is Android mature and will it be adopted by OEMs ? Google has dedicated an estimated 200+ man years building the platform (since the Android acquisition), but there are still bugs (see this report). HTC has confirmed it is launching one handset in 2H08 and reportedly plans to release a total of 2 or 3 Android-based handsets in 2008. Moreover, according to a WSJ report, T-Mobile US has committed to releasing a phone in 2008 that will be based on Android. For a new Linux initiative, this level of commercial support is extremely rare.
What’s in it for Google ? Android is a service access platform, not a delivery platform. It’s about growing the pie of mobile advertising inventory and not necessarily growing Google’s share.
There’s nothing to stop Yahoo taking Android and launching a phone with Motorola that bundles Yahoo Go!, flickr and eBay. I ‘m guessing however that Google has some sort of agreement with OHA-participant handset manufacturers and operators about bundling Google services with Android handsets by default.
Moreover, Google might want to bundle the gPay payment system (see this Times Online article). Or connect the physical world to Google advertisers via its ZebraCrossing QR reader technology for mobile phones.
What’s even more interesting is that it may provide a channel for feeding customer analytics back to Google, such as presence, contacts, call logs, SMS messages and a wealth of user profile information that can be used to build extremely detailed digital footprints.
Another important impact of Android is that it will catalyse the development of white-label phones, i.e. phones ready-to-customise by consumer brands like MTV, Nike, Gucci and Tag Heuer. Rapid software customisation is what hampers the scalability of customised design manufacturers like ModeLabs today.
All-in-all, Android seems to be the only non-proprietary operating system with a strong chance of wider commercial adoption. Motorola is losing interest in LiMo (it committed to Qtopia APIs, whereas LiMo supports rival GTK). The LiPS forum doesn’t really have a route to market, apart from Chinese ODMs, and is a partial OS. All other mobile Linux operating systems are either in alpha stage (Celunite, ALP, A la Mobile), not shrink-wrapped (Greensuite), or not backed by a big services firm (Purple Labs). Symbian is dominated by Nokia and DoCoMo; outside Japan, the overwhelming majority (volume-wise and model-wise) of Symbian handsets are Nokia, whereas in Japan the vast majority of 30 million Symbian-based shipments are DoCoMo (60 out of 66 models). And Windows Mobile is for enterprise segments only (at least up to version 6). Plus Android ticks several boxes of OEM checklists including control, time-to-market and cost.
Thoughts ?
– Andreas