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November 14, 2012



@Baron95 "These comments that Google will win the smartphone war is very funny."
@LeeBase "70% market share on a product they give away."

What you apparently miss is the fact that Android is bigger than Google.

Android is open source, it can survive if Google looses interest, or even if Google falls. Can you say the same about the relationship of manufacturers with Windows Phone? No, they are hostage of Microsoft. When Microsoft says "jump" they (particularly Nokia) ask "how high". Android manufacturers can simply fork the development as Amazon did. WHY WOULD A MANUFACTURER PREFER WINDOWS PHONE TO ANDROID?

That's the reason why Android is quickly becoming the Windows of mobile.


@notzed "Umm, so somehow monopolies are now good economics are they?"

It is better to have an open source monopoly, where everyone has fork, than a closed one.

Amazon forked Android. Anyone can do that.

"Diversity is good, it allows experimentation and the exploration of niches - and there are plenty of programmers to fill every niche possible."

Android allows diversity; Windows Phone doesn't. That's the reason why we see a flood of Android devices, occupying every niche imaginable. Some of them flop, some of them succeed. How can Microsoft mimic that?

Microsoft is trying to mimic Apple with a common standard for manufacturers. That's great for Microsoft, but terrible for the manufacturers, because there is so little space for differentiation.

When a company can't provide cost advantage nor differentiation, it is doomed to become a niche player.

Recommended read:


@notzed Microsoft having an economic monopoly was a very bad thing, since they could force people to use their software, etc. Platforms having a monopoly has pros and cons

Pros of platform monopoly:
1) Lots of developers since users can buy some software and know it will run
2) Well tested software since popular software on a monopoly platform is going to be hugely used/tested
3) Room for niche software - you can't make software targeted at a small customer base and then only be able to serve a small number of customers on a small platform

Cons of closed platform monopoly (windows, apple):
1) Platform developer can outmaneuver any competitors trying to use their platform
2) Slow innovation since enhancements to the platform are driven by only 1 company
3) Platform acts as a 'tax' - everyone has to pay the platform owner a tax even if they aren't using the platform fully (having to buy windows just to copy .dlls to your linux box to run some software, etc)
...) Tons more..

You could argue either way for pros-cons of the above. Some people think Windows was really good and helped computers grow fast, at least at the start. Personally I think it was a really bad thing though, mostly because of how MS (illegally) abused the platform monopoly...

However, Android is an open monopoly and none of those cons apply. So you get only the pros. Anybody can develop a brand new platform that can still run Android apps, etc, since they can just embed the open source dalvik into their OS. (Blackberry is heading this route)
I'm running MIUI on my Samsung phone currently, and it has very nice enhancements to Android such as blocking app permissions, ability to download full themes and customize the phone, etc.

So yeah, an open platform monopoly really is a good thing.


LeeBase> 70% market share on a product they give away.
LeeBase> Yes, folks, Android is far from having been proven to be a winner for Google.

They also "give away" a web-search-thing, and email. They just keep on giving, never asking for anything in return, total saints!

Google are advertisers, income does not come from us, WE are their product.


If Google had wanted to make money off Android it wouldn't be an open source platform.

It's also obvious that they didn't need Android to promote their services.

So what did they need it for? The most likely answer: To prevent Msft and Apple from dominating yet another market segment.

Do they have to fear Samsung? I doubt it. Samsung's revenues come from selling hardware mostly. They would ultimately risk more by walling themselves off.

Amazon is a bad comparison. Their main business is to sell content - and to promote that business they have to shut out Google and its services.



Problem for Samsung is that they need to have Google Apps / Google Market. To get those, they must play by Google's rules. Sure they can go ahead and make their own store and maps and everything, but Samsung has tried to do that before and failed (and even Apple has failed on the mapping side...). So Samsung can't easily push Google out of the picture without heavily annoying customers and pushing them to competitors. LG has hardware just as good as Samsung's. Samsung is thriving because their product is the best currently. If they drop Google, they no longer have the best product.

Long term they may need to drop Google, but this 'long term' is 5+ years and completely out of anybodies ability to predict right now...



Do you have any national or regional numbers for smartphone sales and platform adoption? I ask because I believe the world wide numbers are hiding what is happening in specific markets. For example, I believe China and India together represent over 1/3rd of the smartphone market and in those countries Android absolutely dominates, with some recent reports stating over 90% of sales. Obviously if China and India so heavily favour Android then Android's dominance in other countries/regions is less than the worldwide average. I know, for example, Android does not out sell iOS 2-to-1 in the US.

All that said, I have had a hard time finding exact numbers for China and India so I am hesitant to draw any strong conclusions. If you have and can share any of this data it would be greatly appreciated.



true, they can be ripped off, but not much.. this stuff is GPL, if it was BSD; it would be plain madness.

Samsungs alternative (Bada/Tizen or whatever it's called) is also Linux based, as we know it's usually just a matter of time before stuff that works on one Linux platform, works on all other Linux platforms as well. Even the tiny Meego community has started building a compatibility layer for Android apps (with no funding):

for now it's mostly Angry Birds, but this is destined to change. If you had some money to put behind it, it would be a matter of time, before Android apps ran fine on Meego/Tizen/Bada etc. and vice versa.

Google have already made their money back; they are now in so many pockets, and have access to location/email etc. that this is paid for ages ago. This is the real revenue, when Google knew nothing about users, their ads was worth 5 cents, now it's 5 dollars. The value of all that information can easily be seen by Google's attempts at buying/building facebook alternatives (orkut/googleplus).

A fishing-pole ad is pretty useless to someone who never fishes, but when you only show it to people who live places where they do a lot of fishing, and you know the person has called/emailed fishing-gear-stores etc, it's money..



No, it's not GPL. It is Apache (same as BSD). Samsung can very easily strip out all Google stuff and replace it all with their own stuff. Nothing stops them at all if they want to do that.


But Samsung is definitely not going to do this in the short term. Feel free to speculate on it if you want, but it is very much guaranteed that Samsung will be sticking with Google Apps for at least the next 5 years. (For Non-China markets only, though - for China, they may very well strip out everything Google if the cost of Google services exceeds the cost of doing that customization.)
Customers buying Android want all of their existing paid apps to carry across. They want their gmail to carry across. People would move to LG in a heartbeat to get access to Google services at present.

Tomi T Ahonen

Hi gang

Nice discussion, keep it going.

First to regular visitors, I have hoped I would not need to make this comment, but here goes.. obviously its no longer possible to even try to respond to all comments. I love it that we get so many commments so often on the blog, but apparently the popularity of this blog is now so big, we get often so many comments, with what time I have, I won't have the chance to respond to everybody. I will still do my best. Trust me, I read every comment and take it in.

I will comment now more generally on a few themes that came out. Early in the comments was the debate about size of reach vs how easy is it to make money on the platform. Baron95 gave an often-repeated line by those who don't have the biggest platform, that their system allows easier chances to make money. Yes, that will be relevant to some, and even a winning argument to few, but as many pointed out in the comments like bjarneh - the most common interest, by developers, is whose platform reaches the widest. I trust even you Baron95 will begrudgingly admit, that it is often the clinching argument at developers - whatever your personal preference of what it SHOULD be might be - and that the biggest platform over time always gets the most developers. That is what history has shown, that makes economic commercial sense. But it does not mean, that for some the argument is not valid, where can we make easiest money or most money.

And with that, I would add, Blackberry is the lest not-dead of the small platforms, for that very reason, the big corporations are very reluctant to throw out their Blackberry OS investment, they take long time to decide and the platform is thus far more viable and can sustain short-term problems, and still survive. A consumer-oriented platform, if hit by sudden loss in popularity (witness Symbian, Palm) cannot recover..

Tomi Ahonen :-)


Google doesn't really a believer in Patent system. They believe by spreading the knowledge, innovation can be had at greater speed.... The idea is like a school, school/teacher doesn't hold back when teaching their student. And a teacher is succeed only if their student is become smarter than the teacher.... and this would benefit the ecosystem.... example. A teacher in medical teach all his knowledge, and the student find a cure to cancer, that in turn might help the teacher family.

Google believe in Open Source, and in open source by working together at the core level (OS), and competing at the user interface, it boost the speed of innovation. Thus would benefit Google.

I know for real capitalist, it's really hard to understand the essence of open source and afraid that open source would destroy the leading advantage of capitalist. I believe this is the reason that Microsoft destroy Nokia at all cost.

I, for one, really hope that astrosurfer like baron95 would look at Android vs. Microsoft at different angle. Because there is no benefit for them to think: I WOULD BUY WP8 EVEN THOUGH IT'S BAD, AND BECAUSE I THINK GOOGLE DOESN'T MAKE PROFIT FROM IT...

I really hope when they compare android vs. WP8, they would be honest and see which one is really best for them in short term and in 1-2 year.

Tomi T Ahonen

Then there was the comment about Android and Google's motivations.

Android is not there for Google to try to make money on the license (obviously) and here is the why. The mobile industry sits at the epicenter of digital convergence - most of my regular readers will know at least that I believe 100% this is true, and increasingly it is accepted by many futurists (but not all).

The critical central point of that digital convergence is the mobile service, that is delivered to our pockets through that gadget we call the mobile phone (increasingly, a smartphone). The one player, that has a certain path to that future is the carrier/operator who owns the spectrum and then builds a Billion-dollar network infrastructure with typically 10,000 base stations and antennas around the country, to serve their millions of clients. So if we look at mobile advertising or mobile banking or mobile commerce or mobile social media of the future, the only 'guaranteed' winner who will be there, is the evolution of what we now think of as the carriers/operators like Vodafone, Sprint, Telefonica, China Mobile etc.

That race is closed. If you were not there to buy the spectrum when the licenses came out, often a decade ago, you are now locked out. Apple cannot build a network on 4G and launch services on it. There is no spectrum. If there is a supplemental spectrum auction, as some countries have from time to time, then Apple could theoretically go try to bid for such a license and try to become a carrier/operator - but in so doing, they could at best gain a few countries, and lose the rest of the planet, as the other carriers/operators would immediately put all iPhones on sales boycott as they do not want handset makers becoming licensed operators/carriers.

Apple could also theoretically try to buy a carrier/operator, but it would amount to the same thing.

Now, what of Google. They were too late to try to outbid Vodafone or Telefonica or Orange or America Movil etc for 3G spectrum licenses, by the time Google figured out, they want to become a mobile company. They discovered a backdoor route to our pockets - Android.

Android is BY FAR cheaper way for Google to get into our pockets, than what Carlos Slim did by buying cellular telecoms operators/carriers in just about every Latin American country (and is starting to expand to Europe too). Google is, through Android, getting to 'have its cake and eat it too'. They 'cheated the system' and got into our pockets, without bidding for very expensive spectrum in auctions, and then building Billion-dollar networks across the planet. So this is actually a very clever ploy, to become a central player in the future of digital convergence. Don't ever expect Google to abandon the free Android model, and observe how stupidly Microsoft is killing what little chances it had, by insisting on the license fee. Google is inheriting the digital future, and Microsoft is pushing it away.

Tomi Ahonen :-)


One more thing i would like to add here...
Google is getting money for every apps you buy in the Android Play Store.
So, google GOT MONEY from android directly from user.

Microsoft with their WP8 is doing DOUBLE DIP.
they got license money from WP8 manufacture (nokia, samsung, etc)
and also got some cut when someone buy apps/music/magazine etc.

What Google doing with Android is like selling the FREEMIUM apps.
You give FREE GAMES, and got $$ from selling the cheat item.


4 bada . 5.2 M . 3.0 % ( 2.7 %)
5 Symbian . 3.4 M . 2.0 % ( 3.3 %)

me thinks there is typo in #4 or #5 (last % column).

Regards, Szymon.


sorry no typo, just tired :( please remove both comments.


@Baron95 and @LeeBase

You guys are talking about 'Google not winning' with Android, but you guys are way off here (and cycnus is way right).

Google gives away their search results and competes on the quality of the results. Googles gives away email etc and competes on the quality of the service. Google gives away Android and competes on the quality of the product. These are all identical business plans - they are all based off of one single aspect: quality.

Google believes that regardless of who they compete with on the market, the stuff with the Google brand is going to be what users want to use. The actual advertising and money is actually very secondary to this - Google could easily double their revenue in the short term by doubling up on ads, making movie ads part of their search, requiring users to enter a credit card to use Google search and then charging for information, etc. All of these would easily and enormously boost Google's profits for a few quarters.

Except, Google focuses on making their product the best possible product, and then tries to make money off it after the fact. This is actually very opposite to near all other businesses and is (probably) lowering their overall profits. Google's core strategy is clearly to have people using their stuff and then hope to make money off it down the line - the stuff comes first for Google, and only then do they work out the money.

So Google's view of their products is all about market share, and it obviously shows with most search (knowledge) going through Google, and now most people using Google/Android as their phone. So if you use Google's own measure, they are winning enormously with Android. The only way Google can lose is if customers prefer Samsung's software extras (email, maps, etc) over Google's software extras. This is very unlikely right now as Google's software is just leaps and bounds ahead in terms of mapping, app ecosystem and email.

In the future, Google can easily lose. The same can be for search - in the future, Bing could be improved until it is better than Google Search. Google believes they can make a better product than Samsung and Microsoft and so they compete directly with them on quality by providing the open underlying system for everyone to compete fairly on. Google isn't trying to make a direct profit off Android - they are trying to make a 'web browser' as they do with Chrome where Google services have at least an equal chance to be used over Bing or Samsung services. Once they have that open platform, they believe they will always win on quality.

So the only 'risky bet' Google is taking on Android is the same 'risky bet' they take on Search, Gmail and everything else Google makes - the risk that they can't compete on quality (it is a risk, but it's the risk that Google the company is founded and based on).


@RyanZA: the core of it is GPL (Linux kernel + drivers). What Google develops is Apache, but that cannot be taken and extended/modified, so it does not matter. Nobody is going fork the Android SDK and make some incompatible version annoying 600.000+ app-developers in the process, that would be pure lunacy.

Baron95> LOL - If I spent $20B buying a refinery in Los Angeles and gave the fuel away, I bet I could achieve 70% fuel market share in that market.

If that fuel only worked on your cars and you sold cars, that would not be a bad idea. The value of having knowledge of WHERE people are, WHO and WHAT they are emailing, WHAT websites/apps they use is important info. Google has literally increased the price on their ads by a factor of 100.

Google is not giving away anything, this is not a charity project, they have already been paid in full, and by making it open source, and by owning the largest appstore, it cannot move in 100 different directions forward, it can only move in one direction..


I really curios as why Baron95 would make a long debate on whether Google making money on Android, and defending that Nokia was making the right decision when elop announce the burning platform, and also defending Microsoft doing great, where in fact WP7 is a failure.

Why is it so important for Baron95 that Android with open source die, and Microsoft win...


Google mobile revenue for 2012 is expected to be 8 billion USD (up from 2.5 billion in 2011). Google typically keeps a 30% share of that revenue. So even if we put Android investment at 20 billion USD, it will be recovered in 2014 at current growth rates.



You're comparing past years iOS against parts years Android. SGS3 only launched recently and most Android devices are still very low powered - they can't really browse the web well yet.

However in 1 or 2 years, the cheap, low cost Android devices will look similar to the SGS3 (same as cheap low cost Android devices now currently look like the original Nexus). So in 1 or 2 years, Android will overtake iOS in ad clicks and likely ramp up very fast towards mobile ad revenue as well. Basically, you're using the past to decide the future without including the growth and changes that have happened over the last year - very very bad mistake - same one that Nokia made when deciding against touchscreen phones.

Also I'm not sure where you get the $20billion from? Do you mean every cent Google has spent on salary / acquisition costs etc? That number seems very low considering the amazing success of Android if true. If $20bil is all it took for Google to literally place their software in the pocket of 70% of the world population going forward.. then it's likely the best spent $20bil in the history of humanity. Just check how much people pay for a regular interstate highway that services a tiny tiny piece of the planet.


>> Google typically keeps a 30% share of that revenue.

No, they don't. If the app developer gets 70% the rest of the 30% must include all the costs involved in money transactions, meaning exchange fees, credit card fees and other stuff the banks involved in the process take.

Running an app store also costs quite a bit of money so I find it puzzling why some people tend to treat the 30% as profit. I guess at the end less than half of it is left, if not significantly less.


As others have concluded, both Android and iOS can survive the smartphone platform wars. The smartphone market is certainly large enough to support more than one platform. To put things in perspective, the current apparent runner up, Apple, will soon be selling more iOS devices per year than MS sells Windows licenses.

Both iOS and Android are currently healthy enough that no one should be worried about them becoming burning platforms. They are in a class of their own. The only other currently viable contender is probably RIM because of their deep pocketed installed base and because their next OS will be able to piggy back somewhat on Android's success.

If I had to choose which of Android and iOS are in better shape right now, I would say iOS. Yes, there are more Android smartphones but when you include all devices, the difference is much smaller. Android already has a problem with fragmentation, and, when compared to iOS has a less platform features which encourage user lock-in. Note: I am not saying iOS is better than Android or that iOS is going to beat Android. I just think it is currently a safer bet to maintain momentum.

One last point. Android success does not equal Google success. Android can be and has been forked and Google could very easily lose control of Android.



How can samsung success threatening Google??
If I want to use samsung, I still want to buy apps from Google Play store... REASON??? Because when I change my phone to Motorola or Sony or LG or Huawei or ZTE, I would still download all the apps I purchased in my Samsung Android. If I bought the apps in Samsung store, I could not re-download in my future Motorola or Sony or LG or Huawei or ZTE or Yu Long Coolpad. This GOOGLE BRAND ecosystem is the glue of android that won't be easily kick away.

How can Amazon success threatening Google??
The way I see it, Amazon did great in forking Android, but it's a flux, only a temporary market that resulting Amazon tablet to become a niche market. A market that Amazon really want. An e-reader market. As for those who really want the real Android tablet, will get the US$ 200 Google Nexus 7 anyway.

Fragmentation... is CRAP created by the God... I mean Steve Jobs.
Just FYI, this whole fragmentation crap is the one that make Apple losing market share.

First, on OS
Do you know the last iOS for iphone 2G is version 3.1.3
The last iOS version for iphone 3G is 4.2.1
and the last iOS version for iphone 3GS will be 6.1
and while talking about this, Siri is available for some version of iphone, but not on iphone 3GS of the same OS

retina display?? what is the resolution of the retina display??
Do you know why apple can't have iphone nano??
because... unlike android phone that have different resolution for different size of phone, apple keep on insisting have the same resolution...

FRAGMENTATION is a bully word to bash android
but in reality... this is the one that hurting apple.

Tomi T Ahonen

To all about Google vs Samsung

They are competing and cooperating at the same time. Google's purchase of Motorola put it directly in competition with Samsung's core future strategy, the smartphone business. Sammy's bada and now Tizen projects put it directly in competition with the essential core of Google's world domination plan for this decade and beyond. They are competing.

But they find the current collaboration on Android and Galaxy very useful for both. Look at Sammy's role in the Android handsets, nearly half. Look at Sammy's dependency (currently) on Android, 90%. While Samsung will shift gradually to its own platform(s) it might well never full abandon Android. And as Google has already 7 of the Top 10 biggest smartphone makers on Android, they can have a very good life even if Sammy left completely.

The thing with this partnership is, that it is not particularly poisoned (at least, not yet). So they do see each other encroaching onto their own turfs, but they also see a lot of benefits from the cooperation. And neither is seen as the greedy stab-you-in-the-back style of 'partner' like say, Microsoft haha...

I'd still expect half of Samsung's smartphones to run Android two years from now.. but that increasingly, Sammy will shift to its own platform(s) and - if and when Tizen gets traction, the Tizen partners like Huawei will also start to shift parts to that world

Tomi Ahonen :-)


Google seems to aim at Android on all mobile phones. That is, 7 billion handsets.

Can Samsung deliver billions of very cheap Smartphone handsets? Will they?

Or will some Chinese or Indonesian company churn out a billion cheap smartphones? And will they run Android?

If they will run Android, will it matter what Samsung does?

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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