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November 14, 2012



@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?


Who knows? Maybe some other company surprises us with something really innovative and desirable.
If that happens Microsoft will look quite bad.

And concerning 'giving away Android for free', have you ever thought about the advertisement Android's mere existence is doing for Google?

Saying 'they spend $20B to give it away for free' is quite an oversimplification of the matter.

I'd rather say you do not really understand this company's philosophy.

chunky beads

Mitä sanoit tehnyt paljon järkeä. Mutta ajattele tätä, mitä jos olet lisännyt vähän sisältöä? Tarkoitan, En halua kertoa miten ajaa blogiisi, mutta entä jos olet lisännyt jotain ehkä saada ihmisten huomion? Aivan kuten videon tai kuvan tai kaksi saada. Voit tarkastella tätä tasoa teidän kummankin velvollisuus rahat takaisin-takuu, käy HINNAT verkkosivuilla seurauksena etsiä kaikki koko google haku.



You seriously aren't getting it even when people explain it to you over and over - Google gives away search. When Google started giving away search, they also didn't make money on it.

1) Get marketshare
2) Make money from it

The gap between 1 and 2 can be 5 years - and Google will never make money off Android directly - they will make money off added services to Android (most notably Google Play - 15% profit off a large sum of the world's software spending in future will push Google above Apple). Exact identical strategy to Gmail / Search / everything Google does. Google can still mess this up by making it hard for people in China / India etc to use Google Play. Currently Google Play is very USA centric which is a terrible mistake as it lets others in China compete. If Google can roll out all of their services to China and other countries quickly they will have a huge advantage in the decades to come. (ie. Buying Nexus devices in countries other than USA for cost, etc)


Why Google gives away Android is a question that is rather easy to answer.

If all Smartphones were running iOS or WinPhone, then Apple and MS could very easily cream off all Google's income. Putting a toll booth between the user and Google is quite simple.

But it is very difficult to get a person to understand something if his income or religion depends on not understanding it. This thread illustrates this maxim very well.

Earendil Star

Why bothering with the usual troll comments?

Not because we are trying to convince them, but just to be sure that occasional readers of the blog are not fooled by their baseless arguments.

Today's pearl of nonsense: "Microsoft is paying Nokia"

This is a joke, right? If Microsoft were paying Nokia, no one here would be complaining in any way.
What is troubling is that *Nokia* is paying *MS* for being acquired. Never ever seen before.
Apart from the alleged "1 billion" that was hinted when the original agreement between Nokia and MS was signed (and never thereafter demonstrated), there is no indication of anything MS is paying to Nokia. On the contrary, Nokia is paying a licence for ALL W POS installed on their phones. Plus, they gave MS patents, maps, store, you name it.
The math does not add up. Why doing this? Why betting (still) on a (P)OS that brought Nokia from 30+ to 3% market share in smartphones?
No answer whatsoever, unless you yield to conspiracy theories.

Today's best unanswered curiosity: Cycnus' "why [some] would make a long debate on [Google and other nonsense]"?

Well, perfectly legitimate question. Why? Why hoping that Google gets pursued on an "anti-dumping" basis (thus demonstrating they don't even know what "anti-dumping" means... what a laugh!). Why this hatred?
It is actually very similar to the obsession THT Elop has against Android, and his obsession that WP becomes a viable "third ecosystem".
Why is he obsessed with that instead of with Nokia's real problems?

Today's best reply to today's best unanswered curiosity: trolls and astroturfers

Yes. The answer was given before the question was even asked. Thank you John.

By the way, the funny thing is that these guys are always forced by events to demonstrate the impossible.
* In the past, they tried to say that WP7 was a serious option for Nokia (and anybody else, for that matter).
They immediately got contradicted by their employer, MS, when it osborned the crappy WP7 platform, a short time after launch.
While ensuring no transition path for the poor guys that were tricked into buying the WP7 crap.
* Now, the usual trolls are trying to say that despite Android having gained 70% market share, it is losing.
Trouble is, consumers buying droids do not read techno blogs much, and the meaningless comments being written even less. So this FUD is totally useless.

So, WP8, with Win RT and W8, was meant to be the turning point. Ooops... maybe it won't be.

But no worry. The usual trolls will just tell us to wait until the next W9 / WP9 iteration.

Meanwhile, we will continue to read their deluded comments with amusement.

Never refraining from exposing their fallacies, though. Just because it's easy :)


Regarding the 'Samsung and Google are at war' idea that came up earlier in the comments...

Seems a bit strange to be at war while working together extremely closely to create devices? Maybe the relationship is pretty good after all?
The only one Samsung is interested in being at war with is Apple, who are moving their business away from Samsung. Rather than seeing Samsung move off Android, I think we're going to see a lot more of Samsung and Google working together to push Apple out of phones.


"If iOS continues to outsell Android in the US and other advanced economies"

The problem is that iOS is _not_ outselling Android in "other advanced economies" -- rather it is the converse...


@Earendil Star:

>> No answer whatsoever, unless you yield to conspiracy theories.

You don't need conspirary theories to explain what's happening.

They made a bad decision, bet their entire company's future on it and when it tanked had no working alternative to salvage what's left and probably no resources to develop some alternative strategy.
Right now Nokia is in a position where the only option left is hope and pray that the unlikely event of WP8 being successful still happens.

It's also not Elop who dismissed Android, that decision was made by the board before he was even hired.


Of course the 30% share that Google takes does not directly translate to profits. But I would be surprised if running the App store costs more than a couple of millions per year. And as large customer, Google is able to negotiate better rates than the 2% or so that a typical retailer pays.


@LeeBase: "And Google most assuredly NOT gotten it's investment back yet. Google and Facebook are both struggling to monetize mobile....all the while mobile canabalizes their profitable web businesses."

You and baron95 keep saying this, but I don't see any hard figures. Google is still the largest search provider in the world by a long stretch. They lead all others by nearly an order of magnitude. Your blithe assumption that this means that they're losing money hand over fist doesn't seem to borne out by their financials:

@LeeBase:"...They bought Motorola for patent protection but what followed? A billion dollar verdict against Samsung and a 10 year cross licensing deal between HTC and Apple."

You're mixing up quite a lot. First off, outside the U.S. Apple's attempts to win patent lawsuits has been abysmal. The UK court sitting as a European Court slapped them down but good, for example.

Second, the Samsung/Apple case was about design patents, not wireless patents so Motorola wasn't really in play. Besides, it's distinctly possible that the jury foreman has created a situation where the entire case is going to be thrown out.

Finally, HTC also knuckled under to Microsoft, too, when MS came demanding Danegeld for bogus patents. That's not uncommon because it's frequently cheaper to pay the patent trolling Dane, unfortunately, than it is to fight him. The patent landscape is clearly a mess.

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