Ever wondered whether Google (NSDQ: GOOG) has plans to tack more revenue-generating services on to Android? If it does, one of them doesn’t look like it will be a licensing fee. Eric Schmidt, the chairman of Google, yesterday reiterated to an audience that Google has no plans to charge for Android in the future, and that it does not intend to change its strategy for Android after it completes its acquisition of Motorola (NYSE: MMI) Mobility.
The comments, made by Schmidt during a visit to South Korea — home base to Android phone vendors Samsung and LG (SEO: 066570) — echo the statements Google first made when it announced that it would buy Motorola for $12.5 billion.
That Google executives like Schmidt continue to be asked questions about how this arrangement will work could point to people continuing to remain skeptical that Google will keep its word.
Schmidt told media in Korea that the plan is to run Motorola “sufficiently and independently,” and “that it will not violate the openness of Android.” He added: “We’re not going to change in any material way the way we operate.” (via Reuters)
The worry amongst some observers — despite Google saying otherwise — has been that by buying a rival Android device maker, Google would channel more efforts into Motorola’s business and provide less support to those OEMs that compete with Motorola and with multibillion-dollar smartphone and tablet businesses built on the platform.
Indeed, giving Motorola preferential treatment would have seemed like an obvious strategy to promote Motorola’s business, so Google’s continuing insistence that it will make sure that Android remains as easy for others to use as it is today appears to make it even more likely that a very primary reason for the acquisition was for Motorola’s patent portfolio.
Motorola Mobility owns more than 17,000 patents that Google will be able to use to defend Android, which is facing a three-front patent war: facing off separately against Apple (NSDQ: AAPL) and Oracle in the courts; and driving Android OEMs into signing licensing deals with Microsoft (NSDQ: MSFT) to avoid further courtroom battles. There are already 10 Android device makes paying licensing fees to Microsoft, and that number could soon go up to 11 with the addition of Huawei.
Today, Google’s main sources of revenue from Android come from making itself the default search engine on the platform (generating more audience and therefore higher ad rates), advertising that runs in its apps, and purchases around the apps, from which Google gets a commission. It’s not clear how much actual revenue Google has made from Android to date but as of the end of June, there were 500,000 Android activations made every day, and it was growing at 4.4 percent week-on-week, according to Google executive Andy Rubin.
In other comments made while speaking in South Korea, Schmidt defended Google in response to remarks made by the late Steve Jobs in his recently-released biography, who believed Android was a crude copy of original ideas from Apple: “Most people would agree that Google is a great innovator,” said Schmidt (via AP/Yahoo), later noting that “the Android efforts started before the iPhone efforts.”