Google’s (s GOOG) mobile operating system Android is the new Linux: open, free (aside from patent issues), and just a utility. It’s completely worthless as a brand in which to build upon. Unfortunately for Google, Android means different things to different companies. For HTC and Samsung it’s beginning to be a patent mess. And for Amazon (s AMZN), it’s just a customizable layer that doesn’t even deserve branding, acknowledgment, or universal support. And ultimately this will be Android’s downfall into irrelevance.
Android, based originally on a kernel of Linux, and backed by 84 hardware and software partners, as part of the Open Handset Alliance, was first envisioned to be the next open mobile standard. Google presumed, with good reason, that if they were able to get industry consensus there would be less compatibility issues, more sales, and a much higher chance of long-term success. Well, one out of three ain’t bad.
Sales we can’t argue with. According to Nielsen in their latest report, Android accounts for a 43% share of the smartphone market. And the recent purchase of Motorola Mobility (MMI) by Google has led many analysts to believe that Google is saying to the world two critical things: (1) We’re all in on Android; and (2) Securing more patents will help buttress Android from patent suits. But it also showed a significant weakness. “The MMI purchase is the result of Google’s miscalculations about the way value is captured in mobile computing. These strategic missteps placed Google in a position of weakness and forced it into a costly and desperate move,” said Horace Dediu, noted mobile industry analyst.
Android Becomes Linux
It’s fitting that Android was birthed from Linux. Long thought to be the crown jewel of the “open software approach,” Linux is an operating system that is completely free and the source code may be modified at will and given away or sold. It was going to herald in a new era of desktop computing and conquer Microsoft (s MSFT) in the 80s, claimed fanboys. Of course, no such thing happened. In case you hadn’t heard Microsoft went on to have a little bit of success, and Linux pretty much became destined for servers, where it mostly resides today. In fact, the competitive advantages that Linux held over other operating systems — free to use, easy and legal to modify, and can work on nearly any device — led to its being relegated to being just a utility to be manipulated by any manufacturer’s fancy, and an even smaller brand identity among mainstream consumers. Turned out people didn’t really care if their operating system was open or not; they just wanted it to work well.
Android is heading in the same direction. Fragmentation is a big issue (One that Google has acknowledged). Because so many partners are using different versions of Android, updating them when they see fit (as opposed to on a unified schedule), and naturally have different hardware limitations, the Android that developers are expecting isn’t necessarily the Android that their apps can play well with. A recent poll of 250 Android developers found that 86% were concerned about fragmentation, and 56% said it was a meaningful or “huge” problem, an increase over the previous 3 months.
Amazon Redefines Android
If that weren’t bad enough, Amazon’s new tablet, the Kindle Fire, which is built on Android — though you’d be hard-pressed to know — won’t officially support Android apps outside of Amazon App Store. It’s the equivalent of buying a Windows PC at Best Buy and not being able to use Excel on it unless, of course — you guessed it — Excel was also purchased at Best Buy. I don’t fault Amazon for this. It’s actually a stroke of genius guaranteeing that Kindle Fire users will only be buying their matches from Amazon. Users, or detractors, can put the blame squarely where it deserves to be — on Google. By making Android so open as to become a brand-less utility free to be consumed, modified, reimagined, and devoid of the competitive advantage it was born of — namely, openness — Google has allowed Pandora’s box to be opened.
And what’s awaiting inside? Amazon, in a bid to make it “easier” to surf the web on the Fire, has decided to pre-cache user web browsing, meaning use their servers to communicate user information to the site destination. The implications? “Amazon will capture and control every Web transaction performed by Fire users. Every page they see, every link they follow, every click they make, every ad they see is going to be intermediated by one of the largest server farms on the planet, said Apple engineer Chris Espinosa. How’s that for open?
And it gets better. Not only is Amazon changing the purpose of Android –— to proliferate an open mobile operating system — they’re also changing the profit model on which it was created. Espinosa goes on to say:
“[Amazon doesn’t] use Google’s web browser; they can intermediate user click through on Google search results so Google doesn’t see the actual user behavior. Google’s whole play of promoting Android in order to aggregate user behavior patterns to sell to advertisers is completely subverted by Amazon’s intermediation.”
Google gave Android away for free because the more services they could bake into Android, the more advertising revenue they could generate. In the first quarter of this year ad revenue accounted for 97% of Google’s profit (a typical percentage). So Google can’t afford for Amazon’s Kindle Fire to be successful. Not only would that kill the notion that ‘open’ is the future of the mobile space as much as Linux was the future of the desktop, it would also set a precedent: while Google may need Android, Android definitely doesn’t need Google.