You have heard over and over again how Apple’s tight control over software and hardware is a bad thing. Software needs to be open, Apple needs to license their OS to other companies to be a credible player in the tech industry. And how dare they rule upon which apps can appear in their various app stores? The public won’t stand for it.
But if that’s the case, why are other companies attempting to duplicate Apple’s carefully honed vertical integration scheme? Why is Apple so successful?
Back in the days when the iPod took over the digital music player market, Microsoft recruited hardware makers to license their PlaysForSure system, so you could buy all your music in one place regardless of which music player you owned, other than an iPad of course. The phrase “iPad killer” came and went, because none of those music players caught on.
Microsoft’s solution, or attempted solution actually, was to simply mimic Apple. They contracted with Toshiba to build a music player dubbed Zune, and provided software and a music download service to complete the package. This integrated ecosystem followed Apple’s playbook, while at the same time leaving the companies who licensed PlaysForSure to pick up the table scraps. But the Zune failed, showing that just copying Apple by making both the software and the hardware isn’t enough if the product isn’t compelling.
Now Google proclaimed their Android OS, which is built on Linux, as an open source OS, one that can be freely downloaded and used by licensees. Only it is not that open, since Google is notorious for placing restrictions on the degree to which licensees can alter the system. It has also been reported that the GPL licensing agreement under which Android is available doesn’t allow Google to pick and choose how their hardware partners configure their mobile gear. But that doesn’t stop Google. Software has to be free, and licensees were otherwise supposedly treated equally.
Well maybe not equally when Google contracted with HTC to build the failed Nexus One smartphone, supposedly the showpiece of Android technology. Yes, free and open. But the real truth is that Google will do what it takes to get more Android gear into the wild, since most of their income comes from the targeted ads in their apps and search engines. The more Android customers, the more eyeballs available to, one hopes, click on those ads and start the Google cash registers ringing.
But faced with a growing number of lawsuits over patents that target their partners, Google has tried to increase their own small patent portfolio. Now Motorola Mobility has loads and loads of patents, so certainly Google might have felt tempted. The mobile handset maker is a spin off of the original Motorola company, more or less intended to get rid of the failing mobile division. Indeed, Motorola Holding’s share of the cell phone market has been shrinking year after year, and they continue to report losses.
So perhaps Google only cared about the patents, but having an in-house handset maker as part of the package might have been the icing on the cake. When this ill-thought deal is finalized by next year, there will be a new generation of Droids — or whatever Google cares to call them — which will contain the unvarnished versions of Android, free of interface tampering and altered app bundles. Assuming the wireless carriers will cede the sort of control they gave up to Apple to get the iPhone, Google would have the ability to directly push OS updates. After attacking Apple for having a closed ecosystem, Google is moving in precisely that direction. Can you beat that?
But not quite closed, because Google still claims that their independent hardware partners will get equal access to the Android OS for both smartphones and tablets. Nothing will change, except that Google will now be competing with those same companies courtesy of their Motorola division. You have to think that such manufacturers HTC and Samsung are quickly looking for alternatives, so they aren’t stuck at the bottom of the food chain. It sort of reminds you what happened to Microsoft’s PlaysForSure partners when the Zune came out.
I can see possible short-term advantages to Google. They wouldn’t have to depend mostly on ad clicks to earn their keep. They’d receive revenue from handset sales. But wait, isn’t Motorola reporting losses, and reduced market share? And since Motorola Holdings as an independent company hasn’t set the tech world afire with their handset and tablet designs, how is that supposed to change under Google’s management? Where is Google’s expertise at designing and building hardware? That’s right, they don’t have any.
As far as those cherished patents are concerned, most appear to be in the area of networking, and aren’t likely to impact Apple or other mobile gadget makers.
Worse, you have to think that the other Android licensees are going to be justifiably concerned over this state of affairs. Published reports indicate that they are even now looking for alternatives. Perhaps some will jump in bed with Microsoft, which has already made Nokia first among equals for Windows Phone 7.
It may well be that the Google/Motorola combo may end up actually reducing Android’s market share, as other handset makers jump ship.
To make the whole affair even more confusing, there are now published reports that troubled Research In Motion may be shopping around the company, or at least the patent portfolio. Having a prosperous parent may deliver lots of development cash, but RIM already has an integrated ecosystem, a walled garden. It doesn’t seem to have helped all that much. Besides, how can acquiring a failing company suddenly make it successful?
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