Taking on the big boys – Mobile World Live

Taking on the big boys

15 NOV 2012

Without a shadow of doubt, Android has made the mobile internet a consumer proposition, with smartphones available at bargain prices and mobile data services no longer the preserve of the well-healed.

Certainly, it was not the first smartphone platform, and the introduction of the iPhone also had a transformative effect on the industry, but the Google OS has taken smartphones to the masses.

While the search giant does not break-out how much of its revenue is directly related to its Android activities, it forms part of a US$8 billion per-year mobile business, which includes its advertising sales as well as its Google Play content and apps effort.

Mobile has clearly become very lucrative for the company.

Looking back, Google was the dominant force in the fixed internet space, and with the evidence growing that the internet was going mobile, it needed a way to ensure that its services were front-and-centre on the new class of portable, connected devices.

Android, therefore, provided a vital way to ensure its products and services were front-of-mind for the new breed of smartphone users, even if the cost of developing and supporting the platform was significant – short-term pain for long-term gain.

A couple of developments in recent weeks have shown how the company is facing increased competition on its home turf – the mobile internet services at the heart of Android – from companies which have the potential to be genuine rivals.

First-up, as part of its strategy to take its location services cross-platform, Nokia announced plans for an Android SDK which will enable developers to create apps using its mapping data. With Google’s own maps being well regarded in the mobile space – just ask disgruntled iOS6 users – this is quite a bold move for the embattled Finnish device maker.

Mapping services are difficult to do well – as Apple will undoubtedly testify – but Nokia are one of the few companies that can pose a real threat to Google. Nokia does maps well.

Indeed, as part of its alliance with the ailing device maker, Microsoft picked Nokia’s technology to underpin its own maps services, indicating how much faith the computing giant has in its partner’s capabilities.

Secondly, Verizon Wireless has partnered with Amazon to integrate the online retailer’s “app suite” in its Android devices, giving access to (among other things) music, ebook and audiobook content – products Google offers through its own Google Play store.

While this is hardly earth-shattering on its own, it does show how Google is coming under fire in its own backyard. Through its Kindle Fire tablet, Amazon is already competing with Android-powered tablets from various device makers, and is able to price its hardware competitively in order to get its content products and services into customers’ hands — transforming the business model for these products.

With its own app store as well as its multimedia content services, Amazon is almost uniquely well-positioned to take on Google in the content space, leveraging an already trusted brand and fully-integrated payment mechanisms.

There is already evidence that Google can be a little touchy when faced with unwanted competition: in 2010 it was sued by location technology company Skyhook Wireless, which alleged that the search giant had stopped Motorola from shipping an Android device which integrated its products in place of Google’s.

And Google also came under fire for forcing Acer to shelve a device based on a platform similar to – but not the same as – Android, for Chinese e-commerce giant Alibaba.

But with Google already facing various probes into the way it does business, the company is unlikely to resort to strong-arm tactics now in order to try and prevent vendors, operators and developers supporting products from its competitors.

Indeed, one mustn’t forget that Google is in a strong position anyway, through the breadth of the content, products and services it can offer mobile users – an ecosystem which only a handful of companies can hope to rival. But the few that can are looking to Android as the way to connect with mainstream smartphone users – at the expense of Google.

Unlike with iOS, where Apple clearly calls the shots, Android is an open platform. When it pushed Android into the market to drive take-up of mobile services, Google also provided a platform for its competitors to serve the same end users.

And Google is now reaping what it has sown.

Steve Costello

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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