Android - Why Google Needs It To Succeed

If you've followed this blog for a while you'll know that I am involved with Android application development. This means I have a vested interest in seeing Android succeed. It doesn't mean that I will be ruined if Android fails or falls short of iPhone's appeal, just that as matters currently stand I benefit from Android's continued market acceptance.

Regardless of the my situation, I have always been puzzled by Google's intentions with regard to Android. Their attention (and resources allocated) to the Android Market and to their OHA partners is exceptionally poor. I would have thought that they would at least give the Android business more personal (human) attention than they do to the bulk of their products and services -- Google typically excludes any human-operated aspect to their support systems, relying instead (it seems) on random sampling of feedback and automated, statistically-driven response systems.

It is natural to question just how committed Google is to Android. They have not even adequately explained how HTML5 and their Chrome OS will be positioned versus Android and native Android applications in their overall market strategy. They play Android close to the chest, just as they do with everything else they do. That's their choice. Ultimately, even for a company as technology driven as Google is, there has to be money in it.

Lots of delivered and rumoured phones, tablets and other devices certainly demonstrates that Android has gained broad acceptance by carriers and device manufacturers. Since the platform is available at no charge, this is not how Google makes money from Android. It's been said that the money would flow from the Google experience applications and services that are typically bundled with Android, but this is optional and therefore uncertain, as has already been seen in several devices. Again, Android on its own is not a guaranteed revenue stream for Google.

I suspect the actual business is one of strategic positioning versus the alternative platforms, especially Windows and iPhone. Without a presence in the mobile device market -- Google does not build hardware -- these competitors can lock Google out of the mobile ad market. This comes about in two ways: mobile search and in-app advertising.

...Google prefers to have mobile users access the mobile web instead of have them locked up within smartphone applications. Users tend to use the Google search engine more if they’re surfing the web, which brings Google more cash.

Since Android had to be open with regard to applications and services to gain acceptance with carriers and device vendors, there is risk that Android adopters would sign deals with other search companies such as Microsoft's Bing and other ad networks such as AdMob. However, and I believe this is the key point, Google is at even more risk of losing search and app presence on iPhone and Windows. This is why, for example, the niche mobile advertising marketers are being acquired by Google, Apple and the other large players.

Google is also threatened by Apple's move into in-app advertising with iAd. Since Apple makes its money on selling hardware but not on software or content (these drive hardware sales), they are happy to create strong incentives to app developers and advertisers to use iAd.

If my analysis is right, Android is Google's opportunity -- although an uncertain one -- to protect its ad business for search and apps when its two competitors seek to lock them out on the other mobile device platforms. With the mobile web and apps taking an increasing share of total time spent by users on the internet, this is no small concern, even if there remains a real possibility that native apps will eventually be supplanted by HTML5-driven web apps.

I'll be watching announcements coming out from Google this week during their I/O conference to see if there are any that indicate their future direction on apps, Android, Chrome OS and mobile search.