Will Android make Google Money?

August 30, 2010 by admin

On some of the blogs discussing the Verizon Google deal yesterday. Many commentators said they would now prefer Apple's iPhone over Google's Andriod. What they fail to understand is that while Google developed Andriod, Google doesn't own Android.

Andriod is a mobile phone O/S that is not owned by Google. You don't need Google's permission to use it or have to pay Google for it.

From the Andriod Open Source Project website:
Here you can find the information and source code you need to build an Android-compatible device.

Android is an open-source software stack for mobile devices, and a corresponding open-source project led by Google. We created Android in response to our own experiences launching mobile apps. We wanted to make sure that there was no central point of failure, so that no industry player can restrict or control the innovations of any other. That's why we created Android, and made its source code open.

That means literally that you can download the software and create your own Android based phone and not owe Google a thin dime. It is open source. Same as FireFox, same as Linux or Open Office and the price is the same. And since you have the source code you can modify it, debug it and extend it completely independent of Google.

So how will Google make money off of Android?

This question is being discuss this morning on Slashdot as they ask the question

Does Google have an Android revenue-model?

oxide7 writes "Google's basking on its Android success — 200,000 Android units activated each day, total shipments of Android are surpassing those of iPhone in U.S. and Nielsen reports Androids hold 27 percent of US smartphone market — but is the reported success actually minting money for the company?"

He cites this article in International Business Times Does Google have an Android revenue-model?

Recently Google's CEO Eric Schmidt was questioned about this but as there is no way to measure Android's success, Schmidt merely said, "trust me, we do", bordering on abstraction. When asked if the revenue was enough to support an Android project, Schmidt pointed out Google's ad-revenue model saying "Trust me that revenue is large enough to pay for all of the Android activities and a whole bunch more."

Ever since Google launched Android in 2007, its business model around the open-source OS platform for smartphones has been ambiguous. Though, it is a widely accepted that unlike traditional firms, Google does not build product around a viable business model but instead makes a product and then seeks a revenue-model.

Android provides an open-ecosystem for manufacturers and application developers to build products around the platform. However, with no control over licensing, its lack of an Apple style application store to monitor apps and also with no bargaining capacity with service providers, options for Google to generate revenue from Android are slim.
I'm quite sure also that Google will find away to make money off of Android. They are the preeminent practitioner of the Open Source ethos of getting rich by giving it away, but please understand Google is not your enemy and Android is not iPhone.

In the popular mind Google is in competition with Apple because Apple makes the iPhone and Google makes Android, which is seen as the iPhone's new rival. The iPhone has been everybody's new darling, but please understand what iPhone is. It is owned lock, stock and barrel by Apple. If you want to buy it, you buy it from Apple. If you want to write software for it, you do it on Apple's terms, and for now, if you want to use it, you use it on AT&T.

Android, on the other hand, is a mobile operating system based on the Linux kernel and while Google developed it, Google doesn't own it. Android is Open Source Software, the entire source code [which you will never see for the iPhone] is available under the open source Apache license.

Anybody can make Android phones, any carrier can service them and anybody can write software for them, that is the nature of Open Source. For this reason alone, progressives should favor the Android over the iPhone.

And another thing I'd like to point out. All you iPhone users can thank Google for releasing Android because the competition will bring you cheaper and better service, just as all you Window 7 users can thank the Open Source community and the latest Linux Desktop offerings like Ubuntu Linux 10.04 for forcing Microsoft to wake up and perform, and all you Mac users can thank the Open Source community for building most of the inerts of OS X. Peace out.