Commentators are busy suggesting that Android-iOS will follow the
Microsoft-Apple path, but what they fail to note is that no
organization can sell or license anything but a standard version of
Windows authorized by Microsoft.
Android Is Fragmenting
What Android will be is another
Unix. When workstations were new, each manufacturer bought a Unix
license from what became Bell Labs. Over time, each OEM added
enhancements which, because they were useful, locked in their user
base. So we had SunOS, AIX from IBM, HP's HP-UX, and several more.
Programs had to be ported and tested on each Unix, and many of the OEMs
made proprietary software to fill in the gaps. Migration became time
consuming and expensive, and only when PCs came along was it worthwhile
for many organizations to move.
Android already suffers from fragmentation, with the majority of
users on old versions of the OS - and carriers and manufacturers
unwilling to spend the time and money to upgrade them. Why would they,
when it's so much easier to sell a new phone with a new contract?
This fragmentation is likely to increase. Manufacturers will
continue to sell phones using the version of Android current when they
made the design, and there will be versions of Android controlled by
other organizations. In tablets, Amazon already uses its own Android on
the Fire, has its own Apps Store, and doesn't see the need to offer
Google+, etc.
Google Can't Thrive in China
In China, once the new leadership is settled, the Communist Party
will want to control social media as tightly as possible. They won't
want unauthorized groups organizing online, let alone flash mobs
threatening their power, even locally. So no room for Google+. They
certainly won't allow Google spy-cars, so no Streetview for
China. Baidu is
already the dominant search engine, so no need for Google there. Google
was even
shut out during the recent Communist Party Congress.
The obvious extension of this is a Chinese fork of Android, so that
the main phone OS is no longer under the control of a foreign company.
China Mobile and the other carriers are hardly likely to object.
ChAndroid can be more tailored for them. ZTE and Huawei and other local
manufacturers will probably gain market share. When they want to
export, they can, if necessary, install another version of Android
.
To show market openness, Apple will still be able to sell iPhones
and iPads. After all, only 5-10% of the Chinese market can afford them.
Perhaps foreign OEMs like Samsung, HTC, and LG will be allowed to
participate too.
But Google will be left on the outside looking in.
Samsung Isn't Wed to Android
Samsung is
already the dominant manufacturer, selling over 50 million Android
phones in the last quarter and taking in most of the profits, leaving
others like LG and HTC far behind. It closely follows the Apple model
but largely owns its component supply chain and also has its own OS,
Bada. It already
customizes Android with its own apps and TouchWiz, a touch interface
also available on Bada.
Like all the manufacturers, Samsung knows that if it can get the
phones into the carriers' shops and the phones work well and look good
enough, very few customers care which version of Android they are
using. They won't be upgrading Android even if the manufacturer
supplies a new version and the carrier allows it. If it ain't broke,
why fix it? Especially if you rely on your phone.
So as soon as Android is good enough, Samsung will want to lock in
users and market share and profits. It can take another leaf from
Apple's book and optimize the ARM chips it manufactures, but for one
version of Android. A faster Android, a better TouchWiz, and good
Samsung default apps may well be enough for lock in. With good sales,
good hardware, and a stable development environment, developers will
come. And, just to show there are no hard feelings, if Google is the
highest bidder, I'm sure Google search and maps will be available
too.
Apple Dominates US Smartphones and Tablets
In the US, for each of the past four quarters, iPhones have outsold
Android. With the launch of the iPhone 5, the gap is likely to
widen this holiday quarter, and web stats show owners download more to
their iPhones. So for US carriers and developers, they are more
valuable customers - and Apple is cutting Google off from them. Google
has long admitted that it makes more money on mobile from iOS, but
native Google Maps and YouTube have already been cut, and the more Siri
is used, the less valuable Google search is, and location based ad
revenue will flow elsewhere.
The online
sales figures over Thanksgiving and Black Friday from IBM show iPad
(10%) and iPhone (8.7%) generating over three times the traffic of
Android (5.5%). As the same ratio has come from web analytics reports
over the past year, more iOS users are actually using mobile power
rather than treating their new smartphone as a nicer looking feature
phone.
Apple Owns the Tablet Market
In tablets, much has been made of analyst reports showing Android
shipments almost catching up with iPad last quarter. That Apple
increased sell through by 44% year-over-year (Tim Cook, analyst
conference call) and was destocking ahead of the iPad 4 and mini
launch seems to have been largely ignored.
Amazon is selling millions of Fires, which analysts include in the
Android figures, but Google doesn't make anything out of those. Barnes
and Noble's Nook too, has been reasonably successful but from the
tablet sales figures released in the recent California trial, Samsung
has made little progress. So how much was the launch at cost of the
Nexus range at cost a desperation move, to try and grab some market
share that Google can monetize?
The Windows/iOS Solution
In business, it looks like a straight fight between Wintel tablets
and iPads where, for once, Apple holds the hardware price advantage.
Most large businesses are trialing or deploying iPads already, and IT
departments have long since standardized on Windows. Unless the Intel
tablets with Windows 8 are compelling with much better performance
and converting Windows programs to apps is easy and effective, most
businesses look likely to stay with Windows 7 or XP and
conventional PCs. The training cost is lower, programs will require
less effort to maintain, and good hardware costs no more.
Businesses can then move to iPads where it makes business sense. In
7-8" tablets like the iPad mini, which will be popular in areas like
healthcare, inventory, order taking etc. Wintel tablets aren't yet a
comfortable, cost effective solution, and Android tablets look to be
too late to the game.
The guys at Google are smart. They know the risks. They know the PC
market, where Google dominates, is getting smaller as the world goes
mobile. They know that if they can't establish Nexus as a brand and get
Motorola Mobility to contribute, their chances of getting more from
mobile will fade as profits from PC advertising sink with the falling
cost per click.
With Android, the biggest risk is that Google has given away the
rope to hang itself. 
