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The Tricky Road Ahead For Android Gets Even Trickier
HughPickens.com writes: Farhad Manjoo writes in the NYT that with over one billion devices sold in 2014 Android is the most popular operating system in the world by far, but that doesn't mean it's a financial success for Google. Apple vacuumed up nearly 90 percent of the profits in the smartphone business which prompts a troubling question for Android and for Google: How will the search company — or anyone else, for that matter — ever make much money from Android. First the good news: The fact that Google does not charge for Android, and that few phone manufacturers are extracting much of a profit from Android devices, means that much of the globe now enjoys decent smartphones and online services for low prices. But while Google makes most of its revenue from advertising, Android has so far been an ad dud compared with Apple's iOS, whose users tend to have more money and spend a lot more time on their phones (and are, thus, more valuable to advertisers). Because Google pays billions to Apple to make its search engine the default search provider for iOS devices, the company collects much more from ads placed on Apple devices than from ads on Android devices.
The final threat for Google's Android may be the most pernicious: What if a significant number of the people who adopted Android as their first smartphone move on to something else as they become power users? In Apple's last two earnings calls, Tim Cook reported that the "majority" of those who switched to iPhone had owned a smartphone running Android. Apple has not specified the rate of switching, but a survey found that 16 percent of people who bought the latest iPhones previously owned Android devices; in China, that rate was 29 percent. For Google, this may not be terrible news in the short run. If Google already makes more from ads on iOS than Android, growth in iOS might actually be good for Google's bottom line. Still, in the long run, the rise of Android switching sets up a terrible path for Google — losing the high-end of the smartphone market to the iPhone, while the low end is under greater threat from noncooperative Android players like Cyanogen which has a chance to snag as many as 1 billion handsets. Android has always been a tricky strategy concludes Manjoo; now, after finding huge success, it seems only to be getting even trickier.
The final threat for Google's Android may be the most pernicious: What if a significant number of the people who adopted Android as their first smartphone move on to something else as they become power users? In Apple's last two earnings calls, Tim Cook reported that the "majority" of those who switched to iPhone had owned a smartphone running Android. Apple has not specified the rate of switching, but a survey found that 16 percent of people who bought the latest iPhones previously owned Android devices; in China, that rate was 29 percent. For Google, this may not be terrible news in the short run. If Google already makes more from ads on iOS than Android, growth in iOS might actually be good for Google's bottom line. Still, in the long run, the rise of Android switching sets up a terrible path for Google — losing the high-end of the smartphone market to the iPhone, while the low end is under greater threat from noncooperative Android players like Cyanogen which has a chance to snag as many as 1 billion handsets. Android has always been a tricky strategy concludes Manjoo; now, after finding huge success, it seems only to be getting even trickier.
"The 'Majority' Of New iPhone Switchers Came From Android"
With Android's huge marketshare, wouldn't you expect that to be the case?
What if a significant number of the people who adopted Android as their first smartphone move on to something else as they become power users?
That would be a possibility if there were a more power-user-friendly smartphone platform. However, Android is the platform for power users.
In Apple's last two earnings calls, Tim Cook reported that the "majority" of those who switched to iPhone had owned a smartphone running Android.
That is hardly surprising, since that is true for people in general.
Still, in the long run, the rise of Android switching sets up a terrible path for Google — losing the high-end of the smartphone market to the iPhone
While the iPhone is definately in the high-end segment of the market if we look at the retail price, it is hardly competetive to high-end Android phones functionally. They serve a different market. Hence, I don't think this is a big threat for Android's market share.
When Android has the vast majority of the market, where do you think the majority of people "switching" to Apple are going to come from? The single digit % of users running Windows phone or Blackberry?
How many of those people bought a cheap (crap) Android device and then instead of spending money for a "superphone" decided to go the the "cult of iDevices"? I've had a number of android based devices and given the broad range of hardware out there it's easy to get suckered into buying something that's absolute crap and then wind up blaming the part you can see. I've had a few friends that made this kind of switch and when I pull out my current Android device (OnePlus) most of them kinda kick themselves.
There's statistics, and then there's useless bullshit. I'm thinking this is more the latter.
So 16% of iPhone purchases were made by people who previously owned Android phones. (I'm going to assume here that "owned Android devices" doesn't mean you owned a Nexus tablet and now are buying an iPhone.) This statistic is useless, though, unless you also find out how many people buying Android phones previously owned iPhones. If there's an equivalent amount of people getting Android phones to replace their iPhones, then the "16%" isn't really a loss for Android. It's just normal churn. Presenting the 16% figure on its own is misleading as it makes it seem like people are fleeing Android and nobody ever leaves Apple.
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Google doesn't care about the platform, they want screens in front of faces.
Putting 100 android screens in front of 100 faces 1% of the time is making them money.
Putting 50 iOS screens in front of 50 faces 2% of the time, is making them money.
There is nothing tricky about this for google... They want to grow, they biggest source of income is ads, ads are all about getting people to look at things.
They have two options, they can try to compete for a bigger slice of the same sized pie, push all the other ad companies out of business...
OR they can get us to spend more time with our screens in front of our faces, the pie gets bigger and even if every one keeps the same percentage of the pie, Google makes more money than the rest of them.
Why is google working on self driving cars? They want you to use your commute time to browse the web.
Why is google working on glass? They want to be in front of your face every waking hour of the day.
Why is google running internet lines and looking into connectivity by high altitude balloons? Every hour they can one additional person connected to the internet is making them money, connectivity to places that don't have it expands their portion of the pie.
Google provides Jquery libraries, graphing software, mapping software, and DNS servers to make the internet faster and more reliable because the more people looking at more pages makes them more money...
Screens in front of faces, that is what google wants... They don't care about the platform, they gave andriod away to get cheap devices out there to put screens in front of faces.
Google pays billions to Apple to make its search engine the default search provider for iOS device
Think of how much MORE Google would have to pay if Android was not the dominate OS. . . HINT: Companies usually Open Source technologies to reduce costs, not to DIRECTLY increase revenues.
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Why would a 'Power User' move from Android to iOS? They won't be able to do any of their 'power things' any more.
This article makes no sense at all.
No, I don't see it as in issue for anybody.
Every iPhone I buy has been used *hard* for two years by two busy professionals working as consultants, and then used continuously as a home telephone (we kept our landline number and ported it to a cell number because it was actually cheaper than the monthly taxfest that is a landline) and then used pretty hard by a 10 year old boy after that.
I may buy a new iPhone every year, but every one of those iPhones gets used for four years and by then it's not even a question of battery that's an issue, but of software and processor obsolescence for any kind of a serious tasks, and I don't think that's really all that different for Android users, either. The only hardware issue I've ever had was a volume up button on a 4S that crapped out six months in, and it was swapped out in store for a replacement phone in 10 minutes.
I really don't understand guys like you that are so angry about people who do buy a phone every year. Admittedly the biggest "feature" add on year on year is mostly CPU/RAM, although the screen size bump with the iPhone 6 Plus has been the main thing this year. It's a fucking tax writeoff for us and even if we bought 2-3 phones individually we'd be looking at upgrades every 18 months or so anyway, so one every 12-14 months doesn't seem outrageous.
I sometimes think the hostility is because you're too broke, too cheap or just flat-out jealous.