Google, Android and Samsung: A Love Affair?

Contrary to popular belief the Android operating system, which powers a variety of mobile phones and tablets (in addition to a host of other hardware peripherals) is not the cash cow for Google that many think that it is. In fact, in 2012 Android accounted for paltry $550m of Google’s $5.5bn 2012 turnover. So why does Google continue to invest in a product which in comparison to its core business seems like a commercial failure? Furthermore, should Google be worried that a single handset manufacturer continues to dominate the vast majority of all Android handset sales?

One only needs to look at the origins of Android in order to realize that it was never directly meant to create a massive new revenue stream for the company; after all, it was designed in order to be freely distributed. Google’s aim was to benefit financially from the selling of advertising, which would become increasingly personalized, based on the data that the company could obtain from users of its Android operating systems. Therefore, if Google’s aim was to get Android in the hands of as many consumers as possible in order to push its other services and deliver more bespoke advertising then it would appear that they succeeded, because by Q4 2012 Android accounted for 70% of the global mobile market. It is unlikely however that Google would have anticipated that the growth of Android’s market share would be to the potential detriment Android itself.

Until 2010 Google was content with simply providing the software that was powering the growing mobile handset market, after all the company remained an advertising business and Android facilitated that. However, seeing that other companies were altering the Android experience, and thus potentially Google’s source of data, the company got into the hardware business and introduced its Nexus series. The Nexus series are handsets that were designed by Google alongside 3^rd party handset manufacturers (HTC, Samsung and LG respectively), which run Android without any software tweaks. This is important for Google as it gives them control over what services and applications the end user engages with. The problem that Google faced is that the Nexus brand has always been a sub-genre of phones that never gained mainstream popularity. Whilst the Nexus phones have failed to make a dent in the market, the success of Samsung’s Galaxy series has propelled the company to the top manufacturer in the world with 30.3% of the mobile market share. Samsung realized that it was not in their interest to be too heavily reliant on Android (lest it be taken away from them) and therefore opted to heavily skin their Android phones so that they don’t resemble a pure vanilla Android experience. On top of that, in order to mitigate any further evidence of Google’s influence, they add a plethora of ‘S’ services that look to replace Google’s native applications. The effect Samsung’s self-branding is that people don’t by a Samsung phone because it runs Android, they buy an Android because it’s a Samsung. Samsung have been able to ride the success of the open source Android operating system, offer an outstanding alternative to the iPhone, and are now in a position where they are not beholden to Google’s Android, as Google want it to be used. Google now finds itself in a situation where Android’s greatest advocate has becomes its greatest commercial threat.

As it stands today Google is in a bit of a pickle. At its inception, Android needed OEMs to push the hardware side of the Android ecosystem. As the software became more advanced and more popular it became a bit of a poison chalice for Google, as manufacturers began to put their own spin on it to differentiate themselves within an increasingly competitive market. This has left Google with two options. This first would be to clamp down on how Android is implemented, but this is unlikely as it is wholly against what he open source nature of the operating system stands for. The second is to continue to invest in their Nexus branded phones and ship to a broader market at prices that undercut their competitors; a strategy that has worked well with the Nexus 4. Furthermore, with the existing pipeline of phones that were already in place when Google acquired Motorola in 2011 coming to an end, we can expect a Google influenced and Motorola built phone come out market soon which will allow Android, in its purest form, to stand out on its own in a very real and very compelling way. With Google I/O around the corner, many of these uncertainties ought to be made clear.

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Twitter's 7th Birthday...I never saw it making it past 1!

It was Twitter’s 7^th Birthday this week, a milestone for a company that I was convinced would never hit the mainstream. Twitter was created in March 2006 (I heard about it some point in 2007), and although the exact date that I came across it alludes me, my response to its existence does not. It’s Ridiculous. No one will use it. It will be a fad at best. Evidently I was wrong... very wrong. However, I stand by the response I made back then and despite what I know now I still maintain that based on my understanding of the world back in 2007, Twitter was not meant to profoundly affect our lives.

It’s very easy to think that how things are now are how they have always been. In my lifetime I have experienced life without a mobile phone, a desktop computer and an internet connection, yet in the absence of each of these things ever coming into existence life went on. If you asked me now whether I could live without any of these things, the answer would most certainly be no. It’s only once we have had a taste of the future do we realise that we were living in the past.

I was 13 when I received my first phone, and I loved it, not because it represented the commencement of a technological revolution which would culminate in the ubiquitous smartphone, but rather because it would enable me to text girls. The idea that the phone represented something bigger was beyond my comprehension as I was limited by my finite knowledge of what such a product could eventually do.  I didn’t know what I didn’t  know, and thus to have loved my phone for another reason than because it made calls and could text would have been absurd. If on my 13^th birthday I had received an iPad (albeit technologically impossible) instead of the phone, I would have sold it in order to get the phone. Why? Because the world was not ready for the iPad and I would have derived no benefit or enjoyment from it. There would have been no content, no ecosystem, no developers; no nothing – just a metallic square. So if you had told me that this device would change the world, I would have disagreed, not because it was an amazing piece of technology, but because we hadn’t yet worked out how it would fit and add value to our lives. And this how I saw Twitter... Yes the premise was innovative and in theory its reach could be extensive, but there wasn’t the social infrastructure to support it. Remember, this was a time when the internet and apps were not delivering rich integrated real-time content to us on multiple devices, and although we thought we were living in a time when everything was instant the truth was that we were not. We thought we were running, when in reality we had just learnt to crawl. I felt that the world wasn’t ready for Twitter because the world had never (en masse) envisaged a situation where one person could speak to the world; and even more amazingly, where the world could then respond.  

The evolution of Twitter from an application that limited your communications to 140 characters to a service that has changed the world did not arise simply because more people downloaded it; it was because more people began to imagine what they could to with it. It represented a global collective awaking. No matter whether you are a marketer, a reporter or an activist, Twitter fundamentally changed the way you lived and interacted. However, like a knife that can be used by a surgeon to save a life or a criminal to take one, the power of Twitter rests with its users.  The 2010 Arab Spring saw millions of people who had been historically silenced, discriminated against and betrayed receive a voice which they were told they never had and did not deserve. The individual became part of the collective and like water rushing towards the ridge of a dam, the power of a shared vision caused cracks to form in what had been the established way of life for centuries. Yet just as easily as Twitter was used to help bring about a seismic shift in Arab governance, it was used to bring about devastation to one of the world’s greatest cities. The London Riots of 2011 brought scenes from Hollywood to the Streets of Hacky, and Twitter (along with BBM) was the fuel which allowed the fire to spread in a way that was unpredictable, uncontrollable and to many Londoners, unthinkable. London’s misguided youth used the service to boast of their ill-gotten gains whilst using it to group together disparate rioters into a single coalesced force that initially could not be tamed. The world watched as the young waged war and the old struggled to keep up. The pace was frightening. The consequences were devastating. And the lessons were humbling.

Thus instead of Twitter dying a lonely death a few years after its launch, it has become ingrained in the social fabric of our lives. It is one of the world’s most powerful tools as it deals with its most valuation currency; information, and unlike the rest of the world’s valuable commodities this resource cannot be bought, stolen or restricted. Before we never new that it existed, but now that it has been discovered, it is free and unlimited for all. Twitter is here to stay and will continue to shape the way we communicate. In this vain, one should not assess new technologies based upon what it can do today, but by envisaging it’s potential based on what it might be able to do tomorrow.

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