Google, Google Play and the future of mobile operating systems

There are a lot of Android devices out there. We can’t underscore this point enough, the total number of activated Android devices to date is somewhat in the ether and relies largely upon device activations (a metric that has some limitations) but roughly speaking it’s somewhere in the region of 900,000,000 and shipments for smartphones alone are expected to break the one billion barrier this year. Even accounting for a fairly large margin of error, these are huge numbers; numbers large enough to account for a fairly large proportion of the world’s population if allocated evenly.

Android: Future assured or looming doubts?

The vast majority of this growth is driven by Samsung’s ascendant rise as the master of the consumer electronic space, collecting 95 percent of all Android smartphone profits in the first quarter of 2013 as well as solidifying their status as the major competitor to Apple in the tablet arena by being the predominant source of Android growth in that sector, mirroring the early days of the smartphone market by eating away at iPad market share bit by bit. Additionally, the total number of Android tablets is expected to exceed the total number of iPads by the end of this calendar year.

At a certain level of device saturation it becomes hard for us to conceptualize the scale of what this actually means. Therefore this level of market penetration in the context of Google’s overall strategy requires some elaboration. Eric Schmidt, former CEO of Google and currently acting Executive Chairman prioritized the growth of the Android OS (with particular attention to emerging markets), as a way of cementing Google’s position in what he sees as the future of computer devices. A way of out competing Microsoft without ever having to directly challenge their near-monopoly of the PC-space. Android dominance in the mobile market is therefore meant to ensure Google a Microsoft-like status as part of its wider strategy to branch out beyond web-services and diversify its business. On the strength of these above numbers Google seem to be well on their way to doing this with Android. One result of all of this is that many analysts now believe the future of the smartphone and tablet operating system markets will be in essence duopolistic, that is, a straight up fight between Apple and Google.

However, there are issues with this projection. For example, there’s the question of whether this explosive “Samsung-led growth” is dangerous for Google in the long run. Ever since Google’s purchase of Motorola Mobility marked their entrance to the smartphone market as a consumer electronics manufacturers, Samsung have been dropping hints that they would develop their own OS, later revealed to be part of the “Tizen” project developed in coordination with Intel. Naturally, Samsung’s already massive install base and its status as an established global brand means this move away from complete reliance on Google seems, at face value, inexorable. However, for Samsung to be credible challengers to both Apple and Google in the mobile OS space they must address existing issues with their own software, which to date hasn’t been as well received as their handsets and tablets have (to be kind).

Unsurprisingly, Samsung aren’t the only established consumer electronics manufacturer with an eye on developing a native operating system for their own products. Emerging Shenzhen based Chinese tech-giant Huawei also has its own OS in the works, but Huawei bosses also insist this is merely an insurance scheme in the event of existing partnerships with Google and Microsoft breaking down. In spite of these assurances it’s not hard to see why the option could seem attractive, given Huawei’s increasing prevalence in what is now the largest smartphone market in the world. The prospect of Huawei “going native” also raises questions about the long-term plans of the two other Chinese consumer electronics’ giants, ZTE and Lenovo. This widespread interest underscores a crucial difference in the tablet and smartphone OS market when compared to the PC OS market, namely that the cost barriers to entry in the former are much lower than the latter.

The strategic long game for Google therefore seems more fraught with danger than initial Android activation numbers would suggest. For Google to compete effectively in a mobile OS market that could once again multi-polar in the near future, it needs to establish Android as something with more to it than simply “the alternative to iOS”. It needs to capture the imagination of people in much the same way iOS initially did on the iPhone, combining functionality and flair seamlessly, and delivering as near to native performance as it possibly can if it remains a cross-platform operating system at this point. Additionally, Google, having placed key executives in top positions at Motorola Mobility following its acquisition, will have to demonstrate whether they’re capable of delivering truly innovative, disruptive smartphones in the same vein as Samsung’s Galaxy Note and the iPhone, or at the very least steer the subsidiary away from its current predicaments.

The Google Play conundrum

There’s also a paradox at play as far as the existing Android numbers go, namely that these raw figures in terms of activated devices aren’t translating into dominance in web-traffic vis a viz iOS or comparable app store revenue (Apple accounts for somewhere in the region of 65% of all App revenue) through Google play when compared to Apple’s App Store. This has already been a topic that has received a fair amount of attention, but it’s worth briefly summing up some of the major reasons as to why Android still lags behind despite apparent sales at a device level.

Android holds most dominant sway in emerging economies like China and India, economies where the middle class, despite their nascent wealth, do not have the same degree of disposable income to spend on micro-transaction based products as consumers in the West do. Furthermore, repeated studies have shown that even within developed economies like the US, the demographic profile of an average iPhone or iPad user is generally wealthier than that of the average Android user.

Why Android is here to stay (for now)

Despite all of this, the current major smartphone and tablet manufacturers who are reliant on Android have too much to lose by moving away from Google. True, Android is heavily fragmented already and sacrifices performance to achieve uniformity across heterogeneous hardware architecture, but the manufacturers recognize that further fragmentation would be costly and dangerous, in that it could very well alienate markets that are becoming increasingly used to dealing with either Android or iOS as the two sole proprietors. On top of this, despite the aforementioned gap between App Store and Google Play revenues, Google Play is growing at a phenomenal pace and closing the gap on Apple, which is going to make consumers even more dependent on Google Play as a storefront. As a result, we’re unlikely to see major paradigm shifts occurring overnight; instead, we’ll see companies like Samsung testing the water with their own operating systems to gauge market reaction, and then planning long-term strategies off the back of the data they receive from those tentative forays. Therefore, any major change to the market won’t come unnoticed, and we’ll have advanced warning of it.

Mobile operating systems and platforms as a whole are an important topic for anyone in publishing, since tablets and smartphones have been key drivers of digital publishing growth and because the emergence of new software platforms would in the minds of many necessitate new delivery methods to reach those platforms, something that can cause headaches for many traditional publishers. This is something we’ve talked about internally, to our clients and to the wider publishing world many times at YUDU.

The conclusion we’ve reached is that cross-platform applications are going to become increasingly important in the face of long-term uncertainty. Creating, maintaining and building upon apps that work solidly around a platform agnostic runtime environment whilst maintaining feature richness is imperative for us hence the reason for our already successful cross-platform apps, alongside maintaining the option for native iOS or Android apps for publishers who may well prefer that option.

Allowing our clients to tailor their choice depending on their needs is an essential part of what we provide. Combining platform ubiquity alongside choice. As strange a phrase as it may be to use in this context, having the peace of mind of knowing your digital publishing needs can be met across all devices in spite of often frenetic technological change and development is a common concern amongst clients, and something we always aim to meet.

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