Was Google’s Gamble on Android Really Worth It?

By , Nov 1, 2011

When the original iPhone launched in 2007, Google and Apple actually had a good relationship. Google was set to be the iPhone’s default search engine, and Google was also going to power the handset’s Maps application. Everything was wonderful. And then came Android.

The Android operating system was born in Palo Alto, California in 2003. Two years later, the company was acquired by—you guessed it—Google. The deal was worth an estimated $50 million, but the Android OS could end up costing Google much more than that…

Why it Began

To understand whether or not Android has been or will be a successful venture for Google, you have to understand why it all began. Google’s sole purpose for entering the mobile OS market was for advertising. Anyone who says anything different obviously doesn’t understand the company’s business model. Andy Rubin himself said that Android was designed for “smarter mobile devices that are more aware of its owner’s location and preferences.”

After acquiring Android, Google distributed the mobile operating system to handset manufacturers with the promise of a low-cost, free to license, upgradeable OS that would give companies a fighting chance against the popular iPhone. But more importantly, the operating system removed another barrier between users and Google’s search engine. Have you ever tried doing a search on an Android phone? It takes you straight to Google.com (not Yahoo, not Bing) and its hoards of advertisements. Now how does Google make its money again? Oh yeah, advertising.

The Break-Up

Google joining the mobile OS space put a major strain on its relationship with Apple. Apart from enraging then-CEO Steve Jobs, the move also resulted in Eric Schmidt, Google’s CEO, stepping down from Apple’s board of directors. It was obviously a conflict of interest for Schmidt to sit in on meetings about Apple’s future plans, now that the two companies were direct competitors.

But the problems didn’t stop there. Jobs, as stated in his biography, considered Google guilty of “grand theft” in regards to Android, and vowed to do whatever it took to destroy the OS. His hatred has materialized into dozens of Apple-led lawsuits against multiple Android partners, with many more likely to come. And it doesn’t stop there either. Since Android has come into the picture, the Cupertino company has slowly been severing ties with the search giant in every way imaginable.

For starters, Apple just snatched up its third mapping software company in the past two years. It’s not hard to figure out that it’s looking to eventually replace Google’s mapping technology with something built in-house. But Google’s map-licensing deal with Apple is chump-change compared to the hit it’s going to take when Siri is fully up and running. If you own an iPhone 4S, chances are you’ve been using Siri to find answers that you typically would have used Google to look up. Sure, the service still takes you to Google if it doesn’t know something, but it takes you to an ad-free mobile page. Now imagine a more knowledgeable version, Siri 2.0, if you will, on hundreds of millions of devices. Yes, Siri makes Google very nervous.

Why it Matters

While testifying before the Senate Judiciary Committee in September, Google employee Suzanne Michel admitted that two thirds of Google’s mobile searches are initiated from iOS devices. Wow. Even with all of the direct lines Google has integrated into Android to take users straight to its search engine, over 60% of its mobile searches happen on Apple’s devices. That’s devastating considering search is the whole reason Google got into the mobile OS market in the first place, and even more so when you think that Apple has now made it a priority to essentially wipe the company from its iOS platform. But it’s ok, Google still has Android, right? But how much longer can Google and its partners withstand the lawsuits?

Not only is Apple going after Android partners, but Microsoft has started attacking the manufacturers as well. Google’s OS must clearly infringe on patents owned by the Remond-based company, because Microsoft has asserted its IP (Intellectual Property) against nearly every Android device-maker in the business. Word just got out that it collects licensing fees on over half of all Android devices sold. On top of that, Android has gotten Google itself into hot water. The search giant is currently being sued by Oracle over its deliberate use of unlicensed Java software in its mobile OS. Ouch.

Conclusion

Imagine for a second that Google never purchased Android. Pretend that the company never entered the mobile OS market. Eric Schmidt would have stayed on as an Apple board member, and the partnership between the two companies would have thrived. Think native iOS support for Google services, like Gmail, and much deeper Google Search integration with Siri. With Android out of the picture (or a much smaller part of the picture), the iPhone would have inevitably been more successful. And Apple might have just taken Google with it to the top.

Admittedly, it’s unfair and impossible to predict the way that the mobile landscape would have unfolded had Google not purchased Android back in 2005. But it’s conceivable to think that if Google hadn’t acquired the mobile OS, Android would not be the powerhouse that it is today. And in turn, Google’s relationship with Apple would be much, much greater.

The bottom line isn’t that Android is doomed—it’s clearly not. Google has money to fight the lawsuits, and Android has certainly done wonders for the company’s brand over the last few years. But as Google stares down the barrel of seemingly endless litigation, and the possibility of being erased from the platform (iOS) that generates over 60% of its mobile search business, you have to wonder if Google regrets anything.

You have to wonder if Google’s gamble on Android was really worth it.

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  • Jason Masters

    Of course it was worth it they are the only mobile operating system that can even somewhat compete with ios the os may be buggy and not completed or polished but it is a viable alternative to ios because rim is dead and Nokia well Nokia just turned to another dead os windows mango.

    • DebTym

      haha

  • AbuJaffer

    This article is completely biased up until the last paragraph, while (as with most biased articles) being littered with opinions in between carefully selected facts.

    A better argument would have easily been made that Apple should have just abandoned their iOS platform and worked with Google on Android; its hardware would be supported for a long time on Android, and be perfectly suited for the OS (think the Nexus line). They could even mod it and add their iOS theme (think Sense), and since they would have strong ties with Google optimization and lack of bugs would be as well done as iOS is today (not iOS 5 though, that thing’s a minefield of bugs, compared to iOS 4).

    Not to mention Apple wouldn’t have to lose millions of dollars over lawsuits (or other companies, for that matter), apps would be made only for Android (so a much larger App Store than the one today), and with all the freedom that Android provides (no jailbreaking). Like I said earlier, Apple could have a closed mod of Android, like Sense, that offers the simplicity of iOS; but if a user wants to they can just root the device and install a vanilla OS.

    Anyways, there’s a bunch of flaws in my plan as well, but in my point of view it works out much better for all sides, as opposed to this article’s outcome of simply a wealthier Apple and nonexistent competition, which would simply stifle innovations and make Apple much lazier in making good phones/OS improvements because of the lack of innovations from the competition and/or pressure from consumers (who look at the competition and want those features).

    • Sean

      Are u drunk , drop a well polished iOS , to help develop a crappy android os?…FAIL

      • Anonymous

        This is pre-iOS, we’re talking about before it was even made. Android would be polished because Apple would be making a modded version. Android isn’t “crappy”; it’s a vanilla version, and the OEM’s add whatever features they want. Apple could make exactly the same interface as iOS, but with the underlying Android structure (programming langauge, architecture, etc.).

    • Jofnd

      Most retarded comment. If apple worked with google, it would become what android is right now, crap. Apple lost millions in lawsuits? From which Android manufacturer? How would being with google create less bugs? Android app store currently has a lot of crap, apple would not allow them to get in, creating the CURRENT apple app store… Apple wants hardware to be integrated with software; thats the whole reason it performs so well even though android has better specs.

      Did I miss anything?

      • Anonymous

        The fact that they’re even replying to the lawsuits means they’re losing money. This is talking pre-Android, so the App Store wouldn’t be created, or the Android one; they would have worked together to make a more stable one.

        The hardware could be easily integrated with the software; think Galaxy Nexus, with Apple as the flagship phone.

        Did I miss anything?

    • Karma32

      Android has too big of a footprint, much more of a resource hog that eats up cpu and memory, and isn’t as polished. iOS can run a lot smoother and apps run faster on lesser hardware than a beefed up Android device. While Android devices need 1gig of memory, it’ll still run less proficient than the iPhone 4S with 512mb of memory. Android is slower and overbloated against iOS devices. Thank god Apple doesn’t use Android, I’d much rather have iOS than a fragmented and messy OS like Android any day

      • Jofnd

        Totally agree. Specs are complete bs in android vs iOS.

      • Anonymous

        Once again, we’re talking about all of this BEFORE Android/iOS were even made. That means the entire Android architecture would be made FOR Apple devices. Therefore, the OS would be optimized for Apple devices, like iOS is now, and still be available for other devices.

  • Jt

    Monopoly is never good. So we need android

    • Jas God

      +1

    • Ershad

      +2

    • Painman

      +3

    • J P

      +4

    • Nando

      +4

      • Ghiles

        +5

    • http://ObamaPacman.com/ ObamaPacman

      No property rights, aka Communism, FAILED.

      In addition, iOS is not a monopoly.

  • albioni

    Lol if it wasent for Google ud still have an iphone 3g with couple features instead of iphone 4s. Apple is such an evel company that would have squised you and ripped you hundreds of dollars for one feature at a time. That’s what apple wants no competition, u didn’t tell us nothing new except for the fact of how horrible apple intentions were and still are for the consumer

    • Sean

      Not true , it’s the other way around

    • Karma32

      Yes Apple can be evil, but don’t forget Google is Satan and is the worst of them all.

      • Goofygreek

        Wow, are you really that far up apples ass. Take a look at notification center for example, that’s a complete rip of off androids notification center. Also, how about all the jailbreak apps that have been “created” stolen from devs and apple uses them. Multitasking, copy and paste, etc were all jailbreak apps before apple used them in ios. If it wasnt for jailbreak devs, iphone would be much farther behind then it is right now. Apple is one of the worst companies in the world when it comes down to ethics.

      • Alex

        Wow. Are you serious?

    • http://ObamaPacman.com/ ObamaPacman

      If not for Apple, Android would be a BlackBerry knockoff.

      • Anonymous

        We wouldn’t know anything better could exist (yet), so we’d all be mentally better off. No?

  • anon

    The OS that gets to 70% of all smartphones first wins despite every single lawsuit and licensing deal they had to deal with.

  • Hi-Top

    Look at all the Android fans coming to defend and justify their purchases.

    • Dennyporkchop

      Exactly!!! All the ex-iOS users that spent their hard earned dollars on Android crap. Deep down inside they all wish they would have stuck with Apple.

      • Goofygreek

        Uh, no. I like my gs2. I switched from an i4. Gs2 for me works great and I have no regrets. Also, I like the bigger screen. Fits much better in my hand then the iPhone did.

    • Anonymous

      I don’t have an Android device or a Blackberry, only iOS devices.

  • http://about.me/eladrich eladrich

    You are forgetting windows phone, if Android wasn’t in the picture then most manufacturers would have used, since it’s using Bing it could have made a lot of trouble to Google.
    Apple might not like Google but it doesn’t have its own search engine and it will alway prefer using Godgle’s search engine when the only alternative is using Microsoft’s one.

    • Goofygreek

      I highly fought apple will ever leave googles search engine. It’s the most used engine ever. People would be pissed if they couldn’t use google for searches on thee iOS device.

      • Emre SUMENGEN

        “Couldn’t use Google” is way too much to tell. But, what if Google was not the first resource iOS would use, to give you your information? Or, what if iOS used optimized, non-ad populated Google results? That would suck for Google, while proving advantage to users…

        Win-win for all, except for Google.

        Right?

      • Jofnd

        Siri offers a Google search without ADS, Big G’s main buisness. In a couple of years, many iOS devices will have Siri, lowering Google’s ad profits. And fucking them over. That might not be leaving google, but it’s really close. Second to stopping google, stopping google ads.

  • JC

    Android can be on 80 percent of smartphones however that is not what makes google its money. it the adverrtising. when 60 percent of mobile web searches come from iOS and not android they are not making the money with android as they origonally planned. that is the point of this article . had adroid not exsisted then the google apple relationship would have flourished and googles potetntial to make make even more money would have been greater . easy to say now but who knows what would have really happened.

    i agree that it is becuse of android that ios keeps getting better. Android is the windows of smartphones (PC vs Mac analogy, i know there are windows smartphones) Its more widespread and on more inexpensive devises, hence windows, but its crappy and full of bugs and not polished, again windows, while iOS is like Mac. only one brands device and a much better more polished OS. If apple was to license iOS, (never going to happen) android would no longer be a factor.

    also when comparing an android device to an iphone you can really only compare the top of the line android device running the latest version to the iphone 4 and now 4s. say the galaxy s II. now is where the true sales numbers come in. Apple hands down. I believe that now that iOS is available in all flavors, free 3gs, moderate 4 and top of line 4s, the IOS market share will close the gap considerably because people know that Apple just makes a better product and now everyone can afford one.

    • Jofnd

      If apple license iOS… There WILL be world domination… iOS would be on everything, but it would still be all crap since its hardware and software is not integrated. (not chanllenging your comment, if it seemed like it)

  • Eduardo

    I am a big fan of iOS but I do agree Android is necessary, Apple needs the competition. Their OS is awesome but theyre way too slow to bring major updates (once a year!!), imagine if there was no competition, they would be even slower!

  • _ThaNerd_

    If there was no Android then we would all be doomed by a monopolizing rotten Apple. I say Android will slowly take over as Apple will become stranded in its outdated patents. Android will not only bring novelty features but it will patent them forcing Apple to stick to their dinosaur aged bricks.

  • http://NeXT.com nameRequired

    if it wasnt for android, iphone would still be subsidized at $599. probably… im on team steve jobs lolololol anyway

    • http://ObamaPacman.com/ ObamaPacman

      WRONG. iPhone was NEVER “subsidized at $599″.

  • Control

    Actually Cydia, Installer, Icy, and Rock have made the app store and apple what they are and will be in the future

  • http://www.idownloadblog.com Cody

    So the purpose of the article was to look at Android’s success strictly from Google’s standpoint. Not how it has or hasn’t affected innovation, not which platform produces better products (although those are both interesting topics), but has Android really been the mobile-user driving force that Google hoped it would be. Or might it have been better for Google — from a business standpoint — to stick to being Apple’s search sidekick.

    Thanks for reading!

  • diaztronaut

    What are the proper references for calling out Android and Google? This was an amazing article, and I would like to have deeper information.

    Thanks!

  • mohgui

    i still don’t get it why people who abandoned iOS for Android still come by and give their crappy comments here. maybe it’s because they have a slight hint of regret changing and want to see what’s brewing in Apple…

    • anon

      Stop picking sides, many people use both daily.

  • albioni

    Cody ur a dummy dude, sorry i meant funny dude.
    Don’t be mistaken. You as Sebastians side-kick vs Google with apple. If anything apple and all other digital company’s are Googl’s side-kick

  • smith K

    China Baidu is taking Android, removing all Google services to put their own services instead.
    So, google thought android is working for their main chinese competitor Baidu…

  • http://www.facebook.com/profile.php?id=548063099 Lucas Dantur

    Good work, nice article

  • Painman

    This is ok, but what happened to the comments pre disqus?

  • Michael Elliott

    Yes, imagine – we’d all be stuck with a mobile OS with a locked-down App store, pitiful support for bluetooth, no SD slots, sealed batteries, propriety docking ports and limited ability to interface with desktop applications except on a Mac (i.e. Facetime?) Where would Google Voice be without Android phones? Oh, I don’t want to imagine a world where the only choice I had for a smartphone was whatever Steve Jobs decided I was going to have. If nothing else, even if you are an iOS fan, Android keeps iOS pushing to be better. I’m glad iOS is here, but I’m VERY glad it’s not my only choice.