Showing posts with label Android business model. Show all posts

Would you be okay...

 
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...If Google decided to SELL the Android as a platform instead of offering it for free?

At the moment, the Android is offered as a completely free, fully-customizable, purely awesome mobile OS platform. However, given the fact that Google Music Beta hasn't really taken off yet, would Google soon be offering the platform for a fee?

If Google starts charging the OEM phone companies for using the Android OS, here is how it would look like for the end-users:

1. The cost of Android devices would go high. Since there would already be a fee for the use and modification of the OS, it would only be logical that the prices for the devices themselves would increase.

2. Since there would be a license fee to use and adapt the Android, either the OEMs would have greater freedom in how to implement the Android, or Google would exert greater control over quality, because it's now a premium platform.

3. The Android Market and the whole Android ecosystem might become a closed system, much like the Apple universe.

But before we scare ourselves into believing another good-company-gone-bad story, let's face a few facts:

  • Google revenue from searches increased to the level that Android users have been increasing. Since 550,000 new users have adopted the Android every day starting June 2011, think about the number of searches there have been from the total number of Android devices daily. And that's just search. Google also earns from contextual advertising via the Android.
  • It is projected that by 2013, the Android niche alone will be a $4 billion-a-year business for Google.
  • If Google Music will take off by a miracle, that's another revenue stream for Google.

That being said, there's actually no need to worry, nor no reason to even think that Google may charge OEM phone companies for the Android anytime soon or even in the future. If the trends continue, Android may well be free for eternity -- or at least until someone thinks up a better, brighter idea.
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If The Android Is Totally Free, How Will Google Earn From It?




The Android as a platform was offered free. Thus, a business or profit-minded person would ask, where then, would Google get its profit if it let major cellphone companies use and adapt its platform for free?

Simple. Where Google has lived on all these years: contextual advertising.

Google apparently has an unconventional, consumer-oriented approach to its solutions. While certainly a lot of people distrust Google, no one can deny that it has provided beneficial apps and platforms that have revolutionized the way people use technology. In fact, Google has changed the technological landscape so much that it now sets the pace for innovation, alongside Apple.

Back to the profit model that Google has taken for the Android. It is said that the Android was intended to earn its keep by letting Google have another medium through which ads could be shown. That's why the Android's main purpose is to be a platform for mini-computers with phone functionalities: its main goal was get more people to go online on a constant basis, and even as a lifestyle. This way, when people are online, Google can ply its ads onto the people who use the Android.

Another proposed revenue source was a media store, containing videos and music for sale, much like the iTunes. The store has launched last May 2011, but it's still currently in beta. On the other hand, the Android Market with paid apps is now in full swing.

There are some snags and issues about the Android as a platform that have arisen: malware has started to become a formidable threat to the community and the platform itself, so Google must tighten its rein on the open-source platform soon. As it is, the biggest snag seems to have been the very heart of Android itself: its wide open-source nature seems to have been flung way too wide for security's sake.
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