Android: Double-Edged Sword
When Google (Nasdaq: GOOG) waded into the market with the introduction of its license-free Android platform in November 2007 it created a sword that cuts both ways for phone vendors. A number of handset companies quickly jumped on to the Open Handset Alliance bandwagon, as is usually the case with such announcements. Hey, go back and look at the Advanced Computing Environment (ACE) group from 1992, and you’ll see it doesn’t take much to put out a press release announcing your support for XYZ. (See Open Handset Alliance Names New Members.)
Just how well Android does and its impact upon the market is anyone’s guess at this point. However, two things are very clear: First, Android is for the benefit of Google and its mobile aspirations; and second, if you’re an OEM reliant on Android you’re largely relegating yourself to assembling other people’s technology.
Regarding my first point, this is nothing new or profound. Dominant, cash-rich companies have been doing “good works” for the benefit of an industry or group for many decades. Obviously, Google needs to extend its search and advertising dominance into the mobile Internet world as early as possible. With something of a fractured handset market several years ago led by proprietary products, what better way to open that market to all-comers than to offer your own platform, free to all? So much the better if that platform accelerates the acceptance of Google applications and other Google assets. Hey, everyone wins, right?
I suppose that depends on how you define winning!
Android levels the playing field for every handset original equipment manufacturer (OEM) and wannabe to enter the smartphone and/or mobile Internet device market. In essence, what we’re going to see is a replay of the PC market from a financial and investment standpoint.
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