Android – Will It Make An Impact?

Well, the much anticipated, much hyped Google phone turned out into a completely new operating system called Android that is supposed to be open and free.  Meaning thereby that manufacturers could use it for developing their smartphones without having to pay for or license an OS such as Symbian or WinMo. The idea behind the entire scheme of things is deriving advertising based revenue and thus reducing the cost of the phone. However would this business model really make a difference? Would it actually revolutionarise the way we use phones? Would it be spectacular? The more I think about it, the less convinced I am.

The question on my mind is, how much of an effect will this have on pricing. The absolute maximum amount a manufacturer pays a vendor such as Symbian or Microsoft for their software is not more than 5$-20$ a handset. Now even if Google is not charging this money for the OS, the largest price drop in the cost of a smartphone would be in the same region. Meaning thereby there would not be a substantial price drop.

For a high end smartphone, this is not a difference at all and in my opinion not sufficient for pulling a customer from a company such as Nokia; which is not a part of the Open Handset Alliance. The reliability of a business and the trust a consumer places in a brand would not be overcome so easily. In the high end segment there is enough profit margin, the Nokia N95 on launch was priced somewhere around 900$ now it retails for a mere 600$, all this within 6-7 months of its release. A 300$ dip in profit on each phone and Nokia is still making money on the device. In face of competition the phone could be a little more competitively placed and Nokia and S60 would prove tough to beat.

For the mid range smartphone, such a cost cut would be a little more important. But then it wouldn’t be the sole criteria. The mid end Android smartphone should be able to do say what an N73 can and then some more.  Brand name would continue be an issue though to a lesser extent. 

It is in the low end smartphone where the open handset alliance can actually make a difference. If they can deliver features which no one’s seen in that segment and match it such with seamless service then we might just have a winner.

I keep coming back to the point of brand value and trust. Do consumers place the same amount of trust in the members of the Alliance, as say in Nokia? I personally do not. It’s no mystery why Samsung and other manufacturer have made S60’s and still not succeeded inspite of the popularity of the OS. The argument I’m trying to make is that it is not just the OS but the hardware vendor that also plays a critical role in a device’s success.

S60 v. Android

The Introducing Android page on the OHA website has brought out certain aspects that will go to the core of the device.

The first point they have harped upon is ‘openness’ and how the platform is open to innovation and new applications without any restrictions being placed on developers. S60 also allows the same but to a lesser extent. S60 has caged directories, the Symbian Signed Program and other mechanism to monitor applications to a certain extent and keep a tab on malware. Which I think is a good thing because people are paranoid about security these days. I wonder how android plans to keep malware out.

The second point brought out is that how all applications are created equal. This is something I like and which S60 lacks. The platform will give you the ability to replace any application you do not like e.g. the default contacts or calendar if it is not to your liking. There will be no applications permanently there like in S60, soldered to the ROM!

The third and fourth are easy and fast development of a vast array of applications. This S60 also offers and to a large extent successfully. There are a few problems with the signing program, especially for small developers, however if they can be worked out, Android will have no big benefit left at least in this regard.

Bottomline: The high end Nokia S60 will not be impacted. The fight for market share will be in the budget smartphone market. Whether or not manufacturers like Motorola and Samsung who will only be working on this part time in addition to their own platform, will be able to prove a point remains to be seen, however at this point in time I’m skeptical. Comments welcome!

Update: Here’s something worth a read too.

Trackback URL is here.

6 thoughts on “Android – Will It Make An Impact?”

  1. In the announcement, they explicitly noted that there would not be any advertising-funded phones and that a carrier/manufacturer could replace the GMail client with a Hotmail client.

    My bet is that the applications and the Java runtime will be so good that they will drive a number of people to Google’s services. Even if this number is 0.5%, it will probably pay for the entire development costs via the advertising take on those services.

    Look at how Google funds Firefox development to the tune of $70million per year. And all because the homepage is google.com. If Google can do this and still make a bunch of money, then they are well positioned to throw money at a mobile OS project in the hope of a small percentage growth in their user base.

  2. In the announcement, they explicitly noted that there would not be any advertising-funded phones and that a carrier/manufacturer could replace the GMail client with a Hotmail client.

    My bet is that the applications and the Java runtime will be so good that they will drive a number of people to Google’s services. Even if this number is 0.5%, it will probably pay for the entire development costs via the advertising take on those services.

    Look at how Google funds Firefox development to the tune of $70million per year. And all because the homepage is google.com. If Google can do this and still make a bunch of money, then they are well positioned to throw money at a mobile OS project in the hope of a small percentage growth in their user base.

  3. I quite agree. This does seem to be their bet. But somehow Samsung and HTC are the only big manufacturers among the partners and my expectations from Samsung are low. HTC will work on the platform and theirs’ is expected to be the first gPhone!

  4. I quite agree. This does seem to be their bet. But somehow Samsung and HTC are the only big manufacturers among the partners and my expectations from Samsung are low. HTC will work on the platform and theirs’ is expected to be the first gPhone!

Comments are closed.