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Google and Motorola are accused of conspiring to inflate FRAND patent prices

Sources: Microsoft, Reuters

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By Tony Swash on 2/24/2012 5:43:29 AM , Rating: 2
I think it worth pursuing this issue of Android commercial success. Some people see the figures for Android devices sold or for Android market share and think that that automatically translates into commercial success. It doesn't.

At the moment all the Android device makers except for Samsung are either barely breaking even or making a loss, and Samsung's profits (in relation to turnover) are pedestrian. Android's App ecosystem is financially pallid compared to iOS as is the Android device specific peripheral market.

Google has spent billions on Android, including £10 billion plus on just buying Motorola whose purchase was predicated on Android. Android devices sell in their tens of millions every quarter. And yet Google makes (in relation to market size and the size of of it's core business) piffling profits. The mobile ad market looks like being fairly insignificant for everyone, which is a problem if your core business is advertising. If we are really witnessing the long term secular decline of the desktop market and a shift to the internet primarily on mobile devices then on these results Google will see it's business contract sharply over the coming decade no matter how many Android devices are sold. Google can see this coming and everything it is doing is about avoiding that but it's core response strategy, Android, is not succeeding in removing that threat.

Meanwhile Android is forking with products like the Amazon Fire that appears to have eaten the low end Android tablet market but which is not making either Google or Amazon any money. Amazon's strategy of killing all other retail via razor thin margins and massive scale may work long term and thus selling devices like the the Fire at a loss as they do may make sense long term but it hardly counts as being a financial success for Android.

You may be right about Apple losing it's mojo after Steve but I wouldn't bank on it. The main product that Jobs designed at Apple was Apple itself and I think he crafted something rather special. Apple appears to be using the same strategy with Android as it did in the PC market where it started as a huge underdog and attacked the PC business via attacking it's weakest link, the OEM's, by just seizing all the profits in the market and thus sucking the oxygen out of it's competitors businesses.

The only worthy competitor Apple have at the moment is Samsung (and maybe Amazon) and the battle between them is going to be hugely entertaining as they shower competing toys upon us. Google seems incapable of moving beyond it's one good idea which it had an amazing fifteen years ago, everything else it has done has been a commercial failure. Microsoft fell into a coma sometime around the end of the 1990s and seems only now to be waking up but no matter how fast it runs it may never catch up.

By Tony Swash on 2/24/2012 1:42:33 PM , Rating: 2
Just a follow up. Came across this report today.


In North America, iOS' share of mobile ad impressions grew a full 12.1 points between October and January, according to mobile advertiser InMobi. Traffic from iOS devices hit 35.3 percent in January, as compared to 32.7 percent for Android, and 11.6 percent for BlackBerry. Android in fact slipped 3.2 points between October and January, allowing iOS to seize leadership.

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