| | | The Windows Phone Threat to Google ...
... one man's opinion.
This piece was first published by @alex in Spanish as a guest post on 'Celularis.com.' This is a slightly edited version. Since the original date of publishing, Microsoft bought Nokia's smartphone division. It's @alex's opinion that now, the threat described below is even greater, as Nokia won't make Android devices in any way.
>> Google is Afraid of Windows Phone
@alex (Admin)
Post PC
September 11, 2013
postpc.wocial.com
Some people may laugh at the title, as they laughed when Windows Phone was about 1-2% marketshare in a few European countries. Now it's around 10% on EU5 and 5% in the US according to IDC. Also, several devices like the Nokia Lumia 625 with LTE, dual SIM and 4.7 inches screen are meant for the Asian market. Nokia's Lumia brand already outsells BlackBerry, Motorola or HTC to name a few. Only Apple and 5 Android OEM surpass Lumia in sales: Lenovo, LG, Zte, Huawei and obviously, Samsung.
Getting the OEMs to like you
Windows Phone has an advantage over Android: In low-end hardware, Windows Phone works better. Low end-devices makes the bulk of all Android device activations, Google's pride. For instance, Nokia Lumia 520, for about ~100$ and only 512MB RAM+Dual core 1Ghz can run its OS perfectly, whereas a new top-of-the-line Android device like the Galaxy S4 or the Nexus 7 (2013) still lags on some parts while scrolling or with some animations. Unforgivable.
Threats to Android
One of Google's main goals with Android was to "democratise" the Internet access through smartphones, specifically to their services/ads. That's a goal more than met. And we all should be grateful that 50$ phones and tablets are around ready to get people to browse the web, even if the experience is not the best. But that is precisely the reason I think Windows Phone, and not iOS, is Android's biggest adversary as a smartphone/tablet OS, and whatever new devices may come around next. It is possible than iOS get a biggest slice of the cake in the future, but it won't be licenced to other OEMs, also Apple can't, and does not want, satisfy the rest of the market.
That's Google's main reason to not support Windows Phone. Apps like Chrome, an official Youtube App, Google Maps, Drive, Gmail, etc, only will make Windows Phone more appealing to end users.
As the world is switching to mobile, Google wants to secure their position as market leader in advertising in mobile as they are on desktop. Mobile advertising dollars are the future of Google's earnings, and who's their threat? Apple and Samsung do not have a search engine or a remotely rival advertising network. Also, Google pays Apple, Samsung and the rest of the bunch a nice sum of money every year to keep Google as the default search engine. Even if Microsoft payed more, most won't switch. Definitely not Apple, which even with a less than great relationship with Google hasn't switched.
But you know who has a Search Engine, and Advertising Network and has a Mobile Operating System, right? It starts with an M.
Costs
Android is free, as in gratis. What's not gratis is most of the Google apps that came bundled with the phone: Google Play, Gmail, and so on. That's why most Android devices in China cannot get count as 'Android activations' by Google. Google can't know. Besides this licence costs for Google Apps, most Android OEM have still pay a few more bucks to Microsoft for patents after settlements around the globe between these companies and the Redmond company. Unfair? Possible. But it's the reality they have to live with.
But it's no secret that Google shares some of the profits of Google Play sales with Carriers and OEMs who bundle their apps in the smartphones they sale, which helps to bring down the costs of Android devices sold to the public, and on the other hand, steers away those device makers and carriers to make their own App Stores and preinstall them on the phones.
Still, after adding costs, is still cheaper to licence Google Apps and pay Microsoft for patents than a Windows Phone device licence. That cost is estimated to be around 20-30$ each, and although some device manufacturer like Nokia had an special deal, it's a high cost to pay in a market where most devices sold are in the ~100-150$ area.
Solution
If Microsoft does his homework, and that's a big 'if', Windows Phone can be a serious threat to Android. Reducing the Windows Phone licence costs, or even setting the price to 0$, and switching their business model to alternative methods like Google does: search engine ads, a cut of the sales of the store, etc, are the more obvious.
This way Microsoft would lose a few of his income on the short term, but it's not like they can't play the game: Bing loses money, Xbox does too, or at least lost money for most of its life… besides, the alternative to that is irrelevance, and lower profits are still better than no profits.
Windows Phone will keep growing, and maybe it will reach a certain point where other device makers than Nokia should reconsider a dual strategy with Windows Phone and Android. A real one, not like Samsung and HTC are doing now putting half-assed phones on the market with Windows Phone. Or even ditching Android entirely in favor of Windows Phone.
Reducing or removing the licence cost will bring that date closer, and Microsoft should do it now. ###
- Eric - |
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