Sep 272010

Reading discussions on mobile operating systems, Android is many times pitched directly against iOS and now Windows Phone 7, and the success is measured by comparing the current market share. While that certainly currently is relevant comparison, looking into the situation long term it’s easy to underestimate what Android will mean for mobile computing.

What might have spurred Google into creating Android and what would the long term goals with the project could be?
On his first day at Google, Vic Gundotra asked Andy Rubin about the reasons for creating yet another mobile OS, since it was not really obvious why the market needed it and why Google should take that on. Andy Rubin explained that it was critical to create a free, open operating system that would enable innovation of the stack. Rubin also told him that if “Google did not act we faced a Draconian future, a future where one man, one company, one device, one carrier would be our only choice.”

Of course Google does not simply act to save humanity from Draconian dictatorship over mobile operating systems, but they realize that would be a scary future for their business. They live of search and advertising, and it was not hard to see that with the current path Apple was taking with iOS, it could be possible that they would be loosing ground when it comes to mobile users. And it seems like those fears would have been justified considering that Apple indeed tried to ban 3rd party advertising in iOS.
So by ensuring that there was a viable alternative to tightly controlled mobile operating systems, they could ensure that they would not be locked out from mobile devices. Microsoft could very well turn out to be determined to lock Google out of search and advertising as well, which would be a problem if they would be able to get back some market share. And Symbian Foundation could not keep up with innovation.

One important factor which many times seems to be ignored is that there was a very good reason why Google needed to create an open source OS for mobile devices. Currently there is a lot of hype around mobile, but in reality it’s a minuscule market share compared to people using computers. It’s currently in the region of 2% that access the Internet from a mobile device. Sure, there is a rapid growth, but for most people in industrial nations the mobile devices are a complement to computers, and mobile devices are currently very far from becoming the main means of accessing the internet in those markets.

The reason why mobile devices are predicted to rapidly go from a tiny minority of usage to dominating the web is emerging markets.
In countries where most people do not have their own phone line and computer, getting internet access used to be too expensive for ordinary people. With mobile devices they will be able to get what in practice will be a computer connected to the Internet and telephone for a very reasonable sum. We already see Android devices with a reasonable specification for less than €100 without a contract here in the EU.

For devices to take off in emerging markets there needs to be a capable operating system that can be used without licensing costs. Obviously Apple will not sell an iOS device that is affordable for the masses in those markets, and Windows Phone 7 has prohibitive licensing costs. So looking at the situation globally, Google certainly has a very clever strategy. They are now in an excellent position to ensure that their brand becomes dominant in these emerging markets, and that the use of their services becomes widespread.
I would guess that they are actually a bit stumped by the massive success Android quickly has become in developed markets, and that they planned to get the proper return on investment a few years down the line when Android will be by far the most common OS used in emerging markets.

So iOS might stay relevant for a small but affluent group of users on devices they use to do part of their browsing, playing and working. Windows Phone 7 will most likely give Microsoft at least a reasonable foothold on mobile devices in developed nations. But neither of them currently seem to have a chance of becoming a dominant platform globally. Android currently seems have nearly no competition when it comes to taking that position when the real adaptation of mobile devices starts in emerging markets.


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