Back Where It All Began
Let?s recall 2007, which one day we?ll probably consider a pivotal year in the history of the tech industry.
In January, Apple unveiled the iPhone, making it clear (to everyone but Research in Motion, anyway) that the company had come up with a mobile computing concept far beyond anything else on the radar.
Some years earlier, Google feared that Microsoft would extend its desktop monopoly into smartphones, locking out Google?s services. Android was purchased as insurance against this happening.
Apple never expected to go head-to-head with Google.
For Google to have foreseen Apple as the sole competitor in mobile, they would have had to imagined Apple knocking out Microsoft, long before it was even recognized as a serious contender.
In the end, Microsoft was asleep at the wheel, and failed at smartphones. But before 2007 we didn?t know that?s how things would turn out.
Pre-2007, when Microsoft owned the 'smart' phone marketSmall as it was at the time, with Pocket PC.
When Apple announced the iPhone, Nokia, MS, and RIM thought the it was little more than a toy. Who does not remember Balmer dissing the iPhone on multiple occasions?
It didn't take long after the iphone's release, the other companies mentioned were not going to be competitive against Apple regardless of whether Android ever existed. ?The diversity of that landscape? was obsolete the minute the iPhone shipped, and they all knew it: which is why Samsung now uses Android, Nokia was forced to adopt Windows Phone, RIM is in big trouble, and Windows Mobile, Symbian, Palm OS, and WebOS are all but dead.
It might also be noted, at least in passing, that Microsoft actually competed head-to-head with Google in 2006.
MS fell asleep at the wheel, Apple and later Google ate their lunch and MS has been playing catchup ever since.
The iPhone ships June 2007And it shipped as the most hyped product ever: I don?t think ?much of the industry opinion was that Apple was going to fail,? my recollection was that the mobile industry (sans RIM) instantly realized that Apple was onto something.
More than a mere fad, the iPhone has gone on to dominate the mobile phone market for the next five years with no sign of any slowdown.
Many, however, still don?t believe that Apple is as successful as it is. RIM wasn't the only one who didn?t get it? What of Palm, Nokia, Microsoft? What about the whiners begging for a hard keyboard, replaceable batteries, and external storage for the first 4 years ? claiming it would never succeed and always be a niche?
Android announced November 2007Google bought Android before there much even in the way of rumors about the iPhone. And the Android model of a licensed OS was designed to disrupt WM, in the same way that WM had disrupted the single-manufacturer OS?s.
Many believed Google and its partners unveiled Android and the Open Handset Alliance to give other handset makers and carriers a modern mobile operating system to compete with the iPhone. No. Android was purchased as a defense against Windows Mobile and MS?s online advertising. It had little to do with the iPhone. It was Microsoft that Google was initially worried about, not Apple.
It licensed the software for free in hopes of spreading it far and wide, which worked. It would have had to charge a massive fee to earn as much gross margin as Apple does on the iPhone, and that would have doomed Android to failure.
Android handset makers don?t make nearly as much profit as Apple, but that?s not necessarily Google?s fault: Apple has entered into very shrewd component-acquisition agreements with suppliers, and quite smartly focuses its development efforts on just a few products. Where else are those handset makers going to go in search of more profit? Windows Phone (licensed for a fee)? WebOS? Would they dare attempt to build their own OS a la Apple?
Android isn?t pretty, but when it was announced it was the only mobile OS that could have hoped to compete with Apple. Look at Apple?s current iPhone product lineup: without Android, a $199 iPhone 4S, a $99 iPhone 4, and a free iPhone 3GS would be dominating the market.
Fast forward to 2012Looking back, it's hard to imagine that Google would be comfortable being utterly dependent on Apple for its mobile business. But Google actually finds itself in more or less that situation, PLUS having pointedly encouraged Apple to reduce its exposure to Google, whether by Siri, Bing, Baidu or whatever, and in the last 8 months it has also put OSA members on noice that by strengthening the ?Android ecosystem? they are building their 2012 and 2013 competitor, on whom THEY are today dependent.
Google needed an ?enemy? to get the Googlites riled up. A foe had to be created so they picked Apple and the, for lack of a better word, sheep followed.
I can?t quite see how alienating every single one of your partners is much of a long term win. It might have been fine in the rapid transition we?ve just seen, but it may mean the modest short term gains are about as good as it?ll get.
As proof, they still make 80% of their mobile revenues from iOS. Imagine how much money they could have made in mobile if they had been a good partner with Apple, MS, Nokia rather than a competitor.
Also, Google only makes $1.70 per device per year. Apple makes $575 per device. Guess which shareholders are happier?
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