Must Read: Samsung Galaxy S4 review

Topic: Mobility

Android army rankled over race to bottom: Is it too late?

Summary: Android devices makers are trying to find ways to differentiate and boost profit margins. Good luck with that.

Larry Dignan

By for Between the Lines |

Google's Android army is getting a wee bit restless amid a race to the profit margin bottom and devices that all look alike.

MIT's Technology Review has a post on the potential mutiny among smartphone makers. When the Android march first started Motorola, HTC and Samsung were the leaders. Now there's Huawei, ZTE and others.

The reality: All of these devices kind of look alike. That fact means hardware is just a commodity and if they all have the same software there's no differentiation. In this world scale rules. And for the Android market that situation means Samsung wins, racks up cash as HTC struggles.

Christopher Mims at Technology Review notes that Amazon's move to revamp Android Gingerbread 2.3 and make the OS its own was an eye-opener. When you play with the Amazon Kindle there's almost no evidence that Android is the core code.

Let's play this out a bit.

  1. All Android hardware makers wake up and realize they need to jazz up Google's OS to be different.
  2. Google won't officially recognize these non-compatible apps.
  3. Hardware companies stink at software generally speaking.
  4. Price still wins the day.

In other words, it's heartening that smartphone makers realize they have to do something with Android. But it's probably too late. The race to the bottom is well underway and new devices from HTC, Samsung or whoever won't change that equation.

Related:

Topics: Mobility, Android, Google, Hardware, Mobile OS, Security, Smartphones

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35 comments
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  • The irony...

    The irony of the whole situation becomes this: Apple has not changed their iOS but slightly since it's first release but only updates the hardware in it. They only differentiate the models by CDMA and storage capacity. Yet people flock to their products like cattle.

    Then you have Android. I love android but the sad fact that phone makers have created the fragmentation. Phone makers release phones then almost never update them, while the $500+ phones always have the latest and greatest with the most custom abilities (eg. flashing to a custom rom). No new phones means no new sales except by existing customers wanting to upgrade their phones. All phone makers could just give in to Apple and let apple make the ONLY smartphone on the market while the other go back to making "normal" phones. There was never a problem with new designs but since apple is involved, if they say you copied something.... look out sales. You just might have your product pulled.

    Apple has created an all out attack on Android and this means any phone maker that uses that product is under heavy scrutiny and possible lawsuits. Right now we can really thank apple for creating the problem with their little temper tantrums and stifling any innovation evolution of mobile platforms.
    Nate_K
    Reply Vote

    • From one comment, you can tell you nothing about iOS.

      "The irony of the whole situation becomes this: Apple has not changed their iOS but slightly since it's first release but only updates the hardware in it. They only differentiate the models by CDMA and storage capacity. Yet people flock to their products like cattle."

      Really? Are you serious?
      Bruizer
      Reply Vote

    • @Nate_K

      I see you are as clueless as ever: [b]The irony of the whole situation becomes this: Apple has not changed their iOS but slightly since it's first release but only updates the hardware in it. [/b]

      So Apple didn't do things to the OS like add the capability to run 3rd party apps, cut and paste, multitasking, mobile hotspot, and over 200+ more features to their OS since it was first released in 2007? Really?
      NonFanboy
      Reply Vote

    • Shortened it for you

      Blah blah blah...I hate Apple...blah blah blah...Android can do no wrong...blah blah blah...Apple should not be allowed to protect IP right or wrong...blah blah blah...I hate Apple...blah blah blah...I have no clue what I am talking about...blah blah blah...I hate Apple...blah blah blah!

      There I shortened your post to save everyone time and pretty much hit all the relevant points.
      non-biased
      Reply Vote

  • No substance to this article whatsoever

    Your links lead to nothing that would confirm 'losses' and don't confirm quarterly reporting for net profits.

    It seems to me there will be continual 'variation' in market share and revenue but that does not mean oems are operating at a net loss. Perhaps there are surplus skus which can easily be remedied and Android Smartphone makers will easily continue to 'enjoy the ride' as Android continues to erode the iPhone share in its favor.

    This article has no substance and amounts to 'wishful thinking'.
    Dietrich T. Schmitz *Your
    Reply Vote

    • I agree

      android is the path to prosperity for all OEMs.
      The Linux Geek
      Reply Vote

      • Don't you get tired of being wrong all the time?

        Just asking.
        NonFanboy
        Reply Vote

      • Irrelevant

        Until you show you have ever had any clue what you are talking about and not just spewing crap based on your bias nobody really cares if you agree or not.
        non-biased
        Reply Vote

    • Market share matters little now a days. Not sure how

      much it ever actually meant even back in the day. What makes all the difference today is PROFIT. While you are technically correct that Android has gained market share you neglect to mention that Apple is still selling more and more iPhones as well. So Apple is selling MORE and making considerable monies with each sale and even more still with after sales monies from iTunes and such. All in all I'd reather be Apple than say an HTC:)

      Pagan jim
      James Quinn
      Reply Vote

      • And Samsung

        makes what $170 off each iPhone Apple sells. That's from the iPhone 4 days, but since Sammy is a major iPhone supplier...:)
        timspublic1@...
        Reply Vote

      • Granted as a supplier Samsung makes some money off of iPhones sales:)

        timspublic1@...
        However while it might cost Apple $170.00 I doubt that is anywhere near the actual profit Samsung takes in. Now that is the question.

        Pagan jim
        James Quinn
        Reply Vote

      • @timspublic1

        And what does that have to do with how much money companies make from Android?
        Michael Alan Goff
        Reply Vote

      • @timspublic

        [b]makes what $170 off each iPhone Apple sells. That's from the iPhone 4 days, but since Sammy is a major iPhone supplier...:)[/b]

        Do you have anything to confirm this or is this more of your usual FUD?
        NonFanboy
        Reply Vote

      • So if Samsung

        If Samsung make $170 from each iPhone, how much do they make from their own Android devices? Considering, they are probably paying Microsoft more in licensing fees than Microsoft would charge them for selling Windows Phones.

        At the end, everyone is happy, except the poor customers who brought that Samsung Android phone.
        danbi
        Reply Vote

  • Be Birdseye

    There's no law that says every Android phone maker has to join the race to the bottom. Every grocery store has three or four brands of frozen vegetables, each of them at a different price. What could be more undifferentiated than peas or green beans? Yet the El Cheapo store brand does not get 100% of the sales. The cheapest cell phone won't either.

    People will pay for quality, industrial design, and reliability. Build it, and at least some of them will come. You won't be the market share leader, but you might make some money. Anybody who chases Samsung down the cost curve is likely to end up in the boneyard.
    Robert Hahn
    Reply Vote

    • People have the mind set that Market Share is the end all

      to be all. I don't think that is true however. YOu are correct there will be those who survive and those who sell blank. The only problem wit that is the many consumers of what could be a long period of time who are suckered into buying junk and pay for it in terms of unusable products and warranties. Still eventually it will work itself out as companies or OEM's come and go from the mobiles space and consumers learn who to trust and who to avoid.

      Pagan jim
      James Quinn
      Reply Vote

      • You've been campaigning

        ... to make per-unit profit the be-all and end-all metric for "success" for a long time now.
        Ever since Android started gaining market share on Apple, in fact.
        We get it. You've picked the "winner". You're a real smart guy.
        You can stop crowing any time now.
        Reply to below:
        First, I didn't say you ever supported market share as a metric, jusst that you have repeatedly supported per-unit profit.
        Second, market share is a simple measure of the relative popularity of a platform. Which I thought we were discussing. Yes, many PC makers went belly up as thearket rationalized - which made very little difference to the success of the platform. We'll see the same thing happen in the Android OEM 's - and if windows phone gains enough popularity (ie. Market Share) in that segment too. The only thing we can learn from per-unit profit is that those who like that platform are willing to pay more for it.
        radleym
        Reply Vote

      • If you check my rather long history here you'll find

        radleym
        that I've never been a preacher of market share as a good goal post or sign of a companies health. Back in the day I saw many an OEM that sold far more PC's and Laptops than Apple did go belly up. The only one I saw who actually won the arms race in the PC Price Wars was MS and of course Apple cause unlike countless others Apple made money while so many did not. I see the same thing happen with mobile and it strikes me as odd since the history is not that old that it should be so easily forgotten. So no you are WRONG I've never preached the value of market share and have always wondered in the end what does it mean exactly. Can you tell me?

        Pagan jim
        James Quinn
        Reply Vote

  • No one is building what I want.

    If they did, I would buy a new phone in a heartbeat. I am currently using a Motorola Defy, which is OK, but is a little lacking on CPU and RAM.

    What I want:

    1) 4 inch daylight viewable screen
    2) Current Android with the base UI, no carrier or manufacturer changes
    3) Durable (gorilla glass, water resistance)
    4) All day battery mandatory, 2 days would be best
    5) Reasonable performance. It doesn't have to be blazing, but it also shouldn't lag and make me wonder if it is locked up.

    See, all hardware differentiation. The software differentiation is simple, don't mess with it. Don't install your annoying skins or bloatware, just leave it like it is and give me hardware to care about.
    grant@...
    Reply Vote

    • What about price? Would you pay MORE for such a device?

      The reasons many of the things you seem to dislike are found on Android devices is lack of overall profit. Skins, and bloat ware are there to counter such. Carriers also want after sales monies and place stuff on their Android devices to steer customer in that direction. If you were to be offer a phone a quality phone with no carrier/contract buyin you'd be paying a great deal for said device.

      Pagan jim
      James Quinn
      Reply Vote
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