Google starts to pay price for Android failures

Google starts to pay price for Android failures

Summary: Google's purpose with Android seems to be to keep some market share from Steve Jobs and Microsoft. It has succeeded but at a cost to its reputation.

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TOPICS: Google
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Tech dominance is all about the "mandate from heaven." (Picture from Wikipedia.)

The difference is that while a Chinese ruler had a throne to sit on, a tech leader is standing at the top of a pyramid, on a platform made of ice.

Tech generally has one leader at a time, one company everyone else follows. When I began in this business it was IBM. Then the mandate moved to Microsoft. Google made its 'deal with the devil' on Android to retake the mandate Steve Jobs seized with the iPhone.

Google remains the low-cost provider of Internet-based services, at least in the U.S., and if it were up to me it would have exploited that advantage rather than giving mobile carriers control over what was billed as an open source project.

Growing fall-out over that decision is starting to impact Google's image. Former Mozilla developer Jon Hewitt, now at Facebook, agrees the Android is no more open than the iPhone.

Hewitt writes that Android's acquiescence with carrier demands is a devil's bargain, adding it was necessary for Android to gain market traction.

The problem with that attitude is it makes Verizon and AT&T the gatekeepers of American tech, and having followed this business for almost 30 years I can tell you anyone who bets on the Bells to lead anything is a fool. (Ask Dennis Hayes.)

For as long as I have covered technology the Bells have been the chief obstacle to progress. This is a feature, not a bug. It's in their nature. They are at heart monopolists. The Bell System began as a monopoly, the former "Regional Bell Operating Companies" were regional monopolies.

The Bells seek control. They care nothing about competition. Any pretense in that direction is mere noise, it's shadowboxing. Their business model is based on lobbying, in Washington and in state capitols, and no one has ever been better at it.

Over the last decade the Bells won control of the Internet's last mile by buying up and hoarding your electromagnetic spectrum and overthrowing the 1996 Telecommunications Act, which required them to wholesale their capacity to other companies.

Rather than invest in their networks they let a 1990s start-up, Google, build a better network with its purchases of dark fiber, its low-cost server farms, and its intense focus on lowering costs through things like opening windows to cool servers rather than buy air conditioning.

Now, by dropping boxes at phone company points of presence (POPs), Google has the capacity to compete head-to-head with them. That's why, as I said (and Robert Cringely agrees) its deal with Verizon did not harm the cause of net neutrality.

All Google needs do now is send out its shipping containers to Verizon POPs, throw up some Super WiFi aimed at nearby hotspots, throw in a little mesh magic and you have serious competition in the last mile for the first time in a decade. You can have the Bell, the cable, or Google.

Machiavelli might argue, then, that its Android capitulation is all a cunning plan, giving the Bells enough rope to hang themselves with before Google trots out its network and a phone that is truly free.

The problem with that is it depends on Google maintaining goodwill, both with the public and with policymakers. That can no longer be assumed. (Check out the comments below -- there is a growing sense that not only is Google evil, but evil incarnate.)

Google is not a device company. It doesn't want to be one. Its only purpose with Android seems to be to keep some market share from Steve Jobs, and keep Microsoft from gaining traction in the space. In that it has succeeded, but at a cost to its reputation.

That cost may yet prove to be too high.

Topic: Google

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56 comments
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  • Well, I agree that the carriers are doing some bad stuff, and Google is

    enabling it. That said, end users are getting a taste of something much more open and much more functional than before. They can now download Android applications without restrictions like there were before where everything was controlled by the carriers. In the end, customers will demand more and more openness, and, with time, get it. Google has to play it cool and let the customers figure out what the carriers are doing, and blame it on the carriers, not Google. Google should also continue the development of the Nexus One so that people can see what it could be like.
    DonnieBoy
    • Ah but is the phone an "Android" phone or it is an HTC whatever?

      @DonnieBoy
      I keep seeing posts from fans of Android that "Android" is gaining market share and comparing that to Apple's iPhone. However you NEVER see that this markets share gain is a bunch of players not the one Apple. Nor do you hear about how the individuals are doing margin or profit wise. It's all one lump called Android. So if the public views the problem they are having with their phone as an Android phone issue.. It could get nasty. Also don't forget it's early yet. When PC's first entered into the price wars they started the crapware thing but it did not start out as the incredible swamp of blank it later turned out to be at first.

      Pagan jim
      James Quinn
      • Well all Android phones run Android applications even if the user interface

        is different, and they have crapware installed. The question is if consumers will blame Google in the long run. I think that Google will win the PR war in the long run, and consumers will demand unlocked phones where they decide which applications get installed and removed.
        DonnieBoy
      • RE: Google starts to pay price for Android failures

        I agree that manufacturing "Android phones" will turn out to be a very low-profit endeavor. So low that it is possible that the manufacturers will not be able to afford the R&D to keep up with Apple (which can afford it) on the hardware side. These manufacturers are going to be caught between the chip and display makers on one side, and the big wireless carriers on the other. It'll be like making private-label aspirin for Wal-Mart: they''ll let you make just enough money to stay in business, but not a penny more. The result could well be that Android phones slowly become known for always being "a bit behind" hardware-wise.
        Robert Hahn
      • Only because Google released Android to many companies

        James Quinn, not just one. Plus, does it really matter what they players are doing margin or profit wise to the end user who's buying the phones? That only comes into play to the companies themselves, and we allready know why Apple has the profit margins they do.
        John Zern
      • As a consumer I would like to know how well a company

        @John Zern <br>I might be doing business with is doing? Not wanting to purchase something that might not be supported down the line or evan the following day. Just saying....<br><br>Pagan jim
        James Quinn
      • The vast majority don't, James. I'm sure they realize

        that a company like Verizon isn't going to be selling phones from a company that'll be going out of business anytime soon.

        They do their due diligence before partnering with anyone as they're the face the customer will remember, not the phone manufacturer.
        John Zern
      • Yeah not so sure it is wise to trust Verizon

        @John Zern
        Again not exactly certain on this one but was not Palm dying for sometime before the end? Did not companies like Verizon still sell Palm phones despite all the signs of doom and gloom? Sure Palm was purchased from HP and I suspect the Palm phones remained supported at least for a time but there was never any absolute that was going to happen. After all it could have been a good idea just to let Palm die and pick up it's IP in a fire sale.

        Pagan jim
        James Quinn
      • RE: Google starts to pay price for Android failures

        @James Quinn

        The problem is that it's NOT Android fans those stats. FINANCIAL firms are touting the rise of Android and tying them directly to the earning statements of CARRIERS that are NOT AT&T.

        Android enthusiasts are quietly coddling their beloved Nexus' and hoping they don't break, or they're rooting their Droids and putting on Cyanogen. Tech people, this article as a case in point, are outraged that no distinction is made between Android on the Nexus and Android on a AT&T device, but in the tech docs, that distinction is clear! AT&T says they changed it. They tout it as a feature rather than a flaw, but they acknowledge it is Windows Me vs Windows XP(see how they both say Windows but they are different versions)? It's Wall Street writers who are to blame for your confusion, not techies.
        tkejlboom
      • RE: Google starts to pay price for Android failures

        @Robert Hahn

        Why is everyone always obsessed with margin? Not everyone can be or should be like Rolls Royce(Hand made cars? Really? Stupidest thing I ever heard of). Margin is important, but so is volume, capacity, demand, supply, etc.

        In point of fact, if you look at the hardware of Mac, THEY are a little behind, always, in motherboard features, CPU speeds, hard drive technologies, video cards, RAM, powersupplies, etc. Open architecture has ALWAYS been superior to the Mac in hardware performance.
        tkejlboom
      • RE: Google starts to pay price for Android failures

        @James Quinn <br>You do hear the individual companies success from Android, in their earnings reports. HTC, Motorola, and Verizon have had booming success. Even Samsung, LG, Lenovo, T-Mobile, Sprint and countless others world wide owe a lot of recent successes to Android. Compare that to the iPhone, where Apple gets nearly all of the success after forcing carriers into low profit deals. <br>I also think that most of the Android owning public are able to identify who is responsible for any issues they have. Its pretty easy to tell that the VCast crap for example is from Verizon, not Google, and they'll complain as such. Same goes for when their friend gets an update months before they do. They won't blame Google. If anything, I think Google is too separated from the responsibility of Android in the public's eye. Its too easy for them to say "we released Froyo in the summer!" and let manufacturers and carriers take the blame for what Google has pushed (manufacturer/carrier customization)
        hall.nate@...
  • RE: Google starts to pay price for Android failures

    Any chance we can write headlines that actually match the content of the article?
    captbunzo
    • here here.....

      @captbunzo
      couldn't agree more
      htotten
    • headlines, carriers

      @captbunzo Taking into account the history of journalism -- no. No chance.

      @DonnieBoy -- the next step is for users to start demanding that the barriers that carriers put up -- 2 year contracts, etc. -- get torn down. There's a component of this which is held in place by the legal framework, and another component that is user acquiescence. To change either requires that consumers be aware of how they're being controlled by the carriers, and what could be instead.
      Bob.Kerns
    • RE: Google starts to pay price for Android failures

      @captbunzo

      My thoughts exactly, although it was the title that got me to read this article, so who can blame them.

      I am torn because while the title was bad and the entire premise of "that decision is starting to impact Google?s image" is just not true for non opinionated tech writers and Apple fan boys, the rest of the article was spot on. Well mostly. I do not think Google will ever be an ISP, but I do think they will allow mom & pop ISPs to tap the Google backbone as a way to provide local internet service over whitespace.

      My company provides Google Apps related tech tutoring to local businesses and school districts who have gone Google. I can honestly say that out of the hundreds of people I talk to daily, I have not once had a person bring up the Apple VS Google, Closed VS Open battle with me. It seems to be a battle that only exists in the halls of tech media.
      EntrepreNerd
    • RE: Google starts to pay price for Android failures

      @captbunzo

      LOL - that's a good one. Without the sensationalized headline, people wouldn't read the story.

      It would be nice though if content and headlines actually matched.
      flippedout
    • failure

      @captbunzo
      the failure of android is that it is "open". not really open of course, like linux or firefox but pseudo, pr bullshi*t open as in "carriers can install any crapware they like open and customers have to deal with it and we google don't care open" an epic failure for the customer.
      banned from zdnet
      • RE: Google starts to pay price for Android failures

        > "carriers can install any crapware they like open"

        You can't have it open and then complain when people modify it for their own use. That's what the open source licenses are all about. After all, Android is just Google's modification of linux. If Verizon then takes that and modifies it some more (with stuff you call crapware), that's Open Source at work.
        Robert Hahn
      • RE: Google starts to pay price for Android failures

        @banned from zdnet Your love for Apple and hate of everything google always shows here, so your extremely biased comments should be ignored.
        czorrilla
    • RE: Google starts to pay price for Android failures

      @captbunzo I do my best, but I'm no expert on it and I only take a few minutes for each one. I'll try harder. Fortunately the software here lets me change them before posting, and after writing. I'll try using that technique more in the future.

      Thanks for writing.
      DanaBlankenhorn