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Great Debate: More growth ahead for Android, or is it stagnation time?
Can Google's Android operating system continue its push toward mobile domination? James Kendrick and Larry Dignan debate.
James Kendrick
Android Growth
or
Stagnation
Lawrence Dignan
Best Argument: Android Growth
The moderator has delivered a final verdict.
Opening Statements
Snowball rolling down a steep hill
James Kendrick: Google doesn't always do the expected with the Android platform, and while at times it seems the development is a bit disorganized, it is going to remain a major player in mobile for some time. The platform has taken the smartphone space by brute force, and is so big it would be difficult for Google to screw it up enough to knock it down.
The latest figures have a mind-boggling 550,000 Android activations happening daily. These are not shipments of phones hoping to be sold; these are activations. Over half a million actual users are setting up a new Android phone or tablet each day.
Android is like a snowball rolling down a steep hill. It's already huge so it rolls over all comers that get in its way. It is already so big in the smartphone space it will continue to dominate for the foreseeable future, even if Google starts screwing things up.
Widely successful - but vulnerable
Lawrence Dignan: It's hard to argue that Android has been widely successful. Android has come from nowhere to owning 41.8 percent of the phone market in the U.S., according to comScore. Gartner puts global Android market share at 43.4 percent as of the second quarter. On the tablet front, Android has 17 percent of the market, according to IDC.
How can I argue that Android is vulnerable? For starters, there are other operating systems that will take some share going forward. Microsoft Windows Phone 7 will grab share simply based on Nokia distribution. RIM has smartphones just good enough to retain customers. And on the tablet front, Android has been a disappointment. The tablet-specific apps are missing and good luck trying to get integration similar to what Apple has.
And finally, Android is clunky. As an Android customer, I feel like I'm using the mobile version of Windows 3.1. Android is OK, but if something better comes I could bolt.
The Rebuttal
Great Debate Moderator
Great Debate Moderator
How open is the ecosystem?
Is it fair to call Android an open ecosystem, and do consumers care one way or the other?
Posted by Jason Hiner
Open not so much
I wouldn't call Android a truly open system, but it doesn't matter. Consumers just don't care and it is a non-issue with the majority of the market. Android has grown faster than any other platform in memory no matter whether people think it is open or closed. This is an advantage for Google due to the lack of platform awareness in general.
James Kendrick
I am for Android Growth
No one cares if it's open
For the record, consumers don't give a hoot about whether an ecosystem is open or not. Apple is controlling and folks seem to like it. Consider it a benevolent dictator of sorts. Android is open, but Google clearly runs the show. I'd call Android an open system and that's why I have complaints with it too. If Android were more locked down perhaps the hardware-software integration would be better. Overall, it's a trade off with any smartphone platform. My bet is that consumers don't care and could drop Android going forward.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Amazon Kindle Fire
Is it fair to call the Amazon Kindle Fire an Android tablet? Why or why not?
Posted by Jason Hiner
It's an Amazon tablet
Doesn't matter, it's from Amazon and looks like nothing else. That's the impression that consumers will have of it, and given that cheap price they will grab millions of them. This is why Google needs to be thinking Android phones, tablets not so much.
James Kendrick
I am for Android Growth
It's an Amazon tablet
I think it's a stretch to call the Fire an Android tablet. The Kindle Fire OS is so customized that you could call it Amazon's World. If Amazon moves the Android market share figures it should have an asterisk by it. But the price, business model for Amazon will make the Fire a hit. As a Prime subscriber I already ordered one and plan to watch video, read magazines and check out comic books. I'm already entrenched in the Amazon ecosystem, so it's a no brainer for me at $199. I don't think you can call it an Android tablet given that all the spoils will go to Amazon not Google.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Android tablet expectations
We came into 2011 thinking Android tablets were going to invade like an army and potentially overrun the iPad. There have been a lot of Android tablets coming to market, but adoption has been slow and Android 3.0 Honeycomb hasn't received rave reviews. Do you consider Android tablets a disappointment and, if so, do you expect the situation to turn around soon?
Posted by Jason Hiner
It all comes down to Ice Cream Sandwich
I am in agreement with Larry about Honeycomb, I find it is a mess. Google decided that the tablet version of Android needed to be more desktop-like, and in fact I think the opposite is true. I use Honeycomb tablets and they work fine, but they don't "feel right". That's not good, and I think along with price the main reason that they aren't selling in greater numbers. Ice Cream Sandwich can't come soon enough for the tablet space, and Google needs to hit a home run with it. Unfortunately based on what we're beginning to hear it may just be an incremental update over Honeycomb. That would be a very bad thing.
James Kendrick
I am for Android Growth
I was on the Android army bandwagon
And then fell off after a month or so. I'd say that Android tablets have been a disappointment, but as I noted before it's all about the price. At $250 I'll put up with a lot less refinement than at $499. At $99 I'll even get a tablet with no future in the HP TouchPad. If Android tablet pricing falls enough there will be share and a rebound. However, Android on tablets got off to a rough start and that's hard to overcome. There will be no money for hardware makers. The likes of HTC, Motorola, Samsung can't compete with Apple's supply chain and sure can't charge a premium. Microsoft may be the luckiest company on earth. It missed the tablet market by a country mile and there's no one stepping up to be No. 2 in the market.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Android tablet penetration
Okay, let's talk tablets, because I know you both have some strong opinions there. First of all, how much of the market do you think Android tablets own, because there are reports of up to 20-25%, but Comscore just released numbers saying the iPad accounts for 97% of all web browsing from tablets? What gives?
Posted by Jason Hiner
May not be a tablet market for Android
Tablets are the big question when it comes to Android. There may not be a large market for non-iPad tablets that I can see. The big OEMs can sell some Android tablets through marketing, but not in any numbers sufficient to be very profitable. I believe the Android tablet market share is somewhere between the 3% and 20% mentioned. My gut feeling is it is toward the lower end of that range. I can count the number of Android tablets I have seen out in public on two fingers over months. While we are preoccupied with tablets, it's important to realize that Android as a platform doesn't need them at all. Look at all those smartphone activations taking place daily.
James Kendrick
I am for Android Growth
I'll put this delicately
Android tablets to date suck for the price. Force closes, lack of tablet specific apps and pricing has kept the Android army at bay in the tablet market. However, in a year I'll give Android tablets 35% share, maybe 40%. I won't count that share as a victory though. Why? Amazon's Kindle, which has an old version of Android that's customized out the wazoo, will drive tablet share. It's almost comical that old Android for phones is trumping Android Honeycomb for tablets. Android tablets are fine if you've never played with an iPad. Gmail on an Android tablet is a killer app. Unfortunately Google hasn't stepped up to the plate on tablet apps for Android. At the end of the day, price is all that matters. When Android tablets are all $199 and lower, Android will take share. I'm not paying $499 for an Android tablet. In three years, Android may get more share but all the profits will go to Apple and Amazon. Google gets the search revenue. Hardware makers are toast.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Android's loyalty question
How much are consumers conscious of buying Android phones? How much loyalty does Android have? Are people more loyal to Google or the hardware makers (HTC, Samsung, Motorola, etc.)?
Posted by Jason Hiner
First time consumer ignorance is a plus
I have seen firsthand that in the mainstream consumers have no knowledge of Android. While this means little platform loyalty, it is a good thing as it is not competing with anything as one. Instead of one platform against a couple of other platforms, it is dozens of compelling phones against a handful. The average consumer is entering into buying decisions based on the phones alone. While that strategy plays a role in the oft-chided update situation, it undeniably leads to Android being a success in the global market. It's the biggest reason for RIM's losing so much share to Android (lots of phones). It's hard to fight something your customers aren't aware of. Android isn't the driving force in the consumer space, it's the fact that good smartphones are released constantly that attract buyers. That an enviable position for Google and Android.
James Kendrick
I am for Android Growth
Loyalty is THE big unknown
I think the Android loyalty question is the great unknown at the moment. We'll know more as contracts expire and the iPhone winds up at all carriers. If I had to pick one, I'd say the loyalty lies with Google services. Can anyone really tell the difference between HTC, Motorola or Samsung? Aside from annoying overlays and UI tweaks, they're all the same to me. The other wrinkle is the carrier. I'm on Android because Verizon bet the farm on the OS before it got the iPhone. There were no other choices really. So in my case, my loyalty is with the carrier. That is playing out again due to 4G/LTE connectivity. I don't sense a ton of Android loyalty. It's not like a cult or anything. Over time I'd bet against Android loyalty. It's a commodity OS and often acts that way.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Is Apple poised to grab some Android converts?
Apple's iPhone 4S + iOS5 + iCloud is hotly debated as a significant upgrade or a minor iteration. Does it open the door for more Android gains, or will it potentially win over a significant number of first generation Android users to Apple's side?
Posted by Jason Hiner
The faithful will stay home
I don't see a lot of iOS users dropping it and jumping to Android. That is a largely satisfied customer base that is happy to stay home. The strength of Android's staggering growth is that it happened irrelevant to what was going on in the iOS camp. Android and iOS have been going along merrily side-by-side without impacting each other much, and I think that will continue. Don't forget that while iCloud is new to the iOS world, Android has worked with the cloud since almost the beginning. It's one of the platform's strengths; unbox an Android phone and have all of your information on it in just a few minutes.
James Kendrick
I am for Android Growth
Apple needs an Android-iOS challenge
I think Apple can win over Android users in a taste test. However, the lack of LTE for Apple's iOS is a problem. For me, that's my only hang-up. I'm annoyed with Android a little more every day, but I may stick with it just because of Verizon's 4G network. It's a conundrum over what you value. Apple took preorders for 1 million iPhone 4S devices and when you add in a few more carriers I don't see how iOS doesn't hurt Android for a few points of share. Another thing: Apple's new pricing has a "free" iPhone 3GS with a two-year contract. That will fend off Android in the prepaid market.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
A looming showdown with Windows Phone 7?
Windows Phone 7 plays the same platform game as Android and has many of the same hardware partners, is it a threat to Android long-term? Could the Motorola buy push HTC and Samsung to WP7?
Posted by Jason Hiner
Maybe a teeny-tiny one, maybe not
As long as Android partners make money, they will remain loyal to the platform for the most part. The cost of using Android is minimal compared to licensing Windows Phone, and that will always be a factor with partners. Don't forget how big the Android Market has become, as apps play a big role with smartphone owner satisfaction. Windows Phone has shown the ability to attract a decent number of apps to its Market, but it pales in comparison to that of Android. Developers are not going to drop Android any time soon, given that vast target market. It is also important to remember that Google is not playing the platform game like Microsoft. MSFT's sole results with Windows Phone is determined by how many licenses it sells to partners, whose profitability is tied directly to sales of devices. Google is making money off advertising and search, which is highly profitable given the numbers of Android phones in consumers' hands.
James Kendrick
I am for Android Growth
If consumers buy, Windows Phone is dangerous. Big IF
In the long run, Windows Phone 7 is a threat. Why? Microsoft won't give up and has proven it will keep going no matter how ugly the quagmire gets. Meanwhile, Windows Phone 7 is a nice operating system that I'd rate No. 2 on quality behind iOS. Toss in the fact that other smartphone manufacturers are going to hedge with Microsoft and Windows Phone 7 has a shot. I think the Motorola acquisition if anything pushes that hedging process with Windows Phone. I predict that Windows Phone will at least stall Android a bit. The wild card here is consumers. Will they buy a Windows Phone device? If they do, Microsoft has a valid platform. If not, Android continues its reign. In any case, I don't see how Android winds up with say 60 percent of the market unless Microsoft abandons ship---something that won't happen.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Android vs. BlackBerry and Nokia
A lot of Android's growth has come at the expense of BlackBerry and Nokia, will that continue?
Posted by Jason Hiner
BlackBerry sure, Nokia probably
I believe so, because nothing is changing in the smartphone space with the exception of the Nokia/ Windows Phone alliance. Android is going to continue to take market share from BlackBerry, which seems unable to get its act together. While Nokia's Windows Phones will undoubtedly attract buyers whenever they finally hit the market, I believe they will take share from RIM more than Android due to the enterprise connection. The Nokia/ Microsoft pact may spell the end for the BlackBerry.
James Kendrick
I am for Android Growth
When in doubt kick RIM and Nokia in the head
Android will always have RIM to kick around. In fact, the whole industry has RIM to kick around. I see no evidence to argue that RIM will suddenly be formidable. BlackBerry OS 7 is nice, but not enough to do more than keep customers on the line. Nokia is a story of two geographies. In the U.S. Nokia is a no-show and that's likely to continue. Globally Nokia can rise up and ding Android market share. RIM is also strong globally and may do the same. Both Nokia and RIM are messes of the moment. In other words, Android will continue to knock both RIM and Nokia around for a bit longer. Nokia's bet on Windows Phone is also make or break for the company with little in between.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
The Motorola question
How is Google's purchase of Motorola going to affect the ecosystem, both short term and long term?
Posted by Jason Hiner
Short-term should be OK
This unexpected move probably will affect the ecosystem to a degree, but I think Google has the right intention with keeping Motorola operating as a separate company. A lot of Android partners will be watching the deal closely when it is consummated, and Google must say/do the right things. The last thing it wants to do is give big players (HTC, Samsung) reason to look around for another platform to test. Android is making these partners so much money now that the risk of this is minimal in the short term, unless Google does something stupid over the long haul. The key is business as before.
James Kendrick
I am for Android Growth
Short term neutral, long term negative
At this point the Motorola purchase is neutral to negative. In the long run, the Motorola deal is troublesome. On the one hand, Google allayed patent worries since the Motorola deal is really about intellectual property. The negative part comes from a channel conflict. Unless Google dumps hardware, it's an ally and foe to HTC and Samsung. The Motorola deal will send smartphone makers to Windows Phone if only to hedge their bets. Short-term the deal may be a win for Google on the patent front, but the long run looks very murky to me. When Google reports earnings on Thursday rest assured there will be a lot of questions about what Google will do with those 19,000 extra Motorola employees.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Our Android overlord
Android is an ecosystem more than a product, has Google proven itself to be a good ecosystem leader?
Posted by Jason Hiner
Sort of
That's a tough question, Jason. Google hasn't done everything correctly, has even bungled some things like giving up control over updates to telcos and OEMs. I think it has spent a fair chunk of the time at market learning what happens when you have over half a million customer device activations per day. Overall Google has reacted quickly when negative press about the ecosystem has emerged. The updates situation is such an example; Google stepped up at its IO conference this year and got the largest Android players to join a consortium aimed at addressing the helter-skelter update situation. Nothing has been heard of the outcome, but it's making the right moves. Hopefully Google will step up with more content deals with providers. This is a glaring shortcoming in the ecosystem, and one Amazon hopes to take advantage of.
James Kendrick
I am for Android Growth
Overlord cat herder
Google has herded the cats as well as anyone, but the issue I've heard repeatedly from developers is that the diversity of devices makes developing apps difficult. What works on one device won't on another. Google is in a catch-22. It can take more control of the process---some argue it already has---and be less open. Or it can keep things freewheeling, endure force closes and have the mobile version of Microsoft's driver problems a few years back. There's also an argument that a good ecosystem leader wouldn't allow Android forks.
Lawrence Dignan
I am for Stagnation
Great Debate Moderator
Why has Android succeeded?
Alright, time for the first question. Android came into a crowded market and has skyrocketed to 40% market share in the past 24 months. How has it been so successful?
Posted by Jason Hiner
Good handsets, and lots of them
I believe it was a combination of giving the market an alternative to the iPhone, along with the lack of clear affiliates globally. This opened the door for mass international adoption, aided by the fact that Google gives it away. The risk to OEMs and telcos was minimal, in an age when that is not the norm. The short time it has taken to get such a large market share was surprising, but due in part to the sheer number of Android handsets that flooded the market. It helped that many of these handsets were state of the art, including dual-core processors and advanced camera optics.
James Kendrick
I am for Android Growth
Here's how it happened...
Android's market share gains were created by Apple as much as Google. Android came along as right place at right time. Carriers---notably Verizon---needed an anchor OS to fend off Apple, which had an iPhone exclusive at AT&T. In other words, Verizon had to push Android. That was a nice kick start for sure. Android also benefited from Microsoft, which spaced out on the mobile market, and RIM, which also had miscues. Android's success has even surprised Google. Due to incompetence from other smartphone players, Android was the only counterweight to Apple. It's worth noting that carriers now want a No. 3 player to act as a counterweight to Apple and Google. I'm a bit tired of Android and some days think the OS just sucks. I'm almost waiting for an DOS screen to show up on my smartphone.
Lawrence Dignan
I am for Stagnation
Closing Statements
Lots of partners and quality phones
James Kendrick
With over half a million device activations daily, Android is here for the foreseeable future. Google has created a monster in Android, and one that reaches all corners of the smartphone market. As budget Android phones appear in greater numbers, the phones will start selling en masse in emerging countries in unprecedented numbers.
Google's Achilles heel is in the tablet space, as no definitive non-iPad market has been confirmed in the consumer space. This is further complicated with the upcoming Kindle Fire. Google may find it a good strategy to concentrate on its huge smartphone base, and drop tablets entirely.
The scattergun approach to the market of having lots of partners releasing lots of quality smartphones is the reason Android has grown so phenomenally. Continuing this strategy doesn't gain Google any Android brand awareness, but it doesn't need any. The platform will continue to grow at the expense of the fall of the BlackBerry.
Commodity hardware a tough game
Lawrence Dignan
Android is at an inflection point on both the smartphone and tablet side of the equation. Android smartphones are swarming the market, but growth will stagnate due to Windows Phone 7 distribution. Windows Phone will be a hedge for HTC and Samsung, and garner global distribution via the Microsoft-Nokia deal.
Ultimately, Android commoditizes hardware and that's a tough game for handset makers to stay in for the long run. Meanwhile, Apple's iOS is broadening its distribution. If RIM stabilizes, Android stagnates.
On the tablet side, Android tablets lack traction. Android will continue to be dominant, but that hockey stick growth curve will be a thing of the recent past.
Verdict: More growth ahead. It's tough to see Android faltering
Jason Hiner
The pace of growth for Android over the past two years has been remarkable, especially when you consider that it came into a crowded market dominated by entrenched players like Nokia, BlackBerry, and Microsoft. However, I agree with Larry that the iPhone may have been one of the biggest factors in Android's success because buyers were drawn to it but it was available on a limited number of carriers, so the carriers jumped on Android as a better alternative to the iPhone than any of the existing phones and that bet worked.
Android market share growth is going to naturally slow now that it has already taken so much share, plus you have the fact that the iPhone is now available on a lot more carriers and Windows Phone 7 could start to steal some attention away from Android at hardware partners like HTC and Samsung. That said, there are still a lot of customers converting from old cell phones to smartphones and Android is already in the market with a bunch of solid devices and so it's prepared to capture a lot of that business.
While Android has plenty of problems, which Larry has rightly noted, it's tough to see Android faltering at this point. There are just too many hardware makers and telecom carriers that are pumping out and promoting Android devices. They love Android because they can do almost anything they want with it, and that's also where a lot of the problems come into play. So, I'm going to rule in favor of James and the crowd for this one.
Doc's final thoughts: The Avalanche Called AndroidIN PARTNERSHIP WITH Ricoh
Sorry Larry, but you’re on the losing side of this argument. James is right – the sheer momentum of Android assures it will be a long term success. In fact, rather than describe it as a snowball gaining size as it rolls down the hill (nice analogy James), Doc would call it more of an avalanche. Google will probably bury some of the operating system rivals like Symbian and maybe even RIM. (And does anyone even remember the promise of Nokia’s MeeGo?) I wouldn’t give Windows Phone 7 much of a chance either, despite Microsoft’s sizable muscle (which has become pretty flabby of late). It’s clearly down to Apple and Google in the smart phone wars.
Why? Well, aside from the raw numbers (which put Android in front of the pack), there is likely to be increasingly better integration with Google Plus and Google search, and Google whatever-comes-next. And when you combine Google Wallet (and similar third-party apps) with all the near field communication (NFC) chips that will soon be embedded in Android phones, you have a powerful commerce tool that the credit card processors and direct marketers are wetting themselves over. Mobile payments are the next big thing, and Google is in the best spot to stimulate that market – Apple will eventually get there and certainly do it better, but Google will drive the bus.
Doc’s not saying Google will be king of the hill forever – we all know that today’s leaders are often tomorrow’s has-beens. But I wouldn’t bet against Google anytime soon, and if you can’t or won’t buy an iPhone, then Android is clearly the second best choice, clunky interface and all.
Posted by Jason Hiner