Google's had a bad couple of weeks.
First, the company's Pixel 4 and 4 XL smartphones, which had their specifications slowly leaked for several months before their mid-October rollout, have been widely panned by many members of the technology press. The reasons cited include weak component configurations, poor battery performance, and high prices relative to direct competitors such as the Samsung Galaxy S10 and the iPhone 11.
My colleague, Ed Bott, recently did the math on Google's Pixel business overall, and it isn't good news: The company may have sold fewer than 10 million Pixel devices total in 2019, and the smartphone family's market share may represent less than 1% of the total smartphone user base in North America.
Pixel exists because Android is a Toxic Hellstew
It should be noted that Pixel exists as a product strictly because Google has failed to control the quality of its vast -- albeit highly profitable -- Android OEM and software development ecosystem. Pixel provides the only pure and unadulterated Android experience that is free of unnecessary partner bloat and modifications.
Pixel features the most up-to-date Android implementation that software developers seek, because Google's licensed Android OEMs, such as Samsung, Motorola, LG, and others, have failed to patch and update their products on a routine basis. This failure to update their products is the origin of the Android "toxic hellstew" of bugs and vulnerabilities coined by ZDNet's Adrian Kingsley-Hughes in 2014.
This is in stark contrast to Apple, which offers up to five years of software maintenance for its iOS devices. The Pixel's guaranteed maintenance cycle is only three years. Historically, Android OEMs have had no stated update guarantees or a maintenance cycle at all.
In essence, Pixel customers are being asked to spend a premium on weak competing products because Google is incapable of controlling the quality of its OEM ecosystem. It is a tacit, multi-billion-dollar admission of failure. We can only hope that Google doesn't repeat this mistake of allowing OEMs to run roughshod with Android's eventual replacement, Fuchsia.
Other parts of Google's device ecosystem are equally moribund. While Chrome OS has enjoyed some level of success with OEMs, its tablet and clamshell device business has been questionable; the Chrome OS-based Pixel Slate was canceled not even a year after its launch due to poor sales.
On a global basis, Android does better with tablet market share (an estimated 58.9 percent) from its licensed and non-licensed OEMs. However, Android only occupies about a 20% market share in North America, behind Apple's iPad at 80%. That said, Android as a tablet operating system still lags far behind iOS in terms of tablet-optimized applications and is not a particularly lucrative target for Android application developers when compared to Android smartphones.
As a wearables platform, Android -- which was renamed WearOS -- can be classified as a total failure, with approximately a 4% market share (based on sales of its largest partner, Fossil) as of Q2 2019 according to Canalys, trailing Garmin (7%), Samsung's Tizen (10.6%), FitbitOS (24.1%) and Apple's WatchOS (37.9%), respectively.
Google cannot be trusted with customer health data
As if that poor wearables business performance wasn't bad enough, the company announced its intentions to purchase the beleaguered fitness wearables company Fitbit for $2.1 billion in cash. Immediately, this introduced concerns over whether Google could be trusted to handle legacy Fitbit customer health cloud data.
Many initially gave the company the benefit of the doubt. However, the company quickly showed its true colors when the Wall Street Journal exposed that Google is involved in a massive patient health data harvesting project with Ascension, a Catholic faith-based healthcare provider, potentially impacting tens of millions of patients.
Google has claimed that this project is fully compliant with current HIPAA guidelines. Nevertheless, the company faces a federal probe into potential wrongdoing as well as large-scale civil litigation. Both Google and Ascension could face many billions of dollars in fines if it is determined via future legal proceedings that patient privacy was substantially infringed.
All these issues underlie several existential problems that have plagued Google for years. It would seem that the removal of the mantra "Don't be evil" from its code of conduct in 2018, which Google maintained for 18 years, was a foreboding indicator of how the company's culture has changed for the worse.
It represents a tragic transformation of a culture that was to be envied within Silicon Valley as an innovator and agent for positive change within the technology industry. The company is no longer perceived as a neutral, open-source oriented, and a freemium services-driven competitor to the aggressive, OEM strong-arming Microsoft, and Steve Jobs' obnoxiously elitist Apple.
As with the much younger, social networking-focused Facebook, Google is evolving into a data-hoovering and advertising-firehosing giant that cares very little about the digital safety of its licensed ecosystem and the privacy of its hundreds of millions of users who have been unwittingly victimized by its many information experiments.
Disrupt internally or regulate?
All of these issues point to serious existential problems at the Googleplex -- problems that will get worse before they get better. If Google's products and services could be easily replaced, it would not be as much of a pressing issue. But the reality is that Google's products and services are essential to the end-user computing experience for most of the western world, and even consumers who don't use a single Google product may be significantly impacted from the company's data harvesting operations in multiple key industry verticals, such as healthcare.
As my ZDNet colleague Ed Bott so dutifully researched, kicking the Google habit from a data privacy objective may be extremely difficult, and from a consumer perspective, financially unpractical to replace components piecemeal. While some products and services can be like-for-like replaced with products from competitors, such as Android itself and Gmail with Apple's iOS and Microsoft's Outlook.com and 365, others, such as YouTube, Maps, and Photos, do not have suitable functional equivalents.
The question remains as to whether Google is capable of the type of internal disruption needed to make positive changes to return it to that "Don't be evil" past, and whether that change can be made without fundamentally destroying the company.
Microsoft, which used to be everyone's favorite evil company -- once jokingly referred to as "The Borg" for its aggressive embrace and extend strategy towards industry standards -- was able to shed this reputation by self-disruption over a decade. Redmond managed this thanks to the voluntary departures of Bill Gates and Steve Ballmer, the subsequent elevation of technology progressive Satya Nadella to CEO, and a considerable shedding of the old guard.
While that transition is still considered to be a work in progress, Microsoft has been able to transition from a desktop operating system monopolist to an open-source friendly, OS-agnostic infrastructure and application cloud services provider for small businesses and enterprises.
In my opinion, Google is incapable of that sort of internal self-disruption. Google can't disrupt in the same fashion because of the way the company operates with virtually all of its income in advertising and its parasitic nature. The best we can hope for is to limit its power.
Rebooting the Borg, again
History shows us that the government has intervened with toxic monopolies in order to affect change and ensure fair competition, such as with the time-boxed consent decrees required of IBM in the 1950s, of AT&T in the 1980s, and Microsoft at the beginning of the 21st century.
Google currently faces antitrust investigation in the US and Europe for its dominant market position in various aspects of the technology industry -- particularly as it relates to its core advertising business. Europe may very well continue to fine Google in the billions as it sees fit. The investigation in the US is likely to take years, and the outcome is uncertain. There is no question the increased scrutiny of the company's activities by world governments is going to change the way the company operates, possibly for decades.
Despite Android's qualitative issues and failure to establish leadership with Pixel as a brand, Google has too much influence in the mobile industry with back-end services that could be interpreted as a monopoly.
The answer to Google's systemic problems may lie in divestiture; control of critical Google ecosystem assets that store private customer data could be moved into the stewardship of a public-controlled entity. My colleague Ed Bott suggests taking all the Google Play Services, the Play Store, and the Android Open Source Project (AOSP) and moving it into an independent nonprofit. Google would then be left only with the back-end services (Gmail, Maps, Search, Cloud Storage, etc.).
Google doesn't charge for Android licenses, but it does force its OEM partners to preinstall its apps if it wants access to the Google Play services and the Play Store. If governments were to prevent Google from that forced bundling, it then opens up the possibility for Microsoft Android, Samsung Android, or Firefox Android, using AOSP or a fork of Android.
Such an arrangement would be similar to how Microsoft in the 2000 consent decree was forbidden from writing custom PC contracts and had to make APIs available on a nondiscriminatory basis. An independent organization would also be able to give access to Play Services and the apps to non-Google Android versions -- like Amazon's FireOS and forks created by the Open Source community such as LineageOS.
In such an infrastructure and API asset divestiture, Google would get the benefit of the Play Store and services (and presumably, whatever infrastructure Fitbit has), but none of the data. The legal structure of whatever is deemed necessary by a consent decree does not matter; what matters is that these assets become independent from Google, and customer data is protected, regardless of what industry vertical it is collected from or the cloud services product from which it originates.
Can Google disrupt internally to fix its problems, or does it require a government intervention by consent decree? Talk Back and Let Me Know.