If you've worked at Google, you've probably never felt what it's like to make a mistake in a market, or had to think strategically about a business. "Make it great and make it free" is fun and at Google it also made you rich. Very Googly.
It hasn't worked out well in Android, which is a top 3 priority project at the Googleplex. A series of naive business decisions and strategic blunders meant Google was producing a lot of value, but capturing very little of it. They have now bought a company in Illinois whose last bonafide mobile hit was the StarTac.
This puts Google directly into competition with its partners, and probably will move Android to being a closed system. Asymco has, as usual, excellent analysis.
Have you read esr on this one?
ReplyDeleteAretae:
ReplyDeleteGreat link -- thanks! esr is a true believer when it comes to open source, while I'm more agnostic (but still a fan).
Horace makes a great point -- stack integration accelerates innovation (Theil made the same point in the context of Tesla and his space ship). This has been clearly obvious in the case of Apple's iPad & iPhone, but also frankly in their laptops which began integrating WiFi and cameras long before you saw that on the PC side.
The question then becomes, how much value does the customer see in this integration, and that tells you what will sell.
If you believe that the mobile space still has room for lots of valuable innovation, then an integrated provider is going to drive that (and capture rent).
ESR is still pretty the same idiot he's always been. All these manufacturers making crappy phones and selling them with zero margins to carriers who lard them up with crappy software are going to kill Apple! Any day now!
ReplyDeleteNope. Closed system wouldn't help Android one bit.
ReplyDeleteI hope Google doesn't *compound* its existing mistakes by making Android a closed system.
The correct way to fix its mistakes is to displace the cellphone carriers from their position by providing Google cellphone service -- in other words, competing harder with its partners. Expensive but *highly* effective.