When talking about success in the mobile device market, Microsoft isn’t the name that instantly springs to mind. Google yes, Apple yes, RIM maybe, but Microsoft? Although they have a version of Windows for mobile phones (the latest being Windows Phone 7.5) and although Windows 8 has some potential to increase Microsoft’s market share, Microsoft has failed to make it big on phones (or tablets).
Of course, that isn’t true for PCs. In fact, Microsoft is the overwhelming number one in terms of PC operating systems (Windows) and PC software (Microsoft Office). So, why has Microsoft been so successful on the PC and what can Google learn about this success when it comes to Android?
The fundamental difference between Microsoft and Apple in the PC market is that Microsoft doesn’t make any hardware. It licenses its software to hardware makers and ensures that it is compatible. Apple, on the other hand, makes the software (OS X) and the hardware (Mac). Both companies are successful but Microsoft is the clear leader.
Now, move into the mobile device space and we see the same pattern forming again, but, this time, between Google and Apple. Google doesn’t make any hardware (ignoring Motorola for the moment), but it does license its software (Android) to run on the devices made by the likes of Samsung, HTC, LG, and so on. Apple, on the other hand, makes the hardware (iPhone & iPad) and the software (iOS). Both companies are successful, and, this time, Apple, with its hardware/software combination, isn’t on a distant second place, but on equal footing with its closest rival, Google.
So, in the PC market, Apple’s holistic approach has been successful but not dominant. Whereas in the mobile device market, Apple is a force to be reckoned with. What did Microsoft do in the PC market that gave it that dominance over Apple, and how can Google reproduce the same effect on mobiles?
The answer, of course, is that Microsoft doesn’t make any hardware but licenses its OS to others. Google does the same, but why doesn’t it dominate the market like Microsoft does? I am tempted to tell you it is because Android is open source and this is leading to fragmentation, but that isn’t entirely true. There are lots of open source projects, the majority in fact, that aren’t fragmented.
The problem is twofold. First, the handset manufacturers need a way to differentiate their hardware in a saturated market. The second is compatibility.
Rewind 25 years – IBM is the de facto standard for PCs. Microsoft makes software that is compatible with IBM PCs. When IBM introduces something new, the industry follows (the PS/2 keyboard plug, that was so ubiquitous before USB keyboards, was an innovation made by IBM in a line of computers called the PS/2 range. The industry just followed IBM’s lead). Since Microsoft made software for computers that were compatible with the IBM standard, it didn’t matter to Microsoft which hardware manufacturer made the machine. So, for every PC sold, the hardware came from one of dozens (today hundreds) of companies, but the OS only came from Microsoft. This was a stunning success for Microsoft – while the hardware companies fought to try and differentiate their hardware and take a slice of the pie, Microsoft was guaranteed to be the OS supplier. This model worked so well that Microsoft became number one, and IBM eventually left the PC market, realizing that hardware became a commodity.
The situation is similar today. Handset companies like Samsung, HTC, Sony, and LG are trying to differentiate their devices (how big is the screen, how many megapixels in the camera, how many cores, and so on), while Android is the OS that runs on them all. But to make the handsets even more attractive, the manufacturers are also tweaking Android to bring better features that only work on their phones. This means that the version of Android running on any given phone isn’t actually a vanilla copy of what Google is offering. Because of this, Google has effectively lost control of Android. When Google releases a new version of Android, it now takes months and months for the handset manufacturers to get it out onto their devices and many just don’t bother.
The last thing handset manufacturers want is an equivalent of the “IBM compatible” standard but for mobile devices. The very thing Google needs (and consumers) is a “Verified Google handset compatible” standard. If such a standard existed, any user could upgrade their handset to the latest version of Android, as long as the handset was “Google compatible” and the manufacturer (or Google) had released the relevant drivers. But then handsets would become a commodity, something the handset giants don’t want. That is what killed Nokia in the low-end market.
It is the lack of compatibility which is causing so much pain. Almost daily, I talk with Android users who don’t understand why they can’t have the latest version of Android for their phone or why it is taking so long for their handset manufacturer to ship a new version.
Google isn’t making much money from Android. There are reports that, in its entire history, Google has only made $550 million from Android. In fact Google makes more money licensing its Maps and Search services for Apple to use on the iPhone.
Now that Google has put Android into a dominant position, it should use its influence to create a “Google handset compatible” standard that allows users to buy a phone knowing that it is supported by Google and that the updates from the phone can be found on Google’s website and not their handset manufacturer’s website.
To do this, Google needs to take a hard look at the CyanogenMod project (which supports an impressive and broad range of handsets/tablets) and start shipping its own version of Android for popular handsets. Since Google clearly has lots of money, it should basically give jobs to all the CyanogenMod project members and make it the official Google version. It should also use Motorola to enforce/encourage this, by making all future Motorola phone compatible to a standard that guarantees compatibility with any future release of Android.
This way, Google can become the Microsoft of the mobile device world… But then again, that is what Microsoft is trying to do with its tablet version of Windows 8. The hardware needs to be Windows 8 compatible… Come on Google, wake up!
Would you like to see a “Verified Google Android compatible” standard that would allow you to buy a device in the safe knowledge that it is compatible and ready to receive future updates? Leave a comment below. I promise to answer any sensible comments. Let your voice be heard, maybe Google will listen!