Will forking Android work?

May 9, 2012
4 37 5 9

    In recent days, there have been many reports stating that numerous Android handset manufacturers are working on launching smartphones with their own forked versions of Android. Recent comments by Skyhook CEO, Ted Morgan, and the success of Amazon’s Kindle Fire, seem to have fanned these flames even more. But ignoring Skyhook’s stormy relationship with Google for a second – is this really a sound business strategy for OEMs? Let’s take a closer look.

    In order to truly understand whether this strategy makes sense, let’s delve into the two primary reasons the Kindle Fire was successful with its Android forking strategy, and attempt to gauge how well our other Android forking contestants would perform on those same metrics.

    1. Price

    Amazon Kindle Fire

    This is the most obvious factor. At a price point of $200, the Kindle Fire was the first truly low cost tablet that was backed by a strong brand and arrived on the scene with a great marketing campaign. Since Amazon essentially sold the Kindle Fire at break-even to drive content sales, it was able to keep the price point low enough to attract numerous first time buyers. Being the first mover into this segment and landing with a solid marketing campaign from the big ‘A’ created a lot of traction for Kindle Fire among consumers.

    Other OEMs

    The party is just getting started, folks.

    In developed markets, competing based on price is not really possible because of carrier subsidies. There are scores of mid-range smartphones that are available for as low as $0-$50 with a new contract. And, in developing markets, as Nokia has recently discovered, low cost Android smartphone manufacturers already have considerable presence in the market. Clearly, there is no first mover advantage here.

    In the tablet market, the Kindle Fire is already a strong player. With Google launching its own low cost tablet in the next few months, it will be very difficult for other OEMs to compete with them purely on price, while making a positive gross margin on sales. Since content sales form a minuscule portion of the revenues most OEM’s earn, means that would-be-players do not have the option of making up hardware losses with profits from content sales.

    2. Content

    Amazon Kindle Fire

    A huge driving factor for the sales of the Kindle Fire is the fact that Amazon presented both an acceptable content library and a low price for consumers. For first time buyers averse to high prices and the usual techno babble you find on sites like this, it was a no-brainer. In contrast to popular opinion, I wouldn’t categorize Amazon’s content offerings as “superior”, but rather “acceptable”, considering the price point. The reason for my argument is because of tablet usage trends – tablets are primarily used for browsing, apps, games & media (books, music & movies). A recent survey of tablet users in the UK, by UM London, gives us an understanding of the importance of each of those factors. The most important bit of information from the survey is the chart below:

    Tablet Usage Survey

    As shown by the survey, only 15% of tablet usage is for books, music or movies. The top 5 activities, accounting for 61% of usage, are browsing, games, email, social networking and news. And, for these activities, Android (unforked) offers far more advantages over the Kindle Fire.

    In terms of media content, the Google Play Store is behind Amazon. But, in terms of app selection, even though the Amazon’s App Store has grown quickly thanks to effective monetization strategies and perks for new users, it is still far behind the Google Play Store. As per the latest figures, the Amazon appstore offers over 31,000 apps, while the Google Play boasts a collection of over 450,000 apps, most of which run well on 7 inch tablets.

    Now, even though Amazon’s offerings do not match the Google Play Store just yet, it is important to note that Amazon did give users enough apps and content to match expectations.

    Other OEMs

    There are other ways to differentiate yourself, OEM's.

    Even though the Android operating system is open source, Google services, including the Google Play Store (formerly the Android Market), are not. This means that OEMs looking to fork Android for their devices must load an independent content library onto the device and most Android OEMs are clearly lacking in this area, as anyone that has purchased a cheap Chinese tablet only to discover no Google Play love will sadly recount.

    Given that smartphone usage typically tends to focus even less on media consumption and more on browsing, apps, games and social networking – there is no OEM with the ability to offer a satisfactory ecosystem to consumers. Even OEMs like Sony can do nothing but offer a few Playstation gaming titles. Even if OEMs are successful in licensing Amazon’s forked OS for their devices, the lack of apps would be a severe handicap, putting them below even Windows Phone devices in terms of market performance. I would compare Samsung’s level of success with the Bada OS as a good benchmark for any OEM looking to fork Android. It clearly hasn’t gained much traction thanks to the low app selection.

    Conclusion

    The combination of sufficient content and the low price point that Amazon used to make its Android forking strategy successful is extremely difficult to replicate, especially in the smartphone segment. It may be a low-risk move for small, low cost Chinese vendors, but there isn’t much of an upside either. Given that any attempt by any large OEM to fork the Android OS would most likely be a one way ticket out of the Open Handset Alliance, it is clearly a very risky move. Most Android OEMs are better served looking at alternative means to differentiate, as attempting this strategy could very well put an end to their mobile ambitions.

    What say you?

    Comments

    • Daniel Guidry

      Sounds like a sound analysis to me. If the major players in the Android market are already worried about platform fragmentation, it seems like virtual suicide to try and fragment it further by forking the OS.

    • AppleFUD

      I agree. I don’t see anyone else at this point in time being able to offer a “complete package” that will draw users to their “forked” or “closed” Android device. However, I do think Amazon can run with it. They do offer some things, IMO, that users will like — a curated app store that is easy to find apps in and decent selection of digital goods. However, I do believe they need to do a lot better with their software implementation of Android.

      Nonetheless, I do think Amazon’s fork of Android is a good thing for us all in that it will push Google to clean up some of their issues, especially Google Play, and give them some direct competition for an Android ecosystem — I think that is needed.

      • sameer_singh17

        I agree, Amazon was a unique case because of its focus on the appstore. Amazon’s monetization strategies should push Google to be more serious about the play store. Although Google cannot replicate the monetization strategies of Apple & Amazon, they seem to be looking at other ways, like carrier billing.

      • http://www.AndroidAuthority.com/ Darcy Alexander LaCouvee

        Those are valid points ApplFUD.

        Competition is, inherently, a good thing. The other good thing is that the stakes are very high. Rest assured that things will continually improve.

        That being said, Amazon’s software implementation for the “App store” on devices other than the Kindle Fire is quite poor. At least in my opinion. Very basic, but decent organization.

        I highly doubt any other manufacturer is going to actually attempt to fork Android. Though, in China, which is now the world’s largest smartphone market, it’s an entirely different story. No Google Play makes forking Android a very tempting proposition indeed.

        Either way, the fight is on. Amazon has been losing plenty of money, despite being an international e-commerce all-star. Perhaps their robotic-no-human-needed massive distribution centers of the future will help them appease shareholders worries.

        What I would love to see – and I think many more will agree with me – is more manufacturers adopting pure versions of Android – or – even BETTER – would be for a manufacturer to work with some of the great devs at XDA directly, and offer tons of themes and skins out of the box – with plenty of support for future modification, too. Make it a no-brainer and consumers will flock in droves.

        • AppleFUD

          It’s been a while but last time I looked at what was going on in China with forked version of Android most were doing very poorly. For whatever reason, the Chinese public wanted Android, not a forked version of it. Maybe that has changed?

          Wouldn’t we all like to see more pure versions of Android. I doubt it will happen though. For whatever reason OEMs think they will be cutting their throats by going vanilla, and since the average user doesn’t seem to care one way or the other, or even know the differences, it looks to be unlikely — it’s us few, less than 10% of Android users, that want ‘pure Android’ and carriers out of the way. The rest don’t really have a clue about any of it. . . therefore, I’m sticking with an unlocked Nexus :)

          I remember when Amazon first started up — I was a rather early adopter (compared to the average) of shopping online, man you could find some killer deals back in the mid 90s. Anyway, people thought they would never make it. . . and now here we are with retail chains blaming Amazon for all their financial troubles. It’ll be a fight, no doubt about that, however Amazon is one dog I would never count out.

        • JayZed

          Why is there no Google Play in China?

    • http://www.giquegear.com GiqueGEAR_Todd

      Astute analysis. Proprietary-minded companies trying to see proprietary opportunity where there is none. It is a mirage created by the heat of Android’s market share.

    • Nattyzero

      Spoon it first…because everybody knows that spooning leads to forking

      • AndroidBrian

        Lol!

    Popular

    Latest