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The Android abdication

When I wrote about Android’s pursuit of the biggest losers, I made the explicit claim, backed by data, that Android was most attractive to device vendors who were in financial distress. Android is a lifeline to sustain failing business models. But underlying that claim was the more sinister implication that Android is sustaining to the incumbent operator business models. That means that Android is subject to operator manipulation and its market access as well as those of competing platforms will be throttled to maintain control.

The article below makes an even stronger case.

As a result, we now have a situation where the U.S. telecoms are reconsolidating their power and putting customers at a disadvantage. And, their empowering factor is Android. The carriers and handset makers can do anything they want with it. Unfortunately, that now includes loading lots of their own crapware onto these Android devices, using marketing schemes that confuse buyers (see the Samsung Galaxy S), and nickle-and-diming customers with added fees to run certain apps such as tethering, GPS navigation, and mobile video.

The dirty little secret about Google Android | Tech Sanity Check | TechRepublic.com.

I would not say that Android is enabling the consolidation of operator power. I would say that operator power never wavered.

The article concludes:

Despite the ugly truth that Android is enabling the U.S. wireless carriers to exert too much control over the devices and keep the U.S. mobile market in a balkanized state of affairs, Android remains the antithesis of the closed Apple ecosystem that drives the iPhone and so it’s still very attractive to a lot of technologists and business professionals.

But, the consequence of not putting any walls around your product is that both the good guys and the bad guys can do anything they want with it. And for Android, that means that it’s being manipulated, modified, and maimed by companies that care more about preserving their old business models than empowering people with the next great wave of computing devices.

That sounds about right.

  • poru

    I'm shocked, SHOCKED to hear anyone suggest that the carriers would do anything to maximise their profits and exploit their customers!

    But these are in fact very good points. The "open" nature of Android cuts both ways. And when dealing with most corporations remember Tom Waits's immortal words: "The large print giveth, and the small print taketh away."

    Now nobody can pretend Apple is perfect or saintly or isn't trying to maximise their profits. But the hazards of Android *may* be more dangerous to the consumer than the iOS closed system and control ("curation") of apps.

  • Ben Rosengart

    You really think operator power never wavered? I think the iPhone threatened it for a while, at least. It bears no AT&T logo and carries no AT&T shovelware. I used to harbor hope that that would be the start of a trend.

    • http://www.asymco.com asymco

      The fact that the iPhone was launched with an exclusive is proof enough. Apple had to concede even to participate in the market.

  • Iphoned

    I thought Android was open?

  • yet another steve

    When I pay Apple money for products their customer is ME. I pay to money it makes them rich. And Apple is fighting very hard to keep it that way.

    With Google the customer is the advertiser. The better and more effective they make advertising, the more rich they get. With Android not only am I not the customer, I'm the SECOND derivative. Advertising pays the bills, next priority is operators, users come THIRD.

    The other thing about Apple's ecosystem is that it's benign… you do NOT have to participate (this is why Apple has to focus on me, it's customer.)

    Nothing is free… it just means someone else is paying the bills, and the provider works for THEM.

  • Tom

    As the market is flooded with android clone phones, each phone will have to compete, not against the iPhone, but against all those other clone phones. The distinctions will add less and less value as their numbers increase. The iPhone can only stand out more and more as each iteration advances its portion of the iOS.

    • Sevket Zaimoglu

      You make "competition" sound as if it's evil, whereas competition is the driving factor behind the technological advances. If the newly introduced android phones are clone copies of each other, then it will indeed be difficult to differentiate one from the other, but why should it be so?

      For example, why can't a company come up with an android phone that has a gold or platinum case or adorned with precious stones (and sold for thousands of dollars)? I bet Vertu's next phone for the luxury market will be an android phone. I know a wealthy businessman, who drives a Bentley during the week and a Ferrari during the weekends. He was complaining the other day that "even the taxi drivers can afford an iphone" Can Apply provide an "iphone Swarovski edition" or "iphone Ferrari F1 limited edition"? I highly doubt so, but we may see LG, Samsung or another manufacturer offering such handsets in near future.

      • http://www.asymco.com asymco

        Vertu is a division of Nokia. You can bet your last dollar that it won't run Android.

      • http://twitter.com/sevketzaim @sevketzaim

        Well, if not Vertu, then Tag Heuer will do it:

      • Tom

        Someone (you?) could easily make a bumper for the iPhone 4 that is diamond studded, with gold pendants, sold for $10,000, and sell them (on the street corners) next to the Bentley dealerships. It would probably work just fine.

      • Tom

        The inability to differentiate one clone phone from another, with hundreds and eventually thousands to choose from, means little to no profits for the makers. The telcos sell them all for profit. But each maker sells only a few at most. Lots of makers with lots of phones to go around, and little to show for it now and less R&D to improve the next phones.
        Inside the wall, Apple has the RD. to beef up the iPhone, iPad, iPod nano, itouch, iTV, all iOS devices. Here is the real juggernaut!

  • http://lowendmac.com Tim Nash

    As a User, you get to choose the 'walled garden'. With Android, the carrier operates it and decides what handsets are available with what shovelware and if and when the latest version(s) of Android are to be installed. With Apple, you get the iPhone and decide what apps you want and when you want to update it. In the USA, for now, iPhone means AT&T but in most of Europe you get to choose the carrier as well.

    • Sevket Zaimoglu

      Currently, Apple stores cannot supply enough unlocked iphone 4's to meet demand in the UK, and in several European countries iphone 4 is not even officially available yet.

      • Tom

        I'm sure there will eventually be 25-250 Android phones and 25-550 WP7 phones in each of those countries where the iPhone isn't yet available. But when it does, it will move the needle there just as it did in the countries where it is available.
        The walled garden is what Apple is all about. MacOS X is walled, iOS and its apps are walled. This is the way Apple works. Some people don't like it. Some people do. It is sad when one gets rude and vicious when another has different preferences.
        Not to imply anyone in this immediate discussion is doing that, you understand, I hope.

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  • http://www.ecolojic.com joshua

    "I would not say that Android is enabling the consolidation of operator power. I would say that operator power never wavered."

    With the shift towards smartphones (or AppPhones if you prefer) that the iPhone has driven, perhaps you'd like to support the assertion in the first sentence by pointing out what options other than Android the carriers had? Android is the operator's single best hope to retain their power.

    The second sentence also requires us to significantly discount the fact that the iPhone has zero branding, zero bloatware and provided a whole raft of downloadable apps and media that the operators had nothing to do with, other than providing the pipe to suck down the necessary zeros and ones. If that isn't a severe curbing of the power of the operators, I don't know what is.

    • http://www.asymco.com asymco

      Not all smartphones had operator branding. I don't want to take anything away from what the iPhone achieved. It created a market for mobile data that did not exist in a material way before. However it did not dent the operator business model. No phone can do that today.

      The Nexus One was an attempt to change distribution for phones and it was a predictable failure. Nokia tried the same with Series 60 phones in the US because they were locked out of the market by US operators. But in the end both experiments failed because operators have an airtight control over cellular device distribution.

      Before and after the iPhone/Android operators are still able to:
      1. lock devices
      2. decide which devices users can buy
      3. define end user pricing for devices

      Reform requires government intervention, but rather than reform, the power operators have over devices is in many ways increasing.

  • http://www.ecolojic.com joshua

    Indeed, it's a shame that Google sold out so quickly.

    I still have hope that some disruptive technology shift (or maybe eventually consumer power?) might moderate the power of the operators, but you may be right that goverment intervention is the only way.

  • Sevket Zaimoglu

    I don't about the situation in the US, but in the UK, as of today, it is not possible to unlock (or jailbreak) iphone 4 sold by operators, whereas operator branded ROMs on HTC Desires are easily removed.

    Besides, it is very easy to switch from one GSM operator to another. In many countries, you are required to provide identification when buying a pay as you go SIM card, which is probably registered due to security concerns, but no one asks you any ID in the UK. Again, if you are on a contract, you need to make prior arrangements regarding your data plan, but for example on Vodafone pay as you talk cards, you don't even have to buy data packs. For simple email and web access needs, it only costs 50p for daily access. If you are fussy, you can pay 7.50GBP and get a month of internet access, or pay 15GBP and get 3GB worth of internet access.

    From the UK perspective, the GSM operator business certainly seems destined to become (for many, it has already become) a commodity service.