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Day November 19, 2010

Did Google Arm Its Own Enemies With Android?

James Allworth, a Fellow at the Forum for Growth and Innovation at Harvard Business School writes:

Baidu,… has taken an even bolder approach. It’s reportedly in negotiations with a number of smartphone manufacturers to remove all references to Google, and replace them with Baidu.

… Microsoft recently negotiated with Verizon that some of the Android phones that ship to Verizon customers will have Microsoft’s Bing, not Google, as the default search engine. And the manufacturers are getting in on the act too: Motorola recently released a new phone, the Citrus, based on Android, but shipping with Bing.

Yes, it’s Google’s operating system. In both these instances, it counts as a “win” in the handset volume war against Apple, Microsoft, Nokia and RIM. But Google will not make a cent on this handset, despite having enabled its creation with Android. All the search revenue will flow to Microsoft.

via Did Google Arm Its Own Enemies With Android? – James Allworth – The Conversation – Harvard Business Review.

Readers of this blog might find these arguments familiar.

Since February this year, I wrote four articles under the headline “Google vs. Android” documenting these contradictions in Google’s strategy. There have been numerous other opinion pieces that described how Google’s approach was not consistent with an innovation-based disruption.

I’ve also argued that there is strategic incoherence in building systems software and hardware while selling web services.

Android is powerful, but as Google is finding out, power can be very dangerous without control.

Why the Mac keeps growing

When the iPhone vs. Android rhetorical war heats up, both sides bring up the history of Macs vs. Windows PCs. The commonly held thesis is that Windows triumphed as the PC was commoditized (and modularized). This triumph was at the expense of the over-serving and over-priced Mac.

This is a largely accurate view of what happened during the 90s. But the problem with this thesis is that (1) the PC’s job has been slowly changing in the last decade (2) the Mac keeps growing faster than the PC and (3) Apple keeps capturing a vast portion of the profits in the PC industry.

These anomalies or contradictions to the thesis imply that something changed. What changed and can these changes turn the tables on the market and create an opportunity for a new computing disruption?

Are mobile networks commodities?

Apple has been contemplating a SIM card that would make carrier switching a lot easier. Sounds great, doesn’t it?

“Apple is relenting,” said Rodman Renshaw analyst Ashok Kumar. “They are now completely backing away from their plan to take the carrier out of the equation,” said Kumar,.

via Apple to Kill Carrier-Irking iPhone Plan – TheStreet.

This brings to mind a recent article I wrote that any talk of mobile dominance by platform vendors is bunk.

… no single platform can win a disproportionate share because it would threaten the balance of control the operators require. So talk of “dominance” of one platform or another is hyperbole. The most likely scenario is an even distribution of share between 4 or 5 competitors.

The power of distributors in the mobile phone value chain cannot be ignored. It’s not fair, it’s not convenient and it’s not consumer friendly, but as long as networks are not good enough for mobile computing, mobile computers cannot commoditize the network.

The consequence (for those of us who try to foresee the platform game) is that operators will continue to play platforms off against each other leading to the scenario I suggest above.