Telecom & Wireless
Overseas Sales Push Google Android Share
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The head of Android operations at Google (NASDAQ: GOOG) says that the adoption of the mobile operating system has gotten a substantial lift from outside the United States. That does nothing to tell investors how the world’s largest search company will make money on the product, but it is impressive nonetheless.
Andy Rubin, speaking to the FT, said “predicted that a boom in sales in India, Brazil, Indonesia and other emerging countries would contribute to the fast growth rate for the foreseeable future.”
Industry research says that Android-based handsets are activated at the rate of 300,000 a day compared to 150,000 for the Apple (NASDAQ: AAPL) iPhone. That still does nothing to explain why Google has spent time and money on Android. The operating system often carries Google’s search features and Gmail. Most people use the email addresses that they have had for years. Their friends and business associates are used to these addresses. A change would cause a disruption for people who rely on email. Google is already as good as the default search engine for most consumers. The fact that it may be installed with Android probably does very little to help its mobile market share.
Apple and Research In Motion (NASDAQ: RIMM) get a paid customer every time one of their smartphones is sold and put into use. This business model is easy to understand. Android falls into a category of excellent products like Google Maps, Google Apps, and Google News which cost the search company money but apparently do not bring in any revenue. The concern that Google is a one product corporation continues to grow and with good reason.
Google’s Android OS is about to be put into laptops and probably some TV software applications. The product may make these devices easier to use. Android does not cost developers any money. It is open source software so engineers can add features without any toll collected by Google.
Android may eventually reach 1 million activations a day. Google will get bragging rights because of that, but probably not a single cent for its efforts.
Douglas A. McIntyre
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