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Android: Heading For a Fall?

Google's Android OS currently dominates the smart phone market in a way that should scare anyone who's paying attention. After all, this dominance has come in huge leaps over a very short period of time. And it has happened in a market in which industry darling Apple previous reigned supreme with its iPhone. According to the most recent market share stats (which I discussed in today's Short Takes), Android smart phones outsold the iPhone by over 2 to 1 in the most recent quarter. And the gap is only widening. How the heck could Android have beaten back the iPhone so quickly and so easily?

I think Google's cheating.

This notion has been brewing in the back of my mind for a while. It came to a head most recently when Google (hypocritically) complained about Microsoft joining a cabal of other companies to protect mobile patents. I blogged about this episode and then, based on a lot of feedback from readers and on Twitter, later wrote a news story spelling out my argument for why I felt Google wasn't just wrong, but that Google needed to be investigated for dumping Android in the market illegally.

Coincidentally, the FTC is indeed investigating Google for Android-related antitrust issues. Good. But I think this investigation needs to go further than potentially illegal mobile OS/search service bundling. I think the federal government needs to investigate Google for the reasons I outlined previously: It is dumping Android in the market in a manner that I feel is illegal, and certainly as bad as anything Microsoft did previous to its US antitrust trial. And it needs to be stopped.

The interesting thing here is that I can see signs that this suddenly dominant platform is cracking at the edges. It's not just the FTC investigation. It's the multiple mobile industry lawsuits, most of which are aimed at Google's partners for now, but are sure to impact Google directly too. It can be seen in Google's crazy outspoken criticism of Microsoft and others, and its bizarre exclamation that maybe it, too, should purchase some bogus mobile patents and lord them over others.

I see shakiness there. Something that maybe won't have the permanence of, say, the Windows compatible PC, which spent 20+ years at the top of the market (and still shows no sign of slowing down).

I mentioned this notion yesterday on Windows Weekly and received a strange and somewhat belligerent retort from Leo, who had responded in this fashion to another Google complaint I made previously. And yes, it is laughable on the face of things to claim that the ever-growing market leader is heading for a fall. Unless of course you understand the point I'm trying to make.

Every time Leo and I disagree, I receive a number of concerned emails from listeners, worried that we've somehow crossed a line and that Leo and I don't like each other anymore. That's silly: I love the guy and I value his opinion. But one of these emails made me think I needed to explain this a bit better than perhaps I did on the show. It came from a Jeff M. and went like this:

I was listening to yesterday's (8/11) Windows Weekly and heard Leo Laporte call you out for describing Android as "shaky."  I'm an Android user, but I agree with the shakiness sentiment.

Here's what I think is going on from my personal observations:  People don't buy Android phones because they are in love with the OS or the surrounding ecosystem, they just want a great phone on their carrier.  Once they are done with their current phone, they want another great phone.  They aren't married to the OS.  For an iPhone user, there is almost no question what their next phone will be.  This makes Android users kind of a swing vote.  This disposition towards Android supports the idea that despite current dominance, it can be drained dramatically in a 2-3 year period of time (b/c carrier's 2 year plans).

Does this match your observations as well?

I responded like so:

Yes, though I was going in a different direction with this, in that I feel Android has found great success through a circle of interconnecting factors, all of which are non-sustainable.

First, Google gives it away. It does this because it can and because its huge expenses related to developing Android can be paid back implicitly through more people using search and its other ad-supported services on the devices. But Google is not paying for the intellectual property of others that it's using in Android; and it is infringing on other companies' patented technologies.

Second, Android has attracted a much wider than usual licensee base from hardware makers because it's free. So there are a tremendous number of Android devices, all going out through every single wireless carrier. These hardware makers are always trying to one-up the others, so new devices come out all the time and there is a hyper-competitive market just for Android phones. This creates a further unrealistic "capabilities vs. price" situation in just that part of the market.

Because there are so many Android devices, and because one of them is usually the single best phone at any given wireless carrier, more people buy these kinds of phones. I agree with you that it has nothing to do with Android per se, only that this is what the employees are pushing to customers. But the entire situation is all artificially propped up for the reasons stated above. I do not believe this can continue for much longer. The crazy over-commoditization of the Android market is a death spiral. And yes, that sounds like a nutso thing to say in this age where Android dominates the smart phone landscape. I know. I still believe it to be true.

So we'll see what happens.

With regards to Leo, I think the thing that bothered me about the defensiveness was that he took this argument as, a) as some kind of personal attack (Leo uses Android, Paul disses Android, and thus Paul is implicitly dissing Leo, which was not the case at all) and that, b) he tied this opinion to Windows Phone (Android is on a precipice, so Windows Phone has Google right where it wants it). That was not where I was coming from at all. This issue has nothing to do with Leo or Windows Phone, the latter of which certainly has its own issues. It was simply an isolated commentary about Android, which I feel has legitimacy issues that are just now finally starting to be addressed in court and with the federal government.

I wish Windows Phone was doing better in the market; it deserves that. But this is about Android. And I think Google's cheating.

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