Lets's see...
Google develops a mobile OS built around it's services and give this OS away for FREE to device manufacturers so that they may collect user info and *HOPEFULLY* use that info to make money in advertising. Sells no devices of it's own....
For the first part, there's zero revenue stream there to exploit. Of course, the second part alludes to building hooks into that OS which tie into one's advertising-based revenue stream, which would be a mechanism to effect a positive cash flow and potential Return on Investment (ROI). But the problem with this second part is ... "but can those hooks be removed - - or at least changed to point to a different beneficiary?". The answer to that question is YES.
I wonder if they have lost control of Android. Chinese companies are repurposing it without using Google search or ads. Lots of companies are using it to build feature phones which really don't present ads or use search...
Because Android is obstensively Open Source, it is impossible by definition for Google to retain control. That's why Google has tried to forstall defections by having a trademark requirement on Android(TM).
The fundamental business model problem that Google has with Android is that the advertising hooks that Google put within Android can be removed (feature phones) or replaced ... and this latter part isn't just theory: Baidu has already replaced Google in China.
Google is "locked out" of the China market due to Govt-vs-censorship issues and Baidu has stepped into that vaccume: reportedly, something like ~80% of the Android cellphones in China are running with a Baidu replacement of Google in Android OS - - this all just goes to illustrate that trying to associate marketshare to corporate revenue (and profits) is a fallacy.
Dominance does not equal money.
Marketshare does not equal money.
Why are people not getting this?
The reason why people trip on this intellectual hurdle is because
marketshare=money=dominance is true when you're talking about pure commodity markets ... and what we had in the 1990s with Windows OS running on any OEM's Intel PCs was a hybrid of a commodity market: the OS may have been proprietary, but hardware OEMs were the commodity, resulting in price wars (...and slim profit margins).
We're talking about it from a consumer perspective. As a consumer, I don't give 2 craps about profits. It doesn't benefit me.
YMMV. That's entirely appropriate for a consumer with a very short term perspective, such as on a consumable like today's lunch.
However, when the consumer places significance on a product's sustainment, then the health of the company can become a consideration: a company who aren't prospering is at risk of no longer existing when you might come to them with for support, such as a warranty claim. For an analogy, Saab and Suzuki automobiles are discontinued brands in the USA ... who today would choose to totally ignore this as a factor when shopping for a new car?
Anyone ever considered the fact that Android is pretty much installed on every dumbphone so it can be called a smartphone. If you compare Apples vs. Apples, aka High-end devices vs High-end, you see the real picture. 50/50 Apple Android.
A good point: knowing exactly what goes into a metric is often critically important to really understand what's going on in a market. And FYI, when looking further into the ROI for Google's books, there's also a couple of hundred million real smartphones in China running on Baidu (not Google) that also need to be adjusted in the counts.
I'm going to go ahead and say businessmen in charge of major corporations care about who wins the profits....
Maybe it's a sustainable business model, and Google can continue to make small profits with it, and that's fine. Apple's value will continue to be higher because they do business a lot better.
And similarly, there are business models which may look great in the short term, but which may not be sustainable over a longer term. Given how netbooks (and now eBooks appear to be) were a "boom & bust" cycle, the question harkens back to business fundementals on if Google's business strategy for Android may similarly contain a fatal flaw.
What I see as factors to contemplate include:
- the indicated 'smartphone' marketshare values for Android are polluted by feature phones;
- the indicated 'Android' marketshare values (even if corrected for the above) need to be split by the underlying revenue beneficiary (eg, Google vs Baidu);
- the ongoing fragmentation of Android OS;
- relative differences in the consumers' real world lifecycle expenses (less than 10%) versus marketing (cellphone providers heavily promote Android);
- customer retention rates (upon contract renewal: 94% vs 39%, etc).
-hh