moth:The most telling thing to me was Google’s tone toward Apple at the event. Instead of pretending to still be an Apple ally, Google today basically threw down the gantlet and admitted that it’s engaged in total war with Apple.And unlike other Apple rivals, like Adobe, Google execs weren’t huffing and puffing and wringing their hands about Apple’s bad behavior. No, instead, Google was mocking Apple. Making fun of it. Laughing at it.The Android OS is already outselling iPhone OS in the United States. Now it’s blowing past Apple in terms of the technology it’s delivering. Yes, Apple still has a larger installed base.I was a little shocked recently when an Apple spokesbot responded to the news of Android’s outselling iPhone OS by reciting the old chestnut about Apple’s having more phones out there. I was shocked because it’s a familiar line, one that I’ve heard countless times in my 20-plus years covering technology. But I’ve only ever heard it from companies that are doomed, and in total denial about it.”
It’s stunning to me that people think this “more android handsets” means anything. So. What. What does Google make off of Android phone? Anything? I actually don’t know the answer to that, but they sure as heck make a lot less than Apple makes off of an iPhone. They’re only ever going to make any real money off of those Android sets if they can advertise on them. And Apple is doing that on iPhones with iAd.
So: Who makes more when a handset is sold? Apple.
And: Who is most likely to make more money on the ads they serve to their phone? Google? or Apple. Which is better placed to charge a premium? Which already seems to be developing a compelling, premium ad offering? Apple.
Google needs to sell so many more handsets that they make… what? $200 or so (Apple’s extra profits in selling an iphone) more than Apple does, in order to actually make more money off of the mobile space than Apple? It strikes me that in the highly commoditized world of mobile ad serving, Google will be lucky to make a couple bucks per user more than Apple in serving mobile ads, and as of now, they look like they’re falling behind on even that.
So say they make $10 more, per user, off serving ads, on every phone than Apple does. A huge leap of faith on its own. Even then, they’d have to sell something like 20 times more phones than Apple to come close to making more money off of them on mobile.
Or maybe they’re counting on those massive Nexus One sales.
That’s missing the point, isn’t it? Apple has always made more from its products because they control them in their entirety. It’s the reason why they make more off a Mac, than Microsoft does from a PC. But ‘more Android handsets’ (disclaimers) still does mean something because it shows the emergence of a viable alternative platform. Yes, because Android is available to any handset maker and operator, Google has to contend with issues such as fragmentation that Apple doesn’t need to. But Google also wants to ensure that its OS is available everywhere, thus also making it an ever increasingly attractive target for developers. The number of apps on the Android market was already at 30,000 in March, which is a very good number for the relatively young platform. Not to mention they are still making money from all those search queries on the go. We’ll see how iAd does when it comes out, but right now people are still searching on their (i)phones, a lot, which is driving revenue to their main search business.
Lastly, given some of the features that have been unveilved in the past couple of days, Android isn’t just playing catch up to the iPhone anymore. Admittedly, they still are in some areas such as app management, but for the most part, Android is now coming of age and even doing many things better.
Having said this, it’ll be interesting to re-visit the numbers after the next iPhone hardware and OS are out.