The business model behind it is interesting. If people use the android phone, google earns money from advertising. By making the android platform open source software, available to customize it by other manufacturers you will gain quick marketshare. The danger might be the fragmentation to many incompatible versions of the android operating system.
Huge market potential
By 2013 the mobile Internet ecosystem–money spent on access fees, online commerce, paid services, and advertising–will be worth more than half a trillion dollars per year, according to Morgan Stanley analyst Mary Meeker. As users keep downloading services and apps, every device sold generates an ongoing revenue stream
Desktop shift to mobile
The top companies in desktop computing–Apple, Google, and Microsoft–must shift their focus to mobile devices to remain competitive. But that pits them against traditional phone makers like Nokia and Research in Motion. Nokia, which has developed its own smart-phone software called Symbian, remains the industry gorilla. There are already 1.3 billion Nokia phones in use, and 200 million of them are smart phones. The huge customer base is a big advantage, according to Tero Ojanpera, an executive vice president at Nokia. By collecting location information from mobile phones, for example, Nokia can make traffic predictions.
Advantage android
But Google has a few advantages of its own. Instead of trying to modernize an older system originally created for voice-centric phones, Rubin and his engineers started with a clean slate, developing a modern mobile operating system for a new kind of device–a small computer that happens to make phone calls. Unlike older operating systems, Android was created to be good at rendering Web pages and to run many applications at the same time.
Business model Indirect revenue stream
Google also counts the very nature of Android as a strength. The company does not make money from Android directly. It gives the software away to hardware partners. Google reckons that Android gets more people onto the Internet, where Google can show them ads. Google CEO Eric Schmidt says Android-based phones already generate enough new advertising revenue to cover the cost of the software’s development. Google could make money in other ways too, for example, by opening an online store to sell music and videos to Android users. Schmidt envisions a day when there are 1 billion Android phones in the world and notes that if Google could get just $10 from each user per year, it would be a $10 billion business. That’s real money even for Google, whose revenues this year will be $21 billion.
Offer full customisation options to gain rapid market share
In addition to making Android available for free, Google also lets phone makers change the code and customize it so that an Android phone made by, say, Samsung has a different user interface than an Android phone from Motorola. Rubin believes this open-source model gives Google an advantage over rivals selling closed systems, like Apple, which also operates its own online stores. Apple’s tight control enables it to deliver an exceptionally smooth user experience, where everything works seamlessly together.
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how android is transforming mobile computing
this is very authentic transforming mobile computing and further more Offer full customisation options to gain. thanks for share with this post.
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