Google Android and the Wireless Ecosystem

Published: Jan 2008
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This report looks through the hype and cynicism surrounding Google’s official announcement of Android and the Open Handset Alliance and identifies the key opportunities and critical barriers facing the future evolution of this platform.

Google’s plans are focused on the development of a comprehensive ecosystem which aims to bring mutual benefit to all participating members, and spark innovation in handset designs, content and service offerings as well as overall consumer behavior.

Yet, based on the dynamics of the existing mobile industry, they face a number of fundamental challenges in realizing these dreams. This report benchmarks the Open Handset Alliance against Japan’s “Wireless Ecosystem” model, as well as competing services offered by Symbian, Microsoft, MontaVista, Apple, and RIM. Through this analysis, five key insights are presented and a roadmap for the future success of Google’s Wireless Ecosystem is provided.

Key Questions Answered in this Report:

What is Google Android and what is its significance within the Global mobile marketspace?
What are the opportunities for Google and other industry players in creating a robust “Wireless Ecosystem”?
What are the key challenges standing in the way of Android’s success?
What are the most important lessons learned from the Japanese Wireless Ecosystem model over the past 9 years, and how can the Open Handset Alliance leverage these to ensure their future success?
What is the most likely trajectory that the evolution of the Open Handset Alliance will follow over the next 12 to 18 months?

Target Audience: 
  • Google and Members of the Open Handset Alliance: Lessons learned from the Japanese Wireless Ecosystem provide valuable insights into the key challenges that must be overcome to ensure long-term success.
  • Competitors to Google and the Open Handset Alliance: Understand the key elements that Google must assemble to create a truly robust and innovative wireless ecosystem, and make Google’s efforts obsolete by creating such a model first.
  • Network Operators: Is Google Android and the OHA a competitive threat or an opportunity to further grow the overall market?
  • Mobile Content and/or Service Providers: Innovative content and services will provide the backbone for a fully functioning wireless ecosystem. Developers therefore hold the vital key for Google Android’s success. This report outlines how your role must evolve in order to guarantee the success of Android.
  • Handset Manufacturers: Are the investments required for Android worth the money versus other competing platforms?
  • Government Regulatory Agencies: This report provides an appropriate framework from which Android and the Open Handset Alliance can be understood, and based upon 9 years of success in Japan, outlines the key requirements for a robust mobile industry in other markets around the world.
  • Advertising Agencies: Google’s move into the mobile space will very likely create an entirely new advertising paradigm. This report will provide insights into how advertising and marketing in general may evolve via the mobile channel.
  • Industry Consultants: Understand the key drivers that will power the success of a robust Wireless Ecosystem outside of Japan, and the most likely evolutionary path that the mobile industry will follow to achieve such a model.
Key Findings: 
  • Linux Developers are critical: Winning developers over to the Android platform will be a critical first step upon which Google must focus. If Google fails to accomplish this by mid-2008, Android will never achieve the critical mass necessary to compete with Windows Mobile or Symbian.
  • Innovation is Fundamental: While the $10 Million developers challenge is nice, a long-term vision for how content developers will be compensated and rewarded for their efforts is a critical success factor.
  • Operators hold the most critical role: Without Network Operators loosening their revenue-sharing strangle-hold on content developers, these companies hold the greatest power to thwart Google’s ambitions. We predict that Google will succeed in acquiring a spectrum license, and to use this to “convince” operators of the value of mobile innovation, either through partnerships or direct competition.
  • The Power of the Mobile Internet: For mobile innovation to truly succeed, Google and its Android developers must get consumers out of the habit of thinking of the Mobile Internet as a “smaller” and “less robust” PC Internet.
  • Handsets are the Key: Google must develop compelling incentives to convince the larger Handset Manufacturers to focus upon and innovate using Android. Without a broad range of handsets available and optimized for Android content/services, Google’s mobile ad-revenue dreams will remain dreams.
  • The Future is OFF the Network: For the Open Handset Alliance to convince Operators to loosen their grip on content and service revenues, alternative (and more profitable) revenue sources must be identified. While Government regulations will impede operator’s efforts to become banks, without a “carrot” to compliment the “stick” of Google’s plans to become a network operator, Google’s efforts to convince the world’s largest operators to adopt Android will be limited. Off-Network revenues will be the key ingredient for these discussions.
Table of Contents: 

Situation Overview

The Android Launch
What is Android?
What is the Role of the OHA?
What is Google's Vision for Android?
Eric Schmidt's Perspective
Sergey Brin's Perspective
Responses to the Android Launch
Steve Ballmer's Perspective (Microsoft) - YouTube Video
Nigel Clifford's Perspective (Symbian) - YouTube Video
John Dvorak's Perspective (Editor, PC Magazine) - YouTube Video
A Mobile Value System
Towards an Ecosystem
Japan's Dominant Mobile Market
DoCoMo's International Failures

Ecosystem Models

What is an Ecosystem?
The Japanese Ecosystem Model
The Traditional Mobile Value System
Exporting the Ecosystem (Successfully)
The Android "Ecosystem"
The Competitive Landscape

Mobile Platforms

Existing Mobile Platforms
Symbian's Market Dominance
The Symbian, Linux, Windows Mobile "Ecosystem" Model
It's Google's Android (Not a lesser competitor)
Competition in the Linux Segment
Blackberry (RIM), Palm and Apple "Ecosystem" Model

Key Insights

The Challenges for Android
Ecosystem Success Factors
Lesson 1
Lesson 2
Lesson 3
Lesson 4
Lesson 5
Android's Challenges From the Ecosystem Perspective
Challenge 1 - Unify
Challenge 2 - Reward
Challenge 3 - Guide
Challenge 4 - Inspire

The Way Forward

Clear Intention to Succeed
Android is an Ecosystem
The U.S. Takes the Lead in Mobile?
The Unique Mobile Consumer
The Way Forward

List of Figures:

Figure 1 The OHA
Figure 2 Global Mobile Data Users
Figure 3 Japan's Wireless Ecosystem
Figure 4 Japan's Mobile Customer
Figure 5 The Typical Mobile Value System
Figure 6 Everyone's Customer
Figure 7 The Android Ecosystem
Figure 8 Still Everyone's Customer
Figure 9 Smartphone Market Share
Figure 10 Symbian, Linux and Windows Mobile Ecosystem
Table 1 Mobile Linux Players
Figure 11 RIM, Apple and Palm Ecosystem
Figure 12 Unify
Figure 13 Reward
Figure 14 Guide
Figure 15 Inspire