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There are approximately 1 billion Android users and half that amount of iOS users. If Google didn't own Android then other companies would have those billion u

There are approximately 1 billion Android users and half that amount of iOS users. If Google didn't own Android then other companies would have those billion users. Google would have to pay them for the user activity (if not outbid by someone else) and would be subject to their whims (eg Apple deciding to do their own maps). Google does not need to own every user, but does need to control some to keep the other players in check. As I mentioned, if Android costs less than a billion dollars a year to develop, then Google is ahead. It won't show up as a regular profit line, but they will be better off by the difference. It shows up in other ways too - Android gets Google's apps preinstalled. Defaults are extremely powerful as most users go with them. Google can essentially do whatever they want on Android. For example doing Google Now even required some changes to Android. A competitor platform would severely limit what could be done, and most platform owners would want that kind of functionality and knowledge of their users for themselves. Think of Android as sending pennies a day back to Google's products for each user. On other platforms, the platform owner gets first bite, controls Google's access, requires payment, and reduces what Google gets back. As for the Android OEMs, Google doesn't need them to succeed, and only that there is reasonable choice of devices available in the world. Heck it is actually in Google's interest for Android OEMs to just barely make it, as that means cheaper devices which means more users, and that those users have a bit more income left over to spend with Google. Google is making billions on Android. Without it their future would be very much in doubt.

gress 11y ago
You're right about Android being important as a way of blocking competition, but it's false to say they are making billions on Android. It's just like all the other free stuff they offer - it raises the bar for competitors, but it doesn't make them money. Saving money is not the same as making money.
- rogerbinns 11y ago
  Using nice round made up numbers let's say that a Google ad is displayed and clicked on iOS. Google got paid 10c for the ad, but then had to pay Apple 5c to be the search engine. Same story on Android, except they didn't have to pay Apple, but did have to pay to develop Android (1c). In the iOS scenario they are left with 5c, but in the Android scenario they are left with 9c. They are better off in the final accounting by 4c because of Android. Call that whatever you want, but they end up with more money and more profits. The "free stuff" is not free. It is a place to deploy ads and encourage use of other Google services which then provides more places to deploy ads (aka revenue opportunities). Even if no ads are involved, the user activity is very valuable. Knowing what people search for, where they go, who they communicate with etc let Google make better products. For example when showing search results, which ones the users click on is monitored. If they keep clicking on the 3rd result then that one should likely be higher. The more traffic you get the better you can make your search results because the users tell you. Navigation data tells you what physical places are popular, which again reinforces the search results (eg Chinese restaurants in your town). Even seeing mis-spellings helps. If you ask people who have tried multiple search engines why they use Google, the answer is usually the quality of the results. It is a vicious cycle and why Google has 70-80% of search traffic. Guess where that makes the advertisers go, and the more advertising demand the higher the rates that can be charged. The positive feedback loops around Google really help. Android does not directly add to Google's bottom line. It does however add over a billion users to Google products, significantly reduces the costs to access those users, does not place those users under someone else's control, and helps the revenues of those Google products they use which does show up in the bottom line.
  - gress 11y ago
    None of this contradicts my point - Android doesn't make money for google. It just protects the advertising business.
partiallypro 11y ago
Google makes more off of iOS ads than Android ads worldwide (which goes to my suggestion that Apple users have more disposable income and thus higher ad rates.) It's not hard to look up. Google makes less than $1 Billion off of Android app sales/ads quarterly, which in Google's financials is practically nothing. Their capital expenditures in that space wipe most of that out anyhow. I'm not sure why this is controversial, it's in their financials.
- rogerbinns 11y ago
  Did you include the fees Google has to pay to Apple, which they don't have to pay to themselves for Android? The whole thing is also not binary. It is fine that Google has ads on multiple platforms targeting multiple demographics and markets. It would be problematic if 100% of the ad activity was on platforms controlled by others. In other words, having some (or many) of your eggs in someone else's basket is okay. Having all of your eggs in their baskets leaves you very vulnerable. There are other big Google benefits to Android. It keeps people using Google services, including when they use other platforms. That makes the other platforms have to play nice with Google, and restricts the amount they can take away from Google. An iOS user who uses Apple for everything (mail, calendar, etc) is far harder for Google to monetise.

gress 11y ago

You're right about Android being important as a way of blocking competition, but it's false to say they are making billions on Android. It's just like all the other free stuff they offer - it raises the bar for competitors, but it doesn't make them money. Saving money is not the same as making money.

rogerbinns 11y ago
Using nice round made up numbers let's say that a Google ad is displayed and clicked on iOS. Google got paid 10c for the ad, but then had to pay Apple 5c to be the search engine. Same story on Android, except they didn't have to pay Apple, but did have to pay to develop Android (1c). In the iOS scenario they are left with 5c, but in the Android scenario they are left with 9c. They are better off in the final accounting by 4c because of Android. Call that whatever you want, but they end up with more money and more profits. The "free stuff" is not free. It is a place to deploy ads and encourage use of other Google services which then provides more places to deploy ads (aka revenue opportunities). Even if no ads are involved, the user activity is very valuable. Knowing what people search for, where they go, who they communicate with etc let Google make better products. For example when showing search results, which ones the users click on is monitored. If they keep clicking on the 3rd result then that one should likely be higher. The more traffic you get the better you can make your search results because the users tell you. Navigation data tells you what physical places are popular, which again reinforces the search results (eg Chinese restaurants in your town). Even seeing mis-spellings helps. If you ask people who have tried multiple search engines why they use Google, the answer is usually the quality of the results. It is a vicious cycle and why Google has 70-80% of search traffic. Guess where that makes the advertisers go, and the more advertising demand the higher the rates that can be charged. The positive feedback loops around Google really help. Android does not directly add to Google's bottom line. It does however add over a billion users to Google products, significantly reduces the costs to access those users, does not place those users under someone else's control, and helps the revenues of those Google products they use which does show up in the bottom line.
- gress 11y ago
  None of this contradicts my point - Android doesn't make money for google. It just protects the advertising business.

partiallypro 11y ago

Google makes more off of iOS ads than Android ads worldwide (which goes to my suggestion that Apple users have more disposable income and thus higher ad rates.) It's not hard to look up. Google makes less than $1 Billion off of Android app sales/ads quarterly, which in Google's financials is practically nothing. Their capital expenditures in that space wipe most of that out anyhow. I'm not sure why this is controversial, it's in their financials.

rogerbinns 11y ago
Did you include the fees Google has to pay to Apple, which they don't have to pay to themselves for Android? The whole thing is also not binary. It is fine that Google has ads on multiple platforms targeting multiple demographics and markets. It would be problematic if 100% of the ad activity was on platforms controlled by others. In other words, having some (or many) of your eggs in someone else's basket is okay. Having all of your eggs in their baskets leaves you very vulnerable. There are other big Google benefits to Android. It keeps people using Google services, including when they use other platforms. That makes the other platforms have to play nice with Google, and restricts the amount they can take away from Google. An iOS user who uses Apple for everything (mail, calendar, etc) is far harder for Google to monetise.