Android Devices

Google goes further towards competing with its own OEMs

CEO Sundar Pichai hints at greater control of Nexus hardware and a unique Android implementation to tempt Apple users

News that Google will put “a lot more thought” into Android, to enhance its differentiation from iOS and upcoming mobile operating systems, was encouraging – until CEO Sundar Pichai linked that work directly to Google’s own Nexus range of devices. The company has always had to make difficult compromises between control and openness in Android, but now it seems to be veering heavily towards increasing control by being a fully fledged hardware vendor. In doing so, it needs to remember the sorry precedent set by Microsoft’s handset adventure as well as its own period of owning Motorola.

Pichai told the conference that Google will add more features to Android for Nexus, and will be “more opinionated” about design. It will not go as far as designing its own hardware, at least for now – Nexus production will still be sub-contracted to partners and phones co-branded. But Google will take a more active role in hardware specs as well as controlling the Android user experience, and including features which are not available to the wider ecosystem. “There’s a lot of software innovation to be had,” Pichai added.

Nexus handsets and tablets have functioned primarily as showcases for the latest Android releases, but in very vanilla form, the idea being to encourage OEMs and developers to move to the newest platform and implement it in a Google-approved way. So Nexus has not achieved significant market share, because it was not intended to – like some of Microsoft’s hardware over the years, the aim has been to kickstart a new Android phase and accelerate the production of high end devices and apps by device makers.

Now Pichai is talking about Nexus having its own implementation of Android, with additional features layered on top, making it distinct from other Android smartphones, not just from iOS. Even though Nexus devices would continue to be made by partners, many recent comments by Pichai and other Google executives indicate the firm aims to have control over their hardware design, and to include software features in Nexus which are not available to the whole Android ecosystem.

This would seem to create the conflicts of interest with its own OEMs that Nexus has largely managed to avoid so far because of its modest commercial ambitions. And far from encouraging third parties to adopt a ‘gold standard’ Android implementation as demonstrated on Nexus, this is likely to drive OEMs like Samsung to intensify their work on their own differentiated user experiences. That, in turn, will increase the fragmentation which has dogged Android since the start.

It is not clear what Google aims to achieve here. Android has flourished despite the fragmentation of implementations, or perhaps because of it. The range of choice for consumers can outweigh the developer issues of having to support and update multiple releases, or the problem of inconsistent and sub-standard Android experiences. Much of the success has been driven by the support of companies like Samsung whose economies of scale, supply chain processes and distribution channels can move vast quantities of devices. Google cannot compete in that respect, and it should not risk alienating the handset experts at a time when the smartphone market’s growth is slowing, and market share wars – fought on price and efficiencies more than user experience – will erupt.

Yet Google seems determined to pursue a hardware path, even though it failed to turn its shotgun wedding with Motorola Mobility into a successful union (and even the more hardware-focused Lenovo, which now owns Motorola, is struggling in the slowing handset space). As Microsoft’s purchase of Nokia – another example of a software company entering the hardware market far too late, and with the wrong tools – crashes and burns, Google has hired back Motorola’s Rick Osterloh to lead a unified device program, and a revamped Nexus line looks set to be a highlight of that.

Perhaps Google feels that, as the smartphone market reaches its peak, there is too little innovation going on to drive its platform forward. It is already developing Android flavors for cars, industrial objects, wearables and so on, but smartphones will be the bulk of the installed base for many years to come. While OEMs focus on efficiencies, will they compromise on new capabilities to attract the high end users, leaving Google to fill the gap?

That may be true in software – large handset makers rarely succeed in pushing the OS or user experience boundaries, and most of Android’s new features come from Google or its broad apps developer base. But as long as people use Android more and more intensively, Google’s commercial objectives are fulfilled. Smooth upgrades and updates – the scourge of Android users – are far more important to drive usage than sales of brand new devices.

By asserting full control of its own version of Android, Google could go after the premium market with a single brand and user experience, fully centered on its own services (some OEMs sideline apps like Google Search or even replace them, cancelling out the commercial opportunity). It already spoke, at last month’s I/O developer conference, about designing devices to harness its virtual reality and AI advances.

But creating a showcase device to stimulate interest in a new technology is one thing. Becoming an Apple challenger is another. Nexus could be a direct competitor to the iPhone and enhance Google’s brand as well as usage of its apps. But that relies on the Nexus ecosystem creating devices which are more appealing to those premium users than the top end Galaxy S (as well as the latest iPhone); and if that succeeds, on dealing with the fall-out among powerful OEMs which now have a new competitor in the only smartphone segment that still has real profitability and branding value.

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