> Apple is trying to grab hard onto the market segment that brings in the most profit, while Google is going for the commodity, high volume, low margin option.
Exactly. Google has supplanted Microsoft in the OS business. If you remember, Microsoft's business model was to commoditize PCs. Microsoft won when Dell and HP raced each other to the bottom on margins.
Now I see history repeating itself, only this time the handset makers have two people trying to squeeze them into commodity providers competing on price: (1) Google and (2) The Carriers.
Has anyone ever taken the time to explain why the apparently scary prospect of people "racing to the bottom" is bad for me as a consumer or member of society?
The original usage was about states competing by offering better terms to corporations. These "better terms" were worse for the people living in the state because they got less tax income and less worker protection. But they are the vendors in that analogy, the customer/corporation was very happy with how things worked out.
Am I really supposed to shed tears over a corporation's business model being a bit more like operating in a free market?
Your point is entirely orthogonal to my point, so I am quite comfortable that following your digression does not undermine my comment in any way.
What I will say about Android handset makers racing each other to the bottom is that what is good for you as a consumer is when entire products compete against each other. The trouble with looking at handsets is that they aren't really whole and complete products. They need an OS/Ecosystem/Theme Park and they need a carrier's service to complete them.
What is best for consumers is when there is competition for all the elements of the stack from top to bottom, either in packages (iOS on iPhone on AT&T vs. Android on Nokia on Sprint) or individually. I don't know how things will play out in the Android "space," but from what I've seen so far, the big nut to crack for consumers is the carriers, not the hardware and not the OS.
When text messages are less than a penny each, I will know that the entire stack is competing in a way that is good for consumers.
From that comment, I'll assume you're not in Europe. We've had the telecoms regulated somewhat sensibly and "racing to the bottom" for a while. And while it's not perfect I will note that during my last foray into purchasing phone contracts it seemed fairly difficult to avoid getting infinite text messages thrown into the deal (though I did manage it since I got a very cheap, effectively data-only plan which is all I needed).
'fraid not. Here in Canada, the Oligopolistic situation seems worse (if that can be imagined) than in the US. It is possible to buy bundles with effectively unlimited text messaging, but overall the situation for Internet and wireless telephony is anything but an efficient, competitive market.
Just to clarify on the texts: The very cheapest monthly (as in a single month long contract) deal I could find came with, by default, infinite texts (and these are cross-network texts, which a quick Google suggests seems to be a restriction on Verizon in the U.S. even when you pay an additional surcharge for texts each month, the price of which alone is higher than my entire monthly bill).
I'm sure you've been able to pay extra for a ridiculous numbers of texts for a good while, but now they seem to have dropped to be very roughly in line with their actual cost, which I believe is indistinguishable from zero to the networks.
If they did, though, it would make sense. Apple's business model is to make money by selling hardware; Google's is to make money by selling advertising.
They also collect licensing fees when phone makers use the Android name, Google trademarks and Google's software in the phones.
Is that accurate? Everything I've seen has indicated that if anything money moves the other way - Google sharing revenue on platform ads (and possibly other services) with oems and carriers. I haven't seen anyone claim that oems pay licensing fees to google for google apps and trademarks - I believe they are use granted based on platform spec compliance.
I assume their foray into mobile phones is to fragment the market and prevent any other player from gaining a dominant market share.
While undoubtedly google doesn't want another player to dominate the market, I believe the primary goals for android were to increase global pageviews, drive mobile adoption, and to avoid large upfront costs of paying for placement as the default search engine.
"With a high-quality open platform in hand, we then returned to our goal of making our services available on users’ phones. That’s why we developed Android apps for many of our services like YouTube, Gmail, Google Voice, and so on. These apps are Google’s way of benefiting from Android in the same way that any other developer can, but the apps are not part of the Android platform itself. We make some of these apps available to users of any Android-powered device via Android Market, and others are pre-installed on some phones through business deals."
The phrase "pre-installed on some phones through business deals" is at least suggestive that Google is being paid for the inclusion of their apps on phones.
I think rather the opposite: OEMs sell desktop real estate. You think Dell pays for antivirus? I think they get a fat fee upfront for even thinking of you, and then a per-conversion affiliate payout.
This is similar to many mobile softwRe arrangements in the pre-iPhone world.
To qualify for Google branding and to use the Android trademark and ship with the android marketplace a manufacturer has to comply with the "Compatibility Definition Document" - a platform spec document that includes some software behavior and a number of hardware features. including high speed wireless data, an X MP camera, a compass, acelerometer, touch, a standard screen res, etc.
The nook if memory serves lacks a camera at least so they didn't qualify.
Note that this doesn't say you get access to all google apps like navigation - it does appear another agreement is needed for those - I just don't know if that is a pay for access by the oem or some other arrangement.
Hardly. Google doesn't make phones.