A few days ago, I observed that Google is not pushing back against cell carriers’ lockdown of Android phones as vigorously as I had expected in the wake of the Android 2.2 announcement. If this Twitter rumor is true, Google locked horns with the carriers and lost that confrontation, leading to the semi-discontinuance of the Nexus One. Does this mean the carriers have won the war?
I think not. The good news is that the announcement of the T-Mobile G-2, which will run un-skinned Android, suggests that Google’s longer-term strategy is still working. I have noted that the opportunity cost to the carriers of these unhelpful customizations is rising, propelled upward by increasing time-to-market pressures that force them to either drastically compress development schedules or run down-version releases of Android that sacrifice performance and customer appeal.
I still think the carriers will hang themselves, given enough rope – and that the third phase of the smartphone wars, in which carrier efforts to tame Android collapse of their own weight, is about to begin. I’ve argued this much in a previous post; my point now is that Google’s smart move now is Taoist. They don’t need to fight the carriers in any other way than by keeping the Android release tempo up and the time-to-market pressure on the carriers correspondingly high.
One of my commenters asked how Android customization by handset vendors (as opposed to the carriers) changes this picture. Not much at all, actually; if anything, the time-to-market pressure is worse on them than it is on the carriers, because they have more competition. Most places, the carriers’ markets look like oligopolies, but the handset market has more scrappy small players – and this makes complete sense, since the financial mass required to build and maintain a cell network is so much larger than you need to hire some engineers and rent fab capacity.
The difference in time-to-market pressure has consequences; expect the handset vendors to try to shed the cost of customizing Android faster than the carriers do. Notably, I don’t think HTC Sense will survive very long, especially not if the G-2 (which is expected to be an unskinned HTC Magic) does well. Crap like Sprint’s NASCAR branding will outlast it, because NASCAR will actually pay the carrier for that placement and offset Sprint’s development costs.
Of course, as the handset vendors stop customizing Android, the carriers’ cost of differentiating Android will go up faster. There’s only one way that game can end, really; carriers lose, and Google wins. The carriers can’t get off the tiger any more, not with Android’s new-unit sales growth utterly demolishing every other smartphone OS worldwide.
Which brings us to Windows Phone 7. Microsoft actually had the audacity to throw a shipping party that included a mock funeral for the iPhone. All that really needs to be said abut this is that the event was recorded by an Android phone.
I never thought I’d hear myself say this, but…I find I’m actually pitying Microsoft a little. They’ve got nothing, no hand at all in this game. Their desktop-computing monopoly not only won’t help them gain share, it’s an actual hindrance; carrier and handset-vendor execs understand precisely what Microsoft did to the PC market and are determined not to be Ballmer’s bitches. Microsoft’s previous mobile products have been a string of money-losing duds followed by an outright disaster – the wicked knock on Windows Phone 7 you’re going to keep hearing is “next of Kin“.
Brand power? It is to laugh; if you ask a random consumer in 2010 whether “Android” or “Microsoft” has more positive associations, Android will win hands-down (high marks to Google for effectively flooding that zone). Really Microsoft’s only asset is financial mass; if it’s possible for anyone to outright buy their way into the smartphone-OS market, they’re the outfit that can do it. Of course, this would involve forgoing actual profits, which is a problem now that their legendary cash hoard has largely been spent on fruitless acquisitions and stock buybacks.
No, Google has nothing to fear from Microsoft…and isn’t that an indication of how much the world has changed?