When Android celebrated its first birthday last week, it was basking in the release of nine devices globally, with more in the pipeline.
And things have come a long way since Google’s first Android phone, the G1, was released on T-Mobile on 31 October 2008. The clunky G1 from HTC is miles away from the recently launched Hero and Motorola Dext, which have put services at the core of the Android platform.
According to industry sources, it is services that are going to really take off in 2010, with Android at the forefront of the battle as the address book becomes integrated in an easy to use platform.
Although consumers will initially be attracted by the aesthetics of a phone – just look at Apple’s iPhone – there will come a time when an operating system, or moreover the things that it can do, will matter just as much, if not more.
Services and content
CCS Insight analyst Geoff Blaber says: ‘I don’t think people will start to choose operating systems. Increasingly it will not be the software,
but the services and content that it enables.’
And, as services become bigger, competition is growing on the operating system side, with Windows Mobile and Symbian also preparing for a fight. In the mass consumer market, Android has a big challenge in generating user awareness.
Android’s selling point is the openness of its platform. Next year, every product and experience will be different on each device, says Blaber, adding: ‘It’s not like Windows Mobile as each implementation will be different – the advantage is the services and this is where Google will benefit.’
It is becoming a services world. Strategy Analytics director of wireless practice Neil Mawston says: ‘Instead of looks, it will shift to what apps can be added in as well. Look at Vodafone 360 and LiMo – it’s the gateway between online and offline.’
He adds: ‘Nokia led the way with online shops for online services, but Apple popularised it. That is a good example of how Nokia tripped up – it needs to tackle the US for popularity.’
Android has had a clear strategy from its inception: get manufacturers and developers on board and then work to develop operator relationships. It has done ‘pretty well’, according to Mawston, who says: ‘Most handset vendors, operators and developers are on board. It’s been a pretty successful year
But how will Android increase awareness of its brand among consumers? Android does three things to market itself – increases brand awareness, retail presence, and getting handset vendors on board – Mawston explains.
Blaber says: ‘At the moment, the consumer does not know what they want to see in a few years’ time. The challenge is that Android is a great platform and is good for integrating the address book, but how do you market that? How do manufacturers communicate that to the consumer?’
Android’s logo looks good, it has a memorable name, and it does co-marketing at the point of sale, like with Motorola.
Mawston says Android will also be trying to get Nokia on board, and adds that Nokia has a weak position in the US that Android could strengthen.
However, other sources believe Nokia is unlikely to sign up to Android, instead preferring Symbian and LiMo.
Blaber says: ‘It’s going to come down to getting devices in hand – we saw this with the iPhone. Next year, there will be more innovation on Android than on the iPhone. Apple has an exceptional product, which is tightly controlled, while Android is at the other end – it has an open philosophy, which means third parties can integrate further into the handset.’
Developers love Android. Symbian is old in comparison and developers have to write code for it. Meanwhile, Android is very straightforward to write for – it uses Java standards.
Ultimately, Google is catering more to manufacturers than to the end consumer. After HTC’s first Android phones, Motorola, LG, Sony Ericsson and Samsung admitted intentions to use the operating system. Blaber says: ‘We will be seeing over 10 Android phones by the end of 2009. Next year we will see 40 globally.’
And the danger for other operating systems is, according to Mawston, that Google might do what ‘Microsoft did in the PC market and try to be more aggressive’. He adds: ‘Google is fighting for eyeballs – that is its underlying strategy. It realised that if it didn’t have a presence on mobile it would lose out – it could be pushed to the back of the queue.’
However, there is fragmentation. Android has been a success because most manufacturers do not see Google as a threat.
As Blaber says: ‘Android has been a victim of its own success – it has gathered a lot of support in a short space of time, but people expected greater volume and greater consumer take-up.’
He adds: ‘We are only seeing the Dext and Hero now. The G1 and Magic were vanilla Android. Now they are more differentiated and there is more operator support as a result.’
However, Blaber points out: ‘When you look at the range of manufacturers on board, there will be a stellar Android handset next year.’
Strategy Analytics analyst Stuart Robinson agrees, adding: ‘There will be a lot of handsets released on Android next year – shipments will go away from Windows Mobile and towards Android. 2010 will be a good year for Android.’
The challenge for manufacturers on Android, and the industry, is price erosion. Sources predict there will be some sub €100 products to come and Android will be available across all price points. So, Google’s operating system will need to make sure there is clear differentiation between each product.
Blaber predicts: ‘We will see more low to mid-range handsets such as the T-Mobile Pulse,’ adding: ‘After Acer and Huawei announced Android handsets it put a lot of pressure on price.’
The Android brand is known by tech leaders, early adopters and some consumers in Western Europe and the US, where operating systems are becoming more of a selling point for handsets. This is growing.
But will people choose an operating system over a handset? Mawston says: ‘It will be hardware, software, price, services, and the brand as well.
Mass market consumers buy devices for how they look, but this will change over time.’