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Steve Ballmer Questions Android's Strategy
Rahul Srinivas, Nov 10, 2008 1449 hrs ISTSays he doesn't see the revenue model in Android
Steve Ballmer at an event on Thursday, dismissed the Android OS as being financially unsound for Google. Ballmer seemed to have trouble understanding Google's pricing strategy. While Microsoft's Windows mobile has been licensed to operators and handset manufacturers for a nominal license fee, Google has done this for free -- and aims to make money from Google's core business, the search engine.
Ballmer said, "I don't really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting and said, hey, we've just launched a new product that has no revenue model! Yeah. Cheer for me... I'm not sure that my investors would take that very well. But that's kind of what Google's telling their investors about Android," he said.
Here's my take: What Google really seems to be telling its investors is that there is an untapped market out there -- the billions of people who are yet to use the web on their mobile phones, more specifically, use the search option in their mobile browsers. This is what Google seem to be targeting. Unlike Microsoft, which only earns from the "modest" license fee it charges, Google has this entire untapped market at its disposal.
Now for some statistics.
To start with, let's face it -- there are not many users who fancy browsing websites on their mobile phones. There are reasons for this though. From slow connections to unusable web browsers, and everything in between.
However, the numbers are steadily increasing. To talk about the US, only a measly 5.8% of the mobile subscribers used their phones to actually search for something online. That was in 2007. Fast forward to 2008, that percentage has increased to 9.2%. In sheer numbers, there has been a dramatic 68% growth in the number of people using their mobile phone for searching. Why are we talking about search? Because, as mentioned earlier, that remains Google's number one source of income! Here is another interesting statistic: as much as 53% of Windows Mobile users use the web (not search). The figure for Apple's iPhone though is an amazing 84%. The conclusion? Give us better web browsers and we will wholeheartedly accept the mobile web.
Google already has all the online presence it needs in the mainstream web segment. On the mobile web front, users seem to have ported their preferences -- which is why Google remains the preferred search engine amongst mobile search solutions. Statistics again: Google is preferred by as much as 63% of mobile web searchers in the US. A healthy lead compared to Yahoo, which sits at 35%. Microsoft's Live Search languishes at the bottom of the pile. Google also happens to be an advertising company.
It seems Google is expecting mobile advertising to be a potential money-spinner in the not too distant future. It is hence logical for Google to be involved with an OS that that offers a relatively better browsing experience than Microsoft's Windows Mobile.
Who wants the 'modest' license fee then?
Via: AlleyInsider, ComScore
Ballmer said, "I don't really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting and said, hey, we've just launched a new product that has no revenue model! Yeah. Cheer for me... I'm not sure that my investors would take that very well. But that's kind of what Google's telling their investors about Android," he said.
Here's my take: What Google really seems to be telling its investors is that there is an untapped market out there -- the billions of people who are yet to use the web on their mobile phones, more specifically, use the search option in their mobile browsers. This is what Google seem to be targeting. Unlike Microsoft, which only earns from the "modest" license fee it charges, Google has this entire untapped market at its disposal.
Now for some statistics.
To start with, let's face it -- there are not many users who fancy browsing websites on their mobile phones. There are reasons for this though. From slow connections to unusable web browsers, and everything in between.
However, the numbers are steadily increasing. To talk about the US, only a measly 5.8% of the mobile subscribers used their phones to actually search for something online. That was in 2007. Fast forward to 2008, that percentage has increased to 9.2%. In sheer numbers, there has been a dramatic 68% growth in the number of people using their mobile phone for searching. Why are we talking about search? Because, as mentioned earlier, that remains Google's number one source of income! Here is another interesting statistic: as much as 53% of Windows Mobile users use the web (not search). The figure for Apple's iPhone though is an amazing 84%. The conclusion? Give us better web browsers and we will wholeheartedly accept the mobile web.
Google already has all the online presence it needs in the mainstream web segment. On the mobile web front, users seem to have ported their preferences -- which is why Google remains the preferred search engine amongst mobile search solutions. Statistics again: Google is preferred by as much as 63% of mobile web searchers in the US. A healthy lead compared to Yahoo, which sits at 35%. Microsoft's Live Search languishes at the bottom of the pile. Google also happens to be an advertising company.
It seems Google is expecting mobile advertising to be a potential money-spinner in the not too distant future. It is hence logical for Google to be involved with an OS that that offers a relatively better browsing experience than Microsoft's Windows Mobile.
Who wants the 'modest' license fee then?
Via: AlleyInsider, ComScore
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