Steve Jobs on Android

In a post Macworld interview with John Markoff of the New York Times Jobs is quoted :

 “Having created a phone, it’s a lot harder than it looks,” he said. “We’ll see how good their software is and we’ll see how consumers like it and how quickly it is adopted.” In seeking not to get locked out of the mobile phone world, “I actually think Google has achieved their goal without Android, and I now think Android hurts them more than it helps them. It’s just going to divide them and people who want to be their partners.”

This seems to repeat the assumption of many people that Google will make money from the applications on the platform itself, or from the simple increase in the number of web users (or hours of web use) and the associated likelihood of eyeballs seeing Google provided advertising on the new platform.

I disagree…

I think Google’s most likely stream of revenue from the phone is from delivery contracts with the mobile operators. Today mobile web browsing is a ‘OK’ but problems of poor wireless speeds are compounded by what is a somewhat inefficient approach to the movement of modern web pages, their graphics and the associated elements of the web experience. Google has a widely deployed (Internationally now as well as domestically) topology of data centers and the exceedingly fat pipes that link them. If Google is in a position to ‘own’ the software on the handset and is confident of localized connectivity between the handset and a nearby Google datacenter they can do many things to improve the handheld browsing experience :

  • Localized caching of information
  • Compression of certain elements above and beyond what’s already done
  • Wholesale replacement of the HTTP protocol between the handset and the datacenter to further accelerate browsing.

These sort of things are services that a wireless operator would like to see to differentiate themselves from the competition, it’s also the sort of thing the operator would pay for directly with Google – a single large source of revenue. It can also be easily made part of any opensource project, indeed even done on the iPhone ! Since the real ‘magic’ is the datacenters, their performance and the smart software therein.

Don’t forget that the lead developers of the Android project are the folks from Android Inc. (an acquisition Google made a few years ago). This is the same team behind Danger and the T-Mobile Sidekick – a platform that has a significant service component for which Danger receives revenue from T-Mobile for operating, providing and upgrading.

This sort of thing is a great way for Google to leverage their widely deployed high bandwidth network and datacenters and start getting revenue to cover the cost of all the ‘dark fiber’ they apparently snapped up many years ago.

Posted under Apple

This post was written by awk on January 16, 2008

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