Android’s growth is Google’s gain, but what do regulators think?
By Chantal Tode
June 29, 2011
Google’s advertising business is getting a boost from a half-million Android activations taking place daily, but this kind of growth could also catch the attention of regulators.
Google already dominates the mobile advertising space and as the number of Android devices in circulation grows, so do Google’s advertising opportunities. However, the Android platform’s growth is not all good news.
“Google’s story is that for every device that is out there they have another opportunity to sell advertising and services,” said Carl Howe, director of consumer research at Yankee Group, Boston.
“They get more of a market for their advertising product, which is where they make their money,” he said.
Let’s play Monopoly
Last week, several reports circulated that the Federal Trade Commission is investigating Google’s Web dominance and whether it has been directing search users to its own services.
If Android continues to grow at this pace, Google could strengthen its dominance and add fuel to the antitrust fire.
“Google is the 800 pound gorilla in mobile advertising,” Mr. Howe said. “Not only are they dominant but they could become monopolistic in terms of their ability to affect that market.”
The news about the number of Android activations came from Google senior vice president Andy Rubin, who tweeted that Google is activating more than 500,000 new Android devices every day. The number of activations is growing at a rate of 4.4 percent every week.
It was just several months ago when Google said that the number of daily activations totaled 350,000.
However, what is not clear in the latest figure is how many of the activations are smartphones and how many are tablets, per Mr. Howe.
“Since Google released the 350,000 figure, a lot more Android tablets have been introduced into the market and we don’t have numbers on this yet,” Mr. Howe said.
A half-million daily activations has implications for Google and the mobile space beyond what it means for advertising.
The news that there are so many Android units out there is good for app developers and is likely to mean more development resources will go to Android.
According to recent data from comScore, Google’s Android was the leading smartphone platform between February and April.
However, Android does present some challenges for developers as it relates to the fragmentation of the Android market.
“It sounds great to say there are 500,000 units being activated every day but, there is no single Android device,” said Mr. Howe said.
“Every manufacturer makes some sort of Android device and none of them have a terribly large share of the market,” he said.
“The wide variety of devices makes the development process that much harder.”
There is also less money for developers in Android apps compared to iOS apps.
“Android users don’t buy as many apps as Apple users,” Mr. Howe said.
Besides the fragmentation issue, Google faces other hurdles to continued growth for Android.
There are other platforms to consider as well.
“The next round of iPhones is always something they have to worry about,” Mr. Howe said.
In addition, Microsoft is moving to build a bigger position in mobile by partnering with Nokia and launching the cloud-based business services platform Office 365.
Then there’s Research In Motion, which has seen its position in the market decline but, should not be counted out yet.
“RIM has had its challenges but they are smart guys and could back even stronger,” Mr. Howe said.
Chantal Tode, Assoc. Editor, Mobile Marketer
- Trackback url: http://www.mobilemarketer.com/cms/trackback/10337-1