“If you look at the emerging competition between iPhone and Android, clearly the iPhone has the early edge, and of course Apple is quite good at what they do, their extreme controlling nature allows them to do certain things quite well. But at the same time, we’re seeing the beginning of a flood of new phones coming out from all kinds of different manufacturers…because of the open nature of the Android platform, and that’s going to pose a very interesting kind of competition.
Google, in this instance, ironically, is more playing the Microsoft role here, to Apple’s Apple. One of the ways that Microsoft beat Apple way back in the day was that they were a lot more open; today, in the world I come from, the free software and open-source world, Microsoft is not generally viewed as open; they’re viewed as proprietary. But the truth is that compared to a lot of other companies, they really embraced a very open set of standards and had a very open platform, and it enabled them to gain dominance.”
The big difference between Microsoft-then and Google-now is simple: Windows was a business, with real tangible revenues. Android is not a business, it’s a big fat negative on Google’s balance sheet.
And what’s interesting is that this kind of move is something that the financial markets tend to be happy about when you’re a growth-focused company. But what happens when the company moves beyond the “growth” phase and is regarded as a “value” stock?
This isn’t a hypothetical question: some commentators are already speculating that Google is making this kind of shift. Will investors start looking at the big cost centres on Google’s balance sheet, such as Android, and start asking where the return on investment is?
Oh, and Jimmy: does the phrase “embrace and extend” mean anything to you? Look it up. Microsoft never had an open platform. It took the combined efforts of the DoJ and EU Competition Commission to open them up to the point they’re at currently.
And, you should note, since their abusive behaviour was curbed, their star has faded. There’s a lesson for Google-watchers there too.