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Google's not-so profitable android venture?
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Old 12/13/2011, 05:54 AM   #1 (permalink)
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For those of you who have been talking about ways for hp to monetize webos and the fact that they 'need to' find revenue streams, this is kind of an interesting read:

Google’s Not-So-Profitable Android Venture | TightWind

Take the article for what you will, but at least most of you should be able to see that there is a pretty big difference in how the revenue streams work for 2 of the players in the mobile space, and the fact that there are quite a few ways for an operating system to make money.
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Old 12/13/2011, 07:39 AM   #2 (permalink)
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I think Meg Whitman "we need another operating system" means HP needs another alternative to Windows so that it is not completely dependent on this one player. The case for webOS would be selling devices and HP software and services, not ad revenue.
I hope it succeeds because I think its kind of creepy the way the android apps crawl into your phone (operating system) and read all kinds of information and send it through the internet while you are playing with the shiny bauble bouncing up and down on the screen (and apparently even when the bauble app is not even open).
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Old 12/13/2011, 07:39 AM   #3 (permalink)
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What I suspected and not a big surprise. Thanks for the link and I'm not expecting anyone to make headway on Apple anytime soon since Apple controls everything (licensing, creation, execution, and 30% of all app sales).

It is good to be first out the gate when it comes to Smartphones, that is first with something everyone wants. Sorli...
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Old 12/15/2011, 12:48 PM   #4 (permalink)
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I believe that Google's whole approach to the market, mixed in with the demonstrated cheapness of the Android users that post here, and allowing multiple markets to compete are what is causing the Google Market to be less profitable. Look at this story:

Android is consumers' choice, but developers stick with Apple

Even though Android devices outnumber iOS devices by a wide margin, developers makes 4 times as much per app on iOS as they on Android ($1 per iOS version of app vs $0.24 per Android version of app). Developers favor iOS over Android by a margin of 3 to 1.

Most of the apps on Android are free. Plus, I really don't think that Google cares too much because they just want to sell ads anyway, which most of the free Android apps are littered with.

I think that HP should emulate Apple's approach to app sales instead of Google's. For one, HP doesn't have ad revenue to fall back on. Second, webOS users actually pay for good apps because we want to support the developers. Most of us actually argue with the occasional Android convert that complains about not getting something for nothing. Third, HP already does a good job of policing up it's App Catalog, kind of like Apple. I think that HP should continue this. I also think they should disallow hardware manufacturers from making their own app catalogs like Google does. This only creates confusion and causes HP to lose app profits. HP should set up an app profit sharing deal with the hardware makers to discourage rogue markets.
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Old 12/15/2011, 12:54 PM   #5 (permalink)
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I believe that webOS already does a good job of competing with iOS on the quality, look, and feel of its apps. Most Android apps look like crap on larger screens. I think that webOS' problem has always been with the quantity of apps. If HP could just work to improve the quantity of apps while maintaining the quality, webOS would be golden.
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Old 12/15/2011, 01:05 PM   #6 (permalink)
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I think that HP should emulate Apple's approach to app sales instead of Google's. For one, HP doesn't have ad revenue to fall back on. Second, webOS users actually pay for good apps because we want to support the developers. Most of us actually argue with the occasional Android convert that complains about not getting something for nothing. Third, HP already does a good job of policing up it's App Catalog, kind of like Apple. I think that HP should continue this. I also think they should disallow hardware manufacturers from making their own app catalogs like Google does. This only creates confusion and causes HP to lose app profits. HP should set up an app profit sharing deal with the hardware makers to discourage rogue markets.
You make it sound like they are playing from a position of strength - too many restrictions will kill this stone dead. HP needs OEMs more than they need HP, I doubt anyone will be interested (because of possible channel conflict) unless HP agrees that they can skin WebOS as they like (for the purposes of differentation) and that they are are allow to create their own revenue streams. As for revenue sharing, it's only 30% of a very small amount at the moment, a 'share' is going to be pitiful.

Nobody is making any money in tablets beyond Apple - if they want to convince people in jump in, they have to convince them there is some money at the end of rainbow.
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Old 12/15/2011, 01:13 PM   #7 (permalink)
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Originally Posted by ungenius View Post
For those of you who have been talking about ways for hp to monetize webos and the fact that they 'need to' find revenue streams, this is kind of an interesting read:

Google’s Not-So-Profitable Android Venture | TightWind

Take the article for what you will, but at least most of you should be able to see that there is a pretty big difference in how the revenue streams work for 2 of the players in the mobile space, and the fact that there are quite a few ways for an operating system to make money.
Not familiar with Tightwind, however they appear to be getting some of their bullet points from a guy named Macalope on Macworld. Not a very impartial site to be commenting on Android. If you read the link to Macworld from top down, you will see just how impartial Macalope is. Macalope, jeez.

I use iOS and Android Os'es but find it best to refrain from using links from sites whose impartiality may be in question.

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Originally Posted by k4ever View Post
I believe that Google's whole approach to the market, mixed in with the demonstrated cheapness of the Android users that post here, ...snip
That same impression can be applied for webos users, like with the splashtop app.

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Old 12/15/2011, 01:46 PM   #8 (permalink)
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You make it sound like they are playing from a position of strength - too many restrictions will kill this stone dead. HP needs OEMs more than they need HP, I doubt anyone will be interested (because of possible channel conflict) unless HP agrees that they can skin WebOS as they like (for the purposes of differentation) and that they are are allow to create their own revenue streams. As for revenue sharing, it's only 30% of a very small amount at the moment, a 'share' is going to be pitiful.

Nobody is making any money in tablets beyond Apple - if they want to convince people in jump in, they have to convince them there is some money at the end of rainbow.
1 Skinning? Yeah right. Windows Phone 7.5 cannot be skinned by hw-manufacturers and how many WP 7-phones are out there now and are coming? Skinning is not the problem, else they wouldn't use WP 7.
2 Nobody is making money in tablets yet, but Samsung is gonna make profit. Only today already a few hundred people in The Netherlands replaced their iPad with a Samsung Galaxy Tab 'cause they're getting sick of Apple. If that continues, then Samsung will make profit. Let alone Motorola with the new Motorola Droid XYboard and Xoom 2.
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Old 12/15/2011, 02:07 PM   #9 (permalink)
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1 Skinning? Yeah right. Windows Phone 7.5 cannot be skinned by hw-manufacturers and how many WP 7-phones are out there now and are coming? Skinning is not the problem, else they wouldn't use WP 7.
WP7 represents no possible channel conflict plus a committed software partner who will not cut and run at the first sign of trouble plus other financial and legal advantages. ODMs will overlook the problems the restrictions on software restriction if other advantages exist
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Old 12/15/2011, 02:07 PM   #10 (permalink)
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You make it sound like they are playing from a position of strength - too many restrictions will kill this stone dead. HP needs OEMs more than they need HP, I doubt anyone will be interested (because of possible channel conflict) unless HP agrees that they can skin WebOS as they like (for the purposes of differentation) and that they are are allow to create their own revenue streams. As for revenue sharing, it's only 30% of a very small amount at the moment, a 'share' is going to be pitiful.

Nobody is making any money in tablets beyond Apple - if they want to convince people in jump in, they have to convince them there is some money at the end of rainbow.
Sharing 30% of something is better than 0% of something else. With the exception of Amazon, I don't know any other Android hardware manufacture that makes money on Android apps or even has their own Market that is worth mentioning. Having a profit sharing agreement with all of them will actually make some of them money they didn't have.

How is demanding quality going to weaken HP's position further? You don't have to be from a position of strength to require quality. I don't know too many businesses that don't like to be associated with quality or too many folks that won't pay extra for it. Even poor folks like good quality stuff and will save up to pay extra for it if it is of value to them. At least Apple understand this and before you post anything about them, they were at a position of weakness when they introduced the iPod (Sony WalkMan was king) and later on when they introduced the iPhone (BlackBerry was king).
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Old 12/15/2011, 02:16 PM   #11 (permalink)
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Sharing 30% of something is better than 0% of something else. With the exception of Amazon, I don't know any other Android hardware manufacture that makes money on Android apps or even has their own Market that is worth mentioning. Having a profit sharing agreement with all of them will actually make some of them money they didn't have.
What's better - 30% of app sales on sales of 10,000 tablets or simply taking the cash from selling 10 million phones (samsung sold 10 million of the Galaxy S last year).

This doesn't even get into the more fundamental questions -

* Why suddenly is the consumer going to want to buy a third choice tablet?
* Who's going to plunk down the billions needed to do it?

and the most important question of all - if this is such a great prospect - why isn't HP putting out reference hardware in 2012?

The last three platforms that had reasonable success with this model or where channel conflict exists (Palm OS, Symbian and Android) all had reference hardware and a powerful backer - where is the backer here? Hell, until *anyone* agrees to put out hardware, there isn't really anything solid to talk about.
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Old 12/15/2011, 02:29 PM   #12 (permalink)
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WP7 represents no possible channel conflict plus a committed software partner who will not cut and run at the first sign of trouble plus other financial and legal advantages. ODMs will overlook the problems the restrictions on software restriction if other advantages exist
True, but nobody could predict in the first place that Leo was about to cut webOS' throat, so that's not really fair to say. And now that it's open source, there's even more of a backing. At least Motorola and HTC often work together with the community, so I don't see why they won't trust this backing.
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Old 12/15/2011, 02:35 PM   #13 (permalink)
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1 Skinning? Yeah right. Windows Phone 7.5 cannot be skinned by hw-manufacturers and how many WP 7-phones are out there now and are coming? Skinning is not the problem, else they wouldn't use WP 7.
2 Nobody is making money in tablets yet, but Samsung is gonna make profit. Only today already a few hundred people in The Netherlands replaced their iPad with a Samsung Galaxy Tab 'cause they're getting sick of Apple. If that continues, then Samsung will make profit. Let alone Motorola with the new Motorola Droid XYboard and Xoom 2.
The Netherlands has a few hundred people? With iPads? Amazing LOL. Just kidding.

By any chance, do you have a link to this change over?

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True, but nobody could predict in the first place that Leo was about to cut webOS' throat, so that's not really fair to say. And now that it's open source, there's even more of a backing. At least Motorola and HTC often work together with the community, so I don't see why they won't trust this backing.
I must of missed some headline somewhere. What backing are you referring to?
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Old 12/15/2011, 03:00 PM   #14 (permalink)
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This doesn't even get into the more fundamental questions -

* Why suddenly is the consumer going to want to buy a third choice tablet?
* Who's going to plunk down the billions needed to do it?

and the most important question of all - if this is such a great prospect - why isn't HP putting out reference hardware in 2012?

The last three platforms that had reasonable success with this model or where channel conflict exists (Palm OS, Symbian and Android) all had reference hardware and a powerful backer - where is the backer here? Hell, until *anyone* agrees to put out hardware, there isn't really anything solid to talk about.
1. People WERE buying the TPad at $299 and $399 and it was the #2 Best Seller at the largest online retailer in the world. It was also HIGHEST RATED over even iPad. If you are trying to tell me ALL those people were tech geeks wanting to put Android on it (xda didn't even have a project then) then, well...

1a. They surveyed TPad buyers and 76% didn't even consider Apple or Android which means there a subset of people who DON'T want to deal with either company.

2. The TPad was GAINING excellent momentum after that weekend sale and then two weeks later, Apothefail pulled a Chaney and shot webOS in the back.

3. HP HAD the billions and Meg WOULD HAVE been able to gives webOS the chance it needed (as she said "TouchPad was good and we didn't even give it a chance") however Apothefail in his final shining moment of failure blew 12 BILLION of their CASH on Autonomy. If you were going to buy a car and your wife spent your savings on a new house, you can't buy a car anymore because you don't have the money and can't build it back up so quickly.

HP doesn't have the MONEY to make reference hardware or anything else at the moment. That's why they are waiting until 2013, they should have more cash reserves by then.

4. Until HTC stepped up with the G1, Android was just a cool "potential os" topic to read about on Engadget.
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Old 12/15/2011, 03:16 PM   #15 (permalink)
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4. Until HTC stepped up with the G1, Android was just a cool "potential os" topic to read about on Engadget.
But they didn't simply 'step up', Google put money behind the project because they needed a developer handset - which was the Android Developer Phone 1 (which was a unlocked rooted version of the G10) - to attract developers.

The rest of your post is about a fire-sale situation - not a particularly attractive prospect for anyone that HP wants to attract - "hey guys, get into this and you too can take a two billion hit!"), HP has to convince people they can sell full-price tablets not EOL devices to cheapskates like me.
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Old 12/15/2011, 03:18 PM   #16 (permalink)
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The original purpose of Android was to expand access to the web on mobile devices -- which Apple accomplished first. Now its purpose is to stop Apple from completely taking over the market, which would give Apple the leverage to move into other areas that encroach on Google's turf, like advertising.
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Old 12/15/2011, 03:22 PM   #17 (permalink)
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The original purpose of Android was to expand access to the web on mobile devices -- which Apple accomplished first. Now its purpose is to stop Apple from completely taking over the market, which would give Apple the leverage to move into other areas that encroach on Google's turf, like advertising.
Finally someone who understands.
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Old 12/15/2011, 03:33 PM   #18 (permalink)
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The original purpose of Android was to expand access to the web on mobile devices -- which Apple accomplished first. Now its purpose is to stop Apple from completely taking over the market, which would give Apple the leverage to move into other areas that encroach on Google's turf, like advertising.
Hmm, you'd have to get rid of Apple's cash reserve to do that. But that may not be a problem if Apple keeps on suing the world. LOL

Didn't Apple already venture into Google's turf with iAds? They just revamped the terms: Report: Apple Making Major Changes to iAds

If Android is a stop gap for Apple, then they got a ways to go.
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Old 12/15/2011, 03:44 PM   #19 (permalink)
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But they didn't simply 'step up', Google put money behind the project because they needed a developer handset - which was the Android Developer Phone 1 (which was a unlocked rooted version of the G10) - to attract developers.

The rest of your post is about a fire-sale situation - not a particularly attractive prospect for anyone that HP wants to attract - "hey guys, get into this and you too can take a two billion hit!"), HP has to convince people they can sell full-price tablets not EOL devices to cheapskates like me.
HTC, which was a major Windows Mobile hardware maker at the time had to first take a chance on Android. No amount of backing by Google could have forced them to go against Microsoft and the established mind set. They chose to make an Android phone and to take the flack for it.

I don't know if you were here before the fire sale. I don't believe you were, but everything the other poster mentioned was pre-fire sale data. There was some bad reviews at the began by some tech sites (just like everything else non-Apple or Microsoft), but everything up until a few days before Leo made his move were positive. The TouchPad was already being crowned #2. The fire sale just accelerated the process.

You talk a good game about margins on everything else, except when webOS is part of the story. Which Android hardware tablet maker besides Amazon is making money on hardware especially when most of it is sitting on shelves? No one is making Apple type money on their hardware they do sell and even then that profit is offset by the money being lost by the products that aren't in users hands plus the royalities paid to hawks like Microsoft.

With literaly hundreds of hardware makers, especially on the low end driving down profits, all Android devices not subsidized by cell phone providers are commodity items. That means low profit margins. Why not make the same profit margin on the hardware and some additional profits on the software?

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Old 12/15/2011, 04:33 PM   #20 (permalink)
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In the tablet space, being number two is deceptive.

When number two = half the sales of the market leader, then number two will have more meaning.
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