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  1. KAPS's Avatar
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       #1  
    Personally I don't believe that Google will be the next RIM.
    For Google, Android is a side business just like Youtube, if they are losing heavy amount of money they will just close shop but Google will always have its search engine to fall back.
    RIM Is Finished, Is Google Next? - Seeking Alpha

    Friday was a terrible day for Research in Motion’s (RIMM) shareholders and employees. The stock’s 21% pummeling was the culmination of a series of bad management decisions that date back to first time the word iPhone was uttered in January of 2007. RIMM’s management snickered at the announcement. After all, RIMM was king of the mobile hill. It had a legion of fanatical customers. Its market share was growing like weeds. All was good.

    Four years later, management still believes it’s 6 months away from a viable response. In the mean time, I carved out a few bucks on the short side. Not nearly as much as I should have, but I am ready to move on to the next casualty in the smartphone wars.

    Here are a series of tweets that I tweeted after the RIMM conference call:

    I received several responses back, but none were ready to accept my thesis. Matter of fact, my thesis sounds bizarre. Android is a state of the art OS. Its users are fanatical about it and it’s growing like weeds. Sounds familiar. All is true, but Google’s secret sauce is under attack. Android manufacturers love it, because it’s a much better OS than they could design and the price is right – $0. Google gives Android away hoping to make money from ads.

    Well – free is not free anymore. HTC pays Microsoft (MSFT) a $5 fee for every Adroid device it sells as part of a patent settlement between the two companies. Microsoft has also filed a lawsuit against Motorola (MMI) claiming their devices infringe on nine patents. Microsoft is also pursuing patent deals with other Android manufacturers including Acer and ASUS.

    Oracle (ORCL) is also getting into the mix. A filing from Google hinted that Oracle wants more in damages than Android has earned in its entire existence. Hot off the press – an Oracle expert claims that Google may owe up to $6 billion. If Microsoft delivers on its upcoming Windows Phone 8 OS – these lawsuits may push many Android OEMs into Steve Ballmer’s arms.

    If Larry Ellison and Steve Ballmer don’t inflict enough pain – Google is doing a pretty good job itself. Solar initiatives and driverless cars will all prove to be superfluous expenses. Worse yet it’s entire mobile revenue/expense structure is upside down. Although Android is growing like wildfire, Google’s share of profits is not growing proportionally. It has effectively become the software R&D department for Android manufacturers in exchange for a hope that an end user will click on an ad.

    Google’s Wallet mobile payment service continues its “hope for a click model.” IMO, the amount of money that it has/will spend is not commensurate with its return. Its desktop search advertising cash cow has allowed Google to maintain its current business model. However, desktop search is under attack as different discovery models emerge.

    Every analyst and their grandmother downgraded RIMM on Friday. That horse is out of the barn. Where were they 6 months ago? Check my archives. I felt like a lone wolf 1.5 years ago. Google is still in the barn grazing. I don’t expect it to shed $500 in the next few days. This is a long term play for me.
  2. #2  
    Don't forget Apples on going lawsuit against Android
  3. ijip's Avatar
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    #3  
    i think apple has a bigger chance of going down first before google. at least google has developer support, apple u have big players threatning to leave. i think thats just the begining.
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  4. #4  
    Quote Originally Posted by ijip View Post
    i think apple has a bigger chance of going down first before google. at least google has developer support, apple u have big players threatning to leave. i think thats just the begining.
    Not only that but apple has a similar bus model to rim, albeit much much MUCH better execution of it..

    Google is starting to tighten the reigns on manufacturers, that would still leave them with a low, if any, licence fee in comparison to MSFT.

    As with all ad revenue for Google, more money is made through ubiquity of, be it, android or regular Google search (why haven't they really pulled out from china), the more hands google is in the more revenue they'll make.

    The real problem I see for google is in competing technologies, such as google music BETA. Yes that beta tag will be its downfall, if they don't get it to market before iCloud. Its these missteps that will give it trouble, but they won't ever be out of the game

    -- Sent from my Palm Pre using Forums
  5. #5  
    If anything, that should have said "is Android next". If Android is put away, I'm sure Google will survive, just like if webOS fails, HP will go on. The thing with RIM and Palm before it is that they were exclusively in the smartphone business.

    That article probably has the provocative title just to drive page views anyway.

    -- Sent from my Palm Pre using Forums
  6. #6  
    No. Because Google is an advertising company not a phone manufacturer like RIM is.

    It is estimated that well over 90% of Google's revenue comes from advertising and search. Google doesn't usually breakdown all it's revenue and i couldn't find one for the most recent quarter but most articles i found estimated over 90% revenue being search and ad related. Plus it's got plenty of cash reserves.

    this is from last October so it's slightly old. But it is one time they did break down earnings in Oct of 2010. Given they have had good quarters recently i think it's safe to estimate Google should be doing better then this as of today.
    Google Discloses Revenue Breakdown | AccuraCast Digital Media News
    regardless it says stuff like: "YouTube is now monetizing 2 billion page views per week, which is an increase of 50% compared to the previous year. "

    "Google’s mobile business has had an annualized run rate of $1 billion this year, which is a very positive sign, and it is the mobile ad business which has been responsible for this growth, rather than the Android system"

    which means most of their mobile revenue is coming from advertising NOT from Android. That is they very aren't dependent on Android.

    Google is dependent on the search and advertising both internet and mobile and it's begun to monetize some other areas like youtube page views and movie rentals (i'm sure that's not a ton yet) but it's not dependent android phones selling.
    You come at the king. You best not miss.
  7. tirk's Avatar
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    #7  
    No. Good post though!

    RIM are more like Nokia.
    PalmPilot Professional...Palm Vx...Treo 600...Treo 680...HTC Touch HD...iPhone 4S...
  8. #8  
    Google will not just dump Android.

    Android is an important strategic defense for Google.

    Google understands that the mobile internet is expanding fast and here to stay. They saw early that if they leave that market to Apple and MS, that the competition will maintain their own embedded browsers and integrate their own search engines.

    After a while Google - which lives from the search business - would be excluded from a large part of the market.

    The whole creation of Android, that Google gives it away for free is to defend against that possibility.
    That's why they invested so much money and are generous with features.

    And that's why they won't just dump it.

    And unlike RIM Google can maintain and develop it's mobile OS as a loss leader.
    Pre -> Pre3 & TP32 -> Nexus 5

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