Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Uproar Over Nokia’s Android Phones Shows Android Forks Still Benefit Google

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Soon, Microsoft (NASDAQ: MSFT  ) will own Nokia's (NYSE: NOK  ) handset business. When it does, it could decide to discontinue the Nokia X and X+, the two newly announced smartphones from Nokia powered by a modified version of Google's (NASDAQ: GOOGL  ) Android operating system.

While Nokia insists that its X phones should help Microsoft's mobile efforts, they could be just as beneficial to Google. The broader tech media, responding to the announcement, has concluded as much, with headlines like "Nokia's Forking of Android Could Benefit Google," and "Nokia is Going to Embarrass Microsoft By Releasing an Android Phone."  

Although forked versions of Android are less beneficial to Google than those that include its web services, their existence still benefits the overall Android ecosystem and, by extension, Google itself.

The threat of a forked Android
Android, as a largely open-source operating system, can be forked, or heavily modified, to remove Google's services. In the U.S., the most prominent example of an Android fork is FireOS,'s operating system that powers its Kindle Fire tablets.

Unlike Microsoft, which charges a licensing fee for its operating systems, Google develops Android, and it gives it away for free. Android, as Google imagines it, is built around its services -- gmail, Google Maps, Google Drive, Hangouts, etc. In theory, the more people use an Android device, the more they'll use Google's various web services.

Unless, of course, they're using a forked version. FireOS, for example, replaces Google's services with a combination of Amazon's and Microsoft's. Google gets virtually no value out of a Kindle Fire owner and, to make matters worse, that Kindle Fire may have been purchased in lieu of a full-fledged Android tablet.

Why Microsoft might want to discontinue the Nokia X
Similarly, Nokia's management has argued that the X should benefit Microsoft. Like other Android forks, Google's services have been removed, replaced with Microsoft's alternatives (OneDrive instead of Google Drive, Skype instead of Hangouts, Nokia's app store instead of Google Play, and so on).

The X is aimed at buyers in emerging markets who are on strict budgets. Infatuated with Microsoft's services, they could eventually move on to a higher-end Nokia handset powered by Microsoft's Windows Phone when it comes time to upgrade -- or, at least, that's what Nokia's management hopes.

They could also move on to a high-end Android device made by one of Google's many hardware partners. Although the X phones should bring Microsoft's web services to a wider audience, they also threaten to marginalize Microsoft's mobile operating system. App developers, already leery of Microsoft's paltry market share, could focus their efforts exclusively on Google's Android. Even X owners who are addicted to OneDrive integration may be more addicted to their Android-exclusive apps, and therefore be less likely to choose a Windows phone when it comes time to upgrade

Building an app ecosystem
The same holds true for any Android fork -- even if developers focus their attention on a modified version of Android, they're still focusing on Android, strengthening the ecosystem, and expanding the number of available apps.

In China, Google's version of Android is basically nonexistent -- forks are completely dominant -- but it would be a mistake to assume Google derives absolutely no benefit from China. Chinese mobile developers favor Android, and Chinese hardware OEMs have gone with modified versions of Android rather than backing competing operating systems.

Last year, research firm Flurry projected that Android's Chinese dominance could ultimately tip the software edge to Google, even in developed markets, as Chinese app creators export their creations beyond their borders.

While it would be better for Google if every version of Android used its services, the growth of Android -- forked or not -- is still beneficial to the search giant. The fact that Microsoft is potentially threatened by, embarrassed of, or would consider discontinuing, Nokia's upcoming Android phones is proof enough of that.

A better investment than Google?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 09, 2014, at 6:18 AM, somyasharma wrote:

    Yes, Android is more beneficial for Google. Today, Android is more popular, most of people want to get this OS.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2854793, ~/Articles/ArticleHandler.aspx, 8/31/2015 3:16:06 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sam Mattera

Sam has a love of all things finance. He writes about tech stocks and consumer goods.

Today's Market

updated 2 days ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
GOOGL $659.69 Down -8.27 -1.24%
Google (A shares) CAPS Rating: ****
MSFT $43.93 Up +0.03 +0.07%
Microsoft CAPS Rating: ***
NOK $6.32 Down +0.00 +0.00%
Nokia CAPS Rating: **
AMZN $518.01 Down -0.36 -0.07% CAPS Rating: ***