Android's Game-Changer?

The only thing rising faster than Google's (Nasdaq: GOOG  ) Android right now is the blood pressure of Cleveland Cavaliers fans in front of LeBron's decision tonight. Thanks in large part to huge promotions across each U.S. carrier, with hugely popular flagship models at Verizon (NYSE: VZ  ) and Sprint (NYSE: S  ) , the operating system is seeing unparalleled smartphone sales growth.

Spread like wildfire
Android's amazing growth curve can be summed up in one word: distribution. Major carriers aside from AT&T have been looking for a major phone to anchor their product line and compete with Apple's (Nasdaq: AAPL  ) iPhone. Also, major handset manufacturers like HTC, Samsung, and Motorola (NYSE: MOT  ) were themselves taken by surprise by the success of Apple's impressive mobile operating system. These manufacturers specialized in older "feature phones" that required more hardware know-how and less software expertise. With Microsoft's (Nasdaq: MSFT  ) Windows Mobile looking more and more dated, Android was the only option for handset manufacturers to compete with Apple's talisman.

So Android spread like a virus across the mobile phone world. In contrast to Apple, which tightly controls the carriers and launch of its products, Android's growth has been more akin to controlled chaos. There are different operating system versions on different handsets, and product launches have found their way to even the smallest carriers.

The Android: not magical
Steve Jobs gets lampooned for constantly describing Apple's products with adjectives like "magical" or "revolutionary." However, the words are an apt fit for what the company is trying to do. Apple wants to control every aspect of its platforms; everything has to work seamlessly for users right out of the box.

 Android is the opposite approach. It feels more utilitarian, a work in progress. Since the phone launched at the end of 2008 it has seen a series of major updates incrementally upgrading functionality. Google has nailed an effective model, but there are still serious kinks to be worked out with the Android platform itself.

Get to music, Google!
The most glaring example of Google's and Apple's philosophies is their treatment of media. Apple is famous for its iTunes program, which allows easy synching of all media and also acts as a sales platform. Google comes with no media-synching software out of the box. Plug in your USB and drag and drop songs into a file folder. It's a process many users must find befuddling and suboptimal, especially those with iTunes experiences.

Granted, people could point to downloadable programs that serve this purpose, but the point is that most users won't take this step. This is an area where Google needs to take a page from Apple and ensure that the media experience is perfect from the phone's first boot-up. And don't tell me this isn't an important area: Users are abandoning their MP3 players en masse in favor of smartphones, and the 4.3-inch screens seen on some newer Android phones are geared for consuming visual media.

Google hates your desktop
Google has some natural aversion to the idea of a program like iTunes; it's trying to move users away from their desktops. Its Chrome operating system is completely browser-based; it wants to retrain users not to rely on their computers for storage. It wants the cloud to be the next dominant computing paradigm.  

So it shouldn't shock anyone that Google's announcement of a music platform centered on streaming music from the cloud. While I do think streaming media is a powerful force in the future, it's no replacement for users being able to easily manage and access their own library of media on their computer. Besides, with wireless carriers placing data caps on users, streaming music becomes far less attractive.

Google needs its music service to be more than a cloud-based offering, it needs a media platform that's user-friendly enough to at least feign competition with iTunes. It's not too late either, with the product set to hit at the end of the year, there's still time to ensure its music offerings provide the full ease of use that smartphone users demand.

Final thoughts
In a recent interview with the U.K.'s Telegraph, Google CEO Eric Schmidt bristled at the idea of a rivalry between Apple and Google: "We don't have a plan to beat Apple, that's not how we operate. … We're trying to do something different than Apple and the good news is that Apple is making that very easy."

He's right. The companies have taken extremely divergent paths in their mobile conquests. However, I believe that Google's relentless focus on pushing for features that push users into a Web-connected future, such as its planned music service, might be to the detriment of a better user experience that would keep early Android adopters locked into the platform.

iTunes not only acts as a media platform, it's a key differentiator for Apple. Like apps, it's a switching cost that users face if they want to abandon their iPhone in favor of another smartphone. If Google wants this generation of early adopters to stick with Android on their next upgrade, possibly after the iPhone bolts to Verizon, it needs to address its own media inadequacies, even if that means not acting as differently from Apple as it's used to.

Will a lack of a rich media-synching program scuttle Android? No, but it might just be that last hurdle that puts the operating system on par with Apple, and eliminates that Verizon "iPhone envy" once and for all.

Eric Bleeker owns shares of no companies listed above. Microsoft and Sprint Nextel are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (12) | Recommend This Article (17)

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 July 08, 2010, at 3:24 PM, landoncz wrote:

    Typical historical-looking article written by a non-technical Apple i* user. While Apple continues to peddle DRM, ancient file-based syncing, and it's huge monstrosity of an app that is iTunes, Google is laying the framework for an entire next-generation existing solely in the cloud, making the connecting hardware or device irrelevant. The cloud is a different concept to grasp, so it's no wonder many media types have trouble with it. But, we all know investing is about growth, looking forward, and the future. Apple's tight-control and lack of any progress on developing it's own cloud-based platforms, will cause it to loose out in the end, especially as more and more people, apps, and devices become connected. It was not too long ago many short-sited people where criticizing Google for taking a "chance" with Android, they just didn't understand what a phone OS had to do with search. It is about laying the groundwork and foundation that others will use. Google owns the highway, and Apple just makes cars.

  • Report this Comment On July 08, 2010, at 3:39 PM, GroupVenture wrote:

    I am a fan of the Motorola Droid, I believe the Droid will save Motorola, any thoughts?

    EquityGroups.com

  • Report this Comment On July 08, 2010, at 4:06 PM, SMKEYWORDS wrote:

    Opinions expressed in articles regarding which companies or what products are the best are really only subjective views. What really counts is the success achieved, more specifically by comparisons of units sold, services purchased, and so on. And the true measures of success are the financials reported by companies at the end of each quarter.

  • Report this Comment On July 08, 2010, at 4:33 PM, landoncz wrote:

    I would agree with you SMKEYWORDS, but would re-phrase slightly... what matters most is the success that *will be* achieved, not what has been achieved or reported. Don't look to the past, but look at the future of these two companies to make your decisions: http://nextwebdesigns.com/2010/07/08/why-google-will-win/

  • Report this Comment On July 08, 2010, at 5:33 PM, elchivato wrote:

    i'm sorry. i just don't agree with this author's assement with itunes. I think it's combersome and annoying, always wanting to update and it's not as user friendly as one may seem. sure it shows pictures and we're all visual learners but it sucks the life out of PC when using it or an iphone. Come on with apple already, the sheople really need to start looking at the andriod more closely.

  • Report this Comment On July 08, 2010, at 6:03 PM, Henry3Dogg wrote:

    It looks like the average Android phone is being activated about 3 times.

    Why not announce how many have actually meen sold.

  • Report this Comment On July 08, 2010, at 6:55 PM, TMFRhino wrote:

    landoncz,

    For what its worth, I have a Droid.

    landoncz/elchivato,

    Also, I'm not saying Google has to necessarily copy iTunes, I just think something that can synch with users media would be a huge boon in maintaining mindshare across the next 2-3 years and increasing users ease of use. I agree iTunes is a resource hog, but your average user *loves* it, especially the plug and synch functionality.

    Fool on!

    Eric

  • Report this Comment On July 08, 2010, at 7:50 PM, rtichy wrote:

    Techies cringe, go ahead... but the ladies carrying iPhones are NOT going to carry Android phones if they don't have an easy way to get apps, songs, ringtones, movies, games, etc. and I'm not either. I get goosebumps thinking about HiDef video and an 8 megapixel camera and how cool it all seems, but if apple is vetting and approving the apps on iPhone then I'm probably not going to be a victim of identity theft by an app, but that could happen on Android, right?

  • Report this Comment On July 08, 2010, at 8:35 PM, RHinCT wrote:

    Google would do well to court the RockBox developers to get them to convert it to an Android app. RockBox has the reputation of being the best mp3 player OS yet written, or so I have been led to believe.

  • Report this Comment On July 08, 2010, at 9:59 PM, TMFRhino wrote:

    rtichy,

    Totally agree. We're all techies here to some degree I'm sure, but you need to detach yourself from that to see some of the large implications. With the expansion of smartphones to the sales levels we're now seeing, the average user demands better functionality in this key area.

    Oh, and I'm really sorry for all the Cavs fans out there :(.

    Thanks for the comments everyone, good discussion!

    - Eric Bleeker (TMFRhino)

  • Report this Comment On July 08, 2010, at 10:53 PM, tom2727 wrote:

    Am I the only person in the world who thinks I-tunes blows chunks?

    I have to "sync" my I-phone with it. Meaning I chain my phone to a single PC. If I want to get a song off my work computer onto my phone I have to get a jump drive, take the song home, load it into I-tunes on my home PC, and sync up. Only then will Steve Jobs grant me permission to use it on my phone.

    If I have a song on my phone and I want to transfer it to my work PC? I-tunes don't like that you bad boy.

    And if (heaven forbid) I want to make an MP3 ringtone to use on my phone, I-tunes won't put up with that. I need to convert it and change the extension to "trick" I-tunes into thinking it's an "official approved" ringtone before it will let me use it.

    And if I want to get my contacts list off my phone into a simple text file? No can do with I-tunes.

    When the say "I-don't" in those ads, they really hit the nail on the head. What Apple does, they do very well. But if you want to stray off the Apple reservation, they hit you with the "no" stick really fast. Which is why I will probably go android on my next phone. 2 years ago when I got my I-phone, there really was no good alternative. Not so today.

  • Report this Comment On July 09, 2010, at 8:58 AM, landoncz wrote:

    Eric, if I didn't mention before, great article and great debate!

    Google does have a bit more polishing to do with Android before Grandmas can use it as easily as they can the iTunes store. But, I think a key here is that Google is laying out an entire framework for users with their cloud that will allow for syncing, streaming, and much more, all integrated with their highly open and customizable Android OS. Apple has no such framework in the pipeline and is stuck on what is essentially an old model of closed devices and local applications. You can only push that technology so far...

    Ease of use alone does not necessarily guarantee product success (see Microsoft Kin: http://www.pcworld.com/article/200323/microsoft_kin_a_not_so..., so I think Apple will have to come up with something more than just great devices and easy to use apps to continue to compete with GOOG's next-gen infrastructure.

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