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Should Google Android Be Broken Up?

By Evan Niu, CFA - Apr 14, 2013 at 7:00PM

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Not all Android helps Google. With the rise of numerous distinct versions, should Android data be broken up?

According to Google (GOOGL -1.35%) Chairman Eric Schmidt, the search giant has clearly won the mobile platform war. That assertion is based in part on the sheer fact that Android is by far the dominant mobile operating system on the planet. That's indisputable.

Over the past two years, Android doubled its global market share and now powers 70% of all smartphones sold worldwide. That rise is incredible, any way you slice it.

Source: IDC.

The thing is that while Google likes to tout those legitimately impressive headline figures, saying there are now more than 1.3 million Android devices activated every day, the truth is that there are currently so many different distinct Android camps that lumping them all together is somewhat specious where it counts.

Should Android be broken up?

A subtle admission
Google has seemingly acknowledged this. The search giant subtly changed its methodology for measuring version distribution, which resulted in meaningful changes in its reported statistics. The aging Gingerbread fell from 44.2% to 39.8%, while the newest Jelly Bean soared from 16.5% to 25%.

Android version distribution. Source: Google.

The new method now measures the devices that visit the Google Play store instead of including all devices that check in to Google's servers (i.e., activations). Google says "new data more accurately reflects those users who are most engaged in the Android and Google Play ecosystem."

Translation: Google wants to emphasize its own Android camp to developers, while minimizing the importance of Amazon.com's (AMZN 0.19%) fork as well as all the Chinese OEM forks out there. Google uses the aggregate figures when they make for good headlines, but it concentrates on its sanctioned Android versions when it matters strategically.

Google doesn't directly benefit from the different forks out there, and Amazon's is by far the most successful in tablets. The e-tailer was the No. 3 tablet vendor in the fourth quarter, with 11.5% of the market, and none of those Kindle Fires feed into Google Play. That's what Amazon's Appstore for Android is for.

Facebook (FB -0.49%) just launched its Home software suite, which I consider more of a "half-fork," since Home still feeds into Google Play even though it emphasizes Facebook's social services over Google's. From the social network's perspective, Home is still the right strategy, since Facebook knows better than to compete on a primary platform level.

Even BlackBerry (BB 2.21%) is now piggybacking on Android's dominance, using ported Android apps to pad its app counts. BlackBerry devices still rely on BlackBerry World for their app fix, and developers have to manually port their apps to the platform to run inside an emulator, so those smartphones were never getting included in Google's figures. BlackBerry has made some progress getting developers to go native, but the company serves as another example of a third party riding Android's success with no benefit to Google.

You can't have one without the other
Device fragmentation has long been cited as Android's biggest weakness, but the rise of numerous distinct Android forks takes it to a whole new level. This trend is only strengthening. The challenge for Google is that it can't, won't, and shouldn't fight it. Android has always been built on an open philosophy, which has played a major factor in its rise to the top. Forking is just an inevitable consequence.

Still, Android data should be broken up into its respective camps, because that would paint a far more relevant picture for investors.

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