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| Andy Seybold, CEO, Seybold Group LLC. & Member of Board of Directors, CommNexus |
An expert from the IT-obsessed state of California, Santa Barbara-based Andrew Seybold, who has served on the Motorola Research Board, IBM’s Mobile Computing Advisory Board and is a consultant to companies like RIM, HP, AT&T, Verizon, Nokia, Motorola & Qualcomm, speaks to B&E about pricing issues, and other growing concerns for Google’s Android OS.
B&E: According to UK-based research firm IHS, the Android Market saw revenue grow by 861.5% y-o-y from 2009 to 2010, but the actual dollar figures are small compared to all the other major app stores. What do you think will Google do in near future to increase revenues from apps?
Andrew Seybold (AS): The Android Market place is about those who believe that everything on the Internet should be free, free O/S, free apps. And they are not those who spend money, or desire valued content in the long-run. Therefore the Android community is going to have a tough time figuring out how to monetise apps for the devices.
B&E: Historically, apps have never really been money making machines. Will it be different with Android OS?
AS: Google itself set the stage as a free and open environment. And today, it is trying to capitalise on it. They set the bar for usage of everything free. Apple makes its money on hardware, not much on apps. The developers make more money on apps than Apple does by a long shot, going back to BREW – the first of these types of stores. Qualcomm did not make real money on apps. Its motive was to have the networks sell more devices, which in turn, sold more chipsets. Apps will never be a big money making proposition for those who run the stores. They are only used to drive other forms of business like in BREW, Apple, and even RIM. Since Google has no other portion of the ecosystem in which to make revenue, they are at a real disadvantage over the others who use the apps to drive other profit centres of their business.
B&E: Paid apps have lagged on Android for a number of reasons. One of them has been inadequate billing options. But Google has worked on this front, Do you see this as a move from Google to monetise its Android OS?
AS: It wasn’t until last month that Google added the ability for consumers to pay for Android apps through its AT&T plan. Android is about consumer devices and usage. Google hasn’t made it easy to purchase apps and even adding more ways to purchase apps is not going to make Android a money-making operation.
B&E: In case, one day, Android no longer remains OPEN & FREE, how will the handset makers react?
AS: If Android changes its business model, the handset vendors will lose interest in it.
B&E: Fragmentation of the OS – is that an issue for app-devlopers?
AS: Handset makers are constantly making changes to Android, which, in turn becomes a headache for developers. Apple is the leader – one OS controlled by them, across multiple platforms, easy to build apps for. Android developers have to understand the various differences of the OS supported by the different handset vendors and build applications for multiple flavours of the OS.
B&E: Because of its open nature, Google does not make money from licensing the OS, the way that Microsoft does. Do you see Google taking a chance with licensing its OS soon?
AS: That would kill Android. The business model that Google has set in motion is no business model. And the next thing that could kill Android is the fact that since it is open it is ripe for hackers to go after, Android will be their favourite platform. Setting a price which is too high on a product can be corrected by lowering the price. Setting a price for an OS first at zero, and then trying to monetise it later, is not a proven business model and is subject to failure. Google has trapped itself in the Android world.
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B&E: According to UK-based research firm IHS, the Android Market saw revenue grow by 861.5% y-o-y from 2009 to 2010, but the actual dollar figures are small compared to all the other major app stores. What do you think will Google do in near future to increase revenues from apps?
Andrew Seybold (AS): The Android Market place is about those who believe that everything on the Internet should be free, free O/S, free apps. And they are not those who spend money, or desire valued content in the long-run. Therefore the Android community is going to have a tough time figuring out how to monetise apps for the devices.
B&E: Historically, apps have never really been money making machines. Will it be different with Android OS?
AS: Google itself set the stage as a free and open environment. And today, it is trying to capitalise on it. They set the bar for usage of everything free. Apple makes its money on hardware, not much on apps. The developers make more money on apps than Apple does by a long shot, going back to BREW – the first of these types of stores. Qualcomm did not make real money on apps. Its motive was to have the networks sell more devices, which in turn, sold more chipsets. Apps will never be a big money making proposition for those who run the stores. They are only used to drive other forms of business like in BREW, Apple, and even RIM. Since Google has no other portion of the ecosystem in which to make revenue, they are at a real disadvantage over the others who use the apps to drive other profit centres of their business.
B&E: Paid apps have lagged on Android for a number of reasons. One of them has been inadequate billing options. But Google has worked on this front, Do you see this as a move from Google to monetise its Android OS?
AS: It wasn’t until last month that Google added the ability for consumers to pay for Android apps through its AT&T plan. Android is about consumer devices and usage. Google hasn’t made it easy to purchase apps and even adding more ways to purchase apps is not going to make Android a money-making operation.
B&E: In case, one day, Android no longer remains OPEN & FREE, how will the handset makers react?
AS: If Android changes its business model, the handset vendors will lose interest in it.
B&E: Fragmentation of the OS – is that an issue for app-devlopers?
AS: Handset makers are constantly making changes to Android, which, in turn becomes a headache for developers. Apple is the leader – one OS controlled by them, across multiple platforms, easy to build apps for. Android developers have to understand the various differences of the OS supported by the different handset vendors and build applications for multiple flavours of the OS.
B&E: Because of its open nature, Google does not make money from licensing the OS, the way that Microsoft does. Do you see Google taking a chance with licensing its OS soon?
AS: That would kill Android. The business model that Google has set in motion is no business model. And the next thing that could kill Android is the fact that since it is open it is ripe for hackers to go after, Android will be their favourite platform. Setting a price which is too high on a product can be corrected by lowering the price. Setting a price for an OS first at zero, and then trying to monetise it later, is not a proven business model and is subject to failure. Google has trapped itself in the Android world.
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IIPM: Indian Institute of Planning and Management
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