Google's Smartphone Move

Why Google had to take control of Android with Nexus One

Google's introduction of Nexus One, a phone to truly call its own, is a completely necessary move for the company. Only by taking ownership of the whole user experience will Google really be able to prove the value of its Android platform.

Nexus means a series of things connected together, an appropriate name for a phone where Google is taking more control of both the hardware and software, and therefore much more of the user experience.

We are at interesting inflection point with smartphones, a point where we have two competing development models playing out and a future in which probably only one will survive: Highly integrated, or highly modular.

With a few exceptions (BlackBerrys and to a lesser extent Treos), until recently most smartphones have been modular affairs: hardware from one company, OS and software from another company, wireless network from yet another. This has led to disjointed user experiences that have limted the appeal of the phones to more mass market audiences. The success of the iPhone with mass consumers showed that it was vital to integrate all these elements together seamlessly (and that integration goes beyond the phone itself to content on the PC and in the cloud).

In the early stages of a category such as smartphones, the usage experience is often rough and incomplete. Early adopters will look past this, but until a more refined experience arrives that delivers the right recipe of capabilities, ease of use, and price, then the majority of people will stay away. I refer to this as an experience gap - a mismatch between what people want to do with a product, and what the products on the market can actually deliver.

Once the recipe has been established, and clarity reached about what people want, it then becomes easier to divide up pieces of the experience to different vendors, as they now all have a common goal in mind. Following Clayton Christensen's logic, once this happens then modular approaches will ultimately win out - they will be more technologically sophisticated, cost less, and offer more capabilities. The PC is the archetypal example of this process. Smartphones are coming up on this inflection point, though the timing of when it will tip into full-blown modular-hood is unclear. Smartphones could be like mp3 players, where the similarly integrated ecosystem of iPod/iTunes has resisted being broken into components by competitors.

Google's leaders are excellent students of tech history, and they no doubt understand this trend. When Android premiered it was, as Christensen would say, "prematurely modular", in that it was a system that had a very high degree of modularity and very little structure, but it was too early for other vendors building on the Android platform to know how to put together an effective recipe for user experience.

Charlie Wolf at Needham Company roundly criticizes Google for its overly loose approach to Android:

The great appeal and promise of Android is that it’s an open source operating system in the tradition of the Linux operating system. The appeal of open source lies in the freedom of software developers, smartphone manufacturers and wireless carriers to modify the source code of the operating system.  And, as initial versions of Android phones demonstrate, the smartphone vendors have every incentive to do so in order to differentiate their phones from others running on the Android platform. For example, Motorola sells it customized user interface as “MotoBlur” while HTC markets its user interface as “Sense.”

Unfortunately, the freedom of smartphone manufacturers to modify the Android code has created significant hurdles for application software developers. Unlike the iPhone where a software application can be written once and run seamlessly on all versions of the iPhone [Not exactly true - AR], most software applications written for Android have to be customized for each smartphone. This limits the addressable market of an application to that of an individual smartphone rather than the Android platform itself. 

(Download the PDF of Wolf's report here)

The lackluster success of the early Android phones has surely made Google realize that they need to take a much stronger role in order to bring all the pieces of the experience together. The catch-as-catch can approach they've had to far just isn't going to cut it. Fragmentation is a death knell for a product like this at this stage of maturity. Google needs to lead the charge with an integrated platform until the experience gap is fully closed. Then it can afford to loosen the reins and let the handset manufacturers, carriers, and third party developers go do their own things independently, safe in the knowledge that they will all come together to create something interesting and valuable for customers.