As the new year dawns, everyone seems to be talking about the risks facing Apple (AAPL). But why is no one discussing the risks facing Android, the platform that is Apple's biggest competitor?
Google (GOOG) is constantly trumpeting how its Android operating system is taking the world by storm. To a point, the company is correct, as the system has a huge lead in the market for mobile devices.
Most journalists accept this advantage in market share as irrefutable and don't seem to question Android's continued dominance. Scratch beneath the surface, however, and you will see there are many problems facing the platform.
● Android is doing well in China from a market-share perspective. But can you really call the product there "Android?" Chinese manufacturers have stripped out all the Google functionality from the operating system. Search is done by Baidu (BIDU), for the most part. Mapping data come from local providers. No geolocation data or other search information is shared with Google. Further, Google is not making any money from the product. So what has Google gained from this particular market-share dominance?
● Amazon (AMZN) is using a stripped-down version of Android for its Kindle. But, like the Chinese handset makers, it has managed to completely remove any ties to Google. Again, this is great for Android's market share and activation numbers, but where's the beef?
● Google isn't making any money from Android -- at least not yet. In the Oracle (ORCL) trial last year, Google disclosed that it had generated $500 million in revenue from Android since inception. That's nothing. Google has given away a lot of software to people to allow those partners to make money, yet only a precious few have been able to do so. There's a big difference between Samsung and 78 dwarves, as Roger McNamee calls them.
● The big dog in the Android community is Samsung, which just announced a bunch of new handsets for 2013 based on the Linux-based Tizen mobile operating system. Is Samsung hedging its bets against Android? Obviously, yes. For a long time now, Samsung has emphasized its own set of features over those of the so-called Android community.
● Google has decided to come out with its own "X Phone" this year. This will be the first Motorola phone built soup-to-nuts by Google people, thus fulfilling the desire of co-CEO Larry Page to get in to the hardware and software business. But why won't the company antagonize others in the Android handset community and push them away?
● I was surprised to learn that the No. 3 and No. 4 players globally in the smartphone space are, respectively, Sony (SNE) and Taiwan-based HTC. Both are Android partners. But why should they stick with it through this year? They're both losing money, and now Google is coming after their market share.
Yes, there are challenges facing all handset makers -- but we not to be blind to the issues facing the Android folks.