January 2010. Briefly, my attention turns away from rumors about an Apple tablet (true) and (then) Microsoft CEO Steve Ballmer’s Consumer Electronics Show keynote. On this fifth day of the new decade, Google debuts a new smartphone. I see the launch as a watershed event—and order Nexus One for myself. Made by HTC, but codesigned by Google and carrying its brand, the self-described, so-called “superphone” is the stone that later sets off an Android avalanche sweeping across the planet.

Things that matter about the N1:

  • Google sells it direct, unlocked, with no contract required
  • Voice interaction is as important as, if not more than, touch
  • Operating system and core features tightly tie to Google search
  • Hardware is a baseline reference design for manufacturing partners
  • Platform provides software developers the foundation for making Android apps

“Google’s superphone is both superman and alter-ego Clark Kent”, I write on Nexus One launch day. “It’s the humble, glasses-wearing handset that simply makes phone calls. But voice search and voice-to-text superpowers—leveraged off those Google cloud services—make the Android 2.1 handset so much more. Those superpowers are easily spread by upgrading existing handsets to Android 2.1”.

Something more: The cellular device tops, and in many respects culminates, a series of research and development investments that Google made during the 2008-09 recession—so severe it is often called the econolypse. Historically, companies that take strategic risks during economic downturns, while rivals pull back, are the most likely to reap rewards later on.

In the modern tech era, Apple is most visible example. During a recession, in 2001, following disastrous quarterly earnings, the company launched iTunes (January), released OS X version 1 (March), opened the first Apple Store (May), and unleashed iPod (October). What I sometimes call the “2001 Four” is the foundation for everything that follows, including iOS and iPhone.

Android Armies
Fast-forward to 2015. Nexus One wasn’t a huge seller for Google, nor were its successors—nothing compared to the volumes Apple or Samsung moves. But with imminent release of Android 6 (aka Marshmallow) and rumors about new Nexus devices debuting as early as this month, the original and the others demand to be put in proper historical context. (While wrapping up this report, I received at 11:26 p.m. GMT on September 18 an invite to a Google press event for “new treats and much s`more”.) Meanwhile, there is the European Union Competition Commission’s investigation into Android and adverse preliminary ruling from the Federal Antimonopoly Service of the Russian Federation.

Five years after N1’s launch, Android overwhelmingly dominates the global smartphone market upon which Google extends larger search and advertising ambitions, supported by the “Free Economy” of giving away valuable content, subsidized by search-related advertising. Android’s real rise started with release of Nexus One and also the first Droid from Verizon Wireless.

Some history: Google purchased Android in August 2005—17 months before then Apple CEO Steve Jobs announced iPhone and 23 months before that device’s sales started. The first Android handset, the G1, launched on T-Mobile USA in October 2008, nearly four months after Apple’s App Store officially opened. Nexus One would later only be fully supported by T-Mobile, as well. In October 2009, Verizon debuted the Droid line, manufactured by Motorola and running Google’s mobile OS. The United States’ No. 1 cellular carrier also started a $100 million advertising campaign, which greatly raised awareness about the platform.

Additionally, Android benefited from several strategic blunders by Nokia, which invented the smartphone in the mid-1990s and a decade later was the overwhelming global leader selling cellular handsets: Failure to quickly and effectively adopt the touchscreen motif; difficulties releasing a successor to the Symbian mobile OS; and, in February 2011, entering into an exclusive licensing deal for Microsoft’s Windows Phone. Across the globe, Android supporter Samsung filled the sales share vacuum left by Nokia. Meanwhile, Blackberry blundered away its smartphone share lead, following iPhone’s June 2007 release.

Some numbers:

The data all comes from Gartner and represents actual sales to end users, rather than less-reliable shipments from manufacturers. The snippets aren’t meant to be comparative but illustrative of Android’s massive growth during a very short time period and while smartphones replace once-traditional handsets.

Not to be ignored, Samsung’s success cannot be understated for lifting Android, and the pickup really got gusto following release of Nexus One—the aforementioned reference design for hardware and software developers. The manufacturer is global leader, based on sales, for smartphones and all handsets. Apple ranks second.

Mobile Mayhem
Android’s growth, from near zero market share in 2008 to second place ranking in 2010, is amazing enough. The platform’s placement today is unprecedented. The success transforms Google from the leading search provider into something much bigger. The company reported on Sept. 29, 2015 that the number of active Android users is stunning 1.4 billion.

Other factors driving Android growth that cannot be ignored:

  • There is no fee for manufacturers to license Android.
  • Android is largely an open-source platform that third-parties can adapt. This enables companies like Amazon to customize the operating system.
  • However, there is a catch. Manufacturers looking to provide Google apps and supporting services are not free to do whatever they want. The search and information giant imposes restrictions.
  • To transcend problems widespread Android fragmentation presents, Google unbundled its apps from the operating system. There are mutual benefits for the company and its customers and partners.

Regarding fragmentation, for operating system platforms like Android or Windows, the term refers to widespread and/or increasing use of different versions rather than just the newest, and presumably most beneficial, one. Fragmentation can disrupt customers’ usage experience, introduce security vulnerabilities, and create problems for application developers.

Google reports (consolidated) six different platform versions in use, for the 7 days ended Sept. 7, 2015. The newest, Android 5.x (aka Lollipop), only accounts for 21 percent of the global user base. By contrast, Apple reports that as of Sept. 14, 2015, 87 percent of iOS devices ran the then newest version (8.x). The successor, iOS 9, released two days later. As I write, on September 18, according to data from analytics firm Mixpanel, adoption of the newer Apple mobile operating system already is 23.6 percent in about two days, surpassing Android 5.x a year after its release.

Apple controls delivery of iOS updates. Google is bound to Android manufacturers and/or cellular carriers. The exception: Nexus devices running pure, unaltered stock Android.

Google transcends the worst of fragmentation’s limitations by separating its core apps from the operating system. Before autumn 2010, when Gmail appeared in what was then called the Android Market, apps updated with the OS. Problem then, as is today: The majority of users are bound to older Android versions.

Unbundled Google apps diminish many of fragmentation’s worst negative effects and keep older Android versions more current, which helps to unify an otherwise disparate end user experience.

Russia Roars
But the development strategy also supports Google’s broader mobile ambitions, which two previous reports in this series address, and they won’t be the last. Most thorough to date: “In Europe, Google fights Back“. Simply stated: Mobile is the future of search and advertising.

We end with something foreshadowing, regarding Google’s broader mobile expansion. On Sept. 14, 2015, the Federal Antimonopoly Service of the Russian Federation issued a preliminary finding against Google with respect to its unbundled apps. As previously stated, these are separately available by what is now the Google Play store. Recall also that the company places restrictions on Android licensees looking to distribute Gmail, YouTube and other apps developed by the search and information giant.

FAS faults the “mandatory preinstallment of Google applications and Google search system and mandatory priority positioning on the device home page. Actions undertaken by Google also resulted in prohibiting preinstallment of applications of vendors”.

As such, “FAS can request to adjust contracts with vendors of mobile devices, excluding such clauses from the agreements that restrict installing applications and services of other developers of such devices”, Alexei Dotsenko, deputy head of the enforcement body, says in a statement.

Technically, the apps are unbundled, being that they are distributed and updated independently of Android version. But those pesky devil-in-the-licensing-terms details have the FAS, and Russian search provider Yandex, in a row.

Eleven days later, Bloomberg reported that the U.S. Federal Trade Commission and Justice Department had opened a joint investigation into Google’s mobile platform. See my long analysis “What’s Behind Android Antitrust” for in-depth explanation and context.

The point, when surveying the Russian agency’s preliminary ruling, ongoing antitrust investigation in Europe, and anticompetitive complaints elsewhere (perhaps the United States): Litigation, if anything, is more likely to shake the Android empire than competition.

Editor’s Note: This analysis first appeared on Byline.

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