What's Going On At Google?

By Stephanie Blanchard, Digital Editor — March 19, 2013

In 2005, when Google acquired Android, Inc., its mission was to create a mobile operating system (OS) that allowed devices to access the Internet. After all, the tech giant’s primary business model is built on ads.

Now Android is the leading OS in smartphones (68% of the market), and IDC predicts Android-based tablets will surpass iPads in 2013. And, despite security concerns for business, Android devices are taking over the enterprise through BYOD.

Yet, with developments of late, it appears that something is going on at Google, starting with a shift in hardware strategy. Essentially running its Motorola Mobility Holdings company separately, continued layoffs at the unit are occurring, and rumored devices are on their way.

And, more notably, when it comes to the platform, Senior Vice President of Chrome, Sundar Pichai, a Wharton School and Stanford University graduate, has taken over as head of the Android Division. He succeeds Andy Rubin who co-founded the OS, leading the development from an upstart to 900,000 daily activations. The sudden switch probably explains why Rubin’s scheduled keynote at the recent SXSW was dropped.
In June 2012, in one of his rare tweets, Rubin, a self-proclaimed “entrepreneur at heart,” said he had no plans to leave Google. This once autonomous division head is now relegated to a position undisclosed, possibly with Google X, the lab behind the upcoming Google Glasses. Senior Vice President Jeff Huber, who led the Maps/Geo and Commerce group, is also moving into the division.

With the leader of one platform division taking over another, the question becomes which way does Pichai steer Google? Android or Chrome? Or does this signify a merger between the two open source operating systems?

Dual Developments
Around the same time Android was released in 2007, the Chrome browser was also being developed. Launched in September 2008, its key goal was accommodating complex web applications, not the old-school static HTML pages.

Within a year, Chrome attracted more than 30 million active users who used it as their primary browser (mostly on the Windows platform, as the Mac version had not been released yet). By summer 2010, the browser had more than 70 million users.  

Chrome OS, an entirely new operating system based on the premise that users “lived within the browser,” launched in July 2009. Pichai described it as “Chrome on top of Linux with a new Windowing system.”

As an outspoken proponent of larger form factors and one who obviously leans toward web-based ideas, Pichai said at the 2009 Web 2.0 Summit, “In an ideal world…we would like to see everything run within in a browser.”

Pichai, who insisted the trend was, for a long, long time, going towards browser use, cannot be credited with the idea however, as the late Steve Jobs spoke about web apps years earlier. Clearly this is not actually the case in today’s reality, as many enterprises continue to rely on native apps.

Entering the Hardware Market
Although Jobs and Pichai may have agreed about web apps being the future, Jobs hardly saw Apple and Android as one and the same. In fact, he had a few choice words for his competitor. “Google loves to characterize Android as open and iOS and iPhones as closed,” he said in 2010. “We find this a bit disingenuous and clouding the real difference between our two approaches.”

Previously only focused on the open source platform, and letting manufacturers distribute Android, Google tried to directly take on Apple and BlackBerry with its own smartphone, the Nexus One. Manufactured in partnership with HTC and sold only online, the device was not a commercial success.

Then in May 2012, Google purchased Motorola Mobility, a founding member of the Open Handset Alliance — the consortium of firms responsible for developing open standards for mobile devices and the group “responsible” for continued Android development.

Purchased for $12.5 billion, the unit was acquired presumably for its large chunk of patents which provide a liability shield in the face of countless lawsuits against Android.

Google’s CFO Patrick Pichette noted recently that at the time of that acquisition, there was 12-18 months of product pipeline to go through. To cut losses, the parent company immediately began shedding jobs at the unit to focus on smartphones and not the lower-profit margin simple handsets. So far, 5,200 jobs have been eliminated, with the most recent round having been announced on March 8.

The Wall Street Journal reported that Google is now working with Motorola to build what is known as the "X Phone,” followed by an "X Tablet." This will not only compete with Apple, but Samsung, a major manufacturer which accounts for more than 40% of Android-based devices.

It’s likely Google is hedging its bets against the Samsung juggernaut from “forking” the OS, similar to what Amazon did to adopt Android for its Kindle Fire.

Forking is really claiming the OS as one's own, and although Android is open source, Google’s store and services are not. So, in order to fork Android,  the OEM must give up the ability to access Google’s content.

In Amazon’s case, it decided to run with its own app store. In the case of others, there is simply nothing in its place.

Even though the new Galaxy S 4 is running on Jelly Bean, Samsung may be distancing itself from Google.

“Did you count how many times Google was mentioned? Zero times,” said Roger Entner, Founder and Lead Analyst at Recon Analytics, in an interview with Mobile Enterprise. He was referring to the March 14th Galaxy S 4 launch. “How many times was Android mentioned? Once. Samsung wants this to be a Samsung phone, they are trying to bury Google and Android in the middle layer and make it as unrecognizable as possible.”

Polishing the Chrome
With Chrome OS, Google took another gamble, that users wanted not just a browser but a simple, low-hassle mobile computer in the first place.

Web-based and in the cloud, apps do not require installation or maintenance on this OS. Data is cached for latency reasons but extensions run in their own process; “sandboxed,” they do not have access to system resources. Users aren’t making decisions as to whether an application can be trusted or not — the system is. However, the netbook is not a laptop.

A range of devices are on the market. The Samsung Chromebook, at $250, is a lightweight, purposely inexpensive netbook powered by ARM. The recently released Chromebook Pixel, at $1,300, is the premium version with hi-res display and touchscreen.

“I don’t think they intended the Chromebook to be a massive seller, but more to show what is technically feasible for them,” Entner said. “Nobody is going to buy a $1,300 notebook.” However, the devices can serve as a showcase for other manufacturers to emulate, he added.

In 2011, Google set up a Chrome OEM center based in Taipei to ramp up the OS effort but such efforts have not seemed to matter. Chromebooks are still not likely choices for either the enterprise or consumers in general, simply because of its limitations. Estimates have only 500K have been sold since its inception, but official figures are not available.

The Potential Hybrid
Pichai’s succession means the future of Android and Chrome is up in the air. He has said that it’s too early to discuss the possibility of integration, but this move suggest the two platforms will eventually combine, forming one operating system for both mobile devices and netbooks.

Chrome OS has not taken off, while Android has skyrocketed to dominance. At the very least, putting Android’s muscle behind the other platform could serve as a kick start.

Update: Speaking at the Big Tent Activate Summit in Delhi, India, on Thursday, March 21, Eric Schmidt, Google CEO, said the two operating systems will remain separate. However, they “could have more overlap.”


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