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What does Google benefit from Android? (self.AndroidQuestions)

submitted ago by MrBoji

I've been asking myself this question for a while, and no amount of google searches has allowed to find the answer. I see the link between iOS and Apple; iOS allows them to sell more handsets, from which Apple makes hefty profits. Same goes for Blackberry, Windows Phone and so on. But what does Google have to benefit from Android? Sure, it sells some Google phones (like the Nexus), but Samsung makes them, and although it probably gets a cut from the Nexus sales, it allows virtually every other phone manufacturer to use their OS.

TL;DR: Where does Google make their money with Android? Why does it bother?

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[–]InconsiderateBastard 6 points7 points ago

Android Market. And a smart phone market where they are a player.

I highly doubt Apple is in the phone business to sell hardware. They get a cut of every AppStore and iTunes purchase. The IPhone/IPad and iOS exist to put an Apple store in your hand.

[–]MrBoji[S] 0 points1 point ago

You're right--the Apple ecosystem pays them on all fronts.

I know that Apple gets 30% of the App Store profits; what % does Google get out of Android market?

[–]InconsiderateBastard 0 points1 point ago

Well the developer gets 70% from Android Market sales, but I'm pretty sure the other 30% goes to carriers and payment processors. I think their goal is more about the content they are trying to deliver. Books, movies, music, stuff like that.

[–]exhilarationHTC EVO 3D, viperROM, Sprint 1 point2 points ago

No, I recall reading that Apple barely breaks even on the app store - the money is indeed in hardware. The purpose of the app store is to keep people loyal to the platform - you're not going to throw away hundreds of dollars in app purchases by switching to android.

[–]redct 5 points6 points ago

Google ads and the whole Google ecosystem. It's the same reason why they let you use Gmail for free. Android Market may make some money for them, but it's a drop in the bucket compared to the revenue they get from all the accumulated mobile ads that people see each day in free apps and in search. As an added bonus, it also gives them a wonderful data-collection platform (almost all the data for Google's traffic in Maps is collected from Android handsets, for example).

[–]MrBoji[S] 0 points1 point ago

This is partly why I don't understand; I don't see any ads when I'm on my Android checking out my GMail; the same goes for Google maps and YouTube. I do see ads whenever I'm playing games but always thought the developer got the revenue for placing those ads; are you saying that Google gets a cut from these ads as well?

You raise an interesting point--the data-collection platform. I really don't want to sound like a conspiracy theorist, but simply want to be an informed consumer--is there a chance that Google monitors everything we do so that it has an even better profile of us, to then serve us even better targeted ads?

[–]redct 2 points3 points ago

As far as I know, they get a cut from all ads that use one of their service, including AdMob ads, one of the most prevalent in-app advertising platforms.

I'm pretty sure the data-collection part is secondary, although Google does target their ads using as much data as they can, including what type of site you're visiting, your past ad viewing habits, and your coarse physical location (which is based on your IP address).

[–]Vovicon 1 point2 points ago

You're not a conspiracy theorist. They do use mobile phones to gather data.

However, they don't monitor everything you do. It's an "opt-in" option when you setup your phone, and they are not spying your every move and action on the phone, but they, for example, are collecting your search queries in relation to your location (again, you can disable this).

Among the billions of queries and millions of users, trends and patterns will appear, and they will be able to figure out better which search result and which ad they should serve you according to your location, your search history, the day of the week, the outside temperature,... whatever parameter they found to be relevant.

You might be atypical and none of their models really applies to you, but in overall, they will be quite precise in their analysis and this is what advertisers are ready to pay for: the ability to target precisely who will see their ad (and therefore pay only for real potential customers and not random people not interested at all).

[–]MrBoji[S] 1 point2 points ago

Thanks for your honest answer. I have no problems really if they did that, as long as I have control over it and opt-out if I have any problems with it all.

[–]Vovicon 1 point2 points ago

The whole privacy question is very interesting in my opinion. In most of the western world, business have to follow a few rules about that. And companies like Facebook or Google are under a lot of scrutiny. If I had to guess, I'd say that data and privacy is much more secure with them than with smaller business.

Because everyone records their interaction with their customers. The question is then, what do they do with it and what level of details they are recording. There is a difference between recording a series of search queries, and recording then associating it with your name and personal details.

In Europe, business have to get the approval from a government privacy authority to maintain database with personal information. The authorization is given only if people listed in these DB are made aware of these data and are able to verify the data recorded have it erased on demand.

I don't imagine Google could take the risk of having their business shut down by a court order, and they are probably very careful about what is linked to your name and what isn't. This is probably why they provide "Google Takeout": https://www.google.com/takeout

The problem comes from the fact that data recorded, even if not explicitly linked to you, can still be linked back afterwards. This is a concern, because even if these companies are not attempting to make this link, the mere fact that they keep a record of the data potentially exposes you to privacy breach from someone with ill intentions having access to this data. It could be someone in the company, government agency or a hacker.

It's nowadays almost impossible to be off the grid. The idea is to be anonymous enough so that breaching your privacy needs more efforts than the potential gain.

[–]theredkrawler 6 points7 points ago

Advertising.

Android is tool for increasing viewers of Google's advertising, and for collecting data to make adverts more targeted and relevant. Why? Because targeted ads are much more effective adn give the most return to the client, thus Google can charge a premium for delivering those ads.

Increase the fee you can charge per ad + increase the number of people looking at that ad = $$$

Personally I don't care. I'm happy to whore my personal details out because Google bribes me with a great OS (Android) full of free and useful tools that I use daily. Google is a symbiotic relationship for me - they give me tools I use to increase my money earning capacity, and in return I provide them with data to help them increase their money earning capacity.

Apple, on the other hand, reach into your wallet constantly and then charge huge markups on the hardware itself too - which is why they make the most profit per handset of any manufacturer. I have no idea why people are OK with this.

[–]TheBobMcCormick 2 points3 points ago*

Advertising! Google is projecting 2.5 billion in mobile ad revenue next year.

By bringing more competition and lower prices to the smartphone industry, Android helps to accelerate the move from "dumb phones" to smart phones, thereby increasing the size of the mobile ad market. It also helps to reduce their risk of a single monopoly mobile platform provider (ie. Apple) shutting Google out of the mobile ad market.

I'm sure revenues from the Android Market don't hurt either. From Google's perspective, they make money on paid apps directly (30 percent of the app's price goes to Google), for ad supported apps they make a cut on most of them because Google AdMob is the most popular mobile ad service, and they make a cut from advertising on most ad-supported websites you visit.

[–]staianoDroid Incredible, rooted 2.1 1 point2 points ago

Ads, ads and ads.

[–]fandacious 1 point2 points ago

This (techcrunch article)[http://techcrunch.com/2011/03/25/search-googles-castle-moat/] puts it very well

[–]MrBoji[S] 0 points1 point ago

Great article, thanks for sharing.

[–]HaMMeReD 1 point2 points ago

Same thing with Maps. There is no money in maps. However, Maps ties in heavily with advertising which does makes google billions.

Google understands that the best way to fuck a competitor is to do what they do for free, and make money off it.

Before maps people had to pay lots of money to use a private OS on their GPS, and a expensive license to read map-data, and google came in and said "FREE MAPPING FOR ALL!!, WE ARE EVEN GOING TO DRIVE THE FUCKING STREETS AND SHOW YOU EVERYTHING".

How is garmin going to compete with free map software and free map-data.

Maps was just a proof of concept, if they could undersell and fuck over the mapping industry so thoroughly and profitably with a free product, why not do the same with OS.

I predict that eventually android will hit the desktop in a big way (since it's free). In ways my desktop is jealous of android. I wish I could have live wallpapers, and touch interfaces on my home computer. Really it seems antiquated.

Google might not even be doing it themselves, but projects like the Android x86 project, and touch-screen hardware will just make this all a natural fit, and all this mouse-keyboard written software will fade into a world of only those who require them.

[–]MrBoji[S] 0 points1 point ago

You have really good insights on the whole situation. Back when I had an iPhone, I wondered how come the Android phones had built-in free GPS nav, when my more expensive iPhone didn't, unless we bought the $100 app from Garmin which people really complained about.

[–]lemonfresh33HTC Hero, FroydVillain, Orange (UK) 1 point2 points ago

it's because if they did not have Android, then Apple / Microsoft / someone else would be in control of the whole mobile ecosystem. In that scenario, they could ban ad-funded apps, limit what was being shown.

Google gains when people use an open platform that allows them to show adverts.

Google Maps / Navigation / gmail / stap map / etc. are all there to add value to the android proposition so that it can compete with the other less-open eco systems..

[–]Xiazer 1 point2 points ago

To add to what everyone else has said. They may have released the OS's source but in order to get that "with Google" brand it has to be officially approved, with that comes the Android Market, Gmail, Sync and so on. So they will get a cut from every phone sold, which is in the millions, that is "given" Google's blessing.

Don't know if you remember this but Cyanogen once received a cease and desist order from Google telling them to stop including Google applications. Once they did that they were allowed to keep releasing their Mod. Source

Hope that helps!

*edit - typos

[–]MrBoji[S] 1 point2 points ago

I really had no idea whatsoever of this. So that's why the gApps have to be downloaded separately. Makes sense now, thanks!

[–]EvilMonkeySlayer 1 point2 points ago

Whilst most points have been covered and Hammered sort of covered the desktop bit, he didn't cover it fully.
Here is where Android is heading next, replacing the desktop pc for most users.
A few years ago I saw a demo of a mobile phone connected to a monitor, mouse and keyboard. It was just a demo (nokia I think), but it showed the future.
.
Imagine, rather than having a bulky or mini-pc.. your computer is your tablet or mobile phone. You put it in a small dock connected to a monitor, mouse and keyboard then wham, you've got a fully functional pc experience. This is where android is heading next. Microsoft knows this and is scared shitless.
If MS loses the desktop, they will be annihilated. Right now the major cash cows for Microsoft are windows and office. If they lose the desktop then they will see windows profits disappear. Then all of a sudden they've lost one of their major profit areas to sell office, having a knock on effect of annihilating sales of their office suite too.
Make no mistake, android isn't just Google making sure they get money through advertising on mobile phones. It's Google ensuring they get rid of the MS desktop monopoly.

[–]MrBoji[S] 0 points1 point ago

That makes a lot of sense. I remember seeing an Apple patent about this, where your phone would be the desktop, and the phone would connect to the cloud to fetch all documents, regardless of where you are in the world. Since Google is king when it comes to cloud services, I can see them very well poised to make Windows obsolete.

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