Google's strategy for winning the smartphone wars: don't fight the smartphone wars

Why beat Apple if you can make money from them?

I missed this story when it went up, last week, but Business Insider's Nicholas Carlson has an interesting alternative take to the mainstream belief about how Google views Android. It's single sourced – attributed to "one ex-Googler" – but explains a few inconsistencies about the company's actions. The big starting point is the explanation for why Andy Rubin, Android's creator and leader, left the project unexpectedly at the end of March. Carlson writes:

Rubin told a room full of Google executives that Google-owned phone-maker Motorola was a hedge against Samsung growing too powerful.
Rubin's comments indicated a view of Android as something to preserve and protect.
Our source believes that Larry Page isn't nearly so worried about Android itself. This source says that Page views it as a means to an end.
He says Page views Google as "a cloud services company," built on cornerstone products like Search, Maps, Mail, and YouTube.

In other words, Andy Rubin was determined to make Android the best, and most successful, phone platform in the world. But while that's obviously the aim of Apple and Samsung, there's no direct reason why Google needs to "win" the phone wars. It makes more money from iOS than Android.

The obvious counterpoint to that is that Google spent $12.5bn buying Motorola in 2011. Why would it do that if it had no interest in taking on the hardware market? It appears the answer was lying in plain sight: when the purchase was agreed, Google claimed that it was Motorola's patent portfolio which it was after, and Carlson's source backs that up.

Even though Google obtained a world-class phone manufacturer lumped in with its patent purchase, it didn't ramp up its hardware business; the Nexus 4 was made by LG, and the company's tablets were made by Asus and Samsung. So what has it been doing? Carlson says it's been trying to boost the whole smartphone business:

Page wants Motorola to focus on better, longer-lasting batteries and faster chips, with the goal of pushing the entire phone-making industry forward.
Why?
So that Google's cloud-based services run better and can do more things on all kinds of mobile devices.

The theory is backed up by Page's choice to replace Rubin: Sundar Pichai, whose previous biggest success was securing widespread adoption of the Google Toolbar at PC manufacturers. If Pichai can make Google's web services as successful on mobile platforms as they are traditional ones, then it may not need an overwhelming success of the Android platform in particular to come out successfully from the smartphone revolution.

In that analysis, Rubin's Android team's success was actually the result of a failure of principle-agent management. His aim – to build the most successful smartphone platform – was not the same as Page's, nor, apparently, Google's overall.

Time will tell which of the two had the right idea. It certainly seems to be a waste of Google's burgeoning ability as a hardware manufacturer to refocus entirely on web services. The biggest threat for Apple remains that Google is getting better at hardware faster than Apple is getting better at online services, and it seems un-Google-like to simply cede that advantage. But if Google is genuinely in a situation where it can "win" whichever phone platform holds the lead, then that seems like a situation worth fighting to stay in.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The 11 things we know after the Brexit plan debate

Labour may just have fallen into a trap. 

On Wednesday, both Labour and Tory MPs filed out of the Commons together to back a motion calling on the Prime Minister to commit to publish the government’s Brexit plan before Article 50 is triggered in March 2017. 

The motion was proposed by Labour, but the government agreed to back it after inserting its own amendment calling on MPs to “respect the wishes of the United Kingdom” and adhere to the original timetable. 

With questions on everything from the customs union to the Northern Irish border, it is clear that the Brexit minister David Davis will have a busy Christmas. Meanwhile, his declared intention to stay schtum about the meat of Brexit negotiations for now means the nation has been hanging off every titbit of news, including a snapped memo reading “have cake and eat it”. 

So, with confusion abounding, here is what we know from the Brexit plan debate: 

1. The government will set out a Brexit plan before triggering Article 50

The Brexit minister David Davis said that Parliament will get to hear the government’s “strategic plans” ahead of triggering Article 50, but that this will not include anything that will “jeopardise our negotiating position”. 

While this is something of a victory for the Remain MPs and the Opposition, the devil is in the detail. For example, this could still mean anything from a white paper to a brief description released days before the March deadline.

2. Parliament will get a say on converting EU law into UK law

Davis repeated that the Great Repeal Bill, which scraps the European Communities Act 1972, will be presented to the Commons during the two-year period following Article 50.

He said: “After that there will be a series of consequential legislative measures, some primary, some secondary, and on every measure the House will have a vote and say.”

In other words, MPs will get to debate how existing EU law is converted to UK law. But, crucially, that isn’t the same as getting to debate the trade negotiations. And the crucial trade-off between access to the single market versus freedom of movement is likely to be decided there. 

3. Parliament is almost sure to get a final vote on the Brexit deal

The European Parliament is expected to vote on the final Brexit deal, which means the government accepts it also needs parliamentary approval. Davis said: “It is inconceivable to me that if the European Parliament has a vote, this House does not.”

Davis also pledged to keep MPs as well-informed as MEPs will be.

However, as shadow Brexit secretary Keir Starmer pointed out to The New Statesman, this could still leave MPs facing the choice of passing a Brexit deal they disagree with or plunging into a post-EU abyss. 

4. The government still plans to trigger Article 50 in March

With German and French elections planned for 2017, Labour MP Geraint Davies asked if there was any point triggering Article 50 before the autumn. 

But Davis said there were 15 elections scheduled during the negotiation process, so such kind of delay was “simply not possible”. 

5. Themed debates are a clue to Brexit priorities

One way to get a measure of the government’s priorities is the themed debates it is holding on various areas covered by EU law, including two already held on workers’ rights and transport.  

Davis mentioned themed debates as a key way his department would be held to account. 

It's not exactly disclosure, but it is one step better than relying on a camera man papping advisers as they walk into No.10 with their notes on show. 

6. The immigration policy is likely to focus on unskilled migrants

At the Tory party conference, Theresa May hinted at a draconian immigration policy that had little time for “citizens of the world”, while Davis said the “clear message” from the Brexit vote was “control immigration”.

He struck a softer tone in the debate, saying: “Free movement of people cannot continue as it is now, but this will not mean pulling up the drawbridge.”

The government would try to win “the global battle for talent”, he added. If the government intends to stick to its migration target and, as this suggests, will keep the criteria for skilled immigrants flexible, the main target for a clampdown is clearly unskilled labour.  

7. The government is still trying to stay in the customs union

Pressed about the customs union by Anna Soubry, the outspoken Tory backbencher, Davis said the government is looking at “several options”. This includes Norway, which is in the single market but not the customs union, and Switzerland, which is in neither but has a customs agreement. 

(For what it's worth, the EU describes this as "a series of bilateral agreements where Switzerland has agreed to take on certain aspects of EU legislation in exchange for accessing the EU's single market". It also notes that Swiss exports to the EU are focused on a few sectors, like chemicals, machinery and, yes, watches.)

8. The government wants the status quo on security

Davis said that on security and law enforcement “our aim is to preserve the current relationship as best we can”. 

He said there is a “clear mutual interest in continued co-operation” and signalled a willingness for the UK to pitch in to ensure Europe is secure across borders. 

One of the big tests for this commitment will be if the government opts into Europol legislation which comes into force next year.

9. The Chancellor is wooing industries

Robin Walker, the under-secretary for Brexit, said Philip Hammond and Brexit ministers were meeting organisations in the City, and had also met representatives from the aerospace, energy, farming, chemicals, car manufacturing and tourism industries. 

However, Labour has already attacked the government for playing favourites with its secretive Nissan deal. Brexit ministers have a fine line to walk between diplomacy and what looks like a bribe. 

10. Devolved administrations are causing trouble

A meeting with leaders of Scotland, Wales and Northern Ireland ended badly, with the First Minister of Scotland Nicola Sturgeon publicly declaring it “deeply frustrating”. The Scottish government has since ramped up its attempts to block Brexit in the courts. 

Walker took a more conciliatory tone, saying that the PM was “committed to full engagement with the devolved administrations” and said he undertook the task of “listening to the concerns” of their representatives. 

11. Remain MPs may have just voted for a trap

Those MPs backing Remain were divided on whether to back the debate with the government’s amendment, with the Green co-leader Caroline Lucas calling it “the Tories’ trap”.

She argued that it meant signing up to invoking Article 50 by March, and imposing a “tight timetable” and “arbitrary deadline”, all for a vaguely-worded Brexit plan. In the end, Lucas was one of the Remainers who voted against the motion, along with the SNP. 

George agrees – you can read his analysis of the Brexit trap here

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.