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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Italian PM Matteo Renzi resigns after referendum No vote

Europe's right-wing populists cheered the result. 

Italy's centrist Prime Minister Matteo Renzi was forced to resign late on Sunday after he lost a referendum on constitutional change.

With most ballots counted, 60 per cent of Italians voted No to change, according to the BBC. The turn out was nearly 70 per cent. 

Voters were asked whether they backed a reform to Italy's complex political system, but right-wing populists have interpreted the referendum as a wider poll on the direction of the country.

Before the result, former Ukip leader Nigel Farage tweeted: "Hope the exit polls in Italy are right. This vote looks to me to be more about the Euro than constitutional change."

The leader of France's far-right Front National, Marine Le Pen, tweeted "bravo" to her Eurosceptic "friend" Matteo Salvini, a politician who campaigned for the No vote. She described the referendum result as a "thirst for liberty". 

In his resignation speech, Renzi told reporters he took responsibility for the outcome and added "good luck to us all". 

Since gaining office in 2014, Renzi has been a reformist politician. He introduced same-sex civil unions, made employment laws more flexible and abolished small taxes, and was known by some as "Europe's last Blairite".

However, his proposed constitutional reforms divided opinion even among liberals, because of the way they removed certain checks and balances and handed increased power to the government.

 

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.