The case against Opera Mini on the iPhone
Thu, Feb 18, 10
In 2002, Apple forked KDE project’s HTML layout engine KHTML and JavaScript engine KJS into WebKit which begot Safari. As usual, everyone thought Apple was either evil or ignorant for not choosing Gecko, everyone’s favorite non-IE rendering engine at the time. Apple rejected Gecko because KHTML/KJS offered less code, cleaner design, excellent standards compliance and faster speed.
Through its sustained commitment for nearly a decade not just to WebKit but also to WHATWG, HTML5 and various complementary aspects of the open web (canvas, H.264, SVG, etc.) Apple gave the open web community an increasingly credible alternative to proprietary platforms like IE, Flash and Silverlight.
Today, in the mobile business, every major platform but Microsoft’s does (or soon will) run WebKit as its primary web browser. The open source WebKit would certainly not be where it is today without Apple.
To Apple, though, WebKit is not merely a web browser. It bet its rich web-media rendering future on WebKit. Every Internet-connected Apple device, and likely Apple TV soon, runs on it. Even for the usual Apple anti-fans, WebKit, specifically its iPhone instantiation, is still considered the best browser on a modern, multi-touch mobile device.
Now comes Opera, mini Me
With amateur-time spectacles in airports that would make Adobe Flash evangelists proud, Opera now is daring Apple to reject its Opera Mini browser which it hasn’t submitted yet to the App Store:
“Opera is not based upon WebKit, no” confirms [Opera co-founder] Tetzchner “but it’s the world’s most popular mobile browser. Why would Apple not want the world’s most popular browser on the iPhone?”
So what’s not to like about Opera Mini? It says “50 million rides” in the ad above, it must be “the world’s most popular mobile browser”? If that’s the case, Apple should reject Opera for not being good at math: there are already more than 50 million iPhones/iPod touches sold, everyone of which actually relies on WebKit as its sole browser. Let’s consider the serious issues:
Proxy. It’s one thing for an app on the iPhone to query the web, talk to its own or others’ servers, but something entirely different for Opera Mini to proxy the entire web through its own proprietary servers. Yes, you read it right. Opera gets in between you and every single URL out there, from your bank to your school to your doctor’s office. You never communicate with any site directly, only through Opera proxy servers that first go to that URL, get a page, recompile it into its own markup language, compress and send it back to the mobile client that alone can understand it.
Security. When visiting encrypted pages, you have to allow Opera to get in the middle to decrypt and re-encrypt (via Opera Software), breaking what’s meant to be an end-to-end security chain. You need to ask yourself if you need another potential opaque layer of insecurity between you and, say, your bank account?
Scalability. In introducing the iPhone’s Exchange facilities, Apple stressed how it was more secure and scalable for a distributed system to deliver email than to rely on a single point of failure, like RIM’s centralized NOC proxies for BlackBerry devices, which have infamously suffered multiple failures over a number of years. Now imagine Opera, a tiny outfit in comparison, having a similar fate, except taking down the entire web for its users.
JavaScript. Opera Mini 5, the version which we assume will be submitted to the App Store, is currently in preview and is not the more capable one that requires Java J2ME runtime which Apple will clearly not approve. Apple gets dinged for not delivering the full Internet by excluding Flash, and yet I bet the very same Apple anti-fans won’t say a word about Opera not even trying.
In addition to recompiling each and every web destination into its own markup language, Opera also deliberately dumbs down its JavaScript support. After Opera gets a page from the real server, its onLoad JavaScript events are fired, but all such scripts are allowed only two seconds, and, for example, all interval and setTimeout functions are disabled. So if the original page was doing something time-related or took more than two seconds, too bad, the original page is compiled, compressed and sent to the mobile device incomplete. Consequences be damned. When on the device, there are only four events allowed to trigger JavaScripts, onUnload, onSubmit, onChange, onClick. Enjoy your full Internet, the Opera way.
Opera Mini may be a huge step forward for dumb WAP phones, but for a company that bet its future on the rich interactive features of HTML5 and JavaScript in WebKit, this Operatic intrusion is clearly a giant step backwards.
Persistence. One of the key capabilities in HTML5 is local storage, which allows web sites/apps to store varying amounts of data on the client side for personalization, preferences, data, syncing and off-line capabilities. Coupled with emasculated JavaScript support, Opera is looking into the WAP past instead of the HTML5 future here.
Interface. Pictures of the proprietary Opera Mini are not being made available, but the company said that the browser does not include such fundamental UI conventions on the iPhone as pinch-zoom. Apple has bet its fortunes on establishing the world’s first pervasive multi-touch UI platform, from Mac trackpads to iPhones to iPads. As we argued here two years ago, it would have been a mistake to allow Flash on the iPhone because it had no concept of multi-touch, regardless of any other issue. Nearly 100 million iPhone/Mac users are now familiar with Apple’s multi-touch gesture library, it’d be a travesty to allow a tiny player with a marginal interest in this platform and no experience in gestural UIs to pollute it now.
Unknowns. There are many of them:
- Will OS-wide copy and paste work as expected in Opera Mini?
- Will it allow multiple text and graphic items to be selected and copied with formatting intact to other apps?
- Will bookmarklets such as Instapaper or ReadItLater work as expected?
- What will happen to Opera when more and more device-specific functionalities (like GPS, accelerometer, background notifications, etc.) are integrated into WebKit?
- Apple’s said to receive $100 million/year for including Google Search in Safari. How does Opera interfere with that revenue?
I could name many more unknowns, but the fundamental problem with Opera Mini is this: other than a few geeks who want everything because that’s what defines them, have you ever met an iPhone user who complained about its browser? Most iPhone users I know bought an iPhone primarily because they loved the browser on it. Sure, who wouldn’t want a faster browser? If the iPhone got 3X faster this summer, will people stop wanting it to be even faster? Of course not.
I have no idea if Apple will reject Opera. But before people start jumping up and down about how evil Apple is, I hope they consider some of the issues posed by Opera, because so far the only advantage they promise, but haven’t yet publicly delivered, is speed. And speed isn’t everything, if the Wintel saga hasn’t taught us anything else.
WAC’s most whacky adventure
Wed, Feb 17, 10
You heard the story: Two dozen Rip Van Winkles wake up one day and decide that it would be a good idea to band together to defeat the evil monster in the forest. They lounge about, wring their hands, have a beer, perhaps two dozen kegs of beer, and then, in a moment of sheer brilliance, name their holy alliance Wholesale Applications Community (WAC).
The first word of their first collective action, wholesale, ought to tell us all we need to know about the likelihood of their success. Like shoveling commodities to the hapless consumer, “without distinction” as the dictionary would put it. Because for the Rip Van Winkle alliance, software is just like sacks of commodities. You load them up on a truck, send them to a depot someplace and you’re done. They call it, “Load’em up once, ship’em everywhere.” After all, rice is rice “without distinction” whether you’re in India, China or Japan, right?
It gets whackier at WAC’s manifesto site: wholesaleappcommunity.com, and yes, that’s the URL.
If you believed the fantastic and utterly bogus numbers generated by VCs and the peddlers of the first generation of mobile phones about how many billions of WAP phones would eclipse traditional wired access to the Internet just any day now, then you’d be very comfortable with WAC’s claim:
Will establish a simple route to market for developers and provide them with access to a customer base of over 3 billion customers.
Some access. Just how many of these 3 billion phones are in fact capable of running, say, smartphone-class applications is of course a minor detail, as we’re dealing with wholesale commodities after all. Here’s a thought: either these carriers “own” these 3 billion customers in which case developers for whom WAC was supposedly created get shafted or developers own those customers, which we know won’t be the case as there’s no incentive for the carriers.
Then comes the biggest bludgeon only a giant Rip Van Winkle can murderously handle:
The alliance aims to unite a fragmented marketplace by involving players from all related industries to create a community based on openness and transparency to the benefit of all.
Yes, you read it right, “openness and transparency to the benefit of all” by phone carriers. It is a terrific idea to bring into this pitch phone carriers’ biggest asset: openness and transparency! But that’s not enough. To rally openness advocates something else has to be bolted on:
We believe our model presents the most compelling format on the market where developers will thrive and customers will reap the benefits of greater choice.
Of course, choice. By the traditional champions of choice, phone carriers no less! Because, truth be told we just don’t already have enough choice in phones or mobile OSes.
WAC’s ambitions know no bounds:
…access to the latest and widest range of innovative applications and services to as many customers as possible worldwide.
This alliance will deliver scale unparalleled by any application distribution ecosystem in existence today.
It’s wholesale in case you forgot. This could go on. Forever. So let’s cut to the chase:
In practice this means that developers will only have to create one version of their application and this can be used on multiple types of devices and operating systems (such as Symbian, Android, Windows etc) which is not the case today.
Here’s a challenge to WAC: if you believe in this fantasy, or more likely if you want developers and users to fall for it, why don’t you design a mobile operating system that works on all devices not named iPhone or iPad and be done with it. Kill them all and replace them with your grand unifying OS. Until then, you can wade through search results for why “Load’em up once, ship’em everywhere” never works…on your 1.5-inch phone screens.
Buzz launch wasn’t flawed, Google’s intentions are
Mon, Feb 15, 10
Last week Google exposed private aspects of Gmail accounts by default in its introduction of Buzz and then backtracked to offer what can only be described as user-hostile instructions to remedy it. Even the generally knowledgeable analysts are being naive about how this could have happened:
Google is a $170 billion company. It employs thousands of engineers and developers. It tests, tests, tests, and tests more. In fact, its “designers” once unable to pick a shade of blue tested 41 variations of it. It’s ludicrous to think that the Buzz fiasco was simply a result of under-testing. Indeed, it was not an implementation snafu at all, as often described. It was a reflection of the strategy with which Google has decided to capture the enormous territory left up for grabs by the decline of Microsoft.
Not how but why
As mentioned in Google Buzz: The Big Misdirection, Google introduced Wave last year in its much abused “beta” form to a yawning public. After much hoopla prior to its introduction, Wave has virtually disappeared from public interest:
Wave remains an over-engineered and under-designed product that was poorly prepped for general introduction beyond a small developer base, which has become an all-too-familiar Google ritual. This tweet cleverly captures what unites Wave with Buzz:
Google clearly feels pressure from Facebook and Twitter in terms of social networking, personal data access and real-time search, as well as location info from myriad geo-apps and smartphones. Unfortunately, it hasn’t been able to deliver products that have captured the imagination of broad segments of the consumer market lately. From Nexus One to Latitude to Talk, Google is in danger of being relegated to servicing geeks.
Unsure of its ability to successfully roll it out as an independent product, Google must have then decided to force feed Buzz through its Gmail user base of 175 million. Google executives likely reckoned that in a single day Buzz would garner more users than Twitter has been able to in two years after all that celebrity publicity. That really is why Gmail users woke up one day to find their private account details exposed to the public, unannounced and unprepared, because without such default exposure Google executives likely didn’t believe they could deliver a critical user base for Buzz. That’s not “improper testing,” it’s a platform strategy. And the fact that Google reacted quickly to public pressure doesn’t negate the fact that its arrogance was thoroughly exposed. The correction isn’t significant, the exposed intentions are.
Why would they do that?
Microsoft became the largest technology company in the world primarily by leveraging its two widely used platforms to enter into new product areas. But having missed search, advertising, online services, digital media, smartphones and a host of other 21st century phenomena, Microsoft is in slow and steady retreat from most of the lucrative new consumer markets.
The only other company that can fill this evolving void is Apple, but Apple is not interested in commodity businesses. Google sees a great opportunity and has decided to pursue it, mostly by imitating Microsoft’s leverage strategy: if you want free mail, you (also must) get social traffic (because we need your personal network data graph). You’re welcome, enjoy your Buzz!
This leverage strategy can indeed let Google harvest more social territory, at the expense of Facebook and Twitter…but only for a time. Eventually, what Microsoft is going through now is what will happen to Google, even if Google thinks it’s immune to Microsoftdom.
Ugly mutation
Google has a tradition of experimentation. It routinely introduces products and features, tests their viability and culls under-performers. Such speed and mutative variation may be seen as a competitive edge: release early and release often.
Marissa Mayer, Google’s vice-president for search and user experience, says 60-80% of Google’s products may eventually fail. Unfortunately, the few that survive are neither all that inspiring nor market leaders. What Google lacks is not infrastructure, engineers, money, time or even great ideas. It’s the ability to delight users. What Google is missing, in other words, is strategic design.
Can they handle the truth?
What’s urgently needed at Mountain View are senior strategic designers with sufficient experience, clout and guts, empowered to stand up to geeky top management, MBA-driven product guys (Jonathan Rosenberg), left-brained quality assurers (Marissa Mayer), Microsoft-bred (Vic Gundotra) and countless other dominating engineer-managers to boldly demonstrate why pulling a trick like Buzz is short-sighted for Google’s long(er) term business interests.
Let’s not mince words: Google is not very good at design. The cacophony of its recent designs in Wave and Buzz are proof positive that Google’s single most valuable contribution to strategic design, its sparse search page, is but a distant memory now. Welcome to the Microsoft Ribbon-land.
For a public that doesn’t even know what a web browser is, what Gmail lacked was not a bolted-on Buzz that further complicates what’s already a poorly designed email reader. What’s needed is not a knee-jerk reaction to Facebook and Twitter that would make Microsoft proud, but a fundamental rethinking of the presentation of Google’s sole cash cow: search. In 2010, the design quality of its search results is a disgrace for a company as ambitious as Google.
Google needs to think deeper
It’s become fashionable among geeks to paint Apple “evil” for its steady control of the user experience. Google pretends to be the champion of the “open” web, but it surely is not, as explained in The Big Misdirection. Apple has no pretense at “openness” but, unlike Google, it thinks deeper when designing its products.
In its urgency to offer a me-too product, Buzz confuses the read/unread email paradigm with real-time messaging stream like Twitter. It adds insult to injury by co-mingling various cognitive spheres like blogs, photos, videos, status, etc into thin soup delivered through an unceasing firehose. The final blow is the embarrassingly unfocused layout: the complete absence of visual hierarchy and progressive disclosure, overabundance of visual cues/links for action, and clumsiness in using white space to strip away meaningful information density.
I’m sure Google executives don’t think these are critical, as long as Buzz is free and can be leveraged through Google’s other widely used properties. If Buzz was a startup product, it would have died shortly. But when you expose it by default to 175 million users, who needs to worry about design and delighting users!
If this takes you back to the ’90s, to a place called Redmond, you’re not alone. Buzz wasn’t an accident. Get used to it.
Google Buzz: The Big Misdirection
Fri, Feb 12, 10
Google has introduced another platform. Well, maybe another product. Okay, perhaps another feature in Gmail. Surely, it must be another piece of Google beta spaghetti on the wall, no? No.
Google Buzz didn’t percolate in Google Labs, where laymen could try it out at their pleasure. It suddenly appeared in your inbox. Edward Ho, tech lead for Buzz explains the big idea:
Five years ago, Gmail was just email. Later we added chat and then video chat, both built right in, so people had choices about how to communicate from a single browser window.
Trust me, I didn’t lift this from the Microsoft court documents in the illegal product bundling trial. But if you ineptly launched a product, okay a platform, with underwhelming aesthetics, poor interaction design, overabundance of functionality but with little focus in the form of Google Wave and received more jokes than traction, what would you do for an encore? Why of course, you’d force feed it over a product, err, platform with 175 million users. Why wouldn’t you want to use Google Buzz within Google Gmail running in Google Chrome browser on Google Chrome OS powering a Google tablet? Everything in a “single browser window” indeed.
A nation of whiners
Now that they shifted their attention from the “big iPod touch,” geeks are divided on Buzz. Some are stuck in details. Jolie O’Dell asks in RWW: “In addition to creating ‘best guesses’ for who to friend and follow using Gmail & Google Talk, why doesn’t Google simply use Twitter OAuth and Facebook Connect to import existing friendships?” Like, “Why doesn’t Apple just allow Flash on iPhones and iPads?” Right.
Most jumped on Google’s appalling attempt to strong arm its way into unsuspecting Gmail users’ inboxes by automatically injecting Buzz into private email workflow and then making it very obscure to get rid of it. It takes a few steps, okay maybe a dozen or so steps, to re-privatize your follower list so that you don’t inadvertently expose your hitherto private Gmail life to the rest of the world. Obviously, if you were looking for design and interaction clarity in Google products, let alone personal data privacy, you are barking up the wrong Silicon Valley pole.
So Buzz received a harsh welcome in some quarters. There’s always that nagging question, now that Google is in a mad rush to Microsoftdom, is it hell bent on devouring all other social networks in its path to online domination?
Has Google become a startup killer?
According to many, with Buzz Google’s trying to kill Twitter. And Facebook. And FriendFeed. (Alright, FriendFeed was acquired last year by FaceBook so this is a double whammy.) And Yammer. And Yelp. And Foursquare. And Gowalla. And BlockChalk. And Yahoo! Updates. (Yes, I know, you can’t kill the undead.) And Jaiku. (Oops, Google already owns it.) And whatever Microsoft may introduce in 2011, or later.
However, the company that couldn’t make Orkut, Google Video, Latitude, Google Base, Knol, Google Catalog, Dodgeball, Google Answers and many other products successful may have a hard time killing off its competitors. Of course attention whores with conflicts of interest like Jason Calacanis already declared Buzz the winner: “Facebook is going to see their traffic get cut in half by Google Buzz.” Well, that settles it then.
The Big Misdirection
Why exactly did Google create Buzz anyway? According to Google’s Open Web Advocate Chris Messina:
This is a downpayment on where we’re going with the open, social web…
Yes, the open web. Where you could go tinker with a product’s source code openly and freely. Like you could with Buzz. What, you can’t? How about its parent Gmail? No, not open either? You could use Buzz without Google Profile, no? No choice there either? Confusing?
For what business reason would Google offer Buzz then? To shift most online activity to its unified platform so that it can make money from search/advertising, its sole cash cow, you might answer. Surely, Google’s search/ads business must then be open, no? No? Isn’t Google the most prominent champion of the “open web”? They made Android open, didn’t they? You could go tinker with the source code of what makes an Android phone attractive and meaningful, right? Like Gmail, Google Maps, Google Apps, Google Voice and so on? No? The crown jewels of the Android and Chrome OS kingdoms, the “open” alternative to the iPhone and iPad, are not open? Something’s wrong.
Now imagine if Microsoft or Apple did this. The blogosphere would have exploded with self-righteous indignation. But we already know Microsoft and Apple are evil. Google, the “Don’t be evil” company, obviously, is not.
Magic acts are entertaining only if you can’t spot the misdirection.
Fragmandroid: Google’s mad dash to Microsoftdom
Tue, Dec 15, 09
Observing Microsoft’s dilemma against the iPod/iTunes juggernaut a few years ago, Steve Jobs offered this prediction:
The problem is, the PC model doesn’t work in the consumer electronics industry, where you’ve got all these companies and some does one thing and another does another thing. It just doesn’t work. What’s going to happen is that Microsoft is going to have to get into the hardware business of making MP3 players. This year. X-player, or whatever.
Soon Microsoft did get into the hardware business by introducing its own Zune player coupled with its un-licensed PlaysForSure platform, thereby leaving its erstwhile manufacturing partners high and dry. The anti-Apple digital music camp hasn’t recovered since.
Chasing Microsoft
Just as Microsoft leveraged its enormous pile of cash from Windows/Office monopoly to reach into other domains, so did Google with its huge revenue base in search/advertising. In just a few years, Google has put together a breathtaking spread of products that go far beyond search and encroach the Microsoft empire in every possible way, including an OS and business productivity apps:
Unbundled
Microsoft made its money in software. Its forays into hardware have been far more troublesome: its PC peripherals business has been profitable but non-strategic, Xbox a financial drain since its inception, Ultra-Mobile PC and Surface most forgettable, and Zune an unmitigated disaster.
Unlike Microsoft, Google had shied away from hardware until now (except for its lackluster enterprise search appliance). But with the circulating news about its Nexus One smartphone, Google may have decided to complete its ongoing emulation of its archenemy. So let’s assume, as an exercise, that Google will soon sell a branded smartphone direct to consumers. What might its business model be?
Microsoft has been the flag bearer of the “one OS, many hardware manufacturers” approach to product design. While keeping Windows APIs proprietary, Microsoft broadly licensed its OS, thereby fueling the growth of the global PC market. However, as Microsoft’s share of the PC industry profits grew, manufacturers witnessed the commoditization of their hardware in a cut-throat race to differentiate on price.
The failed ‘PC model’
Tied to commodity sales and thus slim profits, PC manufacturers failed to build competencies in hardware and systems innovation. So much so that even the perennially incompetent Microsoft management realized the futility of “one OS, many hardware manufacturers” approach (as we underscored previously) in an internal memo from Steve Ballmer:
In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we’re changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We’ll do the same with phones—providing choice as we work to create great end-to-end experiences.
If Microsoft learned from the success of iPod and iPhone the centrality of “end-to-end user experience” in consumer products, it looks like Google has learned from Microsoft the perils of letting others own the customer behavior around its revenue base. Mobile search, for example, may have grown some 30% recently, but I’m sure Google has also recognized that 125,000 iPhone apps represent an emerging consumer behavior which obviates traditional browser-based navigation and search in favor of domain specific apps that access data and information in much faster and easier ways. Why go to a web browser, type a search term like it was the 1990s and wade through pages of search results, when you can click a button or flick a gesture to get an efficient answer with a dedicated app? Why suffer through Google-supplied ads when a native app costs next to nothing on the iPhone?
So while the market is still relatively nascent, it looks like Google has decided to do what Microsoft couldn’t successfully pull off: Apple-style vertical integration of hardware, OS, apps and services…direct to customer.
Will Google succeed where Microsoft failed?
Google will have to address a few questions:
• Hardware — Apple, General Magic, WebTV and Danger alumni and current Google VP of Mobile Platforms, Andy (“We’re not making hardware”) Rubin does have hardware experience, Google as a company doesn’t.
- So how much of design and production will Google have to outsource if it’s to release multiple devices over time?
- Will it rely on a contract-level partner, like Apple does with Foxconn, or will it hand over greater design responsibility to an established handset manufacturer like HTC, or let multiple manufacturers build different models?
- Will it have time to organically expand its industrial design competencies or be forced to acquire a design outfit or raid a talent pool like the Palm or Motorola smartphone teams?
• Marketing — Google has terrific global brand recognition among consumers. However, it has no (non-ad) sales force, physical store outlets or consumer electronics retailing experience. It may choose to sell the Nexus solely through an online store or in cooperation with a carrier partner like T-Mobile. Unfortunately, unlocked and unsubsidized smartphone sales in the U.S. has been fairly disastrous. Ask Nokia and Sony. Consumer retail advertising and marketing is nuanced and hard to get right. Ask RIM and Palm.
- Where will Google get sufficient marketing and merchandising experience to compete against Apple?
- What incentives will there be for its retail partners that competitors can’t match?
• Marketshare — By the time Nexus is sold, it’s likely for Apple to announce an iPhone/iPod touch userbase of 60-70 million. That’s the most profitable segment of the industry with a demonstrated history of purchasing behavior and billions of dollars of investment in devices, peripherals, content, apps and other sticky aspects of the Apple ecosystem. Unless Apple falls behind spectacularly, Google or any other manufacturer will find it extremely difficult to convert those users to their own platform. Ask Palm.
- Will Google go after Apple’s lucrative consumer base, remain wedged between Apple and RIM or be content to harvest newcomers to the smartphone sector? Will the latter be large and profitable enough?
- They didn’t with the other Android phones, so why would developers first and users later switch from a 60 million strong well-oiled ecosystem to another one starting from scratch?
- How will Google demonstrate to developers that it can actually deliver a userbase not just as large as Apple’s but also with comparable purchasing power and history of spending money?
- If Google’s after Microsoft Windows Mobile users as it’s often claimed, why would it need to release its own phone?
• Partners — Music labels complain about Apple having too much power and print publishers look for alternatives to Amazon’s dominance.
- Why would phone manufacturers and carriers want to adopt the Android platform if its founder and chief driver is directly competing against them, with a first-and-best implementation strategy?
- If Nexus is made by HTC, how happy can other manufacturers be?
- We don’t have a single significant case of a platform licensor successfully competing against its own licensees. Can Google create a precedent for such an unlikely arrangement?
- What will Google do if Microsoft approaches spurned Android partners or those on the fence with improved Win 7 plus financial incentives minus the threat of competition?
• Fragmentation — With Chrome/WebKit browsers and Chrome/Android OSes Google has certainly presented a confusing platform strategy.
- If Nexus runs on open-source Android, what makes it so superior to other Android phones?
- If it’s the UI, why wouldn’t all or most of the enticing parts of it be copied by others?
- If it’s the tightly integrated Google apps/services, wouldn’t Google be seen as favoring itself at the expense of its own developers?
- If it’s the hardware, where did Google get such expertise and how long could it keep such differentiation?
- If proprietary Google apps/services dominate Nexus, will it still be seen as ‘open’ by developers?
- If Nexus is so different to be so attractive, wouldn’t it by definition further stratify the Android platform into an incompatibility mess for developers?
• Focus — One of the principal factors in Microsoft’s decline has been its incessant search for the next profitable market, however far afield it may be from its core competencies. Google has its own share of moribund products, like Orkut, Google Checkout, Google Base, Knol, Google Answers, Google Catalogs, Jaiku, Dodgeball, etc. Nothing is wrong with experimentation, of course, but such fast paced diversification always brings a measure of dispersion of top-level management focus. People have already started complaining about deterioration of Google’s core search competency. Given the growth of non-algorithmic, social network derived way-finding, it’s not impossible for Google to be blindsided by peripheral attacks to its own core business.
- Does Google have a management team and sufficient corporate focus to sustain a profitable direct-to-consumer hardware merchandising strategy?
- If profit is not the primary driver of Nexus and it comes to be perceived as a loss leader to Google’s search/ad business, will developers and other third parties take the risk of devoting resources to it?
• Financials — In terms of impact to its bottom line, Nexus may be Google’s biggest bet yet on its brand equity. If Nexus doesn’t do well, a 20% trim to its marketcap would not be unthinkable.
- In order to deny market dominance to Sony, Microsoft poured cash into Xbox development for years, having little to show for it in profits. Will Google be a better smartphone manufacturer and retailer than Microsoft was with Xbox?
- Apple has very shrewdly used its market share, cash, as well as inventory management and component pricing knowledge from selling iPods to both lower its production costs and deny comparable advantages to its iPhone competitors. Does Google have institutional expertise to match that?
- Is Google planning to subsidize Nexus sales with hard cash or ad revenue shares to gain marketshare? For how long and at what risk to its balance sheet?
- If Nexus falls short, will Google’s top management and share price be punished for having lost perhaps its greatest asset, the aura of invincibility?
An unlikely Christmas gift?
During its growth period, Microsoft entered into one risky bet after another, from cable TV to office equipment automation to Dick Tracy watches. It saw threats to its core revenue base from every new development, every new player to come along. And expand and spend it did. It did, mostly because its management thought it could.
Of course, Google doesn’t think it’s Microsoft and could surprise everyone with a brilliant plan to bypass these hurdles. Or by alienating its own partners and further fragmenting its Android platform, it could inadvertently resuscitate Microsoft’s mobile business as an alternative, if the lights are still on in Redmond.
