Distilling market noise into market sense

VisionMobile is the leading research company in the app economy and mobile business models. Our research and workshops help clients compete and win in their rapidly changing industries.

From 4 to 4000 apps: disruption deja-vu in the car industry?

Automotive-report_illustration_webWhat if cars were like mobile phones? There are some eerie similarities between the approaches of car makers in 2014, and operators and handset makers in 2008. Will car makers be disrupted in the same way that the mobile industry was? Senior analyst Stijn Schuermans shares his feeling of deja-vu.

No, Google is not going ‘horizontal’ by selling Motorola

Another excellent move by Google: Offload Motorola Mobile Devices to Lenovo, while keeping the patents to themselves.

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Skimming through the news this morning, I found there is apparently a lot of confusion about the planned sale of Motorola by Google. From decrying a huge loss by Google by such infotainment sites like Wired and Slate, to seeing Google giving up on copying vertical integration of Apple (hardware + software + services), like Stratechery by Ben Thomson.

Let’s look at things from a broader perspective. The acquisition of Motorola was necessary to protect Android, after Apple, Microsoft and BlackBerry outbid Google for Nortel patents. The Apple-Microsoft-BlackBerry trio made it very clear that they intend to put a drag on then-fledging Android ecosystem and extort royalties from Android OEMs. The cost of doing nothing was huge for Google – just think how much more nasty the patent wars may have turned out for Android if the acquisition hadn’t taken place. Any “profit and loss” analysis of the Motorola deal must account for the opportunity cost associated with Motorola patents. Android is, was and will be critically important for Google’s core online ad business, as I will explain in a bit.

The Naked Android

It had become painfully clear to Android’s executives: they had officially lost control. Something had to be done. There was only one option: to strip Android naked. Senior Analyst Stijn Schuermans explains how Google made it tough for ambitious rascals to fork Android and dump Google.

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It had become painfully clear to Android’s executives: they had officially lost control. The operating system had been forked by Amazon and too many Asian handset makers. Worse, it had become too easy to replace Google Play with a proprietary app store yet leverage existing Android apps; too easy to replace Google’s services (Maps) with 3rd party alternatives (Nokia’s HERE). Even the Android brand wasn’t the king of the hill anymore, being eclipsed by Samsung’s Galaxy.

Something had to be done. There was only one option: to strip Android naked.

The evolution of handset business models: From source of profits to distribution channel

The evolution of the PC and mobile handset industry have been mirror images of each other, as both saw two distinct disruptions: a new market disruption, followed by a low-end disruption. Sameer Singh and Michael Vakulenko, VisionMobile Strategy Director explain how the shift from integrated companies to modular competitors will pressure hardware profit margins across the industry, leading to the emergence of a new business model, i.e. hardware-as-distribution

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The mobile handset industry has already seen two waves of disruption: A “new market disruption”, led by Apple, and a “low-cost disruption”, driven by Google and its Android platform. Each wave created distinctly different business models that completely realigned competitive dynamics in the industry. Where do we go from here?

Dr. Google and Mr. Android

[Google announced changes to Android management last week. With around 500 million current users now, the mobile operating systems seems set on its course of reaching 1 billion users by later next year. Android still has many troubles though including fragmentation, rising security concerns, ambivalence in its relationship with hardware partners and ongoing developer monetization issues.  Sheer numbers may wash away these problems, but many questions remain.]

Last week important news came out of Android. Andy Rubin who had founded the company and later ran it after the acquisition by Google announced that he was moving on to unspecified new projects within Google.  The company had very little to say on the matter beyond that, and the void was filled with speculation. Google made several other changes to management and products last week. The company provided a lot more background on these and they quickly took up the headlines.

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