Google Is Using Android To Push The Wireless Industry And Its Own Agenda: Report

Tricia Duryee
Thursday, July 17, 2008; 4:00 PM

The iPhone and Google's upcoming Android platform are shaking up the wireless industry, according to report released yesterday by In-Stat Analyst Bill Hughes. In an interview, Hughes supported his conclusions with two theories: First, he said Google is primarily using Android to push its agenda of doing location-based search, and second, the two Bay Area companies are implementing change by marketing and merchandising better, not developing more advanced technology. The statements become even more interesting when juxtaposed with two public knocks made recently against Google ( NSDQ: GOOG). In the last week or so, Android developers have become disheartened by the amount of support they are getting from Google, and Sprint made comments questioning its ability to address industry fundamentals.

-- On Google's presence in mobile: Hughes said that Google's interest in mobile relates to its desire to get into location-based search. Because the wireless industry can move slowly, Google needed leverage, which is why it is developing Android ( It took a similar approach in the spectrum auction.) "No one is talking about that, but the whole premise and business model behind Android is to be able to do location-aware search." So far, the focus has been on the Android software and on the devices, but the technology isn't a lot different from what's already out there, he said. "If you look at things purely from a technology standpoint, there's no reason for Google to bother with Android. They are getting involved because from what they've seen is that this market moves at glacial pace...I don't believe publicly held companies do things for purely altruistic reasons, but I would reason, that this is an effective way to do that. Location-aware searches are hugely profitable ventures for many, many organizations."

-- On Google using Android to push location aware: Hughes says because of Android, Google has some leverage, and is using it to push location-based services on other platforms, like the iPhone. " Google can be successful even if Android isn't successful. It ups their leverage, and raises the visibility of the application."

-- It's about marketing, not technology: Hughes: "There's been plenty of good platforms. There's been plenty of good ecosystems, but there hasn't quite been the buzz associated with the applications before that both Apple ( NSDQ: AAPL) and Google have been able to achieve, and as much as the technology is important, it's only half the equation. I think it's important to distinguish between marketing and merchandising. Marketing is understanding the customer's needs in order to become profitable, and merchandising is techniques to get people to buy something. They are doing a better job of both. I'm optimistic of the ability of the Open Handset Alliance [Android] to market applications that have already been available through a number of channels, but aren't successful at reaching the mass market."

-- On potential hang-ups: Hughes: "Android will become a footnote in the history of the mobile environment unless they establish revenue-sharing agreements with the carriers."That's a more compelling statement after reading what ValleyWag reported yesterday. It wrote that Jake Orion, who is in charge of Android development at Sprint ( NYSE: S), said: while "Google's confidence, vision and self assurance are refreshing and innovative," Google needs to " to appreciate and address industry fundamentals more pragmatically." Specifically, that includes "a more proactive and direct linkage to the carrier's network and service requirement." Vallewag guessed that meant Google hasn't made Android friendly to Sprint's network, but we are guessing that the statement has more to do with revenue sharing. Update: The quotes from Orion first appeared on, which says they were asked to retract the post.

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