The smartphone wars: Google goes Taoist, Microsoft uses the farce
<p>A few days ago, I observed that Google is not pushing back against cell carriers&#8217; lockdown of  Android phones as vigorously as I had expected in the wake of the Android 2.2 announcement.  If <a href="http://twitter.com/Scobleizer/status/24025002113">this Twitter rumor</a> is true, Google locked horns with the carriers and lost that confrontation, leading to the semi-discontinuance of the Nexus One.  Does this mean the carriers have won the war?</p>
<p><span id="more-2548"></span></p>
<p>I think not. The good news is that the announcement of the T-Mobile G-2, which will run un-skinned Android, suggests that Google&#8217;s longer-term strategy is still working.  I have noted that the opportunity cost to the carriers of these unhelpful customizations is rising, propelled upward by increasing time-to-market pressures that force them to either drastically compress development schedules or run down-version releases of Android that sacrifice performance and customer appeal.</p>
<p>I still think the carriers will hang themselves, given enough rope &#8211; and that the third phase of the smartphone wars, in which carrier efforts to tame Android collapse of their own weight, is about to begin.  I&#8217;ve argued this much in a <a href="http://esr.ibiblio.org/?p=2534">previous post</a>; my point now is that Google&#8217;s smart move now is Taoist.  They don&#8217;t need to fight the carriers in any other way than by keeping the Android release tempo up and the time-to-market pressure on the carriers correspondingly high.</p>
<p>One of my commenters asked how Android customization by handset vendors (as opposed to the carriers) changes this picture.  Not much at all, actually; if anything, the time-to-market pressure is worse on them than it is on the carriers, because they have more competition.  Most places, the carriers&#8217; markets look like oligopolies, but the handset market has more scrappy small players &#8211; and this makes complete sense, since the financial mass required to build and maintain a cell network is so much larger than you need to hire some engineers and rent fab capacity.</p>
<p>The difference in time-to-market pressure has consequences; expect the handset vendors to try to shed the cost  of customizing Android faster than the carriers do.  Notably, I don&#8217;t think HTC Sense will survive very long, especially not if the G-2 (which is expected to be an unskinned HTC Magic) does well.  Crap like Sprint&#8217;s NASCAR branding will outlast it, because NASCAR will actually pay the carrier for that placement and offset Sprint&#8217;s development costs.</p>
<p>Of course, as the handset vendors stop customizing Android, the <em>carriers&#8217;</em> cost of differentiating Android will go up faster.  There&#8217;s only one way that game can end, really; carriers lose, and Google wins.  The carriers can&#8217;t get off the tiger any more, not with Android&#8217;s new-unit sales growth utterly demolishing every other smartphone OS worldwide.</p>
<p>Which brings us to Windows Phone 7. Microsoft actually had the audacity to throw a shipping party that included a <a href=" http://technolog.msnbc.msn.com/_news/2010/09/10/5087329-zombies-hearses-and-monster-trucks-mark-windows-phone-7-celebration?ocid=twitter">mock funeral for the iPhone</a>.  All that really needs to be said abut this is that the event was recorded by an Android phone.</p>
<p>I never thought I&#8217;d hear myself say this, but&#8230;I find I&#8217;m actually pitying Microsoft a little.  They&#8217;ve got <em>nothing</em>, no hand at all in this game.  Their desktop-computing monopoly not only won&#8217;t help them gain share, it&#8217;s an actual hindrance; carrier and handset-vendor execs understand precisely what Microsoft did to the PC market and are determined not to be Ballmer&#8217;s bitches.  Microsoft&#8217;s previous mobile products have been a string of money-losing duds followed by an outright disaster &#8211; the wicked knock on Windows Phone 7 you&#8217;re going to keep hearing is &#8220;next of <a href="http://en.wikipedia.org/wiki/Microsoft_Kin">Kin</a>&#8220;.</p>
<p>Brand power?  It is to laugh; if you ask a random consumer in 2010 whether &#8220;Android&#8221; or &#8220;Microsoft&#8221; has more positive associations, Android will win hands-down (high marks to Google for effectively flooding that zone). Really Microsoft&#8217;s only asset is financial mass; if it&#8217;s possible for anyone to outright buy their way into the smartphone-OS market,  they&#8217;re the outfit that can do it.  Of course, this would involve forgoing actual <em>profits</em>, which is a problem now that their legendary cash hoard has largely been spent on fruitless acquisitions and stock buybacks.</p>
<p>No, Google has nothing to fear from Microsoft&#8230;and isn&#8217;t that an indication of how much the world has changed?</p>
