Just curious... how do Google make money off Android?

manveruppd

manveruppd

manveruppd

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I'm sure they get a cut from apps sold on the Android store, but not all devices are connected to it, and users aren't walled into that anyway, they can install apps from elsewhere. I would've thought they charge manufacturers a small royalty per handset, but that doesn't quite make sense since it's an open source OS, the code's just freely available for anyone to grab and build off source.android.com! So, where does the money come from?
 
Google make money off their data services, Android is a good way for them to get more traffic into the services, by incorporating Google search/ advertising / maps / mail into the OS. And the more cohesive and seemless they can make using these services, the more likely people are to use more of them, which again is more traffic, and more money to be made from companies wanting access to that traffic.
 
Neither of you knows, do you? :p
Did you mean advertising? Cause in Android it's possible to replace Google as the default search engine with someone else (and we've seen a US carrier replace it with Bing, presumably replacing Google Ads with MSN Ads), or even install adblockers and such (if anyone develops one), so I don't think advertising is enough on its own to make Android profitable!
 
You don't get it, do you? :p

It's no different to advertising. Seeing an advert for Heinz soup doesn't make you run out the house and buy some. But the next time you're in the supermarket, looking for soup and presented with a few brands to choose from, you're more likely to pick Heinz (consciously or subconsciously).

So if you use Android day-in day-out, not only does that present a direct business opportunity (ie cuts in app profits, in-app advertising, OS sales to handset manufacturers, other licensing etc) but it also means you're more likely to choose Google's other services, which again increases traffic and therefore ad revenue.
 
I do understand how that works, and, after all, most users do mostly buy from the app store, and most providers haven't replaced Google with Bing as the default search. But Android itself can't function as exposure for Google in the way you describe as well, because soon we'll start seeing it as an embedded OS in a lot of "dumb" devices like TVs, set-top boxes, blu-rays and media players, where it'll be completely Google-debranded and its UI will be unrecognisable, cause it'll be replaced with one appropriate for the device.
I seem to remember reading that some bits of Android aren't open (radio and battery management iirc) - is it possible they're charging a royalty for those?
 
The simple answer is that they don't. ~95% of Google's profit is from search. Even considering how massive things like youtube and Android are their revenue stream is focused on search.

The more assets you have and the more people know your name the more sales you are going to make, it's as simple as that... To the point about the OS going into set top boxes, Google are not concerned with that, it's an open platform they do not lose anything when a company ports it to a STB.
 
The Core of android is open source, but google charges manufacturers if they want to include certain closed source apps in the ROM, like Gmail, Maps and the Market.
Manufacturers are free to not include those google apps, and write their own alternatives, and indeed the budget ones do, but the official apps are a major selling point that consumers are expecting.

However google main business is advertising. The more time people spend using devices with googles ads in front of them, the more demand there is for their services and the more money they can make. The angry birds guy reckons he'll make more money from his cut of the adverts than from sales, so imagine how much they are worth to google.

Mobile devices also allow google to offer more attractive packages to advertisers, you can be targeted more accurately by location thanks to the GPS (can turn off the service, but I expect most don't bother) The apps store is another great opportunity for google to target advertise you, since now they know what kind of apps you tend to use etc so they can refine their profile of you.

I make it sound like a bad thing, but tbh, If I have to look at adverts I'd rather they be something i'm interested in.
 
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