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Android set to make USD10bn a year, says Google
Google is on track to make USD10bn a year from its mobile business, thanks to the rising popularity of its Android operating system, according to CEO Eric Schmidt. The comment follows Schmidt's recent claim that Google is enjoying growth of 60% a month for its mobile platform. According to Gartner stats, 5.2m Android phones were sold worldwide Q1.
"If we have a billion people using Android, you think we can't make money from that?" asked Schmidt in an interview with the Wall Street Journal. He says Google has high expectations for the platform, which is already widely used on smartphones and is due to be deployed on a new generation of tablet devices. The CEO told the paper Google is positioning itself to earn USD10bn or more each year in the mobile device business.
Google's open source Android platform is available to developers for free, unlike rivals such as Microsoft's forthcoming Windows Phone 7. This means Google does not benefit directly from sales of Android devices, such as Motorola's Droid or HTC's Desire smartphone. However, Android can drive users to Google's services, thus increasing ad revenues. Android devices are bundled with a range of Google apps, including Maps and Search, and users are required to have a Google account to access the Android Marketplace app store.
"If you've got a one-trick pony, you want the one we have. We're in the ad business, and it's growing rapidly; we picked the right trick," says Schmidt, defending Google's business focus. Speaking last month to the Guardian, Schmidt predicted that the mobile web will be the driving force behind technical progress in years to come, and explained his firm's Android strategy by saying: "Developers go where the volume is. That's the most important lesson from platform economics; it's about scale and volume."
Android head and Google VP of engineering, Andy Rubin, recently said 160,000 Android-powered devices are activated each day, roughly two per second. He also said there are about 60 Android devices on the market around the world. In the three months ending May 2010, comScore reported that Google had a 13% share of the US smartphone market, up four percentage points on the previous quarter. Separate Gartner stats say Google had a 9.6% stake of the world smartphone market in Q1, a massive 707% year-on-year increase.
