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The curse of Google?: Android licensees fail to cash in

Brand-slut buyers have no loyalty

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Google's Android is now in almost half the world's smartphones – but licensees are finding that quod eos nutrit eos destruit – or what nourishes them destroys them.

Figures from research company Canalys released this week certainly show booming growth in Android devices. Android is grabbing 48 per cent of the smartphone market worldwide, up 379 per cent from a year ago, in a market that is growing like Topsy.

But the success isn't translating to the bottom line – nor is it establishing much of a brand.

One observation caught my eye. Nokia's failure to update Symbian or supersede with something more attractive means its left a vacuum for more competitive products from rivals.

"Samsung has failed to fully capitalise on Nokia's weakened state around the world, as the Finnish company rides out a challenging transitional period," noted Canalys principal analyst, Chris Jones.

Android is very much the "generic" platform, but being generic, it brings no brand sizzle to the manufacturer. Expensive efforts to differentiate their Android handsets from others are turning out to be a waste of time. That was one of Symbian's founding principles, and it's coming true.

Samsung scores highly in user satisfaction surveys, but buyers remain promiscuous – once they have their smartphone, they feel they owe the manufacturer very little gratitude. There's no brand loyalty.

So, when the market stops growing, what will manufacturers do?

It's not as if they'll have built up huge cash warchests. Estimates vary on how much profit manufacturers are taking home: here's a recent one. It's still Apple, and decreasingly, RIM. There's a few pickings for HTC and Samsung. The others, Sony Ericsson, Motorola and LG, aren't seeing any positive revenue from Android.

Eventually something has to give, because being in business is about profit, not market share. The operators long to fork Android, because they don't want Google creaming off service revenue. I expect this to be a certainty – I only wonder how many forks there will be in this drawer. ®

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