Are Google and Amazon poised to do battle over Android?

Tue, May 17, 2011

Analysis, News

In the blink of an eye, Apple and Google’s relationship transformed from one of partners fighting a common enemy (Microsoft) into an intense, and sometimes bitter, rivalry. But while Apple and Google are currently duking it out for smartphone dominance, Google’s strategy to distribute Android as far and wide as possible may soon come back to haunt them.

In an insightful piece for TechCrunch, MG Siegler writes that the next interesting tech battle won’t be between Apple and Google, but may very well be fought between Google and Amazon.

If you recall, Amazon is rumored to be working on its own full featured tablet. In a tacit acknowledgment that the Kindle is great for reading and not much else, Amazon reportedly purchased a number of LCD screens for use in a full featured Android-based tablet rumored to launch in the latter half of 2011. Not only that, but recent reports relay that Amazon is not only planning on releasing one tablet, but an “entire family” of tablets. And Amazon CEO Jeff Bezos recently answered a question about Amazon’s tablet ambitions with a coy, “Stay tuned.”

Also, note that BGR reported the following yesterday.

We received word from a tipster that Amazon, practically confirmed to be entering the tablet market in the near future, isn’t planning just one device, but is planning on releasing at least two before the end of the year. Information is light, but we have been told that the “entry” level tablet, codenamed “Coyote” will be based on the NVIDIA Tegra 2 platform. The big boy? That’s codenamed “Hollywood” and will be based on the NVIDIA T30 “Kal-El” which will bring a screaming quad-core processor with a 500% performance increase over the dual-core Tegra 2

But as opposed to other hardware manufacturers like Motorola and HTC, Amazon actually has a lot more to offer than attractive hardware. Indeed, Amazon already houses Android apps on its website, not to mention full fledged and operational digital storefronts where users can download and purchase both music and video content.

It’s no secret that accessing media content via the Android Marketplace is a convoluted mess. Google’s quest to be as open and flexible as possible might be great for folks looking to sideload apps, but for the mainstream consumer, figuring out where and how to download content is downright perplexing.

Which is why Android-backed Amazon tablets are particularly intriguing.

Amazon can provide what is effectively a worthy competitor to iTunes – access to all kinds of media content. This not only gives Amazon a leg up on hardware manufacturers, but carries the potential to irk Google should Amazon supplant Google as the place where users go to download their apps and the like.

Moreover, Amazon is working hard to land exclusive deals on both apps and pricing. “This means,” Siegler explains, “they’ll have the games and Google’s own Android Market will not (at first). That’s huge. And you can expect more of those types of deals.”

Amazon is well positioned to release an Android tablet and center it around its own online retail storefront. While this setup would naturally compete against Apple’s iTunes App Store, it also has the potential to marginalize Google.

Still think Amazon won’t be making Android devices?

And what does Google do if it’s significantly better than the experience they offer with Android? Do they stick to the “open” nonsense? Or do they start locking stuff down (even more) when they realize that Amazon is commandeering their own platform? What if Amazon strikes a deal with Microsoft to put Bing on their Amazon tablets? What if the ads are handled by someone else whose name doesn’t end in “oogle”? It could be bad news for the search giant.

Bad news indeed.

Nearly 96% of Google’s search revenue comes from advertising. Indeed, the entire crux of Google’s efforts to distribute Android as widely as possible is to get their fair share of mobile advertising. Of course, Google does get marginal licensing fees from hardware manufacturers who choose Android, but that’s not their end game. But with Android being “open”, a successful Amazon push into the tablet space has the potential to really mix things up for Google as it watches other companies reap the benefits of its own platform.

Will Google clamp down on Android openness? Will it welcome Amazon into the tablet space no matter what?

Until we see an Amazon tablet out in the wild, it’s really hard to speculate.

One thing, however, is clear. Google is creating a monster in Android. With Google intent on being as open as possible, that monster may very well become more advantageous to Amazon than to Google.


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