Microsoft makes money on the one off sale and then essentially zero from then on. Google makes zero on the sale, but then makes money from then on. Asymco has the numbers from 6 months ago:
You refute my statement that they make almost nothing with an ARPU of $1.63 and a 500 mil profit? seriously? Microsoft made over 20 billion net profit in 2011 and Apple has an ARPU around $600.
Revenues and profits are a trailing indicator not a leading indicator. They reflect what the company has done in the past, not what is happening in the future. My point is that measurements have changed from one offs to lifetime value. (That is not to dismiss Microsoft's two decades of impressive financial performance.)
Note that Apple's ARPU number includes COGS for the hardware which Google doesn't incur (Samsung et al do).
Sure, but $1.63 is a tiny ARPU in any case, and I think that even the most confident estimates don't have that number going to the moon. Sure they can make some money this way, but Apple's profit per device is in the $250-$300 range.
Is there any argument to be made that Google can somehow go from making $1.63 to $300? Not to mention that Apple and Microsoft are also making that tiny ~$1 per user from their stores and search as well.
All of this also doesn't count the fact that running the store isn't free. That revenue isn't 100% profit. My argument is that while they can grow this ARPU, I don't see any possible way that it becomes a big enough number to matter compared to their search profits. What is that path? That is the interesting question. (Note this could partly be answered by the fact that they bought Motorola and do now in fact sell some phones themselves.)
The stores are a wash for both Google and Apple (again see asymco). If you look at Android's income statement you can see that search and advertising is where the big profits come from - something Apple doesn't really have (yet), and Microsoft don't have a sufficiently large installed based for (yet). The $1.63 ARPU is monthly not lifetime and the data is more relevant in showing that the revenue from Android users is increasing at a rapid clip.
Apple is grabbing a large chunk of profit once from the most profitable consumers. Google is grabbing smaller amounts of profit but from a far larger number of regular users on a monthly basis.
At some point the larger Android installed base will mean some number of users will match the profitability of an Apple user's biannual purchase. There is no requirement for a one to one match.
If Google had not done Android then Apple/Microsoft/RIM would have been able to exclude them from the mobile market, which is on its way to becoming the relevant market.
As for Motorola, I don't know. Google can't treat them specially otherwise they will alienate existing Android partners. There is already the Nexus program for providing the unadulterated Android experience, which presumably keeps prices low due to volume.
Other than patents, Motorola would only provide leverage if existing Android partners did not want to play ball on something but there hasn't been any evidence of that happening either.
http://www.asymco.com/2012/05/14/the-android-income-statemen...
Also note that the more recent the version of Android, the higher they monetize:
http://www.insidemobileapps.com/2012/10/24/androids-jelly-be...