> Google's strategy of driving down handset costs continues. They don't make money on the hardware or software but rather on the data collection and advertising from android devices. Apple, on the other hand, makes their money from the devices.
But Google isn't making the devices.
> Why pay $600 to Apple when I can pay $170 to X.
How much does X make on that $170 device, compared to how much Apple makes on their $600 device?
> But they can essentially give it away and make money on the users…
Google can, yes. But their device manufacturers can't. And that's where a lot of Windows PC developers ended up—they raced to lots of low margin sales, and made less and less on each sale. It hasn't gone well for them.
Agree with your points. What I was trying to say was that Google has created a competitive ecosystem like PC manufactures that will drive the price of handsets close to their cost thus depriving them of profit.
In other words there is less and less differentiation between a samsung and htc and lg handset as the pace of innovation slows in hardware. They cannot differentiate on software this they are left primarily with price. This will only exacerbate in the future.
> In other words there is less and less differentiation between a samsung and htc and lg handset as the pace of innovation slows in hardware. They cannot differentiate on software this they are left primarily with price. This will only exacerbate in the future.
Definitely, and that's a rough place to be in for hardware manufacturers. Dell and HP and Compaq and Acer have shown what lies down that road. Hopefully they'll find some other area to differentiate their products.
But Google isn't making the devices.
> Why pay $600 to Apple when I can pay $170 to X.
How much does X make on that $170 device, compared to how much Apple makes on their $600 device?
> But they can essentially give it away and make money on the users…
Google can, yes. But their device manufacturers can't. And that's where a lot of Windows PC developers ended up—they raced to lots of low margin sales, and made less and less on each sale. It hasn't gone well for them.