To turn Android's decline around, Google should negotiate with Epic Games and the EU--and generally treat app developers as strategic allies, not adversaries: the failure of fauxpenness

If smartphones could vote instead of the people using them--a prospect I joked about in light of a "human rights" motion Apple brought in Colombia--Tim Cook would become the 47th President of the United States. In recent months, Apple overtook the aggregate of all Android devices in terms of active U.S. smartphone usage, as Counterpoint Research report (as reported by the Financial Times and Barrons).

Almost ten years have passed now since a Wall Street Journal article that asked in its headline: Has Apple Lost Its Cool to Samsung?

There hasn't been a landslide lately: for several years in a row, iOS has gained U.S. market share at Android's expense.

The bold, visionary, and entpreneurial Google of 15 or 20 years ago wouldn't have let that happen, at least not without a fight. Today's Google is a shadow of its former self in some respects. To revitalize Android, Google must stop being just Apple's junior partner in the "Goopple" duopoly and think different--different than Apple, but much more like the amazing Google that it used to be.

It's not that Google isn't aware of the problem it has: its #GetTheMessage campaign is transparently self-serving and in the public interest at the same time. It is a sign of desperation over Android's endlessly dwindling U.S. market share.

But what Google doesn't seem to have realized is that

• faced with the choice between overtly closed (Apple prides itself on its heavy-handedness and walled garden) and fauxpen (pretending to be open), users in the U.S. and some other markets clearly prefer the former over the latter; and, therefore,

• the answer is not to be more fauxpen, but to make bold moves in order to depart from a failing strategy.

By "fauxpen" I don't mean to say Android isn't more open than iOS: but it's only marginally more open. For me, that gradual difference was enough of a reason to remigrate to Android last year. But the market at large doesn't seem to decide on that basis.

If Google wants to regain momentum for Android, it needs to solve a hardware problem and seize an opportunity on the software side: to become developers' friend again.

First, the part that I--perhaps subjectively--consider most important: app developers.

Google is still acting too much like Apple. Just yesterday, Google announced the extension of its third-party billing system pilot to India, Australia, Indonesia, and Japan. I've criticized that kind of fauxpenness on other occasions: in connection with a European announcement (that still doesn't seem to dissuade DG COMP from its preliminary--and soon probably formal--investigations), the Korean situation, and Google's recent public reaction to a Match Group lawsuit (by the way, Google's counterclaims against the Tinder company have not been dismissed at this early stage because Match Group made arguments that went beyond the content of Google's pleadings).

I do understand that Google needs to make money with Android, but there are--and could be--other ways than the app tax. The problem with the app tax is not just the cost to developers, but that it forces Google to rule its ecosystem with an iron fist, almost like Apple.

Google should change its Android business model, focus more on direct revenues from device makers (and on selling its own devices), and above all, create a situation in which the app developer community will have a strong incentive to promote and strengthen Android against iOS.

While there are more apps on Android than on iOS, the fact that the billion iPhone users worldwide are essentially the world's richest billion people means that app developers with commercial ambitions need to be on both platforms. Cross-platform development tools like Unity and Xamarin are ever more popular.

Google couldn't dissuade anyone from developing for iOS, or persuade anyone to make the Android version of a given app functionally superior over the iOS version.

But Google could open up--which should even include allowing an Android version of the Epic Games Store, for instance--and greatly improve revenues opportunities. Apple destroyed the iOS ad business with App Tracking Transparency, and Android got affected because of budgets shifting. For many types of apps, ad revenues are still an interesting revenue opportunity, and Android could also reduce user acquisition costs. In fact, having alternative app stores like an Epic Games Store compete with each other could create opportunities for developers and improve app discoverability.

With Google eliminating the app tax on Android--I really think it should be no problem to just make that money through license fees collected from OEMs--app developers would be able to offer substantially lower IAP prices on Android while still having better margins there. As a result, app developers would be interested in motivating end users to use the Android rather than iOS versions of their (functionally identical) apps. While I don't think highly of the anti-anti-steering consolation prize that the district court handed Epic in its fundamentally flawed decision, it's a fact that Apple couldn't easily prevent app developers and Google--especially if they did it together--from promoting lower IAP prices to consumers--possibly even within iOS apps.

As things stand today, Apple benefits from App Tracking Transparency in multiple ways. It totally overstates the consumer benefits (in reality, consumers are harmed because of money being sucked out of the app developer ecosystem) and consumers buy it; it harmed other Big Tech players, particularly Meta/Facebook; it forced iOS app developers to focus more on the revenues that Apple can tax; and now Apple basically owns the fastest-growing large advertising business itself.

It's Google's turn to make a bold move. To come up with a game changer. Originally, developers were interested in Android because of Google's openness at the time. Google was cool, geeky, nerdy. Today's Google isn't like that. But the company could go in that direction. The #GetTheMessage campaign raises a valid concern, but is not going to solve the more fundamental problem that Google has in the U.S. market even if Apple adopted an open standard (which appears unlikely right now, except maybe in jurisdictions that force it to do so through legislative measures, but then they could still block access via any open protocol in the U.S.).

At the moment, developers are caught between a rock and a hard place when looking at how Apple and Google are treating them. Android should become developers' sweet spot.

Would it take quite some courage for Google to be the anti-Apple, to be truly open again, and to be developers' ally rather than adversary? To charge device makers rather than app developers? Absolutely. Would it make Google uncomfortable that promoting openness could make it harder to maintain the search engine monopoly? Yes, but Google itself always says competition is just one click away, and with every percent of market share that Apple gains at Android's expense, Apple can significantly increase the amount it demands from Google for being the default search engine on iOS.

Android was a moonshot. Opening up would be a bold move, but not a long shot. If done right, it would definitely work.

Imagine what it would mean if Google settled with Epic Games, with Match Group, and with others. The collective power of the developer ecosystem is huge:

Fauxpen Google < Closed Apple

Open Google + Developer Allies >> Evil Apple

Now, the hardware problem, which is in no small part a geopolitical one. Simply put, Chinese companies are nowhere to be seen in the U.S. and the only major non-Chinese Android smartphone maker left is Samsung. I still have great respect for the quality of Samsung's products, but that one company is not enough to stop the erosion of Android's market share in the U.S. and some other places. Other than Samsung, there's just Google with its Pixel brand (which I really like a lot). Things are going to get worse with the Biden Administration now even contemplating an executive order against U.S. investment in China.

I don't want to take a strong and definitive position on the hardware aspect of this, as I'm naturally more interested in what all of this means for app developers. So, without having thought this through, I believe Google should consider one or more of the following options:

• Put even more muscle behind the Pixel. Make it a much better product than the iPhone in more people's eyes.

• Talk to the European Commission (yes, the same Commission on whose Google Android antitrust decision the EU General Court will pass judgment this month). The EU is now very much concerned with digital sovereignty, but none of the world's leading smartphone makers is based there anymore. Maybe HMD (the licensee to Nokia's brand, and a company in which Google--like Qualcomm--made a defensive investment) is a good starting point.

• The most important company in terms of U.S. wireless innovation is Qualcomm. But it's not so much of a consumer brand, and it would obviously be a very difficult decision for Qualcomm to compete with its own customers. Maybe some solution could still be found to harness the strength of Qualcomm's innovation pedigree and undisputed Americanness as an alternative to Apple. The "Intel inside" of wireless devices.

Share|

Google's #GetTheMessage campaign about iMessenger compatibility with Android Messenger raises important issue for society, gets Qualcomm's support, but has shortcomings

Google has just ratcheted up its campaign to pressure Apple to support the RCS messaging standard in order to massively improve interoperability between Apple's iMessenger and Google's Android Messenger app. I already commented on the topic in January.

The new #GetTheMessage effort says "[i]t's time for Apple to fix texting." Well, it would also be time for Google to fix a number of things--some of which it has in common with Apple. "Goopple" is the mobile ecosystem duopoly, if not a cartelopoly. Apple is more radical and outspoken about its walled-garden approach, while Google isn't truly open in all respects: sometimes it's fauxpen.

One high-profile supporter whose #GetTheMessage tweet I noticed is Qualcomm CEO Cristiano Amon:

At @Qualcomm, we believe interoperability is a basic requirement of the telecom industry, creating better experiences for you — and better overall communications. Everyone should have great messaging, regardless of the device they use. #GetTheMessage https://t.co/Kgw1jEDjtC

— Cristiano R. Amon (@cristianoamon) August 9, 2022

This is just the latest in a series of public statements by Qualcomm executives disagreeing with Apple, which is for now--and possibly for several more years to come if they don't get their own baseband chipset act together--a large Qualcomm customer. Apple and Qualcomm are particularly at loggerheads over standard-essential patent (SEP) royalties. SEP license fees should not be an issue for Apple in the #GetTheMessage context, however: Google proposes using the RCS standard, which is apparently too old to be covered by valid patents.

John Gruber of Daring Fireball, who agrees with Apple most but not 100% of the time, notes that what Google is proposing isn't just the open standard, but also end-to-end encryption, which Google added on top of it. This is an interesting observation, but in the greater scheme of things it's of--at best--tertiary relevance. Google is still right in principle that it's important for society to ensure seamless messaging across major mobile platforms. And I can't believe it's a coincidence that Apple uses an inferior contrast (white on light green vs. white on medium blue) for messages that are not sent by and delivered via iMessage. That is one issue, and there are more important ones.

Should Apple just consider RCS suboptimal (and there may be valid reasons for that), it would obviously be free to propose that Apple and Google form a working group, possibly invite other industry players, and develop a superior alternative. But it's easy to see that RCS would be (a) better than the status quo, which forces low-income family to buy iPhones--instead of cheaper and functionally also very good--Android devices for their kids due to classism, and (b) more than good enough for the start.

It's a U.S.-specific issue because of Apple's market share. The problem may, however, be solved in other jurisdictions (particularly the EU with its Digital Markets Act) before anything happens in the States.

In some communication between the two parts of the Goopple duopoly, someone even suggested that Apple and Google should operate as if they were one company. In some respects they come close to that, but not in all. It's not like Apple's heavy-handedness is great for Google; it's just that Google is trying to mitigate the damage, such as by paying Apple something like $15 billion a year to be the default search engine on iOS. I consider it a positive by-product of Google's #GetTheMessage campaign that their disagreement over messenger interoperability may also lead to greater divergence on app store governance and related topics. That's not because I mean to promote conflict, but because nobody can seriously want an Apple-Google cartel. In these special circumstances, division is a good thing (up to a certain point, and not at the expense of interoperability).

The first question is whether this is going to make a difference. John Gruber says Google is beating the RCS dead horse. Granted, Google's campaign appears desperate. In the end it's about selling Android phones in the U.S. market. Google knows that Android as an operating system, and Android-based devices (such as foldables), often introduce innovative features a while before Apple does, yet Apple keeps growing its U.S. market share. That is a legitimate concern. It indicates a market failure that should be remedied.

But will Apple care about whether the #GetTheMessage hash tag is trending somewhere? The problem is that it will be hard for Google to draw attention to the issue after this news cycle is over. The only thing that would help here is regulatory scrutiny and/or private antitrust litigation (which might have to raise an essential facility question, which would not only be hard to prevail on as the concept hasn't been recognized by the Supreme Court but would also be against Google's own interests in other tech law contexts). While not likely to happen, that course of action would generate news at various procedural junctures and culminate in a trial where the plaintiffs' (whoever they might be) lawyers could grill Apple executives and confront them with issues such as classism.

Apple is already facing a publicity campaign by Meta (Facebook) in the U.S. over app tracking:

Apple and Meta arguing the privacy/utility tradeoff through opposing billboards in Los Angeles pic.twitter.com/chXGoxJEjL

— Eric Seufert (@eric_seufert) July 15, 2022

It's interesting to see the #1 search engine company and the #1 social network company spending money on such campaigns that deal with some of Apple's practices. But so far there hasn't been enough pressure to force Apple to open up.

Will Apple's shareholders care? It's hard to imagine that the board of directors would order the company's executives to do something about messenger interoperability. If Google's campaign makes an impact, it may, however, make it easier for Tim Cook to get his board to support a decision in favor of enhanced interoperability--but there's no reason to assume right now that he even wants to propose such a move.

One thing that Apple may have to consider with a view to the long haul is that it's becoming more and more controversial--not yet to the extent that it influences purchasing decisions, but at some point that may happen. In a recent post on app store class actions in various jurisdictions I mentioned that it would be like a modern-day pillory for Apple if they had to pay out money to iPhone users as a result of a court of law finding that they illegally overcharged their customers. The combination of losing one or more consumer class action lawsuits, Google's #GetTheMessage campaign, and further (ideally even more aggressive) resistance by Meta and others to Apple's ATT program (see this recent post on macroeconomic effects)--and maybe if Epic Games ultimately turned things around and won its case--could materially affect Apple's reputation even in the eyes of end users.

So, while I'm not fully convinced, I support #GetTheMessage because it's a good thing in principle. Please do so as well.

Share|

Google's call on Apple to support the RCS messaging standard is consistent with what an EU commissioner already wanted 11 years ago: the EU's unfinished interoperability business

I may not always agree with The Verge on Apple-related issues, but I have no problem acknowledging that they've been right all along to ask Apple when iMessage would finally support the RCS messaging standard in order to achieve interoperability with other messengers. Now that Google's Android chief Hiroshi Lockheimer publicly called on Apple to do so, there is at least some hope for change.

While the iMessage lock-in problem and the social pressures it exerts on low-income families has been discussed on the Internet for some time (see this Septemer 2020 thread on Hacker News, which contains pretty good explanations of how it works), it took a recent Wall Street Journal article to draw the attention of influential people to that problem. It also came up during the Epic Games v. Apple trial, with Apple-internal communications revealing a lock-in strategy.

When I ditched my iPhone last summer, I knew (not least thanks to the public debate surrounding Epic v. Apple) that one can switch off iMessage, which I did about a week before making my Google Pixel my primary phone. It was a non-issue since I primarily use WhatsApp and Signal. Then I'm not a teenager in the United States. The problem is real, and I do feel sorry for low-income families impacted by it. However, let's be clear that Apple's "culpability" in this context is merely a refusal to be interoperable. No one can reasonably expect them to provide an iMessage app on Android, but I agree with Google that supporting RCS would be the morally right thing to do.

It's hard to predict whether naming and shaming will change Apple's mind. It would actually be out of character for Apple to bow to that kind of pressure. The sole exception to date is that Facebook succeeded in getting Apple to support a small business initiative. But there was a lot less money at stake for Apple in that context. It was inexpensive to come across as generous. Not so this time around. The U.S. market may be well beyond a tipping point, and Apple--not because of superior quality (I'm even happier with my Pixel--relatively speaking, a bargain--than I ever was with an iPhone) but the most extreme "walled garden" strategy. Apple can continue to gain U.S. market share at Android's expense, and presumably that's a major part of the reason why Mr. Lockheimer speaks out (though I don't mean to doubt that he--like me--believes low-income families should have more affordable choices).

Assuming that Apple remains adamant about its iMessage lock-in strategy (which works only in the U.S., but that's the key market), what's next?

This debate immediately reminded me of a policy-making initiative by an EU commissioner many people in tech industry circles remember all too well: "Steelie Neelie" Kroes, famous for playing hardball with Microsoft while she was competition commissioner. In 2010, when she was put in charge of the EU's Digital Agenda, Mrs. Kroes rightly considered interoperability a top priority. Here's what she told Euractiv in a June 2010 interview:

In response to a question mentioning the iPhone:

"Today we are facing a shift from the PC era to an era where mobile devices with always-on Internet connectivity are becoming widespread. In this new and innovative market, interoperability is especially important."

In response to a question about interoperability being a Digital Agenda priority:

"This is not just about Microsoft or any big company like Apple, IBM or Intel. The main challenge is that consumers need choice when it comes to software or hardware products. Any kind of IT product should be able to communicate with any type of service in the future.

"Interoperability of equipment used, of services provided and of data exchanged promotes an increase in user confidence, value and choice. It also promotes acceptance, success and take-up of new technologies and thus competition among providers. It empowers the user to make the best choice in terms of value for money and suitability without being locked-in to one specific company or brand.

"Open standards are therefore vital to deploy interoperability between data, devices, services and networks. Internet is the best example of the power of interoperability. Its open architecture has given billions of people around the world access to devices and applications which talk to one another."

(emphases added)

Almost 11 years later, Apple's refusal to interoperate shows that it would have been good to mandate interoperability through legislation. There was no legislative initiative at the time, and the iMessage lock-in is a problem only for U.S.--and not for EU--consumers. Lawmakers on all continents would have valid reasons to take action, in a principled fashion as opposed to singling out a particular company. Neelie Kroes identified the problem (lock-in) and the solution (interoperability) more than a decade ago. The iMessage lock-in is just one of many issues in the tech sector that could be fixed that way.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|