Google Android: The Accidental Empire
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nikcub.appspot.com
Google often get slagged for the unfocused, perpetual beta thing. But laser focus is overrated. For example, given the choice of only picking Chrome OS or Android, a laser focused Google would have never gone Android. Overall I think it is much better to admit the future is unknown, and be prepared (especially for a large company with Google-sized resources).
Android is the new Nokia. Lots of worthless Market share, Zero profit.
EDIT: I realize i'm going to be down voted for this. But if you don't think it's true, you're delusional.
I still find unbelievable they can make that much money just with ads – I do believe they do, it just befuddles me – on a phone it's even harder to display them and in fact you don't see as many in the mobile web, are we really sure that Android is profitable? Maybe it's not yet and they're still trying to find the business model for it. Maybe it will never directly be, it will just serve as measure to not be excluded from the mobile world and keep competitors (not derogatory) from eating into Google.
I do as well, and wish there were more research available on internet advertising. I'm sure a few companies at the top of the pyramid make money, but everyone else (IMNSHO) is taking money out of their left pocket and putting it into their right pocket (A buys ads on B, B buys ads on C, [...] Z buys ads on A; in the end, a zero-sum game).
I'm sure we'll be shouted down, but you're not alone in your opinion.
Have you actually looked? It's one of the most actively researched fields in the world at the moment.
Try http://www.iab.net/insights_research to start.
I'm sure a few companies at the top of the pyramid make money
This is absolutely, completely untrue. One of the reasons internet advertising is so popular is because its effectiveness can be proven - advertising companies can show how people exposed to ads buy at a higher rate. The improvement in rate can be calculated exactly, which shows the advertiser exactly how much they should spend.
Take a look at http://www.aimia.com.au/enews/IAB/IAB%20Retail%20Study%20-%2... (skip to roughly half way thorough).
There they promoted a new product in one market exclusively online, and did no promotion in the other market. Sales in the promoted market were 11% higher than the control.
Don't believe it? Try it yourself - I wanted to understand it better, so signed up for an affiliate account and did some Facebook advertising. It worked quite well - I was able to make around $15 for every $1 spent (obviously this was a very specific market segment).
http://www.iab.net/about_the_iab
"The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies that are responsible for selling 86% of online advertising in the United States."
Aside from anecdotal evidence (your returns of 15:1) I haven't found any long-term studies done by independent researchers that prove internet advertising is any more effective than other forms of advertising, if it's effective at all. The only real accomplishment internet advertisers can lay claim to is training the general population to never even glance at the left / right / top / bottom navs on a page.
In general, the poll results and comments in another recent thread on HN on ad blockers (http://news.ycombinator.com/item?id=3324709) seem to support my theories about how ineffective internet advertising is. I'd be interested in seeing some untainted long-term research on this subject.
iOS is the place where people like 37Signals can thrive. Android is the place where people like Facebook can thrive.
They've got a market of millions of people who don't buy anything, but click ads occasionally. Android should team up with AdBusters because on the Marketplace everyday is buy nothing day.
http://tech.fortune.cnn.com/2011/11/21/piper-jaffray-android...
They explicitly compare their estimate of 6.5 billion Android downloads with 18.5 billion iOS downloads. Free downloads are included in both cases (but the Android estimate is way, way out)
(Edit: To make it doubly clear, I'm implying that their estimate of revenue share shouldn't be trusted either)
In the business of selling apps I'd much rather I went to market underestimating the size of the market than overestimating it. To me, one more download is one more client to support with no revenue upon which to service it. I guess if I developed for the Marketplace I could have 40% more freeloaders than anticipated. Awesome, just what I needed, more expenses and the same rev.
I'm not in the business of cheerleading mobile operating systems, I'm in the business of selling stuff. (To be fair, I do cheerlead Apple because people can't buy my stuff on Android, perhaps the market is changing and I'll have to adapt, but once my stuff is available on both platforms, I really wouldn't care what people use)
I'll be ecstatic when the marketplace is at a billion a year but I think that's a bit off at this point. App Store vs. Marketplace is like Google vs. Bing for traffic, if you're a huge site you'll see 15% of your traffic from bing, but if you're a smaller player you'll see 99% from Google. Likewise when doing SEO work I don't care about bing because it doesn't drive traffic for me like Google does. On the other hand I use Bing for SEM because it has cheaper CPCs with a better conversion rate.
There are a couple of platform zealot prats rambling on with their standard, dated anti-Android nonsense in here. It is disheartening that they haven't been carpet bombed into the hellban so many voices of reason end of enduring.
I'm seriously considering picking up some android kit after reading more about how the marketplace works now.
Do you think it would be worth it to just focus on ICS at this point?
On iOS I just support the latest. (I figure users with the older versions can stay on them til they upgrade and it reduces support issues drastically)
1) Apple switches to another search provider, in which case iPhones will have a functional and brand disadvantage as Google Search is both good and a synonym for searching on the web
2) Apple does not switch to another search provider, in which case mobile searches are dominated by Google, as iOS and Android represents a majority
3) Android ends up on 90% of all smartphones, like Windows, making whatever Apple does irrelevant, even if Apple continues to enjoy the highest margins in the industry
You're clearly not seeing the forest from the trees.
Every user having their searches funneled through your search engine. Tight integration with your e-mail service, your video sharing service and your VOIP service. Much, much more.
Millions of people conducting their lives through your product is definitely not 'worthless'.
iOS currently has all of that except the VOIP, FWIW.
If your theory is correct and Android has simply replaced Nokia, it's making a good amount of money for someone. (Unless $1B == 0 in your world.)
Android is clearly a goldmine. The goldmine is the incremental search revenue Google gets from controlling the Android platform. Why do you think the search volume on mobile is a hockey stick at Google? Literally every single android device has a dedicated search button on it; iOS devices do not. Which device do you think has higher searches per user? The incremental search volume (and search ad revenue) is enough to justify the entire Android investment.
More importantly, without Android, Apple had the ability to lock out Google from mobile search by changing the default search provider to non-Google. The lost revenue if Apple changes its mind and Google is locked out of mobile search? There's your 2nd goldmine.
The argument that Android is not a money maker is like the argument that Gillette selling razors below cost is bad idea. At the end of the day both Gillette and Google make a tons of money off selling something that isn't exactly the main product, but is peripheral to it. In Gillette's case it's razor blades, in Google's it's search.
I could take a guess.
"Google Exec Testifies Before Senate That Two-Thirds of Mobile Search Happens on iOS Devices"
http://9to5mac.com/2011/09/21/google-23rds-of-our-mobile-sea...
When Android got #1 market share the Apple fanboys decided that direct profit is the only number that matters.
And that makes Android's success even more amazing.
Worthless market share? Zero profit? Such emotionally-driven hubris has no place on HN.
Android makes Google $2.5B/yr (that's a run rate, up from $1B this time last year). Google's total run-rate is about $35B by comparison.
Given that it's in land-grab mode, I imagine they are re-investing like crazy in Android-- they realize that the dominant smartphone operating system has a lot of market power. As an example, Microsoft makes more on Office/Server stuff than they do on Windows.
tl;dr Comparing a dominant operating system (Android to a hardware company that grudgingly made software (Nokia) isn't really valid.
Android the company was built to sell to a larger company. The acquisition could be attributed to the shrewdness of Android's sales pitch to Google.
Real cost of Android =
Android acquisition price +
Motorola acquisition price ($12.5 Billion) +
Lawsuits
Android has been successful already, even without that.
Lawsuits
Only Oracle has sued Google over Android, and the outcome of that is far from settled.
Android enjoyed a 2.5x growth rate in revenue over the last year. If that continues for a few years, your formula will seem pretty cheap.
On the motorola acquisition, it's fairly hard to calculate what it saved Google. Will the patent portfolio they picked up save them billions in settlements/legal costs? Quite possibly.
They did not report mobile quarterly figures or costs and profits.
But. we can extrapolate:
$2.5 Billion annualized == $625 million quarterly mobile revenue.
Elsewhere in the earnings report:
$10 Billion total quarterly revenue
One of the costs broken out was TAC (Traffic Acquisition Costs,) -- these were $.25 for each $1 of revenue.
Assuming that TAC costs are consistent across mobile and non-mobile that means:
quarterly mobile revenue - TAC == $470 million
ANAICT, Gross margins were 40% of revenue - TAC
quarterly gross mobile profit == $188 million
No figures were given, so let's assume that 50% of mobile comes from Android phones (50 % from iPhones and all other smart phones)
quarterly gross mobile profit from Android == $94 million
No direct expenses/costs were given for mobile, Android development, etc.
If we assume Google has 10 people on the Android team @ $100,000 each, per year (Pay, office, equipment, benefits, etc.) or $.25 million per quarter
That would leave:
Android quarterly profit before taxes == $93.75 million
Obviously, these are just SWAG estimates (and I hope my math and logic are correct) -- but they are an attempt to put in context the headline of this article"
---------
Google announces $2.5 billion in mobile revenue/run rate == $93.75 million Android quarterly profit after taxes (30%)
$93.75 Million quarterly profits from Android is peanuts. Apple earns more selling smart covers.
First of all, you're not counting growth. Smartphones sales have been up 74% in Q2 2011 since the same quarter last year, while PC sales have had only a 2% growth. The smartphones market is about to explode.
Also, as I said in another message - because Androids do have a good share of the market, if Apple switches to another search provider, they'll be technically and from a brand perspective at a disadvantage (people say google it for a reason). Because of Android, Apple simply cannot create customer expectations in terms of the search engine used, like they did with other issues (e.g. Flash), quite the contrary I've seen people bitch about the lack of proper integration with other Google products.
And you know, Apple was thinking about switching to Bing. They haven't. You should really be adding the search traffic Google makes from iOS too ;)
Because that's what Android is about: control / keeping the competition focused on anything else but Google's Search. Quite a genius move if you ask me.
Like iOS device, it's also creating an ecosystem of devices/service. How many people now have gmail accounts, and are searching through google then before they had Android devices?
Google hopefully understands (don't see any indication they don't) that they are getting a channel to market directly to users as well as obtain new users. This system gives them a platform to directly compete in a variety of media markets, now as a content provider in addition to their ad model.
Google wants to create a platform that will dominate all mobile devices for years to come. Cell phones (and, more recently, tablets) are just one aspect of that. They want a standard OS for any small-scale device. In their vision of the future, your coffee maker, refrigerator, and laundry machine may all use an Android-based platform.
This is one of the reasons why they are perfectly happy with Android being used for cheap smartphones which are really just amped-up feature phones. They don't want to be seen as elitist, the way that Apple tries to market itself as high-end. They want to have high-end products, sure, but it's equally important to them that they cover the range of that spectrum.
I don't know if they had exactly this in mind when acquiring Android, but by now, it seems clear to me that this is their goal.
Judging by Android users I see around me, not a single one.
Apple has that pesky hardware business eating at the margins. They are a very, very efficient manufacturer, but hardware margins are always less than software (especially search, which might be the most profitable business ever in terms of margin).
(Also, don't forget Google makes a huge amount off mobile search on iOS devices).
Google's profit margin is 26.7%[1] which includes all the money the spend on non-revenue generating engineering like Chrome, ChromeOS, etc etc.
Apple's profit margin is 23.95%[2], and they have very few non-revenue generating activities.
Google makes $5-$10 per Android phone, maybe 10% of what it's partners make. That's about the same amount as Microsoft makes off each Android phone and is perhaps 1/50th of what Apple makes off each iphone.
Even worse it turns out that the half empty gold mine is on public land and any crazy old coot can waltz in and start mining themselves:
Android won their "empire" by being the only credible licensed iphone clone in 2009. The real question is whether this empire is going to be of the Han/Roman/Windows variety as so many commentators assume or will it be a short lived dynasty like the Qin/Napoleonic/Netscape variety.
I'll put my money on a Three Kingdoms scenario playing out. Why do I think WP 7 has a ghost of a chance when everyone's done nothing but dismiss them? Let's review:
Android phones started shipping in Fall 08. However they really didn't have any traction until Fall 09 when Verizon started pushing the Droid. And it wasn't until Froyo phones shipped en masse in Summer 2010 where Android started to dominate carrier shops.
In the same way WP7 launched buggy, incomplete and lackluster in late 2010. It had no traction for it's first 3 quarters. Lately though we've seen a mature OS update released on a 2nd generation of phones that were designed for it.
More importantly Microsoft has made no secret of it's desire to buy market share with retail subsidies. And it will certainly be buying this market share at Android's expense. How much they're willing to lose buying this market share isn't clear but if it's anything like the money they've plowed into Bing that's a lot.
Also, you're neglecting to account for the money they're making from the Android market: apps, movies, books, etc.
They also have an ad business which gets to safely live on the most popular smartphone OS without real risk of it being shut down for competitive reasons.
They have a massive lever with which to move other projects as well. They have millions of users of their maps program on mobile, for example. They get voice search data. They get people doing searches. They get many more Gmail subscribers. Soon those millions will be nudged toward using G+ because it comes on their phone and offers some nice benefits.
As for whether or not Android is here to stay, there's a measure of user lock-in just like there is with the iPhone. You already have your applications and media that you have paid for.
And according to most everyone, their latest version of the OS is a marked step forward, bringing Android's weak points up close to parity with iOS while continuing to build upon the relative strengths that have been there for the past few major releases.
Microsoft may gain traction with their phone and ecosystem, but I'm not sure why that's any reason to forecast that Android will go the way of Netscape.
I work for TomTom who's been battling for years to collect GPS probes so that they could provide the best HD traffic.
Google recently announced their Traffic layer which magically offered almost similar quality with full world-wide coverage all made possible by their thousands and thousands of free Android GPS probes.
Just a small reminder that there might be more hidden benefits of Android.
Exactly. They set themselves up so they could quickly react to disruptive change in the smartphone market. The iPhone happened to be what came along.
Most people don't understand what an impressive accomplishment this is. Let's look at how long it took for some other smartphone competitors to release their response to the iPhone:
Palm took two years (and started over from the ground up). Microsoft took three years (and still doesn't have traction). Nokia took took four years (and then threw it away). RIM still isn't there yet (next year?).
And Google? They took one year. They clearly were doing something right.
BTW, props for remembering Danger. So many people don't in these discussions and (for someone who was working with smartphones back then) it is incredibly frustrating.
> And Google? They took one year. They clearly were doing
> something right.
On the surface, that's both astounding and completely unexpected.
Google put itself into that position by being a neutral 3rd party that manufacturers could trust coupled with a realisation that most phone manufacturers were great at hardware but terrible at software.
The outcome is that the companies who didn't see software as their competency and were willing to drop their OSes (Samsung, Motorola, HTC) have reaped the benefits while companies whose strengths were based around their software being slightly better than their competitors (RIM, Nokia) have fallen behind.
Yes and no: they have a similar marketshare, but Microsoft had marketshare and money. Google only has the marketshare (and in a limited fashion at that, since implementors "improve the experience" pretty drastically) and get little to no money out of it (likewise for a number of their implementors, too).
And implementors are anything but locked in, as Android holds little software primacy. It does have a lively store, catching onto iOS's, but Android is not "essential", and so far I've not seen any critical software running on android and android only. This means with a little business acumen and some software investment (note that they usually fail at both, but...) most Android implementors can get away from Android pretty fast. And in fact most seem to keep hedging their bets (apart from Moto anyway), either by having WP handsets as well (HTC) or by keeping a ready and used "internal" OS (Samsung's bada)
While I think Larry Page's new focus on focus is great, and I think most of their products are getting better because of it, I do get a bit scared that it comes at the cost of the explorative nature of the company in its youth.
Android is just Google's tool to serve users ads. Nothing more.
The thing is, they rigorously weed out non-working ideas and use the time and energy saved to apply extra polish to the working ones.
The result is products that are just about as close to perfect as it is possible to be in an imperfect world.
I see nothing like this sort of selection pressure going on at Google; accordingly, shoddy architectures like Android not only make the cut, but go on to be Really Big Things if they're good enough to accumulate network effects. Kinda like Windows and Office.
To explain: Apple generally tends to be happy making more expensive, premium products that command a smaller section of the market. They're happy to sacrifice greater market potential to do so- like not allowing carrier customisations, making multiple models, etc. They've compromised this somewhat for the iPhone (they clearly didn't want to have carrier-subsidised handsets originally, for example) but it has worked out for them in a huge way. Still- historically, the ubiquity of the iPhone is in some ways atypical for Apple.
Nokia, on the other hand, has always been more than happy to play ball with the carriers. They should be where Android is now- the ecosystem with a ton of different phone models, carrier-bundled apps, cheap phones and a huge market share. If they had played their cards right Google might still be relegated to teaming up with Apple on mobile. But Nokia left the market wide open- Apple compromised a little to move into the space but Google saw the gap and went for it 100%.
In contrast, Nokia's featured phones with Symbian on them are great for their cost, but they do feel cheap. And an expensive smartphone with Symbian on it still feels cheap.
I don't think that Android's success is
relative to the iPhone
Like in a bad movie when an old dude sitting on its porch says "a storm is coming" ... carriers and phone makers began freaking out and saw in Android THE alternative. It is a good alternative. And while Apple may have a huge network of stores, it cannot compete with the distribution network of multiple vendors.
(EDIT: rephrased the last paragraph)
Oh, sure. But my point was that Android being THE alternative was a failing of Nokia and Blackberry over anything else.
I think that's an astute point. I wanted an iPhone but was on Verizon. So I eagerly snatched up the Droid, a phone that was actually better in many ways than the iPhone of the time. There must have been hundreds of thousands like me.
Apple seemed quite happy to have 70% share or whatever it was with iPods. They've also offered cheaper models whenever they needed to to try and address more of the market -- for example, the iPod Shuffle, or the free-with-contract iPhone 3GS. The Apple TV certainly wasn't priced only to appeal to the high-end market.
I think the article makes quite clear that it is primarily Nokia and RIM that have been devastated, but I don't think it's all inappropriate to look at the way Android has been successful at pulling share away from these companies as something that they have done better at (from a market share standpoint) than Apple.
It's more that they didn't want the damage to their core brand caused by the measures needed to gain that market share.
You will never gain majority market share with a premium device in a market that is essentially "everyone". (Obvious exception is if there is no premium price tag associated with it, but not the case for the iPhone, at least here) There will always be a huge number that go for the budget device. Releasing a budget device will cause a large number of people to judge your product and your brand by that device. How many people judge Android by devices such as the Xperia X8 or Wildfire S? These phones are budget phones compared to the heavyweights like the Xperia Play, and for the manufacturers to be profitable with these budget phones, serious compromises had to be made. Because of this, many people associate Android with the laggy, low res, constantly running out of memory experience of these phones rather than the phones that are actually trying to compete with the iPhone head on, like the Galaxy Nexus. Not something you want to do if your entire brand is based around being a premium item.
Not to mention that if you release a budget item, it is going to take some sales from the premium version as some users settle for "good enough". The continued sales of the 3GS are actually a good example of this. At least that has the stigma of being old at this stage, but if Apple released a new budget device and a new phone in the vein of current iPhones every year, how would that affect the sales of the (more profitable) traditional iPhone?
Of course, the reason it made sense for Google to do so is that they didn't have the expectation from their customers of being a best of brand, premium item. This meant that they couldn't really break straight into the high end market easily, but it also meant they didn't have a reputation to uphold. If the iPhone 5 was a usability disaster, I'd imagine that'd make Apple's customers more skeptical of future Mac purchases for example. A bad Android phone won't hurt Gmail on the other hand. Indeed, customers might blame it on the manufacturer, and still buy a Android phone as their next phone. On top of that, the budget end of the market is a lot more flexible (what's cheapest this week?) than the winner take all nature of many high end markets (This is a lot of money. What do other people already own?), so when you're later to the game, I'd imagine that end of the market is easier to break into.
What makes Google appear unfocused is their long time thinking, they don't care if something integrates in another product only 5 years later. I bet the Google Car and Google Maps integration will be perfect and they also create 3D models of their environment what fits in Google Earth.
Coincidence? I don't think so, these 3 incredible smart guys have all day to think about that.
I think that Android's success is due to its business model, not the quality of the software itself. The Android team should take care to not become the next Netscape.
1) distribution agreements and good relationships with hardware makers trumps quality - that's how they've beaten Apple and IBM (OS/2 Warp, launched in 1994 was better than Windows 95 and compatible with DOS and Win 16)
2) worse is better, a lesson they themselves took from Unix - timing is more important, you can always improve later
3) operating systems are natural monopolies - if you win the market of low-end PCs and keep growing, you'll eventually take over the whole market
If anything, I fear Google is the next Microsoft. I hope not because I love Android.
Did any of them take that option? The first thing I do when I get a new Android phone is to re-image it with what Google provides. Samsung and HTC have shown that all the hardware makers can do is write crap software to replace the working software they got for free. And then never ever even think about updating it or fixing the bugs.
the exclusivity deal allowed android to gain a foothold, but i don't see android as a competitor to iphone, just an alternative. people who buy android phones are people who don't want an iPhone and probably wouldn't have bought one anyways.
I also happen to be someone who influences my friends and family on technology. When Android turned out to be a great experience, I told other people. Now my mom, sister, sister's boyfriend, both brothers-in-law and their wives, and my mother-in-law are all Android users.
Every single one of those people would have purchased an iPhone if Android wasn't around.
FD: Until a couple of weeks ago I owned no Apple products except a very old ipod nano someone gave me years ago. I'm no fan of Apple, but it seems unrealistic to second-guess the success they had for the last decade.
Granted, that's a generalization. But it makes the point.
As far as making money is concerned I don't see the reason why? Android has a good market-share, a good marketplace, and it even allows for in-app purchases. What's stopping them from making money here?
Granted, that's a generalization. But it makes the point.
And Google has done it's share of things; claiming to be for net neutrality but not really being when they saw a way to profit, claiming to pull out of China on "moral grounds" but not actually doing so until they got hacked, the lock-in-raise-price strategy of their for-pay platform, etc. The motto is meaningless, it's only there to sucker people and it's pretty embarrassing that it works.
Google didn't do much to the newspaper and media industry.
They mostly screwed themselves, with some help from competitors like Craigslist in their profit centers like classifieds.
Much of the IP Google does have is kept server side, safe from competitors.
But the legal issues are real, and I imagine many of the downrates of my previous comment was of either google developers or people within that eco-system.
Why did Microsoft take so long to make Windows Phone, and why does it legally appear safe? And how is that related to Android?
But don't get me wrong, I love Google for search and web apps, just not operating systems that, to at least me, seem slightly trojan in nature.
If your product contains software, then chances are that it infringes on many patents.
But sure, let's talk about how Eric Schmidt was the Apple board during the development of the iPhone. That is fascinating. How could that not have influenced the only competition to the iPhone. That seems suspicious to me, as no other company besides Google anticipated it.
So let's talk about the design similarities between Android and iPhone.
These topics are fascinating.
So Microsoft, Apple, and Oracle are all claiming that Android violates their products, while Google, before this, had no patents regarding OS. That is also fascinating.
The only reason why Android is 'open source' is to make it more difficult for litigation. And I don't think a company that develop's open source should be able to place ads on it, as to me, that is still 'selling' the software.
Free speech, not free beer. http://en.wikipedia.org/wiki/Gratis_versus_libre
From: http://www.apache.org/licenses/LICENSE-2.0.html
"9. Accepting Warranty or Additional Liability. While redistributing the Work or Derivative Works thereof, You may choose to offer, and charge a fee for, acceptance of support, warranty, indemnity, or other liability obligations and/or rights consistent with this License. However, in accepting such obligations, You may act only on Your own behalf and on Your sole responsibility, not on behalf of any other Contributor, and only if You agree to indemnify, defend, and hold each Contributor harmless for any liability incurred by, or claims asserted against, such Contributor by reason of your accepting any such warranty or additional liability."
So someone please help explain how this is possible:
From Reuters Nov 9, 2011:
"Google Inc will continue to offer support to firms using its Android system that are involved in legal disputes, its executive chairman Eric Schmidt said on Wednesday, as the Internet giant looks to cement alliances in the face of toughening competition."
The way I am reading the Apache license says that Google should not be giving support to OEMs? Am I reading this part wrong? "However, in accepting such obligations, You may act only on Your own behalf and on Your sole responsibility, not on behalf of any other Contributor" I'm not the best at reading law, so I would love some insight.
Edit to add Reuters link: http://us.mobile.reuters.com/article/technologyNews/idUSTRE7...
Google owns the copyright on Android, so the Apache License has no relevance to their activities. Licenses are a way of limiting the restrictions levied by copyright law; they give you more freedom than you would otherwise have. If you otherwise have more freedom than a license grants because you are not bound by copyright law, you ignore the license. It's meaningless.
I haven't contributed any code to the Apache-licensed parts of Android, but I assume that you assign copyright to Google when you push your code. That means that Google continues to own the copyright on the whole codebase, and you have copyright on your contributions.
Thanks for that. I'm still trying to fully understand the full spectrum of open source law, code, and the many variations. http://en.wikipedia.org/wiki/Apache_License http://www.apache.org/licenses/LICENSE-2.0.html
Compare this to Exchange, which is its own system with a special client and special server. Good luck using offlineimap to sync your Exchange inbox.
But sure, let's talk about how Eric Schmidt was the Apple board during the development of the iPhone.
When Eric Schmidt was on Apple's board, he did not attend any meetings related to the iPhone, and then eventually resigned. He also got Android through buying an outside company, which did not sit on Apple's board.
So let's talk about the design similarities between Android and iPhone.
You press a picture of the phone when you want to make a phone call, and then your voice is transmitted over the cellular phone network to the person you're talking to? Icons are pictures of things? You can send and receive text messages and email from the phones?
Ultimately, any phone is going to be very similar to any other phone, because they are both phones.
And I don't think a company that develop's open source should be able to place ads on it, as to me, that is still 'selling' the software.
Interesting thought. When you write your own open source software, don't put any ads on it.
But it's worth pointing out that Google doesn't put ads in Android. Some providers even switch the search engine that Android uses from Google to Bing. The point of open source is freedom; if someone wants to make money with it, you can just delete that part. And people have done that with Android.