Google Makes over $92B per Year by Owning Android | Hacker News Reader

Google Makes over $92B per Year by Owning Android

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118 points4realz105 comments

This is some bizarre outrage clickbait

There's a lot of problems with android and a whole lot of things that can be levelled at Google for the shit they pull with it but the three points the article cites seem absolutely pathetic

"Google charges for Google Apps!"

Other vendors such as Amazon, Samsung and Microsoft happily ship their own app stores and competing app sets. Google develops these apps in-house and phone users expect to be able to use them. They aren't making money on hardware like Apple (unless you buy a Pixel device) so they have to make money somewhere.

Also at least unlike on iPhones you can say, change out what browser you're using (Firefox and others on IOS still use Safari under the hood)

"Google gets money from their app store!"

So does every app maker. Next

"Google makes money from Google products and advertising!"

Okay? That's...what they've always done. People want to use those apps and services, from Gmail to Maps. There's nothing directly insidious about that. If you want to use Bing Maps you can, or DuckDuckGo for search, or Proton for email. None of these functions are compulsory just because you use android

> "Google gets money from their app store!" So does every app maker. Next

Not the same thing. By owning the Play Store Google gets a cut of every app, not just the ones they make.

> In 2021, the Play Store generated $38.8 billion in revenue, and by 2025, experts predict Google Play Store will make $64 billion annually.

This is why Meta was so big into VR/AR, they wanted to own a (hardware) platform since they don't but rather make apps on others' (Google, Apple, MS).

Isn't that the same as every other marketplace though? The mall, Amazon, Steam, you name it.

The comment I was replying to said "So does every app maker" rather than "platform owner".

[I also added "(hardware)" to my original comment.]

Yeah that was my bad. I meant platform owners

Don't write an angry reply before your morning coffee everyone!

Steam takes a cut of the sales price and a cut of microtransactions done through the Steam wallet. But they don't force developers to use the Steam wallet. I wouldn't be surprised if that last point is what will ultimately matter.

I don't know how this argument can hold? Malls charge their tenant stores a fee to lease space. Why shouldn't app stores?

I use an application that supports plugins from 3P developers. The number of times some script is broken because a certain developer fat fingered their own config drives me mad. Whereas the experience of downloading apps from the Play Store is seamless.

You can easily avoid malls. Try to avoid default app stores.

You don't expect to be locked in a mall when buying a computer device.

The problem is with "rent seeking" where the amount taken is not related to service provided but rather ownership of the platform. If Google only collected for the Play Service usage that would be one thing, but they can also take a cut of ongoing subscriptions. You could also argue that updates are also provided as a service, but the amounts collected aren't in line with the service that's provided.

One way to ensure equity of service/fee is to have competition. There is no reasonable Play Store competitor for Android.

I understand why you are using the words "rent seeking", but that's a defined term with a meaning which differs from what you're trying to describe: https://en.wikipedia.org/wiki/Rent-seeking

>"Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth.[1] Rent-seeking activities have negative effects on the rest of society. They result in reduced economic efficiency through misallocation of resources, reduced wealth creation, lost government revenue, heightened income inequality,[2][3] risk of growing political bribery, and potential national decline. "

But Google actually is rent seeking by the economic description. The poster is just accusing google of a 'lesser charge' by misunderstanding the concept, they should fix their accusation of what Google is doing not change the term.

Charging for access to your products, or taking a cut for sales which take place in your 'virtual store' does not involve any social or political manipulation.

Yes right, I was primarily referring to the economic part of the term.

There is also ongoing effort of platform owners to maintain their position which does fulfill the other part of the definition.

> I don't know how this argument can hold? Malls charge their tenant stores a fee to lease space. Why shouldn't app stores?

Most of us don't object to Google charging a fee for each app sale (although I still think 30% is exorbitant). But they charge a fee for every transaction the app charges and I think that's absolutely obscene. The mall doesn't charge the shoe shop 30% of every pair of shoes they sell.

If they didn't charge for IAP, then every dev would go "free"+IAP, and Google/Apple would get nothing.

Which is precisely what they deserve

So they’re supposed to run all the infra and services for apps as a charity?

if they're putting up barriers to let other people do it as an alternative then yes

It has to be the same rate across app purchase and in-app transactions.

Otherwise every app will be free but charge a transaction to unlock its functionality.

And what's the excuse for Google getting a cut of every book an e-book reader sells? Or every monthly charge from a subscription based video service like Nebula?

They already charge less for those -- 10–15% rather than 30%:

https://play.google.com/console/about/programs/mediaprogram/

But the excuse is that it's their platform and they set the rules. If you don't like it, you don't have to build a business selling there.

15% for the first million of dollars annually though. That’s majority of the devs.

Is all fine and dandy the Mall analogy except that the are only 2 'Malls' in the world. Apple Store and Google Play Store. That kind of leverage has never existed before in the history of this world economy.

Is this from the parent not true?

"Other vendors such as Amazon, Samsung and Microsoft happily ship their own app stores and competing app sets"

East India Company ? Also had some rather negative effects.

Charging rent based on square footage or location and charging a 30% tax on all the transactions that happen in your mall are pretty different.

Unlike google play, malls don't prevent their visitors to buy the same goods from stores outside the malls. Google play protect is known to remove apps installed from another source (e.g. fdroid) if the app is also available from google play: https://news.ycombinator.com/item?id=37879935

>> "Google gets money from their app store!" So does every app maker. Next

>Not the same thing. By owning the Play Store Google gets a cut of every app, not just the ones they make.

It's not the same as Apple, which is famous for gouging developers taking huge cuts of their revenue from apps, and even taking huge cuts of in-app purchases.

The cut and policies are almost exactly the same though?

> So does every app maker. Next

Every major tech player is dying to attain, or retain hold on, their platform monopolies so they can leech of third party developers by controlling access to customers. All of them are guilty.

Steam shows that most customers and developers want an app store even if the platform doesn't provide or enforce one. It might as well be run by the company creating the platform, so that the profit goes to maintaining it.

That's some twisted logic when I can't use steam on my hardware.

> They aren't making money on hardware like Apple (unless you buy a Pixel device) so they have to make money somewhere.

I'm fairly sure they get a (small) cut on each hardware purchase. Sure, AOSP is free, but there aren't many AOSP-only Android phones sold. The full Android bundle isn't free.

"This is some bizarre outrage clickbait"

Isn't that what people use to cater to algorithms created by so-called "tech" companies to get more views and help sell more ad services.

Does Google make money from "bizarre outrage clickbait". Question for the reader to decide.

This ridiculous outraged tone describing how a company makes money with an open source project. If you like open source, shouldn't you be glad that companies are able to make money with it?

They pretend that "android cost money", then go on to explain that "Google Mobile Services" cost money.. but pretend that GMS is really android?

It's fake open-source. A charade. Install AOSP and see how useless the phone becomes. You'll have missing hardware drivers and no Google apps. They've also removed the messaging app and dialer from AOSP. The foundation is open-source but nearly everything in userspace is closed-source.

https://www.androidauthority.com/google-kill-android-aosp-di...

Edit- There is also no browser in AOSP, just webview, which is enough to look at the F-Droid website but not download and install F-Droid.

https://web.archive.org/web/20131225075731/http://www.unwire...

> Android 4.4+ KitKat ships without browser app. OEMs have to license Chrome or build their own

> According to Android developer and author Maximiliano Firtman, he just got official confirmation that KitKat “… doesn’t ship with any browser, just the WebView. The emulator has it but not real devices. It’s up to each vendor to create a browser app using the WebView (such as Samsung) or to get license to preinstall Chrome.”

So you have to write a replacement for the Google apps and get driver support. Sounds a hell of a lot easier than writing your entire OS from scratch.

Or not? One example is that there are more OSes than there are for example kernels.

There were (even before Android) _multiple_ Linux-based operating systems designed for PDAs and/or phones (remember GPE? Qtopia? etc), and there are (even after Android) multiple non-Android Linux-based operating systems for phones.

Frankly, evidence seems to point that Google borrowed from the community much more than they gave back.

Presumably there are open source apps you can install on top of AOSP that let you message and dial though?

Yep. I just find it funny- it's an operating system for a phone yet provides no way to use it as a phone without downloading a 3rd party app or writing your own. This would be like if a laptop came with no screen or a car came with no wheels. Just add your own! Why should you expect basic functionality!?

used to be... but android is a full fledged OS in a lot of things that are not phones (TVs, cars, streaming sticks, etc)

It's an OS for mobile devices, no mention of "phones" on the project site (https://source.android.com) and lots of Android devices don't have cell service.

Doesn't seem unreasonable to bring your own dialing and voice calling app(s) if you want a UI for punching in formatted E.164 identifiers and making PSTN calls.

It would be like if a laptop came with no ... preinstalled apps to do a bunch of things that you might want to do with a laptop.

This attitude is baffling to me. Android is clearly open source. Go build it yourself, it isn't terribly difficult.

that's how it's meant to be ... other companies that want to use android on their bespoke hardware need to write their own drivers/software/talk to their on servers anyways.

If I put AOSP on my own device and it's talking to Google folks will start complaining the other way ... "why is this in AOSP?"

AOSP has a lot of Google in it- the first thing you'll see is a big anachronistic Google search bar.

that's just the "Launcher" app AOSP comes with. most folks using AOSP (commercially) use a different launcher for their own needs

It's part of AOSP- is this it in their git tree? https://android.googlesource.com/platform/packages/apps/Laun...

yes and so is the "Settings" app. not sure i understand your point

I'm honestly surprised at the intensity with which people are going to bat for this (context: used to work on Android and generally have a dim view of the open source-ness https://news.ycombinator.com/item?id=38725926)

If I'm understanding you both right, I'd say their point is:

- it's not very open source if the only thing you can rely on is "API shim on top of Linux kernel", there's to some approximation no phone app, no launcher, no Settings, no browser. Those are hard!

- It's doubly so if _the apps for this open source OS regularly rely on GMS APIs_, which require a commercial relationship with Google.

and your point is:

- There _is_ a phone app, launcher, Settings, and browser. No one said the OS and a _full modern mobile application suite_ are open source.

- It is very good that the OS is open source and that shouldn't be discounted just because its non-trivial to get your own distro up and running.

- completely putting words in your mouth now :) - the GMS APIs are things that _should_ be vendored, it'd be worse if Google's location tracking was baked into the OS. Also, vendors can provide shims that allow apps to call GMS APIs "headers" even if the impementer isn't GMS

AOSP does not come with GMS

Correct

That's the one from Android 2.1. The one from Android 7+ is Launcher3.

https://cs.android.com/android/platform/superproject/main/+/...

An open source operating system for phones is meant to have no dialer?

Absurd.

used to be... but android is a full fledged OS in a lot of things that are not phones (TVs, cars, streaming sticks, etc)

Heh, by your argument a full fledged desktop OS doesn't need to support keyboards because hey, a lot of desktop systems don't have keyboards (touchscreen kioks), doesn't need to support sound (not everyone wants it), doesn't need to support mouse input, doesn't need to support ethernet, doesn't need to support displays (headless mode).

I mean, this line of reasoning is ridiculous. Proper full fledge OSes support the main use cases, not the lowest common denominator.

not close.

Does an Amazon Firestick need a phone dialer? a TV need the contacts app. does your toaster need gMail?

You are still in the mindset that Android == phone. Which isn't true. Android (a full fledged OS) supports all the things you mentioned

As someone who does exactly this (I run LineageOS with microG) I can attest to the fact that a lot of apps just don't work without proprietary, non-AOSP components being present on your device (GMS aka Play Services). microG helps, and does result in increased functionality of these apps (for now) however large parts of the applications remain unusable. AOSP is open source, "Android" the brand and platform controlled by Google is largely proprietary (if you want most of your applications to run properly).

>but nearly everything in userspace is closed-source.

The part you are referring to is not part of AOSP. Different vendors all build their own OS for their devices on top of AOSP.

^ this is correct and accurate.

I worked on Android for several years and was struggling to find an entry point in the comments where people would be amenable to a message like this.

You're either Samsung and have some bespoke deal with Google and get to negotiate out stuff such that you end up with a real, full, OS, or you're a nobody trying to make an increasingly bare version of the full thing work.

The whole thing feels darn creaky too, Google teams outside the phone / tablet team infamously, constantly, struggled to work with it. Even today, my Google TV will sometimes freeze for 20-30 seconds after power on.

I can't help thinking there's room for something much better, but, here we are. Many projects have lived and died on that shore. And if anything, I'm too negative on it. The flavored water dispenser, and a vending machine, I'm looking at both run on it.

Maybe I'm not reading the article in the same tone as you? I am not reading "outrage" in it, more a sort of casual "did you know" - "look how smart I am" ish tone. Cool thing about writing, one can read it in any tone they want, I suppose :)

Maybe, but even reading it in that spirit, I think it's not a smart, and especially not a curious article, and even partly wrong on GMS licensing, which only costs that much in europe and only for devices without Chrome and Google search:

> Android manufacturers will have to pay Google a surprisingly high cost in Europe in order to include Google’s Play Store and other mobile apps on their devices, according to documents obtained by The Verge. A confidential fee schedule shows costs as high as $40 per device to install the “Google Mobile Services” suite of apps, which includes the Google Play Store. The new fees vary depending on country and device type, and it would apply to devices activated on or after February 1st, 2019.

> But phone manufacturers may not actually have to shoulder that cost: Google is also offering separate agreements to cover some or all of the licensing costs for companies that choose to install Chrome and Google search on their devices as well, according to a person familiar with the terms. Google declined to comment.

> Google’s licensing terms are changing in Europe later this month on account of a European Commission ruling that barred the company from requiring phone manufacturers to bundle Chrome and search with the rest of its suite of apps. In public statements, Google has been cagey about exactly how the new licensing fees will be structured, but documents reveal the deal with EU manufacturers will be rated by country and pixel density.

https://www.theverge.com/2018/10/19/17999366/google-eu-andro...

I can pretty much agree with this assessment. I didn't personally think the article was all that smart or curious.

I didn't read any outrage in the article either. Also I don't think any less of Google after reading it.

Apple makes tons of money off of open source. Their operating system kernels are all derivatives of Mach -- https://en.wikipedia.org/wiki/Mach_(kernel) -- I don't think anyone is celebrating it.

But does Apple fund the development of Mach?

I don't think so, the development is pretty much halted at this point. But some of their early devs were hired by NeXT and then Apple when it acquired NeXT.

I think they mean making money off open source contributions

Android™ is not Open Source, it is based on AOSP which is.

AOSP is short for Android™ Open Source Project. It's open source.

https://source.android.com/

>Android is an open source operating system for mobile devices and a corresponding open source project led by Google.

I'm not sure where you both going at but yes, stock ROMs even for Pixels are AOSP + proprietary apps replacements/add-ons.

I would say that most people think of Android as the complete operating system experience that comes preinstalled on most Android phones, and that experience depends a lot on proprietary parts, especially Google Mobile Services that are apparently deeply integrated with the OS (could it be considered part of it at this point?). Plus, these proprietary parts are not fully nor easily replaceable as you almost certainly have to wipe the whole operating system to do so.

So, in my opinion, calling Android an Open Source OS is kind of misleading, but it's a matter of how you interpret what Android is. I would rather refer to Android as the final product (which relies on proprietary software), and to AOSP as the open source project which Android is built on.

Plus, I think that AOSP and Android are considered two different entities and I doubt that AOSP is under the trademark of Android.

To me Android is like freedesktop or GNU. It's a platform that apps target. Some of those apps may also be open source, but some of those may be closed sourced. There are a ton of different distributions for these operating systems and each one gives it it's own twist.

I've never been a huge fan of Android due to its quirks – the annoying bloatware, the subtle yet persistent tracking, and the endless wait for security updates. It can be a real headache. However, what keeps me loyal to Android is open source and nod to the hacker culture (see xda), fostering an environment of innovation. This stands in stark contrast to the profit-centric motives that seem to dominate Apple's iOS.

In the Android world, it feels like Google is saying, 'Hey, go ahead, tinker with the code, use it for whatever you like.' (though it's far less open than it what it used to be tbh). Android makes it possible to even create hacker friendly hardware like the tv boxes and modular phones which is still a breath of fresh air for someone like me who values innovation and customization. On the other hand, Apple's iOS, with its polished exterior, often feels like a closed ecosystem where every change is meticulously controlled, primarily to maximize profits under the guise of ensuring security.

So, while Android may not offer the seamless, perfectly curated experience, the OSS part of it still makes up for it by promoting a culture of exploration and innovation. It's the difference between a platform that welcomes change and one that seems more focused on maintaining a pristine garden, even if it means stifling the potential for growth.

I'm of the same opinion. I also don't live with a false sense of security in "just trusting Apple" with everything. I know Android is more open for both tinkering and with less privacy (though that's been improving).

There's a huge gap between the two, one in which a variety of hardware and software could live as alternatives. Where are they though?

> what keeps me loyal to Android is open source

Google hasn't open sourced the apis that only ship as part of the Play Store, and which modern Android apps require to function. This tactic has been around for a decade now.

> Google’s iron grip on Android: Controlling open source by any means necessary

https://arstechnica.com/gadgets/2018/07/googles-iron-grip-on...

Ya. That's why running Play Services & Apps sandboxed was the only remaining viable strategy to keep some degree of independence without having to go commando.

Android sources are there for the manufacturer, not the device user. It's definitely a "look but don't touch" culture. There's not a single device on earth running AOSP, not even their own Android emulators.

Sure Apple is worse but the bar isn't that high.

> the annoying bloatware, the subtle yet persistent tracking, and the endless wait for security updates.

Get a Google Pixel phone OR put AOSP a phone. All other non-Google "android" phones are that manufacturers take on what Android should be

Tech companies are the new modern day conglomerates.

Most of us weren't adults in the 70s when conglomerates ruled the business world and then in the 80s when hedge funds made bank buying them and splitting them up into smaller companies.

Goldman put out a piece about how Microsoft, Google, etc are the new conglomerates that are ready to be broken up. The moat they have now is their insane piles of cash, their profitability, and their huge market caps, which make them very hard to target or to force them to spin out businesses.

Once they start to lag, and it inevitably will happen, they'll start to have more pressure on them to break up into several companies.

Microsoft, Google and Apple all have 3-4 $10+ Billion dollar in annual revenue companies inside of them.

Goldman's thesis is that one of Google, Microsoft, Apple and Amazon won't exist within 10-15 years and its not hard to see a world where that's true.

It could be one of them being acquired(least likely IMHO), one splitting into multiple companies to unlock business protentional(most likely IMHO), or one being forced to divest by a government(probably the EU)

(my own uniformed opinions ahead)

Google and Facebook have already prepared themselves for this break up by restructuring into holding companies.

If/when anti trust legislation ever mandates breaking off search, advertising, YouTube, or Android from "Google", well guess what... Alphabet is already structurally prepared to continue to own the company just the same as it owns Waymo, Verily, Fitbit, Doubleclick, Nest, and Google

A new company is nothing more than paperwork at this point.

I can see the case for Apple and Amazon going away, but Google and Microsoft are just so fundamentally strong that they should last 100 years. Turning bits into money is the highest margin business out there, and owning an OS is the most lucrative position within the software world.

This article seems inaccurate. Google doesn't charge for Google apps except in the EU, where it does because of EU regulators - that's where the "up to 40$" claim comes from [1]

Per that article, it looks like in general google bundles chrome and search with the rest of the Google apps, and so is happy to offer it for free since search basically pays for the whole app suite. The EU doesn't like this bundling so google charges for apps there, but manufacturers can enter into a deal to use chrome and search and essentially get that money back through search engine revenue sharing.

1. https://www.theverge.com/2018/10/19/17999366/google-eu-andro...

Google made $280B in revenue in 2022 which means this article is claiming that at least 1/3 of it (since they said over $92B) is coming from Android only.

Does that align?

30% of the billions per year made by all the casino games on the app store is a tremendous amount of money. Just a single title like Fate Grand Order or Genshin Impact brings in over $1B every year. There are dozens of titles like them and hundreds more that bring in $100m+/year.

Was Android the best acquisition ever?

YouTube makes ~30B a year in revenue [1]. Meta the whole company "only" makes ~112B a year in revenue [2].

How they got to exactly 92B isn't super clear. The article attributes ~40B to the Google Play Store, ~20B to license fees & the rest (I guess) to pre-installed apps and default search.

[1] https://en.wikipedia.org/wiki/YouTube

[2] https://en.wikipedia.org/wiki/Meta_Platforms

Buying NeXT was pretty cheap but paid off.

I don't understand why it is so hard for people to understand the difference between open source and free software.

I don't mind at all paying for open source software, and I don't see why I shouldn't. My expectations/preference for open source software is purely motivated by resilience (enabling continuity of service in the case the original editor goes bankrupt or stops innovating its product) and security (enabling the community by offering access to the inner functioning of the product).

The article title and intro (seems to be removed now) seem to try shaming Google for charging for Android. Android as a ton of issues but I don't think not being available for free is the issue.

I feel like this does not line up with the earnings statements. I assumed the article would link ad revenue to android somehow but I don’t see it in there. How are they getting $92B?

The article estimates ad revenue from Android at "$50 billion" near the end of the article.

Article says it's expert estimates without providing references on sources of such claim.

Search "Apple v. Samsung" for some litigation that Google was on the hook for. I went to a day of this trial in Lucy Koh's courtroom in San Jose. If you sell Android phones, you're liable for patent infringement, which Google indemnifies you for.

News flash: being in business makes money, and also costs you money. The trick is to make the first >> the second.

They missed the thing with storage. Android makes it difficult to route pictures and videos anywhere other than Google photos. Which pretty quickly fills up your free 15GB storage quota. It then nags for paid storage. Technically savvy folks find ways to get around this. But, it traps a fair number of people into paying for storage they don't really need.

>Android makes it difficult to route pictures and videos anywhere other than Google photos.

How?? I take photos, they are stored on my phone, and I can share them to any of a a few dozen apps I've installed that have nothing to do with Google. My photos also sync to a local NAS every night, thanks to another non-Google app that was pretty easy to set up. I haven't ever used Google Photos and my use of photos isn't hindered at all.

> Android makes it difficult to route pictures and videos anywhere other than Google photos

I've been an android user for well over 10 years and find this to be wholly inaccurate. I have pictures backing up automatically in three different places with no friction whatsoever.

Be it Google Drive, iCloud, OneDrive, Dropbox, or Amazon - you pay for cloud storage. This is a known fact.

Not bad for a $50M acquisition.

How would you pay for the very expensive work of developing an entire operating system without a revenue stream…? This is such a weird take. Obviously they don’t do it as a charity.

open source != non-profit

Breaking news: Company makes money on software it owns

Up next: This bear did WHAT in the woods?

The bear made $92B per year.

They don't sell copies of Android to end users for a total of $92b per year. The vast majority of that revenue comes from exploiting customers (via their data, ad targeting, etc) and business partners (via taxes and things resembling monopolist tactics).

Submarine article?

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