In August 2011, I outlined why I believed that Chrome was more important to Google than Android. At first blush, this sounds kind of crazy, but when you look at the bigger strategic picture it makes sense. With former Android head Andy Rubin relocating to work on other projects at Google, and Chrome head Sundar Pichai taking over Android, it means that the Android and Chrome teams are now under unified leadership. This, I believe, is the signal that Android and Chrome are on a path to merge.
To understand the business side of things, it is important to remember that Google makes the vast majority of its revenue from search. Google?s web properties generated advertising revenues of $8.8 billion in Q4 2012 alone. Google doesn?t release exactly how much it makes from Android, but I don?t believe they make even close to $8 billion from it annually, let alone in one single quarter (as they do from web-based advertising).
Android has been a relevant strategy to give hardware makers a chance to compete with Apple. But as we can see from various market developments, it appears the hardware vendors now either want to forego Android and minimize their dependence on Google, or create their own solutions entirely. I?m thus convinced that Android as we know it today will look very different ? if it exists at all ? five years from now.
This is where Chrome and Chome based hardware comes in.
Chrome Hardware Right now Chromebooks are still in their infancy. They?re rapidly developing and getting better with each generation, but I don?t believe they?re even close to Google?s bigger vision. The Chrome web app solution is getting more apps but not at a level or pace necessary to gain a critical mass relevant for the mass market. This is where Android and future Android app development will play a role.
Google has a large global developer base for Android but not yet for Chrome web apps. Chrome is designed to run only apps developed for the web, where Android is designed to run apps that are installed. Once these two development environments merge, developers will be able to design both Android and Chrome web apps with the same set of tools, consistency and unified application stores. Google, with its expertise in cloud services, could bring a cloud-based virtual Android environment to Chrome, perhaps giving us the ability to run Android in the browser, seamlessly, on all Chrome hardware.
The other benefit Android brings to Chrome is an environment built for touch-friendly applications. Google just released its Chromebook Pixel, which is a touch based Chromebook. The only problem is there aren?t really any touch-based Chrome web apps. Android is built for touch, and those assets will bring value to touch-based Chrome systems down the road.
The Future of Chrome Hardware What this ultimately leads to is new Chrome-based hardware. Right now, Chrome OS is stuck in a clamshell, PC-like form factor. The merging of Android into the Chrome OS solution could open the door to Chrome OS-based phones and tablets as well. As we know, the Chrome OS solution allows for extremely low-cost hardware because of how light a client it is, which means that a Chrome-based solution for phones and tablets could conceivably lower cost barriers.
This seems hard to imagine now, especially given that in China you can purchase an Android tablet for $45. Regardless, Chrome and Android merging would do more for hardware solutions than if the two remained separate.
The Browser This merging of Android and Chrome has traditional browser-based value as well. The Chrome browser runs on all Windows PCs (with the exception of Windows RT), Macs and even iOS devices. What if Android ? and more, importantly Android apps ? could be used from within any Chrome browser on any device? This would drastically increase the potential reach of Google?s services across the computing spectrum.
Since Google makes so much of its revenue from search, they need to make sure their search and web based assets remain front and center on all key hardware platforms. As companies like Samsung, HTC, Sony and even Amazon or Facebook look to take Android further for their own benefits, they take them further from any benefit to Google. Google knows its search being front and center runs the risk of being usurped by those looking to use Android for their own benefit and not necessarily Google?s.
Google must be aware of this, and the merging of Google and Chrome OS will give them more opportunities to keep their services front and center. Google first bought Andy Rubin?s Android, Inc. and used it to drive new growth for themselves and others. I view this merger as if the Chrome team just bought Android and will now use it for further growth.
Bajarin is a principal at?Creative Strategies Inc., a technology industry analysis and market-intelligence firm in?Silicon Valley. He contributes to the?Big Picture?opinion column that appears here every week.
Source: http://news.yahoo.com/coming-merger-google-chrome-android-120039305--finance.html
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