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Android a brilliant case for collaborative management of
innovation amp intellectual property (IP)
Exercise market power Sell DonateCollaborateLicense
Aim dominate Aim Collaborate
Professor of intellectual property law W Fisher proposes a framework of 5 different IP management strategies 1 exercise market power 2 sell 3 license 4 collaborate 5 donate
Innovators often choose by default ldquoexercising market powerrdquo Learn about the 5 vital strategies and that collaborative strategies can be extremely powerful
Only with iOS 201 (iPhone 3G) did Apple allow collaboration Here is what happens next
Apple Lisa (1983) ldquoexercising market powerrdquo Number of Applications 7
Apple App Store (from 2008) ldquocollaboraterdquo Number of Applications 2200000
Exercise market power Sell DonateCollaborateLicense
Power of IP management strategy
2008 2016
Number of apps in iOS App Store
ldquoMicrosoft invited third-party developers to create as many applications as possible for the Microsoft operating systemrdquo
hellip thereby increasing its value and crushing competition (incl Apple and leading to Steve Jobs ousting)
Apple didnrsquot open their Apple Lisa to others remaining with 7 apps for most of its time
1 IP management strategy exercise market power
IP protection through bull patents bull trademarks bull copyrights and bull trade secrets
Net patent premium (Arora 2006 published by National Bureau of Economic Research NBER)
bull IP protection works betterlonger in certain industries (see right)
bull IP protection can give you a temporary monopoly but will motivate competition
bull Many patents get imitated or worked around within a few years
bull IP holder needs to grow the market alone (=high cost) in order to gain above-average profits until competition develops after which profit margins mean-revert (=reduce)
2 IP management strategy sell
bull If you are unlikely to successfully commercialise your IP you might be better off selling (or licensing) it
bull ldquoSale makes sense if the difference between (a) the value of the IP in your hands and (b) its value in Bs hands exceeds (c) transaction costsrdquo Prof W Fisher
bull Consider risk-weighted value of keeping the IP and the benefit minus risk-weighted strategic costs of selling
Example
Nortel 6000 patent IP auction
bull 4 days 20 rounds
bull Sales price $45b
bull Buyers group of 6 incl Apple Microsoft RIM
bull Buyers start seeking licensing royalties from users of the IP
Important insights on the abilityprobability to profit from your IP has been provided by professor D Teece
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Exercise market power Sell DonateCollaborateLicense
Aim dominate Aim Collaborate
Professor of intellectual property law W Fisher proposes a framework of 5 different IP management strategies 1 exercise market power 2 sell 3 license 4 collaborate 5 donate
Innovators often choose by default ldquoexercising market powerrdquo Learn about the 5 vital strategies and that collaborative strategies can be extremely powerful
Only with iOS 201 (iPhone 3G) did Apple allow collaboration Here is what happens next
Apple Lisa (1983) ldquoexercising market powerrdquo Number of Applications 7
Apple App Store (from 2008) ldquocollaboraterdquo Number of Applications 2200000
Exercise market power Sell DonateCollaborateLicense
Power of IP management strategy
2008 2016
Number of apps in iOS App Store
ldquoMicrosoft invited third-party developers to create as many applications as possible for the Microsoft operating systemrdquo
hellip thereby increasing its value and crushing competition (incl Apple and leading to Steve Jobs ousting)
Apple didnrsquot open their Apple Lisa to others remaining with 7 apps for most of its time
1 IP management strategy exercise market power
IP protection through bull patents bull trademarks bull copyrights and bull trade secrets
Net patent premium (Arora 2006 published by National Bureau of Economic Research NBER)
bull IP protection works betterlonger in certain industries (see right)
bull IP protection can give you a temporary monopoly but will motivate competition
bull Many patents get imitated or worked around within a few years
bull IP holder needs to grow the market alone (=high cost) in order to gain above-average profits until competition develops after which profit margins mean-revert (=reduce)
2 IP management strategy sell
bull If you are unlikely to successfully commercialise your IP you might be better off selling (or licensing) it
bull ldquoSale makes sense if the difference between (a) the value of the IP in your hands and (b) its value in Bs hands exceeds (c) transaction costsrdquo Prof W Fisher
bull Consider risk-weighted value of keeping the IP and the benefit minus risk-weighted strategic costs of selling
Example
Nortel 6000 patent IP auction
bull 4 days 20 rounds
bull Sales price $45b
bull Buyers group of 6 incl Apple Microsoft RIM
bull Buyers start seeking licensing royalties from users of the IP
Important insights on the abilityprobability to profit from your IP has been provided by professor D Teece
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Only with iOS 201 (iPhone 3G) did Apple allow collaboration Here is what happens next
Apple Lisa (1983) ldquoexercising market powerrdquo Number of Applications 7
Apple App Store (from 2008) ldquocollaboraterdquo Number of Applications 2200000
Exercise market power Sell DonateCollaborateLicense
Power of IP management strategy
2008 2016
Number of apps in iOS App Store
ldquoMicrosoft invited third-party developers to create as many applications as possible for the Microsoft operating systemrdquo
hellip thereby increasing its value and crushing competition (incl Apple and leading to Steve Jobs ousting)
Apple didnrsquot open their Apple Lisa to others remaining with 7 apps for most of its time
1 IP management strategy exercise market power
IP protection through bull patents bull trademarks bull copyrights and bull trade secrets
Net patent premium (Arora 2006 published by National Bureau of Economic Research NBER)
bull IP protection works betterlonger in certain industries (see right)
bull IP protection can give you a temporary monopoly but will motivate competition
bull Many patents get imitated or worked around within a few years
bull IP holder needs to grow the market alone (=high cost) in order to gain above-average profits until competition develops after which profit margins mean-revert (=reduce)
2 IP management strategy sell
bull If you are unlikely to successfully commercialise your IP you might be better off selling (or licensing) it
bull ldquoSale makes sense if the difference between (a) the value of the IP in your hands and (b) its value in Bs hands exceeds (c) transaction costsrdquo Prof W Fisher
bull Consider risk-weighted value of keeping the IP and the benefit minus risk-weighted strategic costs of selling
Example
Nortel 6000 patent IP auction
bull 4 days 20 rounds
bull Sales price $45b
bull Buyers group of 6 incl Apple Microsoft RIM
bull Buyers start seeking licensing royalties from users of the IP
Important insights on the abilityprobability to profit from your IP has been provided by professor D Teece
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
1 IP management strategy exercise market power
IP protection through bull patents bull trademarks bull copyrights and bull trade secrets
Net patent premium (Arora 2006 published by National Bureau of Economic Research NBER)
bull IP protection works betterlonger in certain industries (see right)
bull IP protection can give you a temporary monopoly but will motivate competition
bull Many patents get imitated or worked around within a few years
bull IP holder needs to grow the market alone (=high cost) in order to gain above-average profits until competition develops after which profit margins mean-revert (=reduce)
2 IP management strategy sell
bull If you are unlikely to successfully commercialise your IP you might be better off selling (or licensing) it
bull ldquoSale makes sense if the difference between (a) the value of the IP in your hands and (b) its value in Bs hands exceeds (c) transaction costsrdquo Prof W Fisher
bull Consider risk-weighted value of keeping the IP and the benefit minus risk-weighted strategic costs of selling
Example
Nortel 6000 patent IP auction
bull 4 days 20 rounds
bull Sales price $45b
bull Buyers group of 6 incl Apple Microsoft RIM
bull Buyers start seeking licensing royalties from users of the IP
Important insights on the abilityprobability to profit from your IP has been provided by professor D Teece
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
2 IP management strategy sell
bull If you are unlikely to successfully commercialise your IP you might be better off selling (or licensing) it
bull ldquoSale makes sense if the difference between (a) the value of the IP in your hands and (b) its value in Bs hands exceeds (c) transaction costsrdquo Prof W Fisher
bull Consider risk-weighted value of keeping the IP and the benefit minus risk-weighted strategic costs of selling
Example
Nortel 6000 patent IP auction
bull 4 days 20 rounds
bull Sales price $45b
bull Buyers group of 6 incl Apple Microsoft RIM
bull Buyers start seeking licensing royalties from users of the IP
Important insights on the abilityprobability to profit from your IP has been provided by professor D Teece
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Opportunities hellip
Licensing is increasingly used as source of additional revenue
And risks hellip
Licensing is hellip complicated hellip and full of litigation cases Number of patent lawsuits
commenced Recent jump due to regularly changes but general trend increasing in line with growing number of patents
Revenues from licensing
3 IP management strategy license (for royalties)
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
The case for collaborative approaches the marketrsquos potential
Using patents to exercise market power is often based on the assumption that the size of the market is limited
Collaborative approaches assume - and contribute to - growing the market
ldquoI think there is a world market for maybe five computersrdquo Thomas Watson president of IBM 1943
ldquoThere is no reason anyone would want a computer in their homerdquo Ken Olsen founder of Digital Equipment Corporation (DEC) 1977
Market potential is hard to predict Collaborative approaches can accelerate the growth trajectory ANDROID is a brilliant example
Ken Olsen has claimed to be quoted out of context Thomas Watson has made significant contributions in the early computer days Both gents have our respect
Android takes over most of the mobile OS market now at gt90
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
2003 Android Inc founded
2005 Google acquires Android
2007 Apple iPhone 1G released
2007 Open Handset Alliance inaugurated Google collaborates with complementary partners (34 founding members from across the industry) to develop open standards based on Android (large parts of code base are open source ie donated)
2008 First handset using Android released HTC Dream (using Android on a free of charge license)
2010 collaboration with renown companies on Google Nexus LG HTC Samsung Motorola Asus
2016 Google Pixel smartphones announced
License
Collaborate
Donate
Google uses collaborative IP management strategies for Android
License
Collaborate
Donate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Acer Alcatel
Asus CGI Dell
Foxconn Fujitsu Garmin
Haier HTC
Huawei Kyocera Lenovo
LG Motorola
NEC Oppo
Pantech Samsung
Sharp Sony Ericson
Toshiba ZTE
Corporation
Most major
handset manufac
turers are part
of the OHA
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
5 IP management strategy donate
AOSP Android Open Source Project
GMS Google Mobile Service
Donate Android Open Source Project (AOSP) is a basic mobile phone operating system It is open source Anyone can download adapt use it It has a basic version of the GMS functions Most popular in China
License (free-of-charge) Members of the Open Handset Alliance take free-of-charge license of the Google Mobile Services These are the premium features of Android hellip shows that licensing doesnrsquot have to be a battlegroundhellip
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
bull A lot of the Google apps and functionality exist only in rudimentary form in the open-source code (AOSP)
bull Over time Google moved the most popular Google apps into to-be-licensed version of Android the GMS
bull Critics and competitors state that Google ldquoforcesrdquo the licensee to pre-install the all GMS apps if they want to use any one of the apps (eg YouTube or Google Play Store) or any of the enhanced functions eg advanced location services or in-game payments Google says these services belong together
bull The European Union takes this serious and have launched an inquiry into Google over the alleged practices and their impact on competition Check also what Google has to say about this httpswwwandroidcomeveryonefacts
bull note things are a bit different within China but that is a different story altogether
AOSP Android Open Source Project
GMS Google Mobile Service
Freemium vs Premium - not everybody gets a lick
AOSP GMS
Search (on phone) Rudimentary added voice search text-
to-speech
Music Rudimentary connected to Google Play Music +enhancements
Calendar keyboard camera messaging Rudimentary Several generations of
enhancements
Location features in-game payments
Very basicNon existent Advanced features
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Donating your IP creates the risk of others ldquostealingrdquo it from you hellip Making Google apps amp functionality proprietary is an important measure of risk control for Google
So far only Amazon has accepted this ldquoton of extra workrdquo and created the Amazon Appstore in place of Google Play
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
GMS apps are used for collecting valuable user data getting search traffic displaying targeted ads create (soft) lock-into Google ecosystem and generating ancillary revenue
Googlersquos benefits from Android are significant mdash Many of the pre-installed Google apps connect to Google services mdash They add users to the Google ecosystem mdash Opportunity to display Google ads (as google is default search engine) mdash Collect search data mdash Collect user data (incl location data) mdash More targeted ads (eg location and context specific) mdash Direct them to Google social apps (Google+ Hangouts YouTube) mdash Revenue from Google Play Store mdash Revenues from Google Music mdash On-the-go availability of Google ecosystem mdash User data from Google Maps and location-specific ad revenues for completeness sake note there are some views stating that immediate revenues from Android are low totally ignoring the disastrous counterfactual (imagine the impact on Googlersquos customer value proposition without the above)
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
In the war of mobile OSs Android was the most collaborative one hellipand this strategy choice was a key to their success This is most remarkable - and even more so - given they were late movers
Symbian was used by Nokia (who were disrupted by smart phones) and many who switched to the free better Android
Google saw a possible Microsoft dominance on the mobile OS market as a major risk to losing a lot of search traffic Microsoft OS has 42 market share in the US in 2007
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Amazon has developed their own mobile OS (based on Android AOSP) and have their own Appstore
Windows (app) Store contains Window Phone Store Xbox VideoMusic
What does the future bring bull Some experts believe the number of developersapps is the best proxy for the
network effects on platforms eg game consoles but also mobile OS thus the future success of the platform
bull Based on this come to your own conclusions on the future of the different OSs bull It is interesting that the measure of collaboration (=number of apps which are
99 3rd party developed) is also the best proxy for the success of the platform
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Understand your strategic options managing your intellectual property and
hellip make the most out of your innovation idea
We have 10 downloads (ebooks presentations infographics and worksheet) for you for a rapid knowledge burst
wwwInnovationTacticscomstrategic-IP-management
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
- Logistics and infrastructure for Android
The returns are significant mdash Googlersquos fear was that they will lose out on mobile search data mdash If eg Apple had be If Google missed out on mobile data the long-term effects would be disastrous Their customer value proposition would erode to below
mdash mobile mdashgt unless you are a completely online company you will care about location-specificity of your ads (and online companies care increasingly)
(1)Prevented depend (2)changing the market trajectory (3)Pre-installation of their apps which connect to Google services on over
1 billion devices (4)becoming a major player in a market that (5) achieving major strategic goals (6) building the ability to exert power over companies (7) managed to add their apps to over 1 billion smartphones that use
their services Note that not everybody agrees that
Immediate revenues from Android search traffic are estimated to be $3-$7b Given Googlersquos revenues of $75b (95 from ads) and a 50 search traffic from mobile devices these estimates appear too pessimistic
==gt these are extraordinary achievements that would not have worked
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Googlersquos strategic goals with Android were
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
There are reports that Google has used exerted power over companies using Android hellip
The EU has opened an antitrust case against Google
1 Did Google force or incentivise Android phone and tablet makers to ldquoexclusively pre-install Googlersquos own applications or servicesrdquo
2 Did Google prevent smartphone and tablet makers who wanted to install Google applications and services on some devices from shipping ldquomodified and potentially competing versions of Android (known as lsquoAndroid forksrsquo) on other devicesrdquo
mdashgt Did Google make it more difficult for those who wanted to use the Android donation to build their OS apps on it where they would compete with those of Google
3 Did Google tie or bundle certain Google applications and services that shipped with Android devices with other Google applications services and APIsrdquo
mdash it is difficule to tell but lets assume it is not hellip what remains still a brilliant ip management strategy googles apps come pre installed to 1b phones of which G has manufactured 0
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
App Store introduced
Number of apps in Apple App Store grows at constant rate unit 2015 All off a sudden there is a massive jump in growthhellip reason Apple invites to more collaboration by reducing their own share of the profit for each app sale by 15 (from 7030 to 8515)
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
5 Multi-sided platforms
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
5 IP management strategy donate
even if you donate where possible do this via a (free-of-charge) license mdashgt can adjust terms as required in future
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
5 Direct amp indirect network effects
Indirect network effectsIndirect network effects enhance the value of an overall system through complementary products (often developed by other parties) It is frequently also called an ldquoecosystemrdquo Without these network effects the market for PCs would have been significantly smaller This observation shows that markets are not nil-sum games and that the right strategic IP management option can make a decisive differenceWhat competitors do plays a significant role for the market trajectory Professor Fisher also notes that your competitors may compete more fiercely on price if they fear you will become a too dominant player They may see strategic benefits of doing so even if they are able to provide only an inferior product The profits you may have anticipated for yourself may move to the consumer because you are forced to compete back on priceThere are other positive externalities of having competition such as consumer education market development infrastructure development standards joint lobbying power and so on These are essential strategic considerations that you should be aware of when assessing your innovation IP options
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
This then leaves Android phones only the option of taking Googlersquos licenses But this comes with having to pre-install certain Google apps (search mail maps navigation app store) The European Unionrsquos antitrust regulator has recently launched their charges over Googlersquos Android practices ldquoThe EU accuses Google of abusing that dominance to force phone makers into favoring the Google search engine and Chrome browser on their devices Those apps ensure consumers see Googlersquos search advertisementsmdashits cash cowmdashwhen they look things up on their smartphonesrdquo Wall Street Journal November 10 2016 Anyone feeling reminded of Microsoftrsquos IE practices No decision has been made yet but you get a taste of it
More power is evidenced by the fact that not everybody gets a lick of the new Android Nougat (the new OS version 7) There are limitations which phones and which microprocessors are supported Eg some Qualcomm graphic processors as well as other components are not supported It hints at the powers Google has gained over manufacturers and consumers80 of mobile phones are now using the Android operating system This gives Google significant influence over the trajectory of the entire smartphone industry And this was at a time before they had manufactured even one phone themselves (which has changed only since recent) I hope these examples give you a flavour of the opportunities of licensing
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
AOSPGMS
Search
Music
Google proprietary requires licensing Free (open source)
GPSCalendar
If you ever question the power of Google Play Services try disabling it Nearly every Google App on your device will breakrsquo It is lsquoa single place
that brings in all of Googlersquos APIs on Android 22 and aboversquo Things like Play Game services Google Cloud Messaging and fused
location services are all handled by Play Services and not the OS
Search
Music
Calendar
Some of the better known apps packaged as part of Google Mobile Services
OHAIn reality though while OEMs like Xiaomi Oppo and Gionee arenrsquot members of the OHA their phones are lsquocompatiblersquo ndash that is they can tap into Play Services and the Play Store Xiaomirsquos Mi3 comes pre-loaded with the usual suite of Google apps including the Play Store if bought outside of China In other words these arenrsquot forked phones or AOSP-only phones or anything of the sort
Within their own Chinese markets they use their own app stores and have their own ecosystems but outside of that Google and Googlersquos apps work just fine on them subject to Google granting the OEM a license (For a list of Google Play compatible phones see here) I
5 Add a balanced assessment huge framentation Google will be unable to support all
risk that google will focus more and more on their own platform (not as being anti-competitive but simply due to incentives alignment)
risk of new HW components not being supported
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
Collaborate Google was the leading force behind the Open Handset Alliance (OHA) a collaboration of initially 34 (now 84) telco and tech companies that all support Android and commit to using it under its licensing terms and not to work on a competing mobile OS
4 IP management strategy collaborate
