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Google’s Disruptive Strategy: A Less Than Free Business Article by Bill Gurley
History Google started in 1996 as research project Had their IPO on August 19th 2004, giving them a market cap of 23 billion Currently worth 170 Billion
The article Google Redefines Disruption: The “Less Than Free Business Model” Discusses Google’s Android OS In particular how this changes the Smartphone market, and potentially the home computer market
Android In Google's words, it's "the first truly open and comprehensive platform for mobile devices. Based on Linux The OS it self is pretty limited, the Google Apps provided with it offer a much better user experience
Android (cont.) One of the team leads says “Android is not a single piece of hardware; it's a complete, end- to-end software platform that can be adapted to work on any number of hardware configurations” Meaning its light and easy to use version of Linux which can be used on a number of devices Already found on other devices such as netbooks and PMPs
The GPS Software On Oct.28/2009 Google announced a free turn-by-turn GPS application for Android For reference Tom Tom’s GPS app for the Iphone is $100 Upon announcement Garmin’s share price fell 16% and Tom Tom’s fell 21%
GPS (cont.) For developers, this means free access to a rich GPS platform
What this Means in the Market This poses a problem for RIM and Apple In the opinion of some the Andorid hardware from HTC, Sony and Motorola has surpassed Apple’s in terms of quality and design Better and better apps are made available every day
Cont. RIM’s software is beginning to fell dated and the applications available don’t adequately rival Apples or Androids Apple has a stranglehold over its App store, which can be limiting to creativity Free GPS software is a big feature, Apple and RIM may have to eat into their own margins to provide it
Cont. With Apple and Rim, the telecoms lost control over the user UI, which offers future monetization opportunities Since anyone can develop their own UI for Android, the telecoms can start add their own features and apps to the OS
The Less Than Free Business Model With the Android OS Google will actually pay hardware makers to use their OS They do this by splitting ad revenue This less than free model will not stop with the mobile OS
Microsoft and Windows To fend off other Linux based netbooks Microsoft already had to lower the cost of XP to compete With an OS that actually provides revenue to hardware manufacturer, Microsoft may be completely priced out of the market
The Future If the netbook market segment continues to grow and become the largest segment of the home computer market, Google with their Android based OS could become largest OS provider This is feasible as netbooks become more powerful, the ability to purchase remote access to a powerful computer becomes cheaper and faster network speeds now allow instant access
Works Cited Citation added: Gurley, Bill. "Google Redefines Disruption: The “Less Than Free” Business Model." Above the Crowd. 29 Oct. 2009. Web. 8 Nov. 2009 Citation added: Herrman, John. "Giz Explains: Android, and How It Will Take Over the World - android 2.0 - Gizmodo." Gizmodo, the Gadget Guide. 5 Nov. 2009. Web. 09 Nov. 2009. <http://gizmodo.com/5397215/giz-explains-android- and-how-it-will-take-over-the-world
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