Samsung Galaxy Nexus/ Google Ice Cream Sandwich launch points to signs of trouble in Androidland

Ever since the first Verizon Droid with Android 2.0 launched 2 years ago, the rise of Google’s mobile OS seemed unstoppable. And meteorically fast. But trouble free Android growth days seem to be coming to the end.

We all heard about the biggest threat to Google’s mobile OS – patent issues. We took a close look at them on Tuesday, and I won’t go into that again. Android 4.0 Ice Cream Sandwich launch event in Hong Kong brought enough signs of Android troubles in addition to patent stuff.

Stalled growth, possible problems with Verizon in the U.S., worsening vendor attitude towards Google and its loss of leverage with OEMs– all signs point to a very challenging 2012 for Android.

Android growth is now stalled at 550K activations a day for 3 months, and there’s something strange about it

Something strange has happened to Android growth in the past three months. During Q2, 2011 earnings conference call on July 14th, Google announced that they are activating 550K Android devices a day. And that they now have a total of 135 million Android devices activated since launch.

On Tuesady, while announcing Android 4.0, Google revealed that 550K daily activations number remains the same.

Which is pretty strange, because just last week, during Q3 earnings conference call, Larry Page told us that there are now a total of 190 million Android devices activated since launch. It means that during the last three months Google has activated 55 million Android devices. The problem is, that at a rate of 550K activations a day – Google could have activated only 50.6 million devices during the last 92 days. It’s a simple math – and it shows us that there is a discrepancy of at least 4.4 million units between what Larry Page told us last week, and what we learned today.

The only explanation I can think of – is that there was a pretty big daily activations spike sometime between July and October. Big enough to account for additional 4 million+ new Android devices. But then it leveled off, and activations dropped again to the July levels. After uninterrupted almost 2 year growth, such fluctuations look rather worrying and raise the question of how much more growth is there for Android.

Of course, we do have a Holiday Season coming up, and new exciting Android devices are launching as we speak. But will they be enough to boost Google’s mobile OS growth to the levels we are used to?

Did Verizon f&#%k up U.S. Nexus/ICS launch plans?

Verizon has long been Google’s main carrier partner in the U.S. It was the key to jumpstarting Android growth in late 2009 with the launch of Verizon Droid, it was a the key launch partner for Android 2.2 Froyo in summer of 2010, and it was the biggest backer of Google’s OS in U.S.

The rumor drumbeat leading to the Ice Cream Sandwich launch was well in line with Verizon’s role. It became clear during the summer that Samsung is making the next Nexus device. Then, in late August, we learned that Verizon decided pass on the new hot Samsung’s flagship – Galaxy S2. Soon after that we heard the name Droid Prime or Nexus Prime bandied about, as a hot new Google Experience device on Verizon. And that Droid Prime will be exclusive to Verizon in U.S. for a few months. The reasons for forgoing Galaxy S2 in favor of Samsung made Droid Nexus Prime were obvious. Then came the invitations to a joint Google Samsung event on Oct. 11th – during CTIA trade show in San Diego.

Stars were aligning perfectly for the exclusive next generation Android flagship launch on Verizon , along the lines of the original Android 2.0 Verizon Droid event.

And then something happened. 4 days before October 11th Samsung and Google cancelled Ice Cream Sandwich launch event. Giving a line about respect for Steve Jobs as a reason.

By Oct. 11th – 6 days would have passed since Steve Jobs death. On the very next day – Oct. 12th – Apple themselves were having the biggest iOS 5 launch in history and they had no plans of postponing anything out of respect for Steve. Heck, Apple execs didn’t even postpone iPhone 4S announcement, which happened just a day before Steve passed away, and they knew about Steve’s situation perfectly well.

And here we have two Apple’s competitors cancelling a major U.S. product launch. During the biggest U.S. mobile industry event in 6 months. Just 4 days before it happened, and when the invited press corps have already made all their travel plans. Out of respect for Steve? It sounds much more like a convenient and rather cynical excuse then the real reason for the ICS launch cancellation.

I think that the real reason why Samsung and Google didn’t launch Galaxy Nexus and Ice Cream Sandwich at CTIA San Diego, was because something happened between them and their main carrier launch partner – Verizon. Most likely – Verizon changed their mind about the support and promotion it was going to give Nexus Prime, by deciding to make Motorola’s Droid RAZR their flagship device for 2011 Holiday Season. And without a major U.S. carrier partner – the CTIA announcement fell through.

Thus two separate major Android device launches on Oct. 18th (Droid RAZR and Galaxy Nexus). Thus Google and Samsung screwing Verizon back, taking attention away from VZWs main device launch of the year with their own Android 4 ICS announcement. Thus Google and Samsung moving their launch event to Hong Kong, to get some additional media exposure from Wall Street Journal’s AsiaD conference. Thus the outright refusal by Google execs to name Verizon as a U.S. carrier for Galaxy Nexus. And thus the multiple carrier availability and no Verizon exclusivity signs on an official Samsung U.S Galaxy Nexus info sign-up page.

Cooling of Google/Android OEM relationships. The other reason to buy Motorola?

A lot of mobile handset vendors still strongly support Google’s mobile OS, and ship Android smartphones in mind boggling volumes. But since last spring/summer, when Google delayed or even interrupted major device launches for Motorola and Samsung over its own mistake and a purely internal Skyhook matter, OEMs have become much more circumspect about Google.

This change in attitude is best seen in the Nexus program. According to Google’s execs – Nexus is supposed to be a showcase, a reference design pushing the smartphone innovation limits. But the only time they were able to do that, was with the very first Nexus One.

After that, HTC lost any interest to build other Nexus Phones, focusing on the development of its own Sense UX instead. Most other vendors do not seem to care much about Nexus either. And Samsung, who now has 2 Nexus devices in its portfolio, only provides a ho-hum oldish hardware. The first Samsung Nexus S was a bit souped up Galaxy S device, and the new Galaxy Nexus is more or less the same Galaxy S2 LTE with a better display. Samsung prefers to save the best of its hardware innovations for its own Galaxy S line.

Google has also lost the leverage it had over OEMs by providing some of them with the early access to the next version of Android code. It used to be a very big deal and huge competitive advantage.

HTC’s early access to Éclair code allowed them to beat competitors by months with first Android 2.1 super phones. And sell millions of them before others were able to catch up. But the early access to Android Froyo or Gingerbread proved to be much less beneficial. Then Honeycomb flopped. And big vendor interest in early code access evaporated. We’ll have to wait and see what Samsung will be able to do with the Ice Cream Sandwich, but current reaction from other Android manufacturers indicates that they are not too worried about it. Android 2.3 Gingerbread interface is good enough for a few months delay it’ll take to upgrade to ICS.

And Google isn’t the only game in time for smartphone vendors, like it was in 2009/2010. Back then – if you wanted to have anything remotely competitive with iPhone, the only thing you could use was Android 2.x. Today smart device vendors can chose between Windows Phone Mango, Ice Cream Sandwich and heavily customized Android 2.3 Gingerbread. What’s more, as Amazon just showed us – Android 2.x is an open source platform that can be forked with a heavily customized user experience. While smartphone vendors like HTC already have their own Android interfaces that may be more important to the end user then the OS version underneath.

What is happening now – is that Google’s early strategy to play Android vendors off each other by providing early access to Android code, and wielding pressure over OEMs by withholding new device certification, is rapidly eroding. Soon, Android OS may reach a level of maturity where any big OEM will be free to do with it as he pleases, paying little attention to what Google wants.

And that, in addition to the patent problems, might have been the other big reason for Google Motorola deal. If Google only makes good software, which somehow conflicts with some interests of Android OEMs, e.g. – if HTC decides that it does not care much for Android 5.0 and decides to develop Sense UI on Android 4.x in some other direction – there may be very little Google can do to make them see the way.

But if Google owns its own Android OEM, and can put great devices with their great software to directly compete with vendor whims – HTC, Samsung and others will have to take notice, and Android will move in the direction Google wants it to.

Google’s troubles with Android. A blip or a start of a bigger trend?

All the signs I mentioned above – stalled growth, Verizon thing, troubles with Android vendors – taken separately, do not mean much.

Last year, after a huge spring/summer spurt, Android growth also leveled off before holiday season. Verizon thing can be just my imagination, or a conscious decision by Google to form closer relationships with other U.S. carriers. Android OEMs may be just hedging their bets some, but still in love with Android. And the patent threat may get resolved somehow in the near future.

But taken as whole, they look to me like a start of a new trend. The heady days of unabated Android growth are coming to an end. There might be one more Holiday Season daily activations jump left for it, but that’s about it.

If patent infringement lawsuits do not kill or seriously cripple it, Android is certainly not going away. It is already a hugely successful mobile platform, and will continue to do do great. But sooner or later this exponential growth we so got used to had to come to an end. And that time is either upon us already, or will be here very soon.


Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Anonymous

    I have mixed opinions on some of the comments in this post, but on the whole can see why you can come to the conclusions you have.  I would like the point out a couple of things if I may.  I think Google holds an incredible amount of leverage due to the Android Market.  So while Vendors and even carriers can balk and do what they want with Android, Google seemingly could use Market access as way to curb this behavior.  Also, I’m not entirely sure I see the growth decline occurring based on your noted assumptions.  I feel the areas of growth right now would be more and more related to the current and present status of the world-wide economy.  Sure, growth may slow or even fade, but I don’t see the market share percentages going down.  If anything there are still enough BB users who are DYING to leave (especially after the recent outage) as well as other dumb-phone users who have yet to convert.  With the amazing amount of cheap smartphones now available, the current trend would seem to indicate Android getting the majority of these consumers.

    Patent issues are certainly a huge spot on the radar at this point, but Google has done well so far with the Oracle situation. On the whole Google has been so disruptive it’s almost understandable that so many companies want a piece of the action. This in itself really says something, but on the whole I don’t think there’s enough information to go on yet to really know what will happen. Proceed with caution?

  • Staska

    Android Market/leverage

    Yes, I agree that market is a big leverage right now and will be for a while. But there already are alternatives like Amazon Appstore or GetJar, and they are getting better. So  the leverage is not absolute. 

    Regarding the market share – if there are no major product injunctions/bans due to patent stuff, I too do not expect Android market share to go down next year. But I also do not expect them to gain much more of the market share then they already have. Of course – with smartphone market growing as it does –  this will still mean pretty good absolute growth numbers. 

    And regarding the patents, except for Motorola acquisition – which may or may not help, haven’t seen anything positive to Google in its IP battles. Not in Oracle suit, not in HTC’s, not in Samsung’s

  • AJones4U

    nice piece

  • Anonymous

    Wow.  I had to reread this article with all the, in my opinion, poorly summed data points and associated assumptions.  Wow.

    Okay, when you look at the growth of Android, there comes a point in time where the % increase has to start leveling off.  There are not an infinite number of new/migrating smartphone users.  Taking a look at the numbers, you are assuming a specific start / end date when the communicated quantities can be expressed in regards to a more general time frame.  That easily accounts for the small delta.

    Now if you take the “stalled growth” out of the equation, the remainder of your points are not relevant in the same fashion.

    Now for the next “assumption”, is that Google cares about the changes the OEM’s and Carrier’s are doing to Android.  Look at the business model.  While they want to keep it within general limits and potentially make it easier for the user to like/dislike/inactivate app/services included on the phone, they would much rather let the consumer decide.  Either way, they (Google) get the data they want.  

    Lastly, to develop a new OS and a new line of devices that will appeal and drive new market adoption is no small mean feat.  Only Nokia or Samsung have the real ability to pull this off.  Add Win8 waiting in the wings, the time it would take to get it into the Carrier chain and bring to market…. not a risk adverse situation.

    Google?  Looking very good.

  • Jeramy Eggers

    Really, didn’t the judge in Cali just drop a couple of Apple’s complaints, and also asked Apple to prove that their patents need to be proven to use? Sounds like Samsung has brought to the courts attention that just because Apple Files a patent, it doesn’t mean they created it, or own it, or is applicable. Google also just bought 1000 IBM patents recently, and those effects haven’t shown up yet. Not that i am a lawyer, but are any of you?

  • Kevin W Reese

    5 Thus in one paragraph, impressive.

  • Dan

    Well… first, none of the signs you mentioned are factual.  They are all speculation.  How about commenting on actual facts?  The only “fact” you’ve got is that Android has “stalled” at 550,000 ACTIVATIONS PER DAY?!?!  Sereiously dude, if you missed the gravity of what 550,000 activations PER DAY represents, you shouldn’t be writing at all.

    I recommend you stop living in your fantasy world.  

  • Plaguedbydoubts

    Apple execs knew Steve Jobs situation very well and didn’t postpone the release of the iPhone 4s. Yet, Google and Samsung did postpone their event.
    This is preposterous, irresponsible journalism. You imply or maybe even downright claim that Apple knew that the man would pass away the next day, God rest his soul.
    You went too far.

  • Staska

    I had several of close people die from cancer. So I know that when the end is near – you usually know it, doctors tell you that its a matter of days at best , not weeks or months now. 

    So, I believe that, yes, top Apple execs, close friends of Steve’s, knew it to within a day or few

  • Staska

    I had several of close people die from cancer. So I know that when the end is near – you usually know it, doctors tell you that its a matter of days at best , not weeks or months now. 

    So, I believe that, yes, top Apple execs, close friends of Steve’s, knew it to within a day or few

  • Staska

    Yep, I agree that none of us are lawyers here. But dropping some patents, while leaving some of the most wide ranging and important is really good news. 

    And so far things do not seem to go Google’s way anywhere 

  • Staska

    About that growth? Your point? I never said 550K a day isn’t important or impressive. In fact, quite the opposite.  All I said was that it isn’t growing anymore, and the days of Android taking market share in leaps and bounds are over

    As for Google business model and things OEMs change – again. I didn’t say that Google cares if OEMs or operators activate/inactivate some third party apps. I said that Google is losing leverage to prevent OEMs making much more drastic changes. Like taking the latest open source Android release, removing all Google apps so no data at all gets back to Google, and then forking Android like Amazon just did. 

  • Staska

    Yea, well, thanks for grammar/style lessons. But those “thus” were deliberate, just to make a stronger point

  • Staska

    It’s a friggin op-ed. 

    Of course its a speculation, based on facts I know. Android activations a day – 550K today and 3 mnths ago. Oct 11th event was cancelled, Google execs refused to name U.S carrier despide VZW prominently present in launch video. Last 2 Nexus specs are rather unimpressive. 

    And I said – 550K is hugely impressive and important. But it’s about to remain at this level, maybea bit more. But Android about reached its level and is about to plateau in 2012  

  • AppleSucks

    You ignorant ass, you think anyone knew he was going to die? The other companies just postpone their releases due to his death, but Apple didn’t because they’re assholes. If they don’t give a fuck about Steve Jobs, you think they care about their customers? Apple is a company made of false advertising and greed. Just remember: “An uneducated consumer is Apple’s best customer”

  • Parts

    You’re right about Samsung saving the best hardware for their Galaxy line, but keep in mind that the major parts of the iphone 4S that Samsung makes are also garbage in comparison to what they use on their own Galaxy line also. With that in mind, the Galaxy line will always outperform Apple iphone on any hardware and software benchmarks.

    The only think holding iphone up now are it’s Apps, any person with a bit of knowledge on mobile devices knows that their hardware are way behind Samsung.

  • Mariano Karesty

    All about:  iPhone 4S’ Siri

  • Plaguedbydoubts

    Another point to consider is that maybe Jobs himself wanted to see the phone released. Sort of a finale. It isn’t inconceivable that Steve Jobs had some hand in the changes that went into making the iPhone 4 1/2 AKA 4S and might have wanted to see it released. We honestly don’t know.
    Not to go too far into the realm of supposition but Siri could certainly be of use to the incapacitated and may have been the brainchild of one who was.

    To return to actual topic. May buy Nexus; Like facial recognition, it’s nice to be recognized.

  • Derek

    Couldn’t read a single paragraph without hitting a grammar error or missing word. Terrible writing.

  • Derek

    Couldn’t read a single paragraph without hitting a grammar error or missing word. Terrible writing.

  • Derek

    Couldn’t read a single paragraph without hitting a grammar error or missing word. Terrible writing.

  • Derek

    Couldn’t read a single paragraph without hitting a grammar error or missing word. Terrible writing.

  • IphoneFamily

    Really? Looks like the iPhone works to me. The Nexus didn’t work too
    well with ICS during the event. Kinda funny. So you choose a buggy OS
    phone over one that works? I’ve got a broken car you might be interested

  • Anonymous

    Ya,deliberate, but still horible writing. What a pathetic reach.

  • Anonymous

    Ya,deliberate, but still horible writing. What a pathetic reach.

  • Anonymous

    This conspiricy based theoretically unfounded and biased article is atrocious and unreadable. Nothing like trying to create something outta thin air that doesn’t exist. THUS, From top to bottom, absolutely one of the worst pieces of journalism I have ever read, bar none. THUS, I can’t even think of where to begin so I can only address this atrocity as a whole. THUS, It’s content is unfounded as a whole and highly speculative based on such redicuolous reaches for the truth. THUS, The countless “thus’s” were to make a stronger point? Really?? THUS, How about the point that you need to go back to school. THUS, You need to come back to reality. THUS, We miss you here back on earth. THUS, You left out one of the biggest FACTS; ANDROID HAS CURRENTLY, CONSISTANTLY, AND PROGRESSIVELY, TAKEN MAJOR CONTROL OVER THE CELLPHONE/SMARTPHONE MARKET……………FACT! Oops, I mean THUS, FACT!

  • Anonymous

    Why were you so nice to this moron? This author is a complete joke……….period.

  • Anonymous

    Do you write fiction novels as well as fiction articles? Dear God I hope this isn’t your day job. Please Lord, please, say it isn’t so.

  • roselyn

    Wow I really Like this thread and you know what Ripped Muscle X  is an enhanced new formula that raises your strength and energy levels while reducing body fat. 

  • zz

    Staska: Wow what a tough crowd you attract. Here’s my 2 cents: I had the original Motorola Razr and hated the buttons on the outside edges of the phone. They I got the Droid when it first came out and figured they would have made those side buttons behave better. No way. The Droid turns on, calls people you don’t want to call, turns the volume off, etc, just from handling the phone naturally.

    So when Verizon announced the new Droid Razr by Motorola, I watched some demos and sure enough, those side buttons are still there. Never again Motorola. I’m waiting for the Galaxy Nexus. The time has come to stop the pocket calls.

  • Jeffrey Hamilton

    Derek, perhaps you should become familiar with the proverb, “Physician, heal thyself.”

  • Jeffrey Hamilton

    Would it be wrong to think that the Apple “executive team,” as well as the late Mr. Jobs, encouraged the announcement as a piggy-back to his demise?

  • Jeffrey Hamilton

    Lest we not forget, continued consumption of “Ripped Muscle X” may result in future negative health and life-event issues

  • Walt French

    I’m not a lawyer either but would caution you about jumping to conclusions about Apple’s failure to get a preliminary injunction. That would sure give them lots of leverage but the case can still go to trial with Apple’s best claims intact. A couple of days ago, FOSSpatents wrote,

    “While Samsung has every reason to be happy or even jubilant about this outcome, I do think that some of what it says in its official reaction may mislead some people into believing that Samsung’s conduct has received full court approval. That, however, is clearly not the case.
    One reasonably important thing that Samsung’s statement doesn’t address is that if the ruling on Apple’s preliminary injunction request had been the outcome of a liability trial in a regular litigation, Samsung would owe Apple very significant damages for the infringement of a valid iPhone design patent and a valid software patent.”

  • Walt French

    This is an interesting read, all right. I have different ideas about how much these issues will affect Google, which is why I look for other ideas to keep from living in an echo chamber. Thanks, even if, as some write, the concerns are kinda sketchy/rambling.

    It’s good to remember that none of these concerns bedevil RIM or Microsoft. And that a bit of variability in sales happens to ALL businesses. Different interests or even tensions between partners? Ditto.

    There’s a tension you don’t mention: Google, Apple, maybe Microsoft all want in on the carriers’ high profit flow. Google started out as an enabler for Verizon, which famously showed Apple the door, but then realized how it needed an entrant to keep up its game of “keep the handset companies barefoot and pregnant.” In fact, Android was perfect, and you rightly allude to the strength of that alliance. But those days are gone and now we see Google being shackled in various ways, e.g., its inability to get its NFC included.

    I’ll end with an idea inspired by today’s EU investigation into iBook pricing possibly being anti-competitive: controlling which carriers and which OEMs get certain features or models or OS versions, when done by the largest smartphone OS provider, could get a bit tricky on the anti-trust front. Yet another aspect of making big changes (successfully!).

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