I watch what they have done with Android, and I’m flabbergasted because their market share in units is so high, but look at the profit share…
So a well established VC who gives companies money for profit is totally confused by Google and their Android platform. That is not surprising at all since most were utterly confused when some countries transited from coin to paper money. Most systems strongly entrenched in old practices find it very hard to adapt to a new way of thinking.
Simply put, Android was made to disrupt the current smartphone/PC categories. Originally Linux was made to do the same thing: a third choice that proved to be both economical and useful for all. Android was made during the Web 2.0 era and therefore monetization was an afterthought like most tech during that time.
Since google spearheaded android during the “see a need, fill a need ” tech movement, most didn’t understand its platform at all. To most Silicon Valley pundits, android didn’t exist because it didn’t have a “value” to it. They looked forward to buying new Apple hardware twice a year because in their minds cost equaled value. We know that isn’t true in every aspect because productivity can also equal value.
If you found a used hammer on the sidewalk would you ignore it because you were on your way to the hardware store to buy a new hammer? Sure the code used to make Android isn’t new but does that make it less valuable or productive? Does using open source tools to make music or run a business mean your product is less valuable? On the contrary! And if you make a profit from your hard work the return is higher because your cost was lower!
When I see quotes like the one above, I don’t see bad math, I see fear of something they don’t understand or want to understand. Now cameras are starting to ship with android built in too. Does that mean these products are worthless? Hopefully it means the premium tag will be dropped but we will save that discussion for another time. Basically I just want to make the point that not everything has to be made with profit as the primary or initial goal. If the product is of “value” to someone, the payoff will come regardless.