Google – Ins and Outs (I/O).

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Developer conferences are where the ecosystem evolves.

  • Developer conferences are becoming increasingly important as the relevance of the device continues to decline.
  • Google will host its 2014 I/O conference this week and it is here that a glimpse of what is really planned for the Google Ecosystem over the next 12 months will be given.
  • As the ecosystem becomes more and more important, it is the developer conferences where the key announcements are being made with device launch events becoming less and less relevant.
  • This has really come into focus this year as Microsoft’s Build, Apple’s WWDC, Facebook’s F8 and now Google’s I/O have been where all the really important announcements have been made.
  • This is a further sign that devices are increasingly commoditised and that the value from which profit margin is being derived in the mobile device industry is coming from the ecosystem.
  • Developers are a critical part of the ecosystem and consequently how an ecosystem loves and nurtures its developers is key to its long term success.
  • Google’s I/O conference runs from June 25th to June 26th and I am expecting two major developments.
  • First: Gaming. Gaming is a huge part of Digital Life and yet Google still declines to properly address the segment.
  • Last year’s I/O saw some half-hearted attempts to address gaming but this year I am expecting something more.
  • There are already signs that Google is working on this (see here) and I am hopeful that some of this is ready for launch.
  • Google does not necessarily have to offer the games themselves but merely be the glue that ties gamers together when they go on line to play and download games.
  • The rumour mill has been very quiet on this issue recently but I think it is one of the most important issues that Google needs to address.
  • Second: wearables and here I think that Google has got it wrong.
  • Wearables are mostly tiny devices that are going to have a single purpose or function.
  • In effect, they will be like sensors that collect analogue data, digitise it and send it on to a larger device like a smartphone that can interpret it and make is useful.
  • Hence, they are not likely to be devices to which third parties will be writing applications.
  • Putting Android into a tiny device like this is exactly the same as trying to shoe horn a full version of Microsoft Windows into a smartphone.
  • This has been tried and tried and tried but every time it fails.
  • Hence, I suspect that using Android in a wearable will result in a large, expensive device with awful battery life.
  • The Samsung Galaxy Gear was a good example of this.
  • Therefore, I suspect that most wearables that give a good user experience, will run an RTOS (Real Time Operating System) which will enable tiny devices to fulfil their purpose and have a very long battery life.
  • Google should be focusing on making Android the data collection and aggregation point for all of these devices rather than trying to put the OS on the devices themselves.
  • It is in the data where the value for Google lies and it is in the aggregation of that data where I expect Google to eventually focus its efforts.
  • Google remains the only company I would look at in the Android ecosystem as it is slowly but surely subjugating all other players to its will.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.