Android a Massive Success for Google

There are some people who still don’t recognize how successful Android is for Google. Even some financial analysts scratch their heads because Google is not making direct revenue from Android. Google is snidely still referred to as a “one trick pony” regularly. I don’t agree but even if it is, it’s a pretty good trick. At the “Techonomy” conference in Lake Tahoe, California yesterday Google CEO Eric Schmidt said that 200,000 new Android devices are being sold (or activated depending on the report) each day — a million a week. Only a few months ago that number was smaller by half. It has been estimated — though I believe this is not entirely accurate — that Google’s mobile search share in the US is almost 100%. Even if the number is 10 or 15 points less it’s still dramatic. Google doesn’t break out how much revenue it generates from mobile search but it’s starting to show up. And Schmidt casually said the other week (according to the WSJ) that ultimately Android-generated mobile revenue might become a $10 billion business for Google.
“If we have a billion people using Android, you think we can’t make money from that?” Schmidt asked rhetorically. All it would take, he said, is $10 per user per year. Among other things, Google might earn such sums from selling access to digital content from newspapers.  
It’s a forgone conclusion that mobile search will at some point in the next 5-7 years match or exceed query volumes coming from the PC. That will happen much sooner in developing countries that lack the PC infrastructure of the West. Google has positioned itself already to “own” that market, as the chart above indicates. And notwithstanding some substitution of Google here and there on Android devices (Motorola-Bing in China or Baidu, AT&T-Yahoo in the US), almost every Android device sold is a Google search device. It’s very clear that in only two years Android has become Google’s second most successful product after PC search. One could even characterize Android’s success as “radical.” Over the long term, it threatens Nokia in developing countries and the combined iPhone-Android juggernaut is beginning to threaten RIM in the US and Europe.