A lot of recent analyst reports seem to have expressed concern at the fact that tech giant Google Inc (NASDAQ:GOOG) may have inadvertently given rise to its biggest enemy from within by making its Android operating system an open-source platform. Those concerns seem to have surged with the introduction of Facebook Inc (NASDAQ:FB)‘s ‘Home’ software specifically created by twisting and turning Android in a way that completely changes the users’ home screen to make Facebook news feeds and messages a priority.
However, I feel that Home, one of Facebook Inc (NASDAQ:FB)’s many recent attempts to monetize its user base will never overrun the Google juggernaut in a way that even remotely threatens the latter company. Let’s start with some fundamental assumptions where Facebook is probably going totally wrong.
The fundamentals remain the same
If you think of a couple of fundamental things that every phone in this world is capable of, you’re probably thinking of phone calls and messaging. And the rapid transition from feature phones to smartphones in the modern age has probably added on-the-hip email to that list, courtesy a certain Canadian company by the name of Research In Motion Ltd (NASDAQ:BBRY). The important thing here is that no matter how important social networking is to an average phone user, the first thing 99% of them probably do when they check their phones in the morning is to look at their missed calls, messages and emails. Not Facebook.
Keeping that in mind, I’m really not sure how the average user would react to Facebook Inc (NASDAQ:FB) as the initial interface residing in their mobile home screens. Add to it the stream of ads that are sure to follow after some time, and you will probably end up with a set of rather irritated users. For all you know, people can well continue using a Facebook icon as they have been doing among other things that they do with a phone. In fact, I feel messages and emails are too primary as applications to be replaced by Facebook or any other mobile computing application for that matter in the near future. That will require a far more radical transformation of people’s mobile usage and related habits.
The Android-iOS dominance
Having said that, it’s important for Facebook Inc (NASDAQ:FB) to remember that Google Inc (NASDAQ:GOOG)’s Android, along with Apple Inc. (NASDAQ:AAPL)’s iOS platform, together have a stranglehold over 90% of the global smartphone market. That also means that an overwhelmingly large section of mobile users all over the world are still accustomed to seeing the Android or the Apple iOS home screen layouts on their phones. A trend that Facebook is unlikely to upset overnight. And it’s probably not even thinking of doing so, remaining content if this move is reasonably able to monetize its user base. At the end, Google should know that Facebook is just another website, albeit an immensely popular one, but an operating system is a whole new ballgame altogether. People continue to search using Google’s search engine, and a majority of them continue to check their emails on the popular Gmail application. And they do so even while using Apple Inc. (NASDAQ:AAPL) iPhones. Think about that.
Google Plus is an exception
However, Google Plus can be a potential area of conflict between the two companies. With Google Inc (NASDAQ:GOOG) already largely unsuccessful in popularizing its online networking platform, they can just say bye bye to the idea altogether if the Facebook Home downloads start showing a surge in numbers. And a certain section of consumers comprising students will definitely want to have a feel of Facebook’s new Home.
But, look at the other side
At the same time, a large section of students and young working professionals in emerging markets prefer applications like Whatsapp over the Facebook app. For them, the new Facebook Inc (NASDAQ:FB) Home will probably be a temporary fad and nothing else. And they will continue to search using Google and continue to send emails using Gmail. While it’s true that roughly 70% of Facebook users do access its services through mobile devices such as smartphones and tablets, just how many of them will want to make Facebook the axis around which their entire mobile experience revolves remains a big question altogether. And if the answer to that is not very encouraging, Facebook Home’s future will itself be questionable.
Points to ponder, though
Once we move away from the Facebook Inc (NASDAQ:FB) aspect, however, there are a few newly-emerged reasons that might force Google Inc(NASDAQ:GOOG) to have to rethink future versions of or even the entire future of Android. The fact that Android has become too much of an open-source platform, if you know what I mean, has created a situation where so-called off-shoots like Facebook Home have been allowed to develop. Why do that in the first place?
And the problem can assume larger proportions. Take for instance, China, where most of Google-related services are blocked by the government. This also means that a host of Android phones activated and circulated in China have very little core relation to Google. This again leads to a situation where Google is unable to mine user data from such phones which helps it to generate more directed ads. And everyone knows that 90% of Google’s revenue is generated by its ad services. Google is not even benefiting from web search traffic from such devices, as most of them use one or the other among local Chinese search engines. In the end, Google’s creation Android, is actually benefiting handset manufacturers, like Samsung, by generating stupendous sales figures.
Solace in Apple, maybe
From that point of view, Google Inc (NASDAQ:GOOG)’s tech rival Apple Inc. (NASDAQ:AAPL) actually provides a huge benefit. Since Apple’s iOS is famous for its ‘walled-garden’ approach, that also means the software cannot be easily tinkered with. And a large part of Apple users conduct their searches using Google, which is where iPhones prove to be hugely beneficial for the company. Not only that, Apple’s recent Maps fiasco comprehensively proved the popularity of Google Maps among iOS users. That’s no mean feat.
At the same time, Android is still not highly regarded in corporate circles, as far as enterprise security is concerned, an aspect in which rival Research In Motion Ltd (NASDAQ:BBRY) has always scored brownie points. Again, the fact that Android is an open-source software that can be easily tinkered with does not speak well of Google as the inventor of that software. Add to it the fact that a recent report from Kaspersky Labs states that 99% of mobile malware targets Android, and you do perhaps realize why Google needs to go back to the Android drawing board, once again.
No clear and present danger as yet
Having said that, these are still minor chinks in Google Inc (NASDAQ:GOOG)’s armor, but some of which do have the capacity to build up on a larger scale. But that’s still a long, long way off, considering the sheer number of Android-activated devices the world over. And Google’s strength lies in the wide repertoire of its services, many of which are not solely dependent on mobile devices. So, sit back and relax. This is one stock that should stand you in good stead for an equally long time to come.
Subhadeep Ghose has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, and Google. The Motley Fool owns shares of Apple, Facebook, and Google.
