Facebook Home, Disintermediation of Google, and Future of Android

Analyst Blog

April 5, 2013, 9:26 a.m.
Aapo Markkanen, Principal Analyst

Facebook Home, the social network's big mobile moment, turned out to be quite much less extensive than what  we predicted back in 2011. It isn’t an OS and it isn't an OS fork, but it certainly goes deeper than an ordinary Android skin. Call it a spoon, a spork , an under-overlay, an unusually thick skin, or whatever else that soothes your soul. In the following, I’ll take a look at how it fits into what is developing into one of the most intriguing themes in today’s mobile industry – Google’s disintermediation from its own OS, and what Google plans to do for it. Samsung is a sub-story of its own, a hardware player trying to figure out software. In the case of Facebook et al, it’s more about web players trying to figure out mobile.

Let’s go first back to China. With hindsight, Google’s decision to not certify Acer’s Aliyun devices as Android was one of the most significant strategic developments in the OS space in 2012. Google made it clear that it’s ready to play hardball if it concludes that an OHA member (in this case Acer) is about to cross a line, and did so in a deliberately vague manner, leaving a lot of scope for further, case-by-case interventions.

Android’s issues with China have been widely discussed, and my guess is that we could see similar regional attrition taking place also elsewhere. Yandex, for example, appears to be keen to use Android UI tweaks – combined with an app storefront – for the benefit of its own vertical integration. The firm’s “Shell” is available as a downloadable overlay , and it’s also available to potential OEM and carrier partners. If Yandex is successful it could quickly weaken Google’s foothold in Eastern Europe, Central Asia, and even Turkey.

What makes the overlay approaches chosen by likes of Facebook and Yandex so precarious is that Google could very easily bring them to a halt. This is especially true for the downloadable versions, since it could be done by beefing up Google Play’s hitherto minimalistic submission policies. (“Thou shalt not unnecessarily alter the user experience, make life difficult for existing third-party apps, or something, something, Dark Side, something, complete…”) My feeling is that the preloaded versions are a somewhat safer bet, since they’d essentially need to be blocked through the OHA process, but then again they’re likely to concern a much smaller number of users anyway.

It would be mistake to claim that all of the fragmentation and disintermediation that Android is undergoing would only work against Google. After all, everything that gives developers extra reasons to create apps and content with Android as their primary platform is away from other platforms. The situation, however, may look pretty different once the current landgrab stage of the platform race starts to be over. It is then when it'll be the right time for Google to start exercising more control over Android. It is unlikely ever to close-source it, but there are also many other levers it could pull. Google Play is an obvious source of control, and then there’s always the option of revamping OHA with a right mix of sticks and carrots – e.g. by investing more in partner-exclusive apps and services, and giving the partners a more privileged (that is, earlier) access to new Android versions’ code.

I’d expect this muscle flexing to be gradual (you could say that it started with that Aliyun episode), and the timeframe for it will depend on how successfully Amazon, Facebook, Alibaba and others manage to exploit Android for their own purposes. Either way, a slightly closed Android ecosystem could be reality by the end of 2015. If Google finds that its lunch is being eaten it will have no problems acting even faster than that, despite of all the openness rhetoric we’ve got used to. For Facebook's mobile strategy, that's an uncomfortably lot of exposure.