Google (NASDAQ:GOOG) will eventually need to split its Android operating system into two distinct forks: one for high-end devices and another for low-end, mass market phones to connect people in emerging markets, according to a research report from CCS Insight.
The detailed report indicated that Android has become one of the dominant smartphone platforms in the world, as numerous estimates of its growth in market share have shown. However, CCS Insight said the platform's growth poses its own problems. Right now, Google is trying to cater to both the high end of the market while concurrently supporting cheaper Android phones.
"Yet successive releases naturally push up the associated bill of materials and total costs," the research firm said in its report. "API compatibility breaks and developers' natural gravitation to the latest SDK and version of the platform suggest this structure is untenable. Consideration of low-end requirements risks restricting performance and users' experience at the top end. With hardware advances requiring specific architecture optimization for graphics and applications, Google can't afford to take this approach. Conversely, a failure to accommodate low-end requirements will restrict Android's opportunity for growth in new segments and emerging markets."
Therefore, the firm predicts that before the fourth quarter of 2012, Google will split the platform into two distinct market segments, and that the split will take place after the creation of distinct Android variants for tablets and handsets in late 2011 or early 2012, following the release of the next, unified version, nicknamed "Ice-Cream Sandwich."
A Google spokesman did not respond to a request for comment.
CCS Insight analyst John Jackson said the research firm made three suppositions in its report: that Android is strategic to Google's core business model and therefore the broadest possible distribution of Android is the objective; API compatibility and consistency is also the goal over time, although there are and there will be some breaks; and that handset specifications will continue to evolve, requiring more expensive components, including more powerful processors.
"Can you build a sub-$100 handset that maintains that application or API compatibility with that specification?" Jackson told FierceWireless. "And I think the answer is going to be no at some point. Google see themselves as Internet enablers to the next several billion of unconnected human beings. And most of those people are not going to able to afford the Nexus 5. We think at some point in time they are going to have to think of a solution to serve that low-cost segment."
Other analysts were skeptical of the CCS Insight report, arguing that Google wants to avoid as much platform fragmentation as possible. "That is certainly a possible approach, but not one I'm expecting Google to take," Current Analysis analyst Avi Greengart said. "Google is already dealing with significant fragmentation in the market, and the minimum required specifications for running Android are dropping thanks to Moore's Law and improved performance within Android itself (the latest versions of Android are significantly faster than prior versions, and the improvements are most apparent on slower devices)."
Roger Entner, an analyst with Recon Analytics and a FierceWireless contributor, said the split already exists. "Actions speak louder than words, and Google is moving toward standardization," he said. "You will see the entry-level phones are running one generation in hardware and one generation behind in software, and therefore you have $150 off. There's no extra effort from Google involved, and it just played out that way. The bifurcation is there, no doubt about it."
- see this CCS Insight report (subscription req.)
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