Android founder Andy Rubin may clash with Google if he returns to mobile

Android co-founder Andy Rubin is interested in returning to the phone business -- and the dominant mobile operating system he helped create -- after two years away from the market, according to a report in The Information.

Citing unnamed "people in the mobile industry," The Information reports that Rubin has been trying to recruit people for a new company that would likely be backed by Playground Fund, an incubator aimed at helping startups that make hardware. Playground Fund has reportedly raised roughly $300 million.

Rubin is credited with helping to develop one of the world's first smartphones -- best known as T-Mobile's Sidekick -- during his time at Danger, which he co-founded in 2000. He then co-founded Android Inc., which was acquired by Google in 2003, leaving Rubin to oversee the development of Android OS before leaving Google 10 years later.

Rubin, who holds 17 patents, is seen as a visionary with a particular genius for designing and building high-tech devices. It's unsurprising, then, that the latest report has led to speculation that Rubin is interested in launching a hardware company focused on building high-end Android phones.

But the smartphone hardware business is a notoriously low-margin space where profits are extremely hard to come by for any company not named Apple. Indeed, IDC today predicted the worldwide smartphone market will slow to single-digit growth in 2015 for the first time. Rather than focus exclusively on hardware, Rubin may be looking to build an entirely new ecosystem atop the operating system he helped create.

While Android is an open source OS, the Google Mobile Services agreement mandates that manufacturers must adhere to certain terms to gain access to key apps such as the Google Play Store on their handsets. The agreement precludes phone makers from pushing their own mobile apps and services alongside the Google offerings that have helped make Android such a success.

A few players around the world have managed to build their own mobile business with Android, though, using the basic OS and replacing popular Google apps with their own, or with those of their developer partners. China's Xiaomi, for instance, has seen success with a forked version of Android branded MIUI, and the Amazon Appstore has gained traction among same tablet users. Cyanogen, a notable startup pursuing a similar strategy of leveraging Android, has raised $115 million in funding so far, including $85 million in Series C funding announced earlier this year. Cyanogen hopes to sell to handset makers a version of Android that doesn't include Google's services.

Even Rubin's inner circle may not know what he has mind, and it's certainly possible that he wants to focus purely on creative new hardware and an innovative new version of Android. But the money in mobile lies in services and app ecosystems. If Rubin and his partners pursue that, it is likely to put them in direct competition with the company -- Google, Rubin's former employer -- that introduced Android to the world.

For more:
- see The Information article (sub. req.)

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