As iOS gobbles 89% of smartphone profits, Google looks to enterprise market with Android for Work

Google (NASDAQ: GOOG) is working to make its Android operating system more salient for business users with its new Android for Work program. Initially unveiled last year at its annual I/O developer conference, Google this week took the wraps off the program, promising Android enterprise users more security and flexibility.

Google's hope is to stem Apple's (NASDAQ: AAPL) iOS advances into the enterprise market and to give its Android handset makers a better chance to eke out more revenues from the sale of devices to corporations, governments and security-conscious buyers. The drivers behind Google's strategy are clear: According to new numbers from research firm Strategy Analytics, the Android operating system captured a record-low 11 percent of the $21 billion global smartphone market during the fourth quarter (down from 29 percent one year ago)--in contrast, Apple's iOS took a record-high 89 percent profit share (up from 71 percent a year ago).

"Android's weak profitability for its hardware partners will worry Google," said Neil Mawston, Strategy Analytics' executive director. "If major smartphone manufacturers, like Samsung or Huawei, cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen or Firefox."

While shipments of Android phones continue to outpace those of Apple's iOS in the wider consumer market, the situation in the enterprise space is notably different. According to new figures from Good Technology, which sells mobile device management software to corporate buyers, iOS devices accounted for fully 73 percent of its total device activations in the fourth quarter. Android trailed at around 25 percent of total activations.

Acknowledging the importance of the enterprise market, Apple last year announced a major teaming with IBM to sell iOS devices to enterprise users. The two companies recently announced their first crop of iOS apps targeted at workers, including those for customers in the banking, retail, insurance, financial services and telecommunications sectors.

Google is clearly aware of the potential of the enterprise market. The company announced four specific components of its Android for Work program:

  • Work profiles. Google said Android for Work users can create a dedicated work profile that isolates and protects work data. Administrators can deploy approved work apps right alongside their users' personal apps knowing their sensitive data remains secured, Google said.
  • Android for Work app. Google said that, for devices running Android Ice Cream Sandwich through Kitkat, or those that don't run work profiles natively, the company created an Android for Work app. The app delivers secure mail, calendar, contacts, documents, browsing and access to approved work apps, and can be managed by company administrators.
  • Google Play for Work. Google said its Google Play for Work allows businesses to securely deploy and manage apps across all users running Android for Work.
  • Built-in productivity tools. Google said it created a suite of business apps for email, contacts and calendar that supports both Exchange and Notes. The apps also provide editing capabilities for documents, spreadsheets and presentations.

Via Android for Work, Google also said it would offer enterprise technologies and services from the likes of Samsung, SAP, BlackBerry, Adobe and others.

Interestingly, as Re/code pointed out, Android for Work does not include any technology from Samsung's Knox mobile enterprise offering; that stands as a reversal from last year's plans, when Google said it would integrate Knox technologies into Android. Instead, Google's Rajen Sheth told Re/code that Google's partners for Android for Work will be able to add their own technologies like Knox into their devices.

For more:
- see this Strategy Analytics release
- see this Google post
- see this Re/code article
- see this WSJ article
- see this VentureBeat article

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