Some investors and fanboys seem to think that is a great way to generate long-term income for a company – and now Apple is looking to ink a deal with China that could boost sales of their iPhone by 10-percent; and because Apple customers typically buy more than one Apple product, they are hoping that sales of iPads and iPods may also increase. Sounds more like a one-trick pony to me – I would much rather invest in a company that makes their money because it is diversified and has several avenues of revenue, like Google. Does Google make much revenue directly from its Android Operating System – it “only” contributes about $2 billion of enterprises value to Google, or about .7-percent of the company, however, indirectly Google make billions more from the widespread use of Android.
Because Android is not a commodity that is bought and sold, it is difficult to put a realistic dollar value on it – it’s the conduit for many Google Services and products, such as Gmail, Google Glass, Google+, Google Groups, Play Store, etc. Every time a person gets on their Android device and uploads a message or picture to Google+, they make money – Google Glass is an excellent example of how Android will help funnel billions of dollars to Google via advertising revenue.
Google had always said they wanted to stay out of the hardware business, but if they do not feel another manufacturer is taking full advantage to spread the Android or Google name, they will, eventually jump in. In the case of Google Glass, no other company could foresee the fortune that could be made, not in selling Glass (it is rumored that Google will sell them close to cost), but in the immense advertising revenue that could be made from their existence.
In the case of smartphones, Google made a move and purchased Motorola Mobility to champion Android’s cause – to build the “General Motors” of smartphones that were affordable to everybody…emerging nations as well as those in the U.S., and as a by-product, Google received all of those precious Motorola patents to protect itself from future lawsuits. By selling a high quality smartphone all over the globe, Google is further spreading Android and its ecosystem that makes Google money – advertising.
With Android 4.4 KitKat, Googles latest rendition of the OS, it is firming up its future for selling affordable devices, by structuring it so that only 512K of RAM is needed for it to run the device smoothly. Google is committed to making Android a fine, polished, and optimized OS – the best in the world – because as goes Android, so does the continued increase in Google’s revenue via those precious advertising dollars.
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