Tim Richardson

Melbourne, Australia

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Google's payment strategy and Android

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Google is serious about Android, the mobile phone OS. I have an Android phone (the HTC Desire) and I'm very pleased. I'm not alone; Android's market share in the US has surpassed the iPhone ... at least, in the months prior to the launch of the iPhone 4.

First and second place belong to other platforms, but the future belongs to Android and Apple's iOS.  The software is excellent, and the pace of innovation seems to have blown Microsoft, RIM and Nokia out of the water. But a key reason why the future belongs to these platforms is the number of apps which are available. As Microsoft proved on the desktop, becoming the common environment for applications becomes a positive feedback loop. Apple is the clear leader, and Google needs Android to catch up before Apple reaches some kind of game-over market share. A lot of app developers like to get paid for their apps (IT guys are working weekends hoping to strike it big), so the Android market place must allow developers to sell apps. Google is therefore strongly motivated to make it easy for people to pay for apps; this attracts more developers, more apps, more Android handsets and more places for Google to sell ads. Apple already has lots of people signed up for iTunes. What should google do?

Well, Google has spent years trying to develop a payment platform to rival PayPal, even back in the day when Microsoft still had credible dreams of being a mobile OS player, and Google Checkout still lags badly. This battle of payment platforms has nothing to do with mobile phones. Someone at Google decided to offer only Google checkout as the payment platform for Android. However, this is hopelessly conflicted. Urgently trying to develop an app base to rival the market leader knowing that this is the key to success is the right thing to do. Mandating a payment platform hardly anyone uses doesn't possibly make sense unless the failure of Android is worth risking to achieve the greater goal of a minor increase in Google Checkout's miniscule market share. That's combining two weaknesses and hoping for a win. Now, it's announced that PayPal will be a payment choice for Android apps. That makes sense, but why did it take so long?

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Last Updated on Friday, 10 September 2010 21:58