Narrative: Android is Hard
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
The LG G6 is sleek, solid, and surprisingly sensible – The Verge (Feb 27, 2017)
After last year’s largely unsuccessful focus on modularity, it looks like LG has gone back the other way, with a really solid, slab-like phone that trades removable items for dust and water resistance. We’ve seen phone makers go for durability as a selling point before, sometimes in a core model and sometimes in a rugged variant (Samsung favors the latter), and it’s rarely enough to act as a big differentiator, especially in a premium phone. But it looks like LG is also majoring on the combination of a really big, high-res screen with small bezels and better one-handed use. It’s always interesting to watch the pendulum swing back and forth between masses of clever features and simplicity with the Android vendors, and we’re seeing that here. I’m betting this phone does better than the G5 last year, but LG continues to be in a tough spot in smartphones – it’s losing money every quarter, sales are falling, and it’s stuck in that unfortunate middle within the Android ecosystem where it’s neither at big scale in premium devices nor price competitive enough to do really well in the mid market. I don’t see this phone dramatically changing its fortunes.
via The Verge (more on Techmeme)
Lenovo Reports December 2016 Quarter Results (Feb 16, 2017)
Lenovo continues to be a business in three quite different parts: in PCs, it’s the world’s largest vendor, grew slightly year on year, and is profitable; while in data centers and mobile it’s shrinking fast and unprofitable. Lenovo’s mobile business in China has collapsed by about 90% in the past two years, to the point that Lenovo didn’t even report China shipments at all this quarter, while it’s likely held up a little better outside of China, though it’s very focused on low-end shipments. Lenovo basically focused its whole earnings presentation on the PC business, with much less detail than usual on mobile, and the usual short shrift for data centers. This was a business that looked really good a couple of years ago, but looks much less so now. Another cautionary tale about the challenge of today’s smartphone market, especially for Android vendors, but also about the dangers of expanding too quickly through acquisitions.
via Lenovo
Mossberg: Android apps on Chrome OS arrive, disappoint – Recode (Feb 16, 2017)
Google has officially released its Android-apps-on-Chrome beta and it’s getting fairly terrible reviews. While Google is legendary for attaching the beta label to things that feel like they’ve long outgrown it (see especially Gmail), in this case the label actually feels premature, since the experience on these new Chromebooks sounds much more like an alpha than a beta. The software is very buggy, and the implementation of Android apps on ChromeOS is if anything even worse than it long has been on Android tablets. Getting Android apps onto a laptop sounds really compelling – all the apps you’re used to on your phone, now on your PC! – but the reality for now sounds extremely disappointing. It’s hard to avoid the sense that this is a misstep by Google, which promised these launches a few months back but clearly isn’t ready to deliver on them yet. In fact, these devices appear to suffer from some of the same lack of readiness as the recent Android Wear 2.0 release, although that was supposedly a finished product. This is uncharacteristic for Google, and it’s a worrying sign that things are being rushed out of the door to meet deadlines rather than because they’re ready.
via Recode
HTC has another tough quarter, with revenue down 13% YOY, but smaller losses – TechCrunch (Feb 15, 2017)
I don’t typically track HTC’s financials that closely, because they’re so small (just $700 million in revenue last quarter) and such a minor player at this point, but it’s worth checking in from time to time, especially as HTC expands beyond its traditional smartphone business into VR and ODM manufacturing for Google. Interestingly, there’s very little sign of any meaningful bump in revenues or profits from either of these initiatives, which either means that their contribution is tiny or that the traditional smartphone business is declining even faster than in the past. Revenue was down 13% year on year, and the company has had negative operating margins for seven straight quarters and most of the last three years. On the Q3 earnings call, HTC said that it was near breakeven on its smartphone business, and blamed the VR business for the overall losses. It also refuses to talk about the Pixel business at all on earnings calls, citing the lack of public disclosure by Google (which is odd because Google has confirmed it). Regardless, it’s worth noting that the company’s gross margin is just barely in the double digits, which obviously doesn’t leave much room for marketing and other corporate costs. HTC is one of a number of what were major Android vendors a few years back which have faded considerably, and unlike Sony it doesn’t yet seem to have figured out how to make the business work at its new smaller scale.
via TechCrunch
Huawei Sold More Phones but at Less Profit — The Information (Feb 10, 2017)
Huawei was the number three smartphone maker I said was one of several missing from that recent analysis of who captured the profits in the global market, and it does actually make a decent profit (relatively speaking) on its hardware. According to the Information, the relevant business unit made $2 billion in profit in 2016, or a margin of 7.7%, which may not sound like a lot but given that almost all consumer electronics businesses generate low single digit or negative margins, it’s not bad. It was down from 11% in 2015, but Huawei invested enormously in marketing in 2016 and saw 30% smartphone growth as a result. It can probably ramp down that spending in 2017 while still seeing decent growth, which should help it get closer to its $4 billion profit goal for the year. Huawei continues to be a very interesting company to watch in the smartphone market, and is one of only a handful of companies which have managed to drive a decent profit from making Android smartphones.
via The Information
Apple Took 92% Of Smartphone Industry Profits In Q4 (not really) – IBD (Feb 7, 2017)
Every quarter, there’s a slew of headlines on this basis, usually based on analysis from Cannacord Genuity. The big flaw in this analysis (and the reason I inserted a “not really” into the headline) is that it only looks at those players that publicly report profits from a smartphone unit, plus Apple. As the article points out, the “survey” of six “major” smartphone vendors includes the #1 and #2 but also BlackBerry and Microsoft, which each shipped well under a million smartphones last quarter. It entirely leaves out the third, fourth, and fifth largest smartphone vendors (Huawei, Oppo, and Vivo) and other big names from the top 10 like Lenovo and Xiaomi. Lenovo is publicly traded, but hasn’t reported yet (and is likely to have been unprofitable in smartphones again), but no-one really knows how profitable the others are. So the headline is misleading when it talks about “industry profits” – it’s a very narrow analysis of six vendors, only two of which are in the top 10. Now, that’s not to say that it isn’t likely that Apple captured the vast majority of profits in the smartphone market yet again – it almost certainly did, and this situation highlights both the general challenges with driving meaningful profits from consumer electronics and the specific challenges associated with competing on the basis of Android in smartphones. But this – as with the flawed quarterly market share rankings with their false precision – grates every quarter because it’s shoddy analysis.
via IBD
Google will discontinue Google Now Launcher in the coming weeks – Android Police (Feb 4, 2017)
Another chapter in the bizarre saga of Google’s various voice and assistant technologies. Now was Google’s proactive non-voice assistant play for years, while Google Voice Search handled the voice aspects. With the launch of the Google Assistant, it was logical to assume that it would displace this combination, and yet its still not clear whether that will actually happen. Google is discontinuing the Google Now Launcher as part of the GMS bundle OEMs use to pre-package various Google apps and services, but isn’t replacing it with an Assistant-based launcher, and gives OEMs the option of not replacing it with anything within their own launchers. So, Now dies as part of GMS (and in the Google Play Store) but there’s no official communication still about when Assistant might be made available broadly to OEMs. Google’s decision to make the Assistant exclusive to the Pixel at launch was a massive strategic shift, and has arguably cost them significantly in the voice platform race against Amazon, and it continues to provide very little clarity on its future as part of Android for OEMs.
via Android Police
Sony Reports Results for December 2016 Quarter (Feb 2, 2017)
Sony’s been such an interesting company to watch over recent years, because almost every aspect of its hardware business has been challenged, and it’s even exited some, like PCs. However, it’s had something of a renaissance in the gaming space, with the Playstation outperforming the Xbox in the current cycle, and actually growing year on year in the December quarter. The other interesting hardware business to watch at Sony its smartphones, because it’s taken a unique approach for an Android vendor, which appears to be paying off. That approach has involved focusing the smartphone business on the premium segment, resulting in a smaller but more profitable business. Sony’s smartphone shipments have dropped by about half from 2015 to 2016, but its margin rose to over 8% in Q4, well above the low single digit or negative margins most consumer electronics businesses generate. There’s an interesting signal here for other Android vendors about what it could take to find success, though there probably isn’t room for more than one or two vendors pursuing this premium strategy.
via Sony (PDF)
Phone startup Nextbit has stopped production and is selling its assets – Recode (Jan 30, 2017)
Chalk another one up to either the Hardware is Hard or Android is Hard narratives (I’ve tagged this against both). Another Kickstarter-backed hardware company which had an intriguing approach to an established category and got lots of interest from tech bloggers and reporters calls it quits and gets bought by a bigger existing hardware player. I was always skeptical on Nextbit – it just didn’t feel like its few unique features and design were enough to overcome the massive barriers to entry that exist around scale, distribution, and dominant existing players in the Android market. I can’t say I’m surprised to see it fail, though it’s disappointing because the team had some interesting ideas and the design was definitely more interesting than your average phone. Razer seems an unlikely buyer – this Recode piece says the group the Robin team is going to has been focused on gaming, so it doesn’t sound like we’re going to get a Razer phone from these guys anytime soon.
via Recode
There are too many ways to Google on Android – The Verge (Jan 30, 2017)
I’ve tagged this post against three different narratives, because this little mini-review taps into several broad threads. Firstly, this is about Google and parent Alphabet’s tendency to allow lots of people to work on the same thing in different parts of the company in different ways, which results in a confusing user experience because there are many ways to do the same thing (see especially messaging). Secondly, there’s the fact that on Android Google’s own messy set of services is often duplicated (or worse) with competing services and apps from OEMs and/or carriers. And lastly there’s the fact that even on Google’s own hardware, the Pixel, which is supposed to represent the epitome of Android at its best, this confusion still reigns. I was half-tempted to tag this post against the Google is Ahead in AI narrative too, because though Google does fantastically well at the back-end AI piece, it often falls short on the user interfaces and experiences that present the functionality to the user. The point is, the situation described in this article is far from ideal, but it grows out of several cultural quirks at Google/Alphabet combined with several of the downsides of the approach Google has always taken with Android, and a solution doesn’t seem imminent.
via The Verge