One Out Of Three Ain’t Bad…

All we’ve heard for the past year-plus is how Android is killing it. The phones are taking over the world. And that’s true — from a unit perspective. But from an actual business perspective, things are decidedly murkier. Google says they’re making a good amount of money as a result of Android, but it’s clearly nothing compared to their main business. The carriers are doing well too — but carriers always do well. Being overly greedy tends to have this effect. As for the OEMs… well, that’s a different story.

The three largest Android OEMs are Samsung, HTC, and Motorola. Samsung just posted record quarterly profit. So far so good. But HTC just reported its first profit drop in two years. And Motorola just warned that its 4th quarter sales were going to miss as well. When you have to warn ahead of actual earnings, that’s a very bad sign.

So one of the three top Android OEMs is doing well. The other two are doing poorly. This matters because of what it means for the future. 

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I fully agree with this editorial by Chris Ziegler calling for the Android OEMs to stop making so many phones each year. His intro:

The seed for this editorial was planted in my brain the day that the HTC Amaze 4G was released on T-Mobile 120 days after its predecessor, the Sensation 4G. It bears repeating: one hundred and twenty days. Even now, it makes my head spin.

If I had bought the Senstation 4G, the senstation I’d be feeling is something akin to a swift kick in the nuts.

Ziegler’s graphic in the post is pretty amazing when you consider that it’s Apple versus only HTC (and not even all HTC phones) — just one Android manufacturer. Factor the others in and it would look like a big gray mass — exactly what I see when I look at the Android phone market.

Ziegler does say there’s hope given that manufacturers like Samsung seem to be trying to establish routine updates and branding with their Galaxy S line. Of course, not mentioned is that this very line made headlines this morning for its inability to upgrade to the newest Android version — even though it was released just 18 months after the phone itself. 

Reading this piece over, another thought popped into my head: what if this once-a-year phone upgrade mentality pushes the carriers more towards one-year contracts? I could see someone like Sprint doing this to differentiate themselves and win customers. Of course, either the subsidy would have to be less upfront or the monthly contracts a bit more to sustain such a move. Still, I don’t think it’s so crazy.

Facebook Not Building A Phone*

*No Facebook employee is actually on an assembly line building phone hardware.

There are two things I like about the AllThingsD (or as John Gruber likes to call them “some website”) report on the “Facebook Phone”.

1) The complete and utter lack of any link to or mention of TechCrunch even though we broke this story over a year ago.

Do they have new information? Yes, namely the codename, “Buffy”, and the partnership with HTC. But it is the same project, as they even acknowledge: “Although it has changed scope and leadership, Buffy has been an ongoing area of concern at the social networking giant for the past two years.”

2) While Facebook denied the project at the time of our report, there’s no question it has been real the entire time. I’m going to stick by what I wrote last September: Facebook Is Not Working On A Phone Just Like Google Was Not Working On A Phone.

In that post, I outlined exactly what these new reports suggest. Namely that Facebook has been working on their own version of Android with social deeply ingrained — which Dan Frommer was first to point out on Business Insider also over a year ago, and I reiterated hearing this past February. And working with a third-party to manufacturer the hardware (again, HTC). 

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