Thoughts On The Latest Chromebook And The State Of Chrome OS

I’ve watched Chrome with much interest over the years. While lately I’ve been generally harsh on a number of Google products, there’s still no doubt in my mind that when it comes to the browser — at least on the desktop — Google is winning. That’s a big part of why Chrome OS fascinates me.

Chrome OS is Google taking their best product and broadening its reach. The aim isn’t just to erase the stain that is Internet Explorer (which sure seems to be working), it’s to go after one of Microsoft’s legs: Windows. So far, it doesn’t appear to be working.

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When you initially read the description of Tizen:

Tizen is an open source, standards-based software platform supported by leading mobile operators, device manufacturers, and silicon suppliers for multiple device categories, including smartphones, tablets, netbooks, in-vehicle infotainment devices, smart TVs, and more. Tizen offers an innovative operating system, applications, and a user experience that consumers can take from device to device.

You think, WTF? What’s the point? Why are Samsung and Intel and Sprint and others messing around with this? It sounds exactly like Android, just without the Google element…

…wait a minute — maybe that is the point!

The obvious answer is that they’re going to do a dividend. But remember that Apple doesn’t always do what’s obvious. Also remember that the majority of their cash (and cash equivalents) is overseas. If they try to bring that money stateside, it’s going to be taxed accordingly. 

I’d still bet on dividend, but I wouldn’t bet against something else. Maybe building more of their own facilities overseas? Committing money towards something that allows them to control even more of their build process would make sense.

To that end, maybe crazy, but what about buying Samsung? It would both harm Google (Samsung is by far the most successful Android partner) and help Apple (which still heavily relies on Samsung chips and screens, etc). They don’t have quite enough cash to do that (but almost!), but the cash they do have could surely sweeten a deal.

But would they be allowed to do that? And would they want to? The Google/Motorola deal looks to be a nightmare, why would Apple want to take on something similar? Unless, of course, they’re about to get into the television business…

Anyway, I’m just dreaming out loud here. It will probably just be a boring old dividend. 

Update: A number of folks have pointed out how odd it would be for Apple to have a press conference just for a dividend. Agreed, that would be weird — but there has been an abnormal amount of interest in this topic due to Apple’s $100 billion stockpile.

Maybe a stock buyback is more likely? Or maybe it really will be something fairly crazy? 

I like this idea a lot more than my totally crazy Samsung dream…

Speaking of crazy charts… these great ones by Horace Dediu of Asymco are just bonkers.

In the first, you’ll see that Apple retains the top rank in profitability among mobile phone OEMs for the third straight year…

In the second chart, you’ll see that Apple snatched the revenue crown back from Samsung last quarter.

But the third one is the best. It’s not just that Apple is ahead in profit share, they’re destroying everyone else. That includes Samsung.

(And if you can’t see Sony, LG, and Motorola on that chart, it’s because they’re making little or no profit.)

Apple now makes an astounding 75% of the profit in the industry amongst their peers. That’s with just 9 percent unit share (smartphones and feature phones are combined), as Dediu points out. Amazing.

For once, a bit of upbeat news for UltraViolet, the awful idea that Hollywood seems dead set on implementing: Amazon and Samsung are now on board.

That’s good news for the don’t-call-it-DRM newfangled DRM, which has been swimming in a sea of shit since it launched last year. 

Of course, the one name still not on board remains the most important: Apple. Wake me up when that happens — which given the customer response to UltraViolet seems unlikely anytime soon. 

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.