Google’s free cloud based storage service – Google Drive – has been rumored to be in development since years now. However, speculation that it may finally be close to launch has intensified in the last week, after a report by GigaOM stated that it will be launched in April 2012.
While the report stated that it will offer 1 GB of free storage – much less than what Dropbox or Microsoft Skydrive offer, a new leaked screenshot by TalkAndroid suggests that Google Drive will offer 5 GB of free online storage to all users. It also says that it may be launched on April 16.
By offering 5 GB, Google Drive is offering much more than Dropbox officially does, but only a fifth of what Skydrive offers.
Google Drive will work on desktop, tablets, mobiles and also have a web based interface at drive.google.com (which currently throws a 404 error).
It will also offer integration with Google Docs and Google Apps, and will be targeted at individual users, as well as small businesses with multi-user support. It may also be integrated with all Android smartphones going forward, to boost market share and make it the default option for the average Joe.
Apple’s iOS is still the top smartphone platform in terms of apps, with over 550,000 apps, while Google’s Android comes a close second with around 400,000 apps in the Android Market.
However, when it comes to generating revenue, iOS is still miles ahead of the Google Play Store. According to Flurry’s research, a top iOS app generates more than 4 times as much revenue than a top Android app on the Play Store.
Surprisingly for us, and humiliatingly for Google, Amazon’s Appstore is much better than the Google Play store in terms of generating revenue from apps. It generates 89% of the revenue generated by iOS apps, and more than thrice the revenue generated by Android apps on the Google Play Store.
Amazon seems to be having much more success than Google with Android. It has the most popular Android tablet, the most profitable Android App Store. Now you know another reason why Google wants to jump into the tablet fray with its own budget Nexus tablet – it can’t let Amazon milk its Android cow, while it stands on the sidelines.
In the mean time, despite losing the market share war, Apple’s iOS remains the best platform for developers, and hence, users.
Google may be planning to launch its own online tablet store, according to a report by the WSJ.
Google is rumored to be working on its own Nexus tablets, to target the budget segment and capture more share of the tablet market, since it clearly hasn’t been able to do very well in competing with the iPad in the premium segment.
Speculation suggests that it may sell not only its own Nexus tablets, but also other co-branded tablets directly to consumers through its store.
With its Motorola acquisition, Google now has the capabilities to manufacture its own hardware, besides working with hardware partners.
Google has tried the direct online sales model before in the smartphone market, with the Nexus One, but it didn’t do very well in the U.S., where most smartphone sales are driven by carriers. However, the tablet market is quite different, with sales driven by retailers.
Like smartphones, Google doesn’t intend to make money directly from tablet sales, but by mobile advertising on tablet devices. Having an online store will allow it to lower costs, and offer its tablets for even lower.
Unlike the smartphone market, which is currently dominated by Android, Google has failed to capture much market share in the tablet space, which is still ruled by the Apple iPad.
With Windows 8 still months away from launch, Google has a good window of opportunity to capture a majority market share at least in the budget segment.
Dell seems to have admitted defeat, and stopped selling smartphones in the U.S. at least for now. Dell has never been a major player in the smartphone space, and most of its offerings have been duds. It has discontinued sales of its Venue and Venue Pro smartphones, and now has no smartphones available for sale in the U.S. It may continue to sell smartphones in other markets, but may exit even those markets soon.
It may focus on selling mobile devices, including tablets, to enterprise customers. Being one of the largest PC and notebook makers, it has a good chance of capturing market share in the tablet space, with the upcoming Windows 8.
It’s funny how the tables have turned. More than a decade ago, Michael Dell commented that he would shut down an ailing Apple and return money to shareholders, and now Apple is the fastest growing player in the PC and notebook market, and a leader in the exploding smartphone market, while Dell is struggling to compete. Steve Jobs did have the last laugh after all.
Another interesting fact: Apple ($560 billion) is currently worth around 20 times as much as Dell ($28 billion).
Working title: Why Android Tablet Makers are Screwed and Apple Will Continue to Capture Most of the Tablet Industry’s Profits
It’s clear now that Apple is positioning the iPad as a reasonably priced tablet, which provides the best experience to users. Initially, almost all Android tablets were priced much higher than the iPad, but once that strategy failed, most of them are now focusing on the budget segment to capture tablet market share.
The iPad, which was one of the best priced tablet just a couple of quarters ago, now seems like one of the most relatively expensive ones. However, it remains one of the most low priced Apple products, and the best tablet you can buy. This is why despite the flood of cheap Android tablets, Apple still commands a majority market share, and an even higher proportion of the tablet industry’s total profits.
Amazon was the first tablet maker to kick off the race to the bottom, with the $200 Kindle Fire. It has been a hit in terms of sales, but has weighed on Amazon’s profit margins, with Amazon taking a small loss on each sale.
Now, almost everyone is competing with each other to launch a cheaper Android tablet. Google itself is rumored to be working on a $199 Nexus tablet, which would force other tablet makers to price their products even lower. Once you start competing on price, with no other differentiating feature, it doesn’t take long for the whole segment to become loss making as a whole.
The only tablet maker which isn’t competing on price is Apple, and they don’t really need to, with iPads selling like hot cakes, and selling way more than all Android tablets combined, despite being priced much higher.
Windows 8 is still at least 6 months away from launch, and Windows 8 tablets will likely be priced higher than the entry level iPad, which now starts at $399.
In the meanwhile, while Android tablet app support remains pathetic, Apple continues to improve the iPad ecosystem, further bolstering its position as the best tablet on the market, increasing the gap between the iPad and every other tablet on the market.
This is why, despite having a lower profit margin for the iPad relative to its other products, Apple seems to be the only tablet maker which can remain largely profitable in the long run, while Android tablet makers fight amongst themselves and bleed each other with losses, with only a few biggies like Samsung and HTC possibly standing till the end.
PS: Even Amazon is positioned well, as it never intended to make money by selling the Kindle Fire hardware, but on digital content that it could sell to Kindle Fire users. Most other Android tablet makers are screwed, because selling hardware is the only way they intend to make money, and that seems to be a game in which the only winning move is to not play at all.
Facebook which filed its S-1 statement with the SEC on February 1, is planning to go public in May, according to a report by the WSJ.
Facebook’s IPO is expected to be the biggest internet IPOs of all time. It is aiming to raise $10 billion at a valuation of around $100 billion. It generated $3.7 billion in revenue in 2011, with a net profit of around $1 billion. Its earnings are expected to continue to grow rapidly in the coming years, as it monetizes its massive user base of more than 845 million users more effectively.
Facebook also halted trading of its shares on the secondary market earlier this week, which sparked off speculation that the IPO may be very near.
Facebook’s IPO is expected to create more than a 1000 new millionaires, with most of its early employees and executives hitting pay dirt. We could see the emergence of the Facebook Mafia, which would spark off the next wave of startups and boost angel investing in the valley.
We should also see more patent litigation activity against Facebook, right before its IPO, from the likes of Yahoo and others looking to make a quick buck.
Facebook is in a very vulnerable position right now, from a litigation point of view, as it is now in its SEC mandated quiet period right before its much awaited $100 billion IPO, and also because it hardly has many patents to defend itself against patent trolls and aging internet giants like Yahoo looking to make a quick buck by suing the hell out of more successful, but younger players who don’t have a huge patent portfolio to defend themselves.
It recently acquired 750 patents from IBM, primarily to defend itself against such litigation, but that may not be enough, and it may need to buy some more.
On the other hand, you have AOL, a dying relic of the dot-com bubble. Its market cap has shrunk to a fraction of its market cap in its glory days, and the value of its business may possibly be less than its patent portfolio.
It has 700-800 really important patents according to its CEO, with half of them incredibly important for internet users. This could be the ideal patent portfolio for Facebook, as it has a lot of patents related to fundamental internet technologies, IM, email, webpage rendering, search engine technology etc.
While AOL seems to think that the value of its patents is more than $1 billion, a patent advisory firm has estimated its value at only around $290 million. This could make it a very easy purchase for Facebook, which has around $4 billion in cash and marketable securities, and is set to raise another $5 billion in its IPO.
IDC just published a new research report tracking the growth in sales of PC, tablet and smartphone shipments in the coming years. Smart connected devices, which include these three, saw shipments of more than 916 million units, with revenues of around $489 billion in 2011.
IDC predicts total device shipments to reach 1.1 billion in 2012, with device shipments almost doubling to 1.84 billion units by 2016 – a CAGR of nearly 15.4%.
Smartphones are expected to account for a major portion of this growth, while tablets will also account for significant growth. PC shipments aren’t expected to grow much in the coming years.
While Windows is currently the top platform on smart devices, its overall share is expected to drop to 25.1% share in 2016, from a 35.9% share in 2011. On the other hand, Android devices will account for almost 31.1% of all smart devices in 2016, up from 29.4% in 2011, and lead the total market. Apple’s iOS devices are expected to capture 17.3% market share in 2016, up from 14.6% in 2011.
The growth in Android device sales is expected to be driven by the propagation of cheap tablets and smartphones, a segment which is currently dominated by Android.
Interestingly, IDC mentions that most Android device makers will find it hard to stay profitable, given the intense price competition.
It also says that iOS will continue to be more lucrative for developers, despite the low market share, due to a higher proportion of users who are willing to pay for apps.
Oracle’s patent infringement lawsuit against Google has gone from being outrageous in terms of the money demanded, to being boring in just a few months.
It had initially demanded more than $6 billion from Google, claiming that Google infringed on its Java IP in Android. Following a scolding from the presiding judge, Oracle lowered its damages claims to $2 billion, and finally brought it down to under $100 million last week.
This week, Google apparently offered Oracle a flat fee for past damages for the two patents in contention – $2.8 million. It also offered a cut of future Android revenues, until the patents expire. For one patent which expires in 2012, it offered a 0.5% cut of Android related revenues. For another which expires in 2018, it offered a 0.015% cut of Android revenues.
It also stated that if Oracle were to accept these conditions, it wouldn’t fight Oracle on damages, once it proved infringement of those patents, presumably to speed up the trial process.
However, Oracle, understandably, has rejected the offer. Its cost of litigation alone would be a multiple of the settlement Google is offering. It’s almost insulting for it to accept a few million considering its original demand of more than $6 billion.
Google’s rumored cloud storage service – Google Drive – has reportedly been in development since 2006, with rumors of an imminent launch surfacing every 2-3 months. However, according to a report by GigaOM, it may finally be launched this April.
Google’s Gdrive will reportedly offer 1 GB of free storage, and charge for additional space, which is less than what Dropbox or Microsoft’s Skydrive offer.
It will come with a local client for all major platforms, and also support a web based interface which will be similar to the Google Docs interface. It may be integrated with Google Apps and Google Docs, with multi-user support, and sync capabilities across multiple devices.
To maximize its reach, Google may bundle it with Android devices.
Google has been too late to this space, which it could have easily dominated had it launched something a couple of years ago.
While Google Drive may not generate a lot of revenue directly for Google, it may help it gather more data about users, and improve its search results in some way.
With its massive data centers lined up across the globe, it is one of the few tech giants which could provide cloud storage services at a low cost. It will be interesting to see how Dropbox, Box and other competitors respond to Google’s entry in the space.