Microsoft now has a new CEO who finally seems to get it. Speaking recently about survival in a "post-PC world," Microsoft's new CEO, Satya Nadella, described today's tech landscape as a dynamic market in which competition must be waged through ideas. "Anybody is capable of anything," Nadella told others at the recent Re/code conference. Indeed, innovation has never moved faster than in today's mobile space. Unfortunately, Nadella's inspiring words at Re/code are at odds with Microsoft's historic practice of pushing for government intervention to hobble competitors. It would seem that Microsoft now has a choice to make: either focus on creating innovative new products that consumers like, or be distracted by efforts to push government investigations and regulation to hurt their competitors.
Most recently, Microsoft has pursued complaints through lobbying group FairSearch, which has cried wolf to regulators that Android is harmful to competition. The irony of Microsoft's anti-Android stance is that the dramatic expansion in smartphone and tablet growth, consumer choice, lower prices and faster innovation over the past several years have been fueled by Android. Dubbed by some as "Android's Law," Android has pushed the average shelf time for a smartphone from three years in 2007 when the iPhone was released, to a staggering six to nine months today. Android has also enabled a number of inexpensive smartphones to come to market.
It's not just new technology Android devices are competing on. Data shows that the price gap between the iPhone and Android phones is widening. These lower-priced devices are enabling lower-income consumers and those in developing countries to gain access to newer technology. In fact, experts expect a $20 Android phone to be available within the next few months.
Android is also the only truly open mobile operating system. Google permits Android to be used without Google apps and products. Nokia and Amazon both released Google-free Android products and Nokia's new Nokia X is essentially a Windows phone built on top of Android. The open nature of Android allows each handset maker and wireless provider to create their own custom versions of Android to suit their customers' needs.
Android's success has driven beneficial competition from Apple and Microsoft. Apple's Steve Jobs admitted in a private email that Android was ahead of Apple in features like notification, tethering, and speech. These features have all seen great advancements in current versions of Apple's iOS. Apple has also released a lower-cost iPhone 5c, giving more consumers access to smartphone technology. And earlier this year Microsoft began offering free licenses to smartphone manufacturers for phones with screens less than nine inches in order to compete with Android.
Consumers have been the ultimate beneficiaries of this increased competition. In addition to proprietary phone and tablet operating systems like iOS and Windows Phone, consumers can choose Android products from a variety of manufacturers such as Samsung, Nokia, HTC, LG, and Sony -- each with their own user experience. And thanks to Google's efforts in pushing for compatibility across Android devices from various OEMs, applications purchased on one manufacturer's device are transferable to another manufacturer's device, preventing customers from being locked in to a single manufacturer. On Android, consumers are also free to use products that compete with Google's own products. Unlike Apple and Microsoft, Android allows competing app stores on its mobile devices.
Thus, accusations from Microsoft that Android stifles market competition and harms consumers are pure folly. In fact, thanks to Android, the mobile device industry is more competitive than it has ever been before. More than 1 billion smartphone will be sold in 2014 alone and experts expect a doubling in smartphone shipments by 2017. This is precisely because consumers now have so many choices.
Truly, the talk of threats to competition in the mobile device market could not be more wrong. Thanks to Android's open and disruptive model, competition is actually thriving. Meanwhile, consumers are poised to reward whoever can produce the best product at the best price. As Mr. Nadella said, in a market as open as this one, "anybody is capable of anything."
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