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Comment by mgreg | Hacker News Reader

Google's strategy of driving down handset costs continues. They don't make money on the hardware or software but rather on the data collection and advertising from android devices. Apple, on the other hand, makes their money from the devices. As people continue to undervalue their data and put up with advertising we'll increasingly see this logic. Why pay $600 to Apple when I can pay $170 to X. This puts pricing pressure on Apple and will eventually reduce their competitiveness.

It's google's ad supported model that is winning - not a superior product. That's not to say their product is bad - its quite good. But they can essentially give it away and make money on the users…

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As people continue to undervalue their data and put up with advertising we'll increasingly see this logic.

I agree in general with your point, but I wanted to add that Android is so open that you can easily make different choices. E.g., you can install CalDAV and CardDAV plugins and you can use Fastmail, iCloud, or whatever your favorite e-mail/calendaring provider is. Google could make people's lives more difficult there, but in a sense Cyanogenmod and the fact that handset manufacturers can fork Android will probably keep it sane.

Also, I think that the focus on advertising is too one-dimensional and doesn't see the bigger picture. The use of free Google products makes people want to use them for work as well (like illegal private Office copies drove enterprise Office adoption). Companies that use Google Apps for Work pay $5 or $10 per month per user for Google's services and get the guarantee that data in Apps will not be used for advertising. Then there's Google Play Music, a percentage of every app store purchase, the future Youtube subscription service, Google Voice and Hangouts calling.

Over the last years, Google has steadily added venues for getting revenue besides advertising.

> Google's strategy of driving down handset costs continues. They don't make money on the hardware or software but rather on the data collection and advertising from android devices. Apple, on the other hand, makes their money from the devices.

But Google isn't making the devices.

> Why pay $600 to Apple when I can pay $170 to X.

How much does X make on that $170 device, compared to how much Apple makes on their $600 device?

> But they can essentially give it away and make money on the users…

Google can, yes. But their device manufacturers can't. And that's where a lot of Windows PC developers ended up—they raced to lots of low margin sales, and made less and less on each sale. It hasn't gone well for them.

Agree with your points. What I was trying to say was that Google has created a competitive ecosystem like PC manufactures that will drive the price of handsets close to their cost thus depriving them of profit.

In other words there is less and less differentiation between a samsung and htc and lg handset as the pace of innovation slows in hardware. They cannot differentiate on software this they are left primarily with price. This will only exacerbate in the future.

> In other words there is less and less differentiation between a samsung and htc and lg handset as the pace of innovation slows in hardware. They cannot differentiate on software this they are left primarily with price. This will only exacerbate in the future.

Definitely, and that's a rough place to be in for hardware manufacturers. Dell and HP and Compaq and Acer have shown what lies down that road. Hopefully they'll find some other area to differentiate their products.

moto g is made by motorola, which is no longer owned by google. As far as I know manufacturers are not making any money from ad revenue.

> moto g is made by motorola, which is no longer owned by google.

Well, except in the real world, where Motorola Mobility is still a division of Google, though a deal for a sale has been reached with Lenovo that's expect to close by next year.

You get the same amount of ads whichever platform you use. The only difference is by using Google services on either platform, the ads served by Google will be more targeted. How is the user worse off in this arrangement? They use superior apps, pay less for the phone, and get less annoyed by non-relevant ads.

If you install the google apps on an iPhone it gets closer but certainly not out of the box. I don't have stats on maps app usage but apple maps is at least used by some folks rather than google maps which means google is not able to collect valuable location data for some users. And on ios google maps is not able to collect location data when it is not running so the collection of data is much more limited for google.

To your point, however, they still collect quite a bit.

Google Maps isn't able to collect location data while it isn't running on Android either, but I'm being facetious to take it so literary. All background location data collection by Google on Android is opt-in. Similarly, Apple collects background location data on iOS if you opt-in.

Let's analyze how things appear from the user's perspective in both cases. If the user doesn't opt-in, the only difference is that the user saves a lot of money in one case. If the user opts in, one provides superior services with that data (e.g., location-based Google Now notifications) and results in more relevant location-based ads in addition to the money savings from the previous case. In both cases, the user is better off with the Moto phone.

You may have a better understanding on this than I do as it's been awhile since I researched it. With apple much of the location info is actually kept on the device where it can actually make use of it locally rather than sent up to a cloud dossier on you. Google works very differently.

Opt in is a little disingenuous in both cases. If you choose not to opt in you basically have an expensive brick. The challenge really in both cases is that you have no idea what is actually being done with your data as the privacy policies of both companies are weak.

Primary point being is that if you look at the business models of these companies one is dependent on data collection and ads while the other device sales. Based on that I can infer what may be done with my data.

Your understanding is incorrect. Apple also allows opting in to their AGPS service, Find my Friends service, etc.; each of which implies sending location data to Apple.

If you don't opt in on Android, everything that doesn't require background location reporting continues to work. You lose no functionality compared to not opting in on iOS.

You can look at the privacy policies and learn that neither company divulges the data to other companies. In both cases, opting in provides exactly the same loss in privacy (to the company the device talks to). The only difference is that one provides better services with that data.

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