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Android, Inc. – A Brief 2011 Industry Analysis
Written by Christopher Frost, Patricia Brown, Amanda Cabrera Edited by: Cristina Miklas, Sarah Caldwell

Background Like a modern day Hewlett Packard, Android Inc. began as a true start-up firm. It was founded in late 2003 by Andy Rubin, a co-founder of Danger, with three former communications executives (Android, 2011). Rubin had scored a modestsuccess the previous year with the TMobile Sidekick. As a follow up, Rubin wanted to develop a platform that could be used in mobile devices. The four members worked in secret until Google acquired the company in August 2005 (Android, 2011). This made Android a fully-owned subsidiary of Google and led to speculation that Google was planning to make its own phone. While Google was quietly buying upphone-related patents, Apple launched the iPhone with AT&T and made history. After a long wait, this prompted Google and 34 other companies to form the Open Handset Alliance (Android, 2011). The stated intention was to develop open standards for mobile devices; however, the real purpose was for all of the jilted bridesmaids to develop a challenger to Apple’s successful iPhone. It brought inhardware vendors like HTC and Samsung, along with telecom providers like T-Mobile and Sprint. Google’s contribution was the open-source Android platform which it provided to everyone free of charge. A year later, the first Android phone, the T-Mobile G1 hit the market.

STEEP Analysis
Technical Both Apple’s iOS and Android’s platform were developed from UNIX; however, Apple’s operating system isproprietary. Apple only licenses iOS for use with Apple hardware, like the iPhone or iPad, and it tightly controls anything that goes out with Apple’s logo. In contrast, Android has been freely distributed to vendors and is an open-source platform. Android provides the source code and SDK, or instructions, to developers so anyone can modify or change the operating system however they want. Thisopenness has been Android’s greatest strength; however, it also means that Google has little control over what their partners do with the platform. When the T-Mobile G1 came out with a stock version of Android 1.0, it was initially dismissed as an unfinished product. In contrast to the polished iPhone interface, PC Magazine noted “serious problems with accessibility and usability (Chen, 2008).”Android’s fortunes started to change in late 2008 when HTC released the Hero. Unlike previous Android phones, HTC used its own user-friendly Sense interface with Android operating in the background. After HTC’s success, these vendor-customized user interfaces became the norm for 1

Android. On the marketing side, Motorola launched a media blitz with its Droid Does campaign which highlighted many of theApple iPhone’s deficiencies. It poked fun at Apple’s restrictive policies on which apps could be in the Apple App Store. In June 2009, Apple boasted a catalog of over 100,000 apps compared to the Android market which had only 10,000 apps (Gibbs, 2009). However, application developers had been mumbling about Apple’s requirements and an approval process that took months. By contrast, an applicationdeveloper could create an account and start publishing apps in the Android Market in the same day. Because of its ease of use, developers began to develop versions of popular applications for the Android Market as well as the Apple App Store. By the end of 2009, the number of apps in the Android Market had more than doubled. More importantly, the number of Android handset exploded from 2% ofsmartphone sales to 8% within just a year (Bernstein Research, 2011). To take advantage of its momentum, Google drove a very rapid rhythm of improvement for the platform, with one new release every 3.5 months, on average (Bernstein Research, 2011). Each release took the name of a dessert – 1.5 was Donut, 1.6 was Éclair, 2.0 was Froyo, 2.1 was Gingerbread. This constant stream of improvements...
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