Good insights here: google will make its money back on purchase on ads alone in medium term. And it can use motorola nexus phones as a differentiator/lever to push/pull other phone makers to improve. So it will probably start making and earning lots of money on phones itself.
I'm betting this will indeed drive other makers into wp7 arms, and if rim is smart, it will do its damnedest to become a real alternative by buying webos. Meanwhile, our phones will keep getting better.
Microsoft CEO Steve Ballmer has a knack for making completely boneheaded predictions about his competitors' products, so when he took to blasting Google's Android strategy last year, many observers—myself included—dismissed him. It was obvious back then that Android was eating Microsoft's lunch and that it was beginning to nibble at Apple's heels, too. (As of March of this year, Android had actually inched ahead of Apple in mobile OS market share.) Microsoft and Google play similar roles in the phone business—they make the software that runs on phones, but they don't manufacture the phones themselves. In order to get their software out to the public, both companies must partner with handset manufacturers. But while Microsoft wanted phone makers to pay for the Windows Phone OS, Google was giving Android away. How could Ballmer ever compete with free? That's simple, he explained in several interviews: "There's nothing free about Android." [more ...]
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