Google Smartphone: Why It Makes No Sense For Alphabet To Build One

A Google smartphone? It has a nice ring to it, and the logic behind a Google-built smartphone seems solid: The search giant has built the world's biggest mobile operating system and has virtually infinite resources, deep contacts in the supply chain and engineers who could certainly build a great smartphone.

And yet, just because Google can doesn't mean it should. The challenges Google is facing in the smartphone market won't be solved by launching yet another smartphone, not even one designed and built from the ground up at the company's Mountain View, California, headquarters.

The problems for Android go much deeper than simply needing a better smartphone. Google needs to completely rethink the way Android is distributed.

A report in the Telegraph on Monday claimed Google is talking to mobile operators about carrying a Google-built smartphone to be launched before the end of 2016. There are no details about the smartphone, but it's been rumored for a few years that Google was planning to move away from its Nexus project and build its own devices.

The report suggests the move is a bid to wrest back control of Android from manufacturers like Samsung and Huawei — but for Google, that horse has already left the barn.

Owning control of the entire ecosystem has obvious benefits. Just look at what Apple has done with the iPhone. Owning the hardware, software and services has allowed it to build one of the most profitable businesses in the world.

Apple was able to do this by retaining tight control over the software allowed on its devices, something Google never did with Android. Google essentially gave Android away to get its services into the hands of billions of people as the world moved from desktop computing to mobile computing.

Trying to go back now just won't work.

Google has tried to show manufacturers how it wants Android to work. It has been building its Nexus smartphones for the last six years in partnership with companies like Samsung, LG, HTC and, most recently, Huawei. While these devices are nominally built by the manufacturers, Google has a strong level of control over how the hardware works so as to highlight the best features of Android.

"Any move deeper into hardware is about delivering the 'art of the possible,' along the lines of Microsoft’s efforts with the Surface devices," Ben Wood, chief of research at CCS Insights, told International Business Times.

Some analysts remain skeptical about the report, suggesting this is just an evolution of what Google is doing already. "I think the likeliest outcome here is that this is an evolution of the Nexus program, rather than a different scenario under which Google actually commissions the phone directly from a contract manufacturer," Jan Dawson, chief analyst with Jackdaw Research, told IBT.

So why would Google look to cut out the very manufacturers who have made Android the most powerful computing platform on the planet?

The reason is that all these manufacturers are looking to lessen their reliability on Google by tweaking the software to promote their own services over Google's. In a smartphone market that is so fiercely competitive and where hardware innovation has slowed to a trickle, manufacturers are looking to software to help them stand out in such a crowded marketplace.

This has not gone down well with Google, which wants its services presented front and center on all Android smartphones. To do this Google requires manufacturers to agree to certain conditions in order to get access to apps like Maps, Gmail and search, as well as the Play Store and its millions of games and apps.

The aggressive approach has led the European Union to open an investigation into Android and potentially anti-competitive practices.

Google wants to win back control of Android from powerful manufacturers like Samsung and Huawei, in order to safeguard its own future revenue streams but also to try to help fix the update system for the software, which is currently a disaster — leaving just 10 percent of all Android devices using the latest version of the software eight months after it was released.

Google wouldn't likely tackle any of these problems significantly by launching its own smartphone, and it could potentially upset Google's manufacturing partners in the long run and make them even more determined to do their own thing.