

Why Android updates are a mess: it's the business model - j_col
http://www.zdnet.com/blog/bott/why-android-updates-are-a-mess-its-the-business-model/4300

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jerrya
The author states that updating "older" products really has no return for
Samsung (or other manufacturers), and is actually a form of cannibalization
with their new products.

That of course is just classic "planned obsolescence", long criticized as
wasteful, and injurious to your customers.

This is exacerbated by Samsung's (and other manufacturer's) rooting policies.
As the author notes, not only will Samsung not maintain products just a few
months old, but they make it very difficult for consumers to maintain the
products on their own. In this case, rooting a Samsung android product voids
the warranty.

Are there other industries like this? Where we are okay with a manufacturer
never updating, or even fixing the bugs, of a very expensive product just
months after they release it? And made worse by accepting that company's
actions to make it hard/impossible/unacceptable for third parties to work on
it?

(Perhaps cars are turning into this model. It used to be that it was not a big
deal to take your car to your favorite mechanic, but now I gather, various
forms of IP lock-in or just plain expensive required diagnostic tools are
creating a barrier for independent mechanics.)

I would like to think that supporting older android products for at least two
years is profitable. Does supporting the Galaxy S as opposed to forcing
purchase of a Galaxy Nexus really result in cannibalization? The answer of
course is no, what it does is help you KEEP a customer from going to Apple, or
HTC, or Motorola. And that customer when their machine is too old will
remember all your frequent updates and understand Samsung, that you take care
of your customers, and buy your Galaxy S III.

The customer that understands you won't support them will be gone. Just like
that.

~~~
nextparadigms
If Samsung and the others see the updates as just a zero-ROI cost for them,
then they are really short-sighted. They keep scrambling to develop the skins
that many say they don't even want, when there is a differentiation solution
right in front of them: offering updates to all their phones for a much longer
period. Now that's some real differentiation, that even non-techie people will
want. Who wouldn't want to go with the company that supports the phones for
the longest time?

~~~
kenjackson
That's not really all that differentiable, and it costs money both short and
long-term.

First, on the differentiation angle, things like length of maintanance are not
things that usually sell devices. Especially not since the lifetime of the
average device is just a tad longer than two years.

Second, it's not as if Samsung can rev every device for free. They have to go
through the carrier to test each update and the carriers have finite
resources. Therefore Samsung may have to stall the release of a new phone in
order to test all of the other phones that exist, including that phone that
only sold 10,000 units. And these tests cost the OEMs a pretty penny.

At the end of the day the Android model really is kind of broken. Updates are
not just some ad hoc thing, but it really needs to be planned. Everything from
how many devices each carrier has, the number of devices each manufacturer
has, to the update rate, etc...

Feature phones didn't really have the update requirement so the Samsung model
of a million phones made sense. But now it actually hurts their ability to
deliver customer satisfaction. Due to the nature of Android, there will never
be a cohesive update strategy. What you see now is what you'll have in the
future with Android.

~~~
jerrya
"That's not really all that differentiable, and it costs money both short and
long-term."

The classic counter example is Nordstrom. Nordstrom looks at you and figures
that if they keep you as a customer, you will spend $100,000 at Nordstrom over
the course of your life.
(<http://en.wikipedia.org/wiki/Customer_lifetime_value>)

Because of that, they will (Snopes says "maybe"
<http://www.snopes.com/business/consumer/nordstrom.asp>) allow you to return
tires to Nordstrom that everyone knows you purchased somewhere else, because
they aren't losing money so much as they are ensuring their $100,000 of your
money.

Regardless of the truth of the tire story, Nordstrom is known for having
excellent customer care and that helps customer retention and supports their
other pricing policies.

~~~
kenjackson
If it's such a good idea, why doesn't Walmart do it?

1) It works great as a publicity, but not in actual practice. If we all
returned tires to Nordstrom they'd very quickly shutdown the practice, if they
actually even do it now. Upgrades to Android phones would have to be practiced
-- Samsung just can't create an urban legend that some phone in the midwest of
the US was updated before.

2) Most people prefer cheaper prices rather than more expensive prices w/
better support. I don't have data, but I suspect that Walmart consistently
does better than Nordstrom.

And if Samsung effectively doubles the lifetime of each Android device and
it's successful then other Android manufacturers will do the same. The net
effect? Half total revenue in the Android marketspace -- unless this practice
is able to eat away at iPhone -- which I doubt since Apple already does a
pretty solid job of updates.

It's one of those things that would be better for the customer. But due to the
way the market is segmented it likely hurt the bottom line.

The only company that could pull this is off is Motorola. Google doesn't care
about the total revenue in the HW market. What's Samsung and HTC going to do?
Focus on Windows Phone? Not likely. Google could squeeze almost all of the
profits out of the HW manufacturers knowing they have very little alternative.
I wouldn't be surprised if Google did just this.

~~~
wycats
_I don't have data, but I suspect that Walmart consistently does better than
Nordstrom_

I'm not sure what you mean by "consistently", but that doesn't actually seem
true.

Over the past year (Nordstom did better most of the year):
<http://www.google.com/finance?q=NYSE%3AJWN%2CNYSE%3AWMT>

Over the past five years (Nordstom got off to a bad start but did better
towards the end): <http://www.google.com/finance?q=NYSE%3AJWN%2CNYSE%3AWMT>

Walmart and Nordstrom have similar stock prices, similar EPS, and similar P/E.
I think it's fair to say that Nordstrom is doing fine.

~~~
kenjackson
I was actually thinking total profit over time. This chart probably captures
better their performance over time, since 1/5/10 year charts depend heavily on
how well you did in the period right before the chart begins:

<http://www.google.com/finance?q=NYSE%3AJWN%2CNYSE%3AWMT#>

Or to put it another way, would you rather own 10% of Walmart or Nordstrom?

~~~
jerrya
But see, it's not an either-or.

Nordstrom doesn't have to become Walmart, and not all phones have to compete
as feature phones.

Certainly Apple knows it will die if it has to compete as a feature phone.

The question is how you stay away from competing on price alone, and the
answers are usually through value, innovation, customer service, quality, and
intangibles like branding.

------
GBKS
I assumed it was sheer incompetence, but maybe this explains why the only
system update I have received for my HTC Incredible is a total mess.

The update process never finishes, no matter what I do. Something seems to be
updated nonetheless, and now I constantly get "out of space" notifications,
despite having 700MB available. At this point, text messaging is crippled due
to this issue, and there doesn't seem to be a solution (checked online and in
store). No outreach from Verizon or HTC on this, and since my friends who also
own Incredibles have the same issue, I can only assume that a lot of people
are stuck now with an almost broken phone.

Just a lovely situation. Makes me want to stay away from Android in the
future.

~~~
vegardx
Just an interesting idea, have you checked if people without the carrier
specific build has the same problems? I have a feeling that all the
customization that HTC and other vendors have to do for the carriers in the US
is adding to even more negative effect to the bad update cycles.

------
Tichy
I have an iPod Touch that I can not update to iOS 5. I fail to see how the
competition is faring so much better. Apple maybe has it the easiest with
their limited selection of devices, but even they can't support old hardware
indefinitely. As for Windows 7, are the requirements for new phones really so
tight that they won't have that problem? And if the requirements are so tight,
is it still attractive for hardware makers?

Also it seems customers just don't care. If they do (as I do), they could just
stick to the official Google devices (as I also do). Problem solved.

I wonder about the driving force behind that article - just one concerned
journalist, or maybe there were other incentives...?

~~~
cek
People ask me all the time why, if I think Windows Phone is such an excellent
product, sales appear so lackluster.

(This post got long. tl;dr: Microsoft's approach with WP7 has a significant
impedance mismatch with the carriers & device manufacturers. Will end-user
dissat with Android be strong enough to overcome this impedance
mismatch...that is the question.)

The fact that Windows Phone has, thus far, avoided fragmentation (almost every
WP7 device from every manufacture r & carrier automatically got updated to
WP7.5 "Mango" this fall) actually points to one of the core reasons:

_The device manufacturers, mobile operators, OS providers, and end users
operate in an overly complex virtuous cycle_

A virtuous cycle is one where each side of the market both gives and receives
positive value from the other sides. So much positive value is exchanged, with
low friction, that the cycle grows and grows, like a snowball rolling down
hill. The more sides to the market that exist, the more complex the system.

In the mobile device space the four primary sides of the market are not
actually aligned very well. In fact, there is such deep _misalignment_ that
there is great instability. Android has succeeded by capitalizing on that
misalignment. Windows Phone is attempting a different strategy...

Carriers: Own the customer. Own billing. Own Sales. Own the physical pipe.
They hate being just a fat dumb pipe, but their capex structure means they
will never be anything but a fat dumb pipe.

Device Mfgs: Own the hardware. Own the industrial design. They hate not owning
the customer. But their HW bias (and manufacturing capex structure) prevent
them from breaking out of this.

OS providers: Own the core of the customer experience. Own most real
innovation. They hate not owning the customer. Their core business models
(search, desktop/server OS, office, ...), as well as the fact they can't build
HW, means they are always at the mercy of some middleman between them and the
customer.

Users: Own the disposable income. They don't know what they hate. All they
know is they buy phone service from mobile carriers and/or buy a phone from a
carrier. They love speeds & feeds and will generally buy anything they are
told to by television ads and RSPs (Retail Sales Professionals).

Note that Apple circumvented this by cutting the device manufacturer out and
used that fact to force the carriers into being even more of a fat dumb pipe.
Topic for another day, but my belief is over time this strategy will start to
deteriorate for Apple.

Android has been wildly successful because it was built to reduce friction
between all sides of the market. It 'bows down' to the device manufactures AND
the carriers. It enabled device manufactures to do what they do best (build
lots of devices). It enabled carriers to do what they do best (market lots of
devices). It enabled users tons of choice. My hypothesis is that it also
enables too much fragmentation that will eventually drive end users nuts.

Windows Phone has taken a different approach. It raises it's middle finger at
both the device manufactures and carriers. It says "here's they hardware spec
you shalt use". And it says "Here's how it will be updated" (to the carriers).

Thus both of those sides of the market are _reluctant_. Especially the
carriers.

This is why, despite being a superior PRODUCT to Android, Windows Phone has
not sold as well.

The question in my mind is whether Microsoft's continued investment in WP and
close partnership with device manufactures such as Nokia will eventually
enable a breakthrough here. I know that MS can be very persistent & patient;
it's been so in the past. We will see.

~~~
pace
Excellent post. In particular the Android and WP7 parts—you should make a
dedicated blog post out of it.

~~~
cek
Thanks. Took your advice and posted this as a blog post. Expanded my thoughts
at bit too:

[http://ceklog.kindel.com/2011/12/26/windows-phone-is-
superio...](http://ceklog.kindel.com/2011/12/26/windows-phone-is-superior-why-
hasnt-it-taken-off/)

------
drivebyacct2
I don't know what to tell people about this. It's unfortunate. I think people
think of their phones as computers (and I'm not saying that's inaccurate), but
unfortunately protected drivers prevent you from going out and grabbing a
random ARM distribution or build and throwing it on your phone all willy-
nilly.

Further, manufacturers have no incentive to upgrade your software because
they're already adapting their changing custom code to their NEXT device that
they'll launch 2 weeks later as a "sequel".

But, we've all heard this before. Not all Android devices are built the same,
not all the software builds are the same. Many devices are more "open" than
others, and some models (read, Nexus line) get timely updates.

I don't think it's unreasonable to compare Nexus vs. iPhone and leave many of
the other Android phones in a separate class. As an Android user, that really
doesn't bother me.

~~~
Samuel_Michon
_"I don't think it's unreasonable to compare Nexus vs. iPhone and leave many
of the other Android phones in a separate class."_

I agree, but not even all Nexus phones get upgrades to the latest version of
Android.

The Nexus One was released on January 5, 2010. It won't get an upgrade to ICS.
Apple's iPhone 3GS was released on June 19, 2009. The latest version of iOS,
5.0.1, gets automatically pushed to it, over the air. It works great, even
though the iPhone 3GS is a 2,5 year old model.

~~~
Tichy
I don't get iOS 5 on my iPod Touch.

~~~
mattparcher
I’m curious to know when you bought your iPod. Depending on the timing, it is
fairly likely that your iPod was less powerful than the latest iPhone at the
time, with less RAM and weaker graphics.

~~~
Tichy
I don't remember the specific date, but I bought it specifically for doing iOS
development. In any case, the fact remains that it is iOS hardware that won't
get an update. Will the iPhone 3g be upgradeable forever?

~~~
msbarnett
No hardware is upgradable forever; that's an absurd standard that no one is
expecting.

The fact remains that Apple consistently provides 2-3 years of updates, for
their phones, whereas even new Google-branded Nexus phones are in some cases
getting cut out of updates in less than one year.

------
shareme
author example is wrong..

At no time does OHA/Google hand over source to MOs...OEMs have contract with
MOs to supply the Android version to MOs not Google..

