

Ask HN: Is Android a case of predatory pricing? - dakimov

Microsoft have been making the Windows Phone OS entirely by themselves and they sell it as a commercial product. It is a 'fair' and direct approach: you have made a product, you sell it, you get the money. (Meanwhile, they are also getting money from Android devices using some patent agreement, but it is a different question.) Google have been making the free Android OS using the money they have earned from their main business (also they use open source, but it is also a different question). Hardly Android is a charity project, eventually it brings profit to Google by significantly increasing traffic to their search engine and services. So Android is obviously commercial, though indirectly. It seems to me that this is a classic case of predatory pricing being commited by Google over Microsoft: Google uses money from their main business to make a free competing product. I can imagine a correspoding example with tangible entities: what if the BMW company decided to produce scooters and give them away with no profit taking finance for the production from their car business, thus killing the scooter market and becoming the monopolist. This would be an immediate case for the authorities such as the Federal Trade Commission to take action. For me this example is the same situation as with Google and Microsoft. What do you think about this idea?
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thechut
I think you are outright wrong. There is nothing "predatory" about the
pricing. And your BMW example doesn't make sense unless BMW has figured out
some way to earn a ROI on the free scooters.

I would say Android (Google) is acting more like a media company in this case,
and since media companies main profit source is advertising, and google's main
profit source is advertising, it makes sense. Media companies (NBC, Viacom,
techcrunch.com) give away free content in order to attract viewers, then they
turn around and sell these viewers to advertisers, thus generating profit only
for themselves. You wouldn't say that NBC/ABC/CBS have predatory pricing over
HBO just because their content is free, and available over the air.

Remember, Google is an advertising company, their primary goal is finding ways
to drive advertising, Android is a good way to do that. If that means
smartphones are cheaper and thus available to more people, I think that is a
good thing, not predatory.

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mpolun
Well, there's at least one difference: Android is open source, so anyone (even
microsoft if they wanted to) could take android and fork it (and make
everything but the kernel changes proprietary).

The problem with predatory pricing isn't that they're giving it away, it's
that once they've established monopoly, they can change more for it, or
restrict access, etc. With android that's just not possible.

Also, technically Android is the property of the Open Handset Alliance, it's
just that google does most of the development, especially of big features.

