Originally Posted by ScotiaBurrell
How are hardware makers profiting?
I read htc is in trouble. maybe only google makes money.
HTC is in trouble because Samsung stole their thunder, and Samsung is making plenty of money
. Samsung's super popular wares give them incredible leverage with carriers in the subsidy system, so they can crank up profits. HTC used to have similar influence, but now are having to make due with less income per set while needing to spend more per sale to counter Samsung's mojo.
Google's income is far less direct. There's some app revenue, more as the tablet market grows where carriers can't extort a cut of app sales, but Google is still an ad company. I can't prove it, but I'd wager Google still hasn't turned a real profit on Android given all their investment and how minimal their revenue is. They just spent $12b on Motorola, and despite whining to the contrary, they'll probably end up handicapping Motorola's profitability, not favoring the company over other manufacturers (they're expanding the Nexus program already to avoid even the appearance of favoritism). They give Android away and haven't made a dime even off market revenue on the millions of the most popular Android tablets, the Nooks and Kindle Fire.
Google looked 10 years out, saw a world where the internet was more mobile than not, and given that 99% of their revenue is online ad revenue, figured if they didn't get serious about mobile, they'd join Yahoo, AOL and MySpace on the ash heap of tech history. Android is still more leverage than it is a product. Lots of tech writers think that has changed under new management, but I think Google is just making their leverage a little sleeker and slightly more versatile, not transforming it into a commodity.