Eric Schmidt Dreams Big

  • Posted: 28 July 2010 04:35 PM

    ?If we have a billion people using Android, you think we can?t make money from that?? Schmidt asked rhetorically. All it would take, he said, is $10 per user per year.

    Google really thinks that they can get a BILLION Android customers?

    Hmmmm.

    http://blogs.wsj.com/digits/2010/07/28/eric-schmidt-on-google?s-next-tricks/?mod=e2tw

    Signature

    .

         
  • Avatar

    Posted: 28 July 2010 06:22 PM #1

    So, in order to make money, they require $10b annual revenue?

         
  • Avatar

    Posted: 28 July 2010 06:37 PM #2

    Minus the $25 in support hours for android per user per year.

    Signature

    The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled.

         
  • Avatar

    Posted: 28 July 2010 07:14 PM #3

    So if Google can make 10 per user and be happy they are using the iTunes model.  150m users and just above break even which turns out to be over 1B per qtr.  Just wait till 1B users.  That’s continuing revenue on top of a new device every two years with some real margins and if Apple decides to go with iAds and take their users away from google where will google find profit?  Rather then being happy with the Apple google synergies they stepped on the hand that fed them.  They better watch because now that they have smacked the hornets nest they have no idea where the attack will come from.

         
  • Posted: 28 July 2010 07:53 PM #4

    pats - 28 July 2010 10:14 PM

    So if Google can make 10 per user and be happy they are using the iTunes model.  150m users and just above break even which turns out to be over 1B per qtr.  Just wait till 1B users.  That’s continuing revenue on top of a new device every two years with some real margins and if Apple decides to go with iAds and take their users away from google where will google find profit?  Rather then being happy with the Apple google synergies they stepped on the hand that fed them.  They better watch because now that they have smacked the hornets nest they have no idea where the attack will come from.

    While agreeing with your sentiments,pats, perhaps you have overstepped the mixed metaphor boundaries here. “Rather then being happy with the Apple google synergies they stepped on the hand that fed them.  They better watch because now that they have smacked the hornets nest they have no idea where the attack will come from.” Sounds a little like “The sacred cow has come home to roost with a great big bang”

    Signature

    .

         
  • Avatar

    Posted: 29 July 2010 12:23 AM #5

    They GIVE AWAY ANDROID FOR **FREE**

    So, tell me again how they are going to *“MAKE”* $10/user on a FREE product that has ZERO tie in sales?

    What is the development cost to date for ANDROID? I would LOVE to see that number broken out and juxtaposed against “sales” of ZERO.

    And the “GENIUSES” at GOOGLE are now spending hundreds of millions to develop and seed another FREE product, CHROME an operating system that will be free as well.

    Now, lets see, they are just copying Apples, music store, webkit work, operating system, handheld system, and tried their own phone….

    ...of course, SCHMIDT the weasle, sitting on the board at Apple, being PAID to steal all the planning and running back home to implement his own version, give it away for FREE.

    No wonder this is the two charts over the past year, AAPL vs GOOG

    Signature

    “Even in the worst of times, someone turns a profit. . ” —#162 Ferengi: Rules of Acquisition

         
  • Avatar

    Posted: 29 July 2010 12:58 AM #6

    Most people LOVE the opportunity to apparently get something for nothing (such as the people who want to pay no tax on capital gains, but that is another thread, LOL!).  Google has tapped into that effectively; of course, people eventually pay for all that Google advertising in the products they buy, but since the cost is hidden from them, it is outta sight, outta mind.  The free phones that come with a lot of cell phone contracts are another example, as is free shipping.  As long as the cost is hidden, they eat it up.  Google has tapped into this somewhat irrational human trait and has been highly successful over the short term as a result.  The long term?  Who knows?

         
  • Posted: 29 July 2010 03:47 AM #7

    This sounds a bit scary:

    http://www.appleinsider.com/articles/10/07/29/millions_of_android_users_hit_by_malicious_data_theft_app.html

    Will the media be all over this? ... I highly doubt it.

         
  • Posted: 29 July 2010 06:27 AM #8

    I’m going to throw this out of there and fully expect some fairly weighty replies, but I think he does have a point to a certain extent.

    The world is moving away from desktop based browsing of the internet, to one mixed with hand held devices like mobile phones and tablets.  Google before Android had a very limited ability to provide advertising on mobiles.  It was literally the next logical step for them to move to mobile devices.  Yes they did it in a pretty nefarious way, but you can’t really blame them for it.  This is business after all.

    1bn Android hand sets may sound fanciful now, but I think they will get there.  After all, there are 4bn people with mobile phones at present.  The way the smartphone market is expanding (see work provided by Asymco a while back) this will be a multi billion unit market in five years or so.

    As per monetising each Android user at $10, I know too little about advertising to say whether this is correct or not, but it doesn’t on the face of it seem outrageous.

    In terms of AAPL, this just means that at the very least iAds should be a $1bn business, given the installed base of iOS units sits around 100m at present (and growing, fast!).  And I don’t think this is anything to worry AAPL about either as Google is commoditising the smartphone market.  The iPhone is not a commodity product, and AAPL never tries to compete in that segment of the market.  But I am sure everyone is well aware of those arguments so no need to restate them!

         
  • Posted: 29 July 2010 07:35 AM #9

    This article over at Fortune is quite applicable to this discussion. It echoes many of the same concerns about Googles strategy.

         
  • Posted: 29 July 2010 10:52 AM #10

    Antennagate helped Google in one way?everyone started running the AdMob supported SpeedTest app, again and again.

         
  • Posted: 29 July 2010 11:48 AM #11

    Derrick, etc.,

    The media will ignore that firestorm. But don’t worry. It’s going viral. Put it on your FB account (use the link from within that story if you don’t want to be slammed by zealots who call you all sorts of names).

    I already posted and so my 1,100 friends can see it and repost. Six degrees of separation is for amateurs. This can go around the world in a matter of a few hours.

         
  • Avatar

    Posted: 29 July 2010 12:14 PM #12

    TanToday - 29 July 2010 03:23 AM

    No wonder this is the two charts over the past year, AAPL vs GOOG

    Interesting. I must admit though that, as someone who does not do a lot of active investing I haven’t the slightest idea what that chart is showing.

    Signature

    Take Only Pictures, Leave Only Footprints
    Is No Way To Run An Art Gallery

         
  • Posted: 29 July 2010 02:15 PM #13

    @Geoduck - it shows change in share price of Google and Apple as a percentage since July 2009.

         
  • Avatar

    Posted: 29 July 2010 04:36 PM #14

    Thanks. Very helpful

    Signature

    Take Only Pictures, Leave Only Footprints
    Is No Way To Run An Art Gallery

         
  • Avatar

    Posted: 30 July 2010 02:27 AM #15

    JonathanU - 29 July 2010 09:27 AM

    After all, there are 4bn people with mobile phones at present.

    When I looked it up, there was a similar number (4.6 billion) for the number of mobile phones, NOT the number of people with mobile phones. For example, according to this Widipedia article, Russia has 213.9 million phones, but only 141.9 million people. There’s a big difference.