The second point that I think is key is the recognition that Google has the opportunity to play a bit of business model jujitsu against competitors with Android, noted in this sentence: “It could afford to do this because Google aims solely to protect the great business they already have in advertising, not to make money directly from the product (HW or SW in this case).” This is a point that we discuss in a variety of different business markets. It’s why we think that those who understand how to embrace the difference between scarce and infinite goods have a huge advantage. If you can make money by giving away a product for free that some legacy business relies on charging for — and then making your money up in an ancillary market (made bigger by giving your product away for free), then you have a massive advantage to disrupt the market.
Google doesn’t need or even want your handset money or your OS licensing money — those things have no margin and/or entail too much overhead cost in support. But if Google can build a vast lead in mobile device advertising (which is more than just display ads, by the way), then their core business is protected from new entrants.
In public service media, I’ve previously talked (and presented) about commodity news and how we should either be giving away the commodity product — even to our legacy “competitors” — or simply stop producing it altogether. Know what business you’re in. Let everyone else scramble for the commodity scraps.