Last week Motorola went on the record to blame Google’s Nexus program for the delay in software updates on its devices. A device manufacturer trying to explain why software updates are delayed is nothing new, but a device manufacturer that was recently purchased by the its software supplier blaming it’s new owner caught my eye. It’s possible that Motorola was trying to give the impression that things really won’t change much once the purchase is complete or that Motorola wants public pressure to support their devices getting preferential treatment from Google; we’ll never know for sure. Regardless, I think it raised some questions about Google’s Nexus strategy and whether or not it has been good for Android as a whole. 

For the past week I’ve been reviewing the Samsung Focus S. I believe that competition drives innovation, so I love spending time with multiple devices and operating systems to see what works well and what doesn’t. I think most of us have spent some quality time with an iOS device and are aware of the competition it presents, but I’m guessing that most of us haven’t played with Windows Phone very much. So how does Windows Phone 7 stack up against Android?  

For the past week I’ve been spending some quality time with the Samsung Galaxy Tab 10.1. While I like the hardware for the most part and I don’t mind TouchWiz, I’ve been struggling to find a place for the device in my life. While a large part of it is simply that I’m not entirely convinced that a tablet is the best form factor, I keep finding myself disappointed with the app selection and quality. There are some great apps available for Honeycomb and Ice Cream Sandwich, but overall I’ve been disappointed time and time again. 

Netflix and Hulu Plus had limited app rollouts because of it. Eric Schmidt and Matias Duarte say it doesn’t exist. Charlie Kindel says it’s the reason Google will lose control of Android. Jon Evans says it’s the single greatest problem facing Android. Sanjay Jha says that carriers require it and he needs it to make money. It’s a subject that Android supporters are tired of talking about and that Android competitors can’t stop talking about. It was the subject of my first official post here at Droid-Life. Fragmentation is still a serious problem.

Yesterday our fearless leader criticized Nokia’s CEO, Stephen Elop, for bringing up Android fragmentation, saying that fragmentation is no longer an issue. While Kellen made some good points about how far Android has come since 2009, I disagree with his conclusion that Android fragmentation is no longer a problem. Four different types of fragmentation remain problematic for Android users. 

Within the last week the top three Android manufacturers reported their most recent earnings. HTC reported its first quarterly profit decline in two years, Motorola’s sales are expected to be disappointing yet again, and Samsung is doing fairly well (though their earning numbers were boosted by the sale of their hard drive division to Seagate). In short, except for Samsung, the top three Android manufacturers are not doing well.

It’s easy for us to look at market share and assume that because Android is dominating, that means every manufacturer is doing well. That’s simply not the case. So far every manufacturer’s strategy has been to make as many models as they can and hope they sell well. The result is a flood of devices in the market and delayed updates. If you make some really good devices you might be able to avoid financial trouble (Samsung), but if you make terrible devices this strategy is just going to kill you (Motorola). HTC has managed to stay in between these extremes by making some good devices, all of which were very similar to each other.  

Think back to January 5th, 2010. That was the date that the Nexus One was first announced and made available for purchase. I can vividly remember the announcement. I impatiently waited for someone to review the device, but the images I saw already confirmed my suspicions: this was going to be an incredible device. Even though it wasn’t on Verizon yet, I had plans to upgrade to it as soon as possible.

This vision of the Nexus One was a phone sold directly by Google to consumers. There was no store to try the device out. You went to google.com/phone to purchase the phone. If you had T-Mobile you could buy the phone unlocked for $529 or $179 on a new two year contract. Eventually a version of the Nexus One with AT&T bands was released in March. By April it was announced that the Nexus One would never be released on Verizon and that customers should buy the Droid Incredible instead. I was crushed, but I moved on (and eventually did get a Droid Incredible, which now sits on my desk running CM7). 

Just wanted to point out that this post was finished on Friday night and sure enough, news broke this morning that Eric Schmidt expects there to be a Nexus tablet in 2012.

HP is currently the number two seller of tablets, though most expect Amazon to usurp them in that position (we’ll never know for sure because Amazon doesn’t release sales numbers). HP didn’t become number two (or even number one plus) because people went out in droves to buy the TouchPad for $499 or even $399. HP became number two because they sold the TouchPad for $99 and $149. Amazon is going to do the exact same thing at a $200 price point.

Over the past few weeks there have been several articles that argued that Amazon’s Kindle Fire is aiming to take out Android tablets, not the iPad. Amazon is obviously trying to beef up their market share by attracting people with a cheap tablet – they made a $200 tablet in every sense of the phrase. Amazon’s goal was never to take on the iPad. To try and take out the iPad would take a tremendous effort and a premium product. Amazon’s goal was to sell a lot of cheap tablets with minimal effort, which they did. The whole point of a product that you sell at a loss is either to get rid of inventory or to make up sales through services purchased; Amazon is doing the latter. While Amazon’s efforts certainly won’t disrupt Apple’s plans, they could hurt Google.

Apple sells a premium product, not a bargain product. Google is trying to do the same thing, but so far tablets like the Samsung Galaxy Tab and the Motorola Xoom haven’t fared as well in sales (Motorola and Samsung make up less than 3% of the market by Gruber’s estimates). It’s possible that products like the ASUS Transformer Prime will gain some traction, but it remains to be seen if any Android tablet can gain significant market share. Even combined, Android tablets are insignificant in market share compared to the iPad.

I’m convinced that Google needs to do three things to gain market share in the tablet space: make a halo product, advertise it, and sell it for cheaper than the iPad.