The smartphone business tends to be cast in terms of a simple 'platform war' between Apple and Android, with market share and profit share tracked and compared. However, this does not really capture what Google (GOOG) or Apple (AAPL) are trying to achieve. It should be obvious Apple is uninterested in being the biggest manufacturer of phones per se, but the raw market share of Android is also several steps away from Google's objectives.
Google's fundamental strategic needs are to extend reach and gather data. Google needs to be on as many screens as possible, delivering as many searches* (and ads) as possible, and it also wants to have access to as much data as possible to index, understand and serve up in ever-improving search results.
The growth of the mobile internet intensifies these imperatives in two ways:
- Reach: search happens on more devices in more places with greater frequency
- Data: mobile devices can provide far more information about behaviour and intent that can help Google deliver more relevant search results
Hence, Google uses Android as a tool to extend its reach, both as a generic access platform that can go to Google.com and by embedding more and more ways to use Google Search within it. But the objective is reach itself, which it will take anywhere it can get it, including on the iPhone – and Google tries hard to put its services onto the iPhone.
In parallel, Google uses Google Plus to collect and understand usage. Talking about the low rate of social sharing on Plus misses the point. Rather, while the history of Google so far has been about understanding the web and the interactions and links within it, the future of Google is about understanding and learning from how people use the web. Plus is the mechanism to do that - it's PageRank for the users. This is why Plus is being stuffed into all manner of Google products - not to get you to share stuff with your friends, but to be able to draw conclusions from all of your activity in the same way that PageRank draws conclusions from all web links.
This means that a helpful way to look at Google is as a vast, decade-old machine learning project: mobile will feed the machine with far more data, making the barriers to entry in search and adjacent fields even higher, while Plus is the database that ties that data to individual behaviour. The combination of the two strategies is (hopefully) self-reinforcing – reach and data collection produces better results, more reach and more data collection. The more control Google has of the mobile device, the more it feeds the machine. But all devices on all platforms (outside China) are feeding it.
(* Of course, things like Now and Glass point to changing future definitions of what 'search' means)