Acer’s founder has given a sharp warning to Google’s chairman Eric Schmidt that the benefits from Android‘s success need to be shared throughout the “value chain” of its suppliers, after complaining that Microsoft and Intel have gathered too much of the profit from the success of Windows.
There are also question marks over the future of Google’s “Chromebooks” – laptops which run its limited ChromeOS operating system, essentially providing access to Google Apps through the Chrome browser – due to limited sales.
But Schmidt, who is on a tour of the Far East, insisted that “resources will be shared” among the members of the Android ecosystem – though he declined to say whether Google would launch own-branded handsets using its acquisition of Motorola, which is due to complete early in the year.
Shih’s remarks indicate that companies making Android systems are wary of being cornered in the way that businesses making Windows hardware have been, where operating margins on commodity PC hardware can be less than 5% while Microsoft and Intel enjoy monopoly profits on the software and processor.
Digitimes says that
Shih noted that an enterprise’s operating strategy should focus on allowing all its partners to enjoy profits and reach a balance, but some US enterprises value too much their own interests, ignoring the profitability of their upstream suppliers, channel retail partners and consumers, causing their operations to be unable to last long.
The warning to Schmidt – that Acer might opt out of the Google’s ecosystems if it feels that the rewards are not sufficient or if Google favours one company over another – may seem trivial, given that Acer is not a major player in the Android smartphone market, and has made little impact in the Android tablet market.
But Shih is almost certainly reflecting the sentiments of a number of Android systems builders who have so far failed to benefit from Google’s efforts outside the smartphone business, where Google faces an uphill struggle to persuade system builders to back it.
Digitimes reports that Schmidt’s attempts to persuade them to build “Chromebooks’ using Google’s Chrome OS have fallen flat:
due to demand for Chrome OS-based devices (Chromebooks) being lower than expected, PC players are taking a passive attitude toward opening projects. In June 2011, Acer and Samsung launched their Chromebooks ahead of other PC brand vendors, but by the end of July, Acer had reportedly only sold 5,000 units and Samsung was said to have had even lower sales than Acer, according to sources from the PC industry. However, Acer has declined to comment.
Google has not provided any figures for sales of “Chromebooks”; Larry Page, the chief executive, made only a passing mention to them in his rundown of Google’s third quarter results discussion:
Finally, Chromebooks have been available for purchase since mid-June, and we’re beginning to see lots of interest and good uptake, both from the businesses and educational institutions.
It is not clear whether the slow sales of computers generally in the US and western Europe have put large organisations off acquiring Chromebooks, or whether the fact that the machines require connection to the internet to function effectively – because they use a minimal OS and do everything else through the browser – has put organisations off deploying them in favour of full-function laptops as well as tablets such as Apple’s iPad, which has sold tens of millions of devices.
But the tensions between Google, Motorola and the Far Eastern system builders on whom Google relies have been made clear by Shih’s words.