a16z Podcast | Google I/O -- A Three-Hour Tour (in 30 minutes)

TL;DR

Google I/O emphasized incremental Android updates and adjacent products rather than major strategic moves, while signaling greater openness toward developers. Google reported one billion active Android users excluding China and Kindle, plus $5 billion paid to Google Play developers in the previous 12 months. Benedict Evans also examines Android fragmentation, developer revenue, Chromecast, and the shifting boundaries between apps and the web. Read on for the numbers and strategic implications.

Transcript

welcome to the a 16z podcast I'm Michael Copeland and we're here with Benedict Evans who is digesting three hours of Google i/o keynote and then some benedict welcome welcome so three hours long really yeah and people started making jokes at about the two-and-a-half hour mark am I suggesting whether they should get Peter Jackson to produce next yea... Read More

Key Insights

• 😄 The Google I/O Keynote focused on incremental updates and strategic shifts in mood towards openness and ease for developers.
• 😀 The future of mobile is likely to involve the unbundling and rebundling of the internet, with a blurring of lines between apps and web pages.
• 😀 Android fragmentation poses challenges for both developers and revenue potential, as hardware and software variations complicate app development and user monetization.
• 🖤 Google's Chromecast is successful, but the lack of widespread content availability is a major obstacle.
• 👤 The mobile ecosystem is becoming increasingly complex, requiring a nuanced understanding of market dynamics and user preferences.
• 😀 The future of software and app development will involve exploring new possibilities and rethinking traditional boundaries.
• 🎨 Apple and Google have different approaches and strategies, with Google focusing on openness and Apple on design and strategic moves.

Questions & Answers

Q: What were the main highlights of the Google I/O keynote?

The keynote covered wearable devices, fitness, cars, TV, and the next version of Android. Benedict Evans saw plenty of useful incremental work, but relatively little centered on Android and no major strategic moves or tentpole features.

Q: How did the mood and strategy at Google I/O compare with Apple’s WWDC?

Evans observed that both companies had become more relaxed and open after personnel and management changes. At WWDC, Apple emphasized openness and making developers’ lives easier, while Google brought Android and Chrome’s future work together under one person and disclosed data it had previously withheld.

Q: How many active Android users did Google report?

Google said Android had one billion active users, excluding China and Kindle. Evans noted that this was close to his own model of roughly 1.1 billion and cautioned that the announced figure was probably not exactly one billion.

Q: How much did Google Play pay developers?

Google said it paid developers $5 billion during the previous 12 months and $2 billion during the 12 months before that. That amounted to $7 billion across two years.

Q: How did Google Play developer payouts compare with Apple’s?

Apple had reported paying developers $7 billion in 2013, and Evans estimated from its growth rate that it probably paid about $10 billion over the latest 12-month period discussed. He summarized the contrast as Apple generating roughly twice the developer revenue with about half as many devices.

Q: Why was developer revenue lower on Android than on iOS?

Evans cited Android’s stronger share in low-income countries, limited payment implementation, scarce credit-card access, and carrier billing that Google had not yet implemented in many of those markets. He also contrasted iPhones averaging $600 with Android phones averaging roughly $250 to $300, while noting that owners of premium Android phones might spend similarly to iPhone owners.

Q: How can lower Android revenue influence app developers?

Developers who believe Android offers less revenue may support it later or adopt a different business model. For example, they may choose advertising instead of in-app purchases, which in turn gives Android users fewer opportunities to spend.

Q: What broader mobile trends does Benedict Evans identify?

Evans describes a mobile ecosystem complicated by hardware and software fragmentation, market differences, payment access, and varying device prices. He also expects the internet to be unbundled and rebundled as distinctions between apps and web pages become less clear.

Summary & Key Takeaways

• The Google I/O Keynote focused on wearable devices, fitness, cars, TV, and the next version of Android.

• Benedict Evans points out the shift in mood towards openness and ease for developers, contrasting it with Apple's recent keynote.

• Google revealed revenue statistics for Google Play and announced the availability of Android apps on Chromebooks.

• The Chromecast, Google's answer to Apple TV, is doing well, but the lack of widespread content availability remains a challenge.

• Evans discusses Android fragmentation and the complexity of the mobile ecosystem.