| That is a great question. And I think the wrong one. But let me share my reasoning and you can tell me if you agree with that or not. My reasoning goes like this, if you believe the smartphone and tablet is how people will be consuming the types of services Google would like to offer (Search, Social, Etc) then Google needs to be able to deliver and innovate in that market. If the market leader in devices is hostile to Google, then Google needs to either enable a new leader that they can control or be the new leader. Android's strategy of being open has been excellent at acquiring hardware partners but it has not been able to compete in terms of user experience. Apple has demonstrated for three generations (3G, 4, 4S) that user experience dominates the smartphone decision. And the user experience is dominated by graphics and graphics performance. I don't think three years ago Google could have appreciated just how much the impact that solid graphics support would have in consumer's minds, but now it seems painfully clear to me (and other bloggers who do these types of articles and Anandtech Etc etc) that this part of the equation is key. I claim that if Google's Android can nearly match Apple software feature for feature in Smartphone OSes, but they don't have a hardware partner that can deliver graphics performance. So by the same reasoning that said "we need to create an OS for smartphones that we're able to compete with" they should now know that "we need to create the complete platform that enables a competitive user experience." The biggest and most stubborn nail sticking up from that problem is effective, high performance, graphics drivers. What is perhaps more important, the emergence of the tablet as a viable platform makes that problem stick out more. So Google spends 1.8 Billion dollars over 5 years, and as a result goes from having Android devices being 1/10th to 1/8th the market for tablets to being 1/2 or 2/3rds? If they achieve that objective then yes, the rate of the return for that investment will swamp any other use of that money. The 'do nothing' strategy of having that 1.8B$ sit in cash and cash equivalents for the next 5 years looks to return less than 250 M$ (with at most a 5% annualized rate of return in the kinds of securities they would hold it in) Makes it look like a simple call from the outside, I completely recognize that it is painfully hard for at least one member of the OC [1] to spend like that, and they've had way too much say on how money was spent for the last 5 years. But the reason I think it is the wrong question, is that once you start thinking about it in rates of return your value system is dollars for dollars. I think the right question would be to ask "Is there anything holding back the growth of Android that only Google with its resources (cash, brainpower, etc) can fix?" And I think the answer to that is yes, this one. [1] The "OC" or "Organizing Committee" is Google's equivalent of the 'executive staff' or the 'executive management group' |
It seems to me that Google can (very cheaply) pick the low-hanging fruit in graphics performance and get 80% of the way there, and then see what they need to do. Also having a "Google" line of devices is very beneficial, as it can be the high end of the Android offerings. I'm typing this reply on a Galaxy Nexus, and I find the phone much better than an iPhone by far (in general, not just in performance, I haven't used an iPhone recently and don't remember how responsive my 3G was).
There's also a false dichotomy in your post that I need to point out. You say that the money will either go to a graphics driver or will sit in the bank, which is trivially false, as Google can invest it in many other ways.