Google’s ‘Long Tentacles’ Visible at Mobile World Congress, CEOs Note Lack of Competition

March 11th, 2013 | Bookmark and Share | SUBSCRIBE

As FairSearch noted last month, Google’s emerging mobile monopoly is starting to raise a lot of eyebrows in the wireless industry. In fact, the lack of competition is so alarming to Mozilla, the nonprofit maker of the Firefox browser, that it built a new mobile operating system.

A few weeks ago, Mozilla used the Mobile World Congress tradeshow to feature the new system, which is a truly open mobile architecture meant to inject the mobile operating system market with some much-needed competition.

According to a Financial Times report from the show in Barcelona, Mozilla Chief Executive Gary Kovacs touted the open nature of the Firebox OS and its own applications and services while offering critical comments of the Google’s Android and Apple’s iOS two-headed monster.

“We fundamentally don’t believe that you should ever have one or two companies that approve every piece of content that you and I, and 4, 5, 6bn people want to use,” he said.

Android’s share of the smartphone OS market grew to 70.1% by units shipped in Q4 of 2012, up from 52.9% in the same quarter a year earlier, IDC reported. Apple, for its part, saw its share of the smartphone market decline slightly to 21.0% in the fourth quarter last year from 23.0% in the year-earlier period. (By the way, Android-powered tablets are just starting to make some impressive market share gains to the iPad. This is another mobile story to watch.)

Google’s payoff for free Android licenses and Google Apps is more than 95% of mobile search ad dollars and 56% of mobile ad revenue – which makes up most of Google’s $8 billion in expected mobile revenue in 2013, The New York Times reported.

Global telecom companies would also like to establish more competition, the FT reported.

César Alierta, chief executive of Telefónica, said the company’s work with Mozilla was a “strategic initiative to bring balance back to the telecoms sector,” he said, adding: “The smartphone market is currently moving backwards … customers are not able to take applications from one platform to another. This is bad for us, it’s bad for developers, but most importantly it’s bad for the customers.”

The telecom companies and Mozilla are not the only ones noticing. Macworld, The Korea Times and The Wall Street Journal also issued reports on Android’s dominance as an emerging theme from Mobile World Congress. The Journal story painted a clear, yet ominous  picture of the Google’s mobile monopoly from a sprawling tradeshow:

 “Google Inc. kept a low profile during this year’s biggest mobile-industry event here, but the Internet-search giant’s long tentacles were visible all across the Mobile World Congress.

“Google’s Android mobile operating system powered the vast majority of the smartphones and tablets on display throughout the roughly 113,000 square yards of exhibition and hospitality space at the event, which was visited by more than 72,000 conference goers.

Google is writing rules that govern the mobile ecosystem – from app developers, device-makers, mobile payment enablers, network operators, and of course, advertisers – to favor Google. Google’s emerging mobile monopoly has the power to shape consumers’ mobile Internet experience, and not necessarily for the better.

It’s a good sign that Mozilla is taking action to try to bring more competition to the marketplace, and that telecom companies and major publications are speaking out about the need for more competition in mobile. But, only time will tell whether that will be enough, or if additional action will be needed to prevent Google from pressing its dominance in mobile in similar ways to its online bias of the display of search results toward its own properties. It seems unlikely Google will let go of its strong grip over the mobile ecosystem to allow in more competition on its own.