What's Next for Android: Google's New Hardware Strategy

NEW YORK (TheStreet) -- For the last few years, Google (GOOG) has rolled out a new version of Androidevery year. There is no reason to believe 2013 will be an exception.Android 5.0, aka "Key Lime Pie," will replace Android 4.2, aka "JellyBean," this year.

I have no idea what Android 5.0 will contain in terms of new features,but whatever it is, it should bring new a new software cohesiveness toall the major Android use cases: smartphones, tablets and Google TV.Google NOW, introduced last June, could take center stage, especiallyon the smartphone.

As interesting as the software always is, 2013 looks like it will beGoogle's epic year for a new hardware strategy. Often overlooked,Google now has an unprecedented overlapping set of hardware strategiesthat will unfold in concert for the first time in 2013.

Let's listGoogle's unique hardware arsenal:

1. Regular Android Builders:

This is, and has been, the dominant share of Android, over 90% ofAndroid today. Companies such as Samsung, HTC, Huawei, ZTE and Sony ( SNE) -- just to mention the tip of the iceberg -- make their ownindividual modifications to Android and sell them as such to theoperators.

2. Nexus:

Essentially since the beginning (2008-2010 or so), Google has workedwith various hardware partners who are also all part of category 1above, to produce one or two reference devices every year. Untilrecently, these were not prominently marketed, and bought mostly bydevelopers and extreme enthusiasts.

More recently, especially after Google got its online store together,sales of Nexus broadened beyond developers and enthusiasts. Thenagain, the ranks of developers and enthusiasts have swelled with theoverall size of Android's market share.

Last year, Jelly Bean 4.1 launched on the Asus Nexus 7 tablet as thefreshest Nexus reference hardware. This year, one can envision thatAndroid 5.0 could arrive on Nexus devices in all three current sizes -- oreven more -- such as smartphone, 7-inch tablet and 10-inch tablet.

Who will make the various new Nexus hardware devices this summer? Mybets are on HTC, Samsung, LG and Asus.

3. Motorola:

Last summer, Google's acquisition of Motorola had just closed andChicago was in no position to lead with a cutting-edge Android devicethat quickly, in time for Android 4.1 Jelly Bean. This year, however,a year will have passed since Google closed the acquisition ofMotorola. Will this be enough?

Consider this: Last summer, Google was bragging that Asus was able togo from a standing start to shipping the Nexus 7 in only four months. Motorola will now have had a year. Surely, if Asus can do itin four months, Motorola has no excuse to take more than 12 months.

How would what Motorola does with Android differ from the categorieslisted above, "general" Android and Nexus? This comes down much tosemantics, and the fact that Google needs to be sensitive to itspartners.

On the one hand, Google wants Motorola to produce Nexus devices, trueto Google's vision for Android. On the other hand, Google can'tafford to alienate companies such as Samsung by showing specialfavoritism to Motorola.

So what does this mean for Motorola's Android future? Motorola couldlaunch smartphones and tablets that are Nexus -- except in name. Iexpect Motorola to launch a portfolio of devices that look and smelljust like Nexus, and will get software upgrades as quickly as Nexus inthe future, but will not carry the name Nexus. They'll simply come upwith a new name!

4. Google Itself:

This is new. Google recently launched a laptop -- the Pixel -- notthrough Nexus, not through Motorola, and not through some otherhardware partner such as Samsung, Acer, Lenovo or HP ( HPQ). It was Googleitself, from headquarters -- not Chicago.

Last year, Google launched the ill-fated "Q" media player. It floppedrather badly and was effectively canceled before Google had a chanceto collect any permanent customer cash for the first batch ofshipments.

Where do you think the future Google glasses will be coming from?By all accounts, this initiative, too, is directed from some sort ofskunk-works department at Google's headquarters.

Given all of this, why wouldn't this headquarters skunk-worksdepartment also go for the largest market of them all, Android? IfGoogle itself can engineer TV media players and laptops, why not alsosmartphones and tablets?

If this is true -- which I believe it is -- then how would this"Google-only-branded" hardware differ from Nexus and Motorola, interms of its software?

My answer: Only in name!

My theory is that whether it's the extension of the current Nexus program, whether it comes out of Motorola in Chicago, or whether it's Google's own skunk-works development from headquarters, they will all be Nexus software in practice.

The name/label will differ -- Google andMotorola will have their marketing departments come up with somethingfuturistic and boring, respectively -- but the software substancewould be the same.

The point is this: Google wants to keep the software cohesive aroundits Nexus vision, but wants more hardware diversity around it. Theyaccomplish this by having their Nexus partners compete both withMotorola as well as its internal skunk-works hardware team at Googleheadquarters.

What does this mean for Apple ( AAPL)Apple, Microsoft ( MSFT) and BlackBerry ( BBRY)?

Android now has close to 70% smartphone market share, up from zerolittle over five years ago. Most people agree that this has happenedwith Android lagging Apple in particular in terms of overall quality.No question about that.

But now it's time for Android quality to catch up. If you have 70%market share and still rising rapidly, you can afford to segment yourhardware products. You need to spread the risk and to allow morecreative brains to differentiate the product.

"The world is not enough" might as well be this new overlapping set ofnumerous Google hardware strategies. It's better to have severalgeniuses in several different camps working on different hardwarevariants, all running your one software load, than to have all of youreggs in one or two hardware baskets.

All of these numerous Android hardware strategies pursued by Googlecan be bewildering if you don't spend all of your time looking at thisstuff, and they would be easy to misinterpret.

However, I think theyactually make sense. As long as the software delivers, these numerousoverlapping hardware strategies are likely to deliver the best outcomefor Google given its size and several constituents it needs tosatisfy.

If you are Apple, Microsoft or BlackBerry, this does not look good foryou. In front of you are numerous hungry and competing forces alllooking to drive to Berlin to get there first. Google holds all thecompetitive cards here -- except for the lack of physical stores a laApple and Microsoft. Expect this summer to be a painful one forGoogle's competitors. They will have their hands full.

At the time of publication the author long GOOG andAAPL, and short MSFT.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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