The Plot to Dethrone Android

NEW YORK (TheStreet) -- Call 911! Senior executives are meeting, right now, in a smoke-filledroom, plotting to take down Android.

I think they will ultimately fail, but not without perhaps inflictingsome superficial wounds on their intended target.

And guess what? The following companies aren't in the room: Apple ( AAPL), Microsoft ( MSFT) and BlackBerry ( BBRY).

What am I talking about? And who?

To understand the scene at the 2013 version of "The Last Supper" youhave to understand the logic and chronology of how the smartphonehistory developed over the last 15 years:

In the early 1990s days, wehad Nokia ( NOK), which was eclipsed in the early 2000s by BlackBerry.

The wireless operators were extremely happy with BlackBerry, partiallybecause BlackBerry didn't pose a threat to them. It shared revenue,expanded the market into the lucrative enterprise sphere, and didn'tdivert existing operator services.

BlackBerry co-CEO Jim Balsille described his relationship with thewireless operators as "constructive alignment" because he emphasizedthat BlackBerry was the chief ally of the operators -- not a threat.All parties -- BlackBerry as well as the operators -- loved thisarrangement and wanted it to continue forever.

Minor threats such as Palm were swatted off like flies. The yearsbetween 2003 and 2007 were all sweetness, light and jingles for thewireless operators and for BlackBerry.

Then came the iPhone stink bomb. Steve Jobs was the opposite of JimBalsille's "constructive alignment." It was Jobs' way or the highway. Any operator carrying the iPhone had to comply with every millimeterof Apple's wishes. No logo on the device, no crapware apps, nonothing. Great for the consumer; bad for the operators.

Apple was confident that it had a product the operators wouldn't beable to ignore, even though they hated it. All Apple needed was acrack in the Hoover Dam of the operator wall. With AT&T ( T) hungry totake down Verizon Wireless from the U.S. market leadership position,Apple got its opening.

Apple and AT&T milked this for all it was worth, and Verizon feltcompelled to respond with desperate measures. Verizon went toBlackBerry for an all-touch version called Storm, which became a totaldisaster. It also licensed the "Droid" name from Lucas Films andagreed to promote Android heavily as its answer to the iPhone.

Android was free and customizable, so the operators -- not onlyVerizon -- proceeded to promote it as their favored solution, tryingto keep Apple away from total industry dominance.

As it turns out, they succeeded beyond their wildest dreams. Androidended 2012 with almost 70% market share worldwide; slightly lower inthe U.S. The wireless operators now realized they had created amonster.

To counter this new menace, the operators first prodded Windows Phonein 2012, and now BlackBerry 10 in early 2013. The ultimate verdict onthose operating systems is likely to take at least another fewquarters, but so far their success is far from a foregone conclusion:Combined, Windows Phone and BlackBerry market share is no higher thanapproximately 10%, possibly even lower.

Even if the operators manage to make Windows Phone or BlackBerry 10 asuccess, the victory may turn out to be temporary for the wirelessoperators. Why? Microsoft owns Skype and has ambitions for all formsof services, ranging from productivity to entertainment, collidingwith operator monetization plans.

In other words, if the wireless operators manage to promote WindowsPhone into parity with the iPhone and Android, in the end Microsoft will care as much about the operators' success as Apple and Google ( GOOG) --which is to say not at all. Microsoft is the ultimate enemy of theoperators, just like Apple and Google.



What about BlackBerry, then? Certainly, in its current form,BlackBerry is the same darling of the operators as it was in JimBalsille's "constructive alignment" heyday, 2002 to 2008. However, asI have pointed out before, BlackBerry is likely going to be acquired by Microsoft, Nokia(essentially Microsoft's smartphone hardware arm), Samsung, Amazon.com ( AMZN) or HP ( HPQ).

If you consider Nokia to be a de facto part of Microsoft, then thebest the operators could hope for is that BlackBerry gets bought byHP. Amazon and Samsung are next after Google, Apple and Microsoft tostep into the center of the operator enemies list for ecosystemmonetization.

So BlackBerry is unlikely to fulfill the role of operator-friendlyentity in the long run, assuming it gets acquired. If you're the bigoperators today, what do you do then?

The answer is at the core of today's smoke-filled room: Support yetanother new and fully compliant operating system!

What the operators want is an Android without a Google. It's truethat Android can be forked, but there is still the lingeringdependence on Google. What could possibly fit this bill?

It looks to me like what the operators want to see is one of the newoperating systems without ecosystem ambitions. They include Ubuntuand Mozilla's Firefox OS. They can run on hardware that's basicallystandard Android.

Specifically, Firefox OS has, with the help of Qualcomm ( QCOM), partneredwith numerous wireless operators around the world. On the handsetside, LG and Alcatel ( ALU) have been announced. You should also expecthigher-end handsets soon.

The major wireless operators around the world will deploy Firefox OSbecause they hope to constrain Google's emerging dominance in theecosystem wars and monetization. The operators want a bigger piece ofthe economic pie than Google is offering them. Google takes 30% ofthe revenue in the Google Play store; the content creator gets 70%and the operator gets nothing except his monthly $20 or $30 mostlyflat data fee.

Will the operators be successful in selling and monetizing Firefox OS? I am skeptical, but it will likely vary greatly from geography togeography. Google is on a major roll, with an epic onslaught ofhardware, software and services slated for introduction between Mayand December 2013.

For example, Google will likely launch an epic attack against at leastthe U.S. wireless operators by offering free voice over IP (VoIP),including free SMS (already available) thanks to the more competitiveLTE offerings becoming widely available later in 2013. This will be ahuge blow to profitability of the wireless operators, and it will bean outright declaration of war between the operators and Google.

Make no mistake about it: Major operators such as AT&T and Verizonknow what's coming from Google, just as the Germans knew what wouldeventually come across the English Channel on June 1944.The operators don't know the exact day in 2013 either, but they're trying tocome up with a counter-move.

This counter-move the wireless operators are plotting seems to be todeploy Firefox OS. I do not yet see how this move will succeed in theend, but we have not yet seen the full picture of their technology andstrategy.

When you have almost 70% market share, and you have further ecosystemmonetization ambitions on the scale of Google, you have to be preparedfor the players around you plotting to take you down. In this case,the latest move by the operators to try to cut down to size a majorecosystem giant will be to promote Firefox OS at the expense ofGoogle.

My bottom line: It is way too early to call this game but, generallyspeaking, I would not bet against Google right now.

Whether you'reanother smartphone maker, or a wireless operator, Google has a hugeoffensive planned for May-December 2013 that will be as epic in theindustry as D-Day was to the outcome of the Second World War. If youthink the last one to eight years were interesting, you just wait until you seewhat's coming in the next one to eight months.

At the time of publication the author was long GOOG, AAPL, QCOM, NVDA, BRCM and INTC, and short MSFT and AMD

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

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