When Google launched the Android operating system for smartphones in 2008 (after acquiring the startup that developed it), the tech giant took the opposite approach from Apple’s closed iOS for its new iPhone. Rather than jealously guarding a proprietary smartphone OS, Google gave Android away to anyone who wanted to build devices with it.
That strategy paid off better than anyone predicted. Android became the OS for over 3 billion smartphones, tablets and other mobile devices worldwide, made by about 1,300 original equipment manufacturers (OEMs), with a global market share north of 70 percent. Google invests billions each year to constantly improve Android and expand it into new uses, such as smartwatches, smartspeakers, and automobile operating systems.
Why Android Found Success
In its earnings reports, the company combines revenue from multiple sources (Android, Chrome, Maps and hardware such as Pixel and Nest devices) under the subheading “Google Services.” This makes it hard to tease out the specific revenue generated by Android, but in the first quarter of 2022, this “services” division brought in $6.8 billion, which equates to more than $27 billion per year. Keep in mind that the highly profitable Google Play app store wouldn’t exist without Android, and that Google Maps and Google Pay both generate much if not most of their revenue from Android devices. But even with a dominant global share of mobile OS, Android still faces enormous challenges because of the extreme complexity of its ecosystem.
Just consider the many entities on its influence map:
The Android Entity Map
- About 1,300 OEMs worldwide, who have the option to drop Android if they find a better alternative or become disgruntled with its terms of service.
- Thousands of app developers, whose efforts are essential to stocking the Google Play app store.
- Hundreds of cellular carriers around the world, who have the power to disrupt the mobile market with a change in their policies.
- Automakers who may or may not embrace the Android Auto phone-to-screen projection system, which competes with Apple’s CarPlay.
- Government regulators in every country, some of whom are on high alert for any predatory abuses of Android’s massive market share.
Relying heavily on external partners gave Android many advantages. One was that OEMs in each country were free to customize Android to fit the specific needs of their customers, leading to a wide range of devices — from minimalist and cheap to fully loaded with features and premium prices.
Another was that Android’s direct marketing expenses were significantly lower than Apple’s for the iPhone, because Android’s OEM and wireless carrier partners already spent billions to market their products.
The Costs of Android Complexity
On the downside, however, this model took most aspects of quality control out of Google’s hands. If an OEM partner produced an inferior product, research showed that many consumers blamed Android rather than the OEM. It was hard, if not impossible, to ensure consistent user experiences. Even worse, any OEM partner could transform into a direct competitor at any moment. For at least a decade, two of Android’s biggest OEMs — Samsung and Amazon, for its Fire phones and tablets— made attempts to replace Android with their own proprietary OS.
In the face of such threats, Android focused on continuing to drive innovation. For instance, in 2014 they launched a slimmed-down OS version for the Indian market, where hundreds of millions of customers wanted smartphones but couldn’t afford high-end models. By coordinating new specs with Indian OEMs and embracing mobile advertising as a revenue source, Google helped its partners develop smartphones that could be sold for as little as $100. By 2019, more than 500 million Indians had one, and 74 percent of those were made by a local partner of Android.
Managing the Android Ecosystem
Meanwhile, pursuing what CEO Sundar Pichai called “the intersection of hardware and software,” Google developed its own smartphone brand, the Pixel, which gave the company full control over a high-end user experience. Launched in 2016, Pixels came with a pure version of Android, with full optimization of all available features. But this move turned Google into a direct competitor to its OEM partners. On Google’s org chart, Android and Pixel were siloed units with separate leadership, but to the rest of the ecosystem, they both were perceived as simply “Google.” As former Android director of product management Sagar Kamdar put it, “We, of course, want Pixel to be differentiated, but now that we’re our own OEM, our partners are asking: How do you think about us relative to your own hardware products? So, it’s a balancing act for sure.”
Google established a communications firewall between the Android and Pixel teams, aiming to reassure enemies like Samsung and Amazon that Pixel wasn’t benefiting from favoritism from the Android team. If anything, the firewall made day-to-day collaboration with Android harder for the Pixel team than it was for other OEMs. In April 2024, Google finally gave up on the firewall and reorganized both Android and Pixel as part of a new Platforms and Devices unit, with the goal of faster integration of AI across all products.
Another major threat has been government regulators around the world. In 2018, the European Union’s antitrust commission fined Google $5.1 billion for alleged anticompetitive practices related to Android. The EU demanded that Google decouple certain proprietary apps that it preloaded onto Android devices, giving those apps an unfair advantage. Google pushed back both in courts of law and in the court of public opinion, stressing that it did not require any OEMs to include, promote or favor its apps or services. To this day, the Android website includes a detailed list of facts about how the OS supports fair competition across the entire mobile industry.
Perhaps the key takeaway from Android’s history is that the more complex your influence map, the less you can ever relax in your success, and the more fluid and frequent the adaptations you will have to make to both internal and external forces.
Excerpted from The Systems Leader: Mastering the Cross-Pressures That Make or Break Today’s Companies by Robert. E Siegel. Copyright © 2025 by Robert E. Siegel. Published in the United States by Crown Currency, an imprint of the Crown Publishing Group, a division of Penguin Random House LLC. All rights reserved.
