Social networks and production

Analyzing a regional network and identifying constraints

As the network of production I have chosen the network surrounding Google, Inc.. The focus will be primarily on the smartphones developed by Google, the Google Nexus line. In terms of this production line the network is actually already named as the Open Handset Alliance (OHA). This is the network that currently develops and uses the android operating system. This alliance came to live around Android and Google. A bit of history.

Android, Inc. was founded in California in 2003. It initially set out to make an operating system for digital cameras. The scope changed very rapidly and they made an operating system for smart phones. Not long after this Google took over Android, Inc. (2005) (1). At Google the system gets further developed and eventually Android gets unveiled as a new open standard (!) mobile device platform. Surprisingly, it is not Google that makes this revelation, but the OHA. This consortium of Google, HTC, Sony, Samsung, Sprint Nextel, T-Mobile and many more are the ones bringing forth this operating system (3). From the website of OHA (4):

“Each member of the Open Handset Alliance is strongly committed to greater openness in the mobile ecosystem. Increased openness will enable everyone in our industry to innovate more rapidly and respond better to consumers’ demands. Our first joint project as a new Alliance is Android™. Android was built from the ground up with the explicit goal to be the first open, complete, and free platform created specifically for mobile devices.”

A year later, in 2008, a smartphone by HTC, the HTC dream gets revealed as the first Android operating mobile phone (2). In 2010, Google released its first smart phone with the Nexus One. This phone was developed mainly in cooperation with HTC. Other Nexus devices were developed together with cooperation’s from the OHA like LG Electronics, Asus and Motorola Mobility.

It seems conceivable that the OHA is more a production network than an actual open standard platform to enable all actors in the industry to innovate. As the OHA was very rapidly created, in 2005 Google bought Android, Inc. and in 2007 a global consortium of more than 20 companies was created which would stimulate openness in their sector and create a vast knowledge database, so to say. A first concept from organizational networks is already becoming visible here. The entire OHA is actually centered around Google. In the two years’ time it took to fully the develop the Android system and setup the network no other company could have created the same knowledge about the operating system as Google. Granted that afterwards everybody was able to access the code, no other actor actually had this knowledge and it is still Google that develops Android. So although the transparency and the openness looks very fancy and attracts a lot of people, it is a way for Google to distribute its operating system. It went even further than that. Google designs, develops, markets and sells the Nexus line, but has original equipment manufacturers (OEMs) in the OHA behind it to do the manufacturing. Although, these are not a 100% loyal to Google, as HTC also has a windows phone for example, the OHA does provide an openness and coolness factor to a lot of these Android operating phones while it seems more like Google trying to provide itself with security (5).

Of course, it is not just Google trying to secure its position. The other companies also had a lot of benefits from this. It enabled them to use a good performing operating system and easily develop hardware around/for it. They also have the security that it will keep getting worked upon in order to give their customers a reliable system. These organizations are mainly hardware developers and thus, now have more time to spend on their specialty while having stable relationships within the industry.

Dependency on others because of  knowledge sharing and rapid developing/innovating is more important because it is an open source system. The developing of Android and coupling it to loyal customers is very important because Google and the members of the OHA do have competitors. Nowadays, most people (globally) actually do not use google’s android services. Amazon uses its own version of android (2.3 Gingerbread) on its own tablet (the kindle fire). Also on the Asian market there are more and more smartphones and tablets manufacturers, for example the current leader in the Chinese market Xiaomi, that are not in the OHA but do provide quality devices based on Android.

As a final remark, I want to make clear that this centrality around Google is actually very beneficial. It is a new way of cooperating and it definitely creates more economic value for the actors involved. The ‘lack’ of openness is not a hypocritical point, as has been pointed out that competition is able to use Android as well, and the power centrality around Google Nexus line is not as straightforward as the other companies (like HTC) sell these Nexus devices and make a profit on it.

References

(1)    Markoff, John (November 4, 2007). "I, Robot: The Man Behind the Google Phone". The New York Times. Retrieved February 15, 2012.

(2)    Mark Wilson (September 23, 2008). "T-Mobile G1: Full Details of the HTC Dream Android Phone". gizmodo.com. Retrieved December 27, 2013.

(3)    "Industry Leaders Announce Open Platform for Mobile Devices" (Press release). Open Handset Alliance. November 5, 2007. Retrieved February 17, 2012.

(4)    http://www.openhandsetalliance.com/oha_overview.html

(5)    Electronista (may 3, 2010). Leak: Google’s Open Handset Alliance a “myth”. http://www.electronista.com/articles/10/05/03/open.handset.alliance.said.solely.for.google/.