At first glance, offering an open-source mobile operating system like Android, wouldn’t be a major profit center for Google. However, one analyst Friday offered multiple ways Android could even further enrich the Mountain View, Calif. firm’s coffers, including become its own ‘virtual telco’ for smartphone owners.
Google gains $500 million per year because Android offers hardware makers and carriers an attractive alternative to payments to Apple for the iPhone, according to Goldman Sachs analyst James Mitchell. In addition, although Apple leads the mobile apps market and is increasing its share of the mobile advertising pie, Google collects 30 percent of apps sold through its Android market and 40 percent from in-app advertising via AdMob.
Perhaps most intriguing, however, was the potential for Android to turn Google Voice combined with Google’s stake in Clearwire into what Mitchell calls a “virtual telco.”
“Google could use Android to evolve into a virtual telco, providing a single contact number and populating its Internet-based calling services,” the analyst told investors.
There is a downside for Google, however. The analyst foresees slow growth of search in Europe and Apple’s continued domination of the mobile Internet.
[Fortune]
