Preamble – I decided to write this post after careful consideration. On one hand I didn’t want the companies involved to suffer because one executive had a loud mouth, on the other hand it raised interesting questions about the state of the Android eco-system. So I decided to thinly veil the identities of the different parties.
March 14: I was sat down in the main dining room of the JW Marriott in Seoul having breakfast and minding my own business when I found myself sitting the next table along from a rather loud discussion of a proposal that a US start-up wanted to make to a major Korean Android handset and tablet manufacturer in a meeting scheduled that day for 2pm.
The crux of the pitch was this: the start-up can help the Korean company sell more devices if they pay for the start-up to develop their software software (currently a prominent RSS and social network aggregation as magazine-type reader on iPhone and iPad) specifically for the Korean company’s Android devices. Said Korean company should also spend a bit more to offer on a new phone or tablet – a three-month free subscription to a publication like The New York Times, Vanity Fair or People magazine – given the media connections that the start-up partnership development person had: they could broker the deal to make this happen.
I also gathered that a similar pitch had already been made to a Taiwanese handset manufacturer; but not much progress had happened, though this may change as they had a good idea that the start-up was in discussions with this Korean competitor.
Now ignoring the lack of common sense in having this discussion in a public place with colleagues when your voice carries across the room I was struck by two things:
- The economics of major applications on Android seem to require major financial incentives if this guy had flown half-way around the world to pitch this offer at the same time that SXSWi was on in Austin
- Android device differentiation / hyper-competition is becoming an issue, if the head of marketing at a large corporate would spend time to do this meeting and seriously consider the start-up’s proposal. The market must be seriously commoditised and there must be little ‘value-add’ benefits between devices
Now I don’t think that a free three-month subscription is going to move the needle that much, particularly if one looks at how Nokia’s Comes With Music initiative failed to arrest the decline of the world’s largest phone maker. And the implication about the economics of high-quality Android application development was something that concerned me, particularly when I look at the increasing demand for mobile work from clients.