Apple, by contrast, generated more than $575 for every iOS device it sold last year
"In terms of returns, Android is sustainable," writes Asymco's Horace Dediu at the end of a long analytical piece posted Monday. "However, in relative terms the value created leaves much to be desired."
That's quite an understatement, especially when you consider how much Apple (AAPL) makes on its mobile devices. According to Dediu, Apple generated $576.30 per iOS device in 2011, including accessories and the licensing of trademarks but excluding income from the App Store, iTunes music, movies, TV shows, iBooks, greeting cards and textbooks.
Hmm. $1.70 vs. $576.30. No wonder Apple is sucking up two thirds of the profit in the mobile phone business.
Dediu's starting point is a settlement offer Google (GOOG) made to Oracle (ORCL) of $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google's revenue from Android to date.
"If this is the case," he writes. "We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google."
The primary source of Google's mobile revenue, of course, is advertising. Ironically, Google seems to be getting more revenue from iOS devices than Android -- by a factor of 4 to 1 according to The Guardian's Charles Arthur. By more like 5 to 1 according to Dediu.
But as he quickly points out, Android represents many things to Google in terms of strategy:
"P&L considerations were not the only (or even at all) factors in investment for Google," Dediu writes. "Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability.
"My take is that [Android] is not a bad business," he concludes. "But it's also not a great one."
The search behemoth accuses the communist state of tampering with, but not completely blocking, users of Gmail in China.
The Guardian reports that China and Google (GOOG) are at it again. Google is now accusing China of tampering with access to Gmail from within China. Customers and advertisers have increasingly been complaining to Google about their Gmail service in the past month. Attempts by users to send messages, mark messages as unread and MORESeth Weintraub - Mar 21, 2011 1:08 AM ET
Google's model of making a few bucks per article may make the most sense in the long run.
Focus Online, the third largest German publisher, is Beta-testing Google's (GOOG) publishing system, according to the Guardian. The One Pass system is a web-based tool for publishers who want to charge micro-payments for content rather than use a subscription service. Each piece of content is paid for through Google's Checkout system and for the trouble, MORESeth Weintraub - Feb 22, 2011 12:40 PM ET
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