Android: How Google Conquered the Smartphone Industry

There is a 72% chance that your smartphone
is running Android, and over the past five years, this number has only gone up. That’s why today we’ll be exploring one
of the most important parts of the Google empire: Android. This video is brought to you by Brilliant,
the best way to master the science and math that lie behind modern technology. Sign up with the link below to get 20% off
your premium subscription. Although the Android OS became popular after
2010, the story behind it goes way back to 1989, not in Silicon Valley but in the Cayman
Islands. It is there that Andy Rubin, a robotics engineer
working in Switzerland, had gone on vacation. Early one morning, he stumbled across a man
sleeping in a chair outside; as it turns out one of Apple’s leading software engineers
had just been kicked out of his beach house by his girlfriend. Andy was compassionate and gave the man a
place to stay; in return, he was offered a job at Apple, right around the time when the
Macintosh had peaked in popularity. Thanks to this lucky break, Andy kicked off
a great career in Silicon Valley, first by developing the Macintosh Quadra for Apple,
and then joining General Magic, the company now famous for developing the predecessor
of the modern smartphone. While working at these companies Andy would
always develop his own side projects. They usually involved him building crazy robots,
and eventually people around the office started calling Andy the Android. Interestingly enough, one of Andy’s colleagues
at General Magic was Tony Fadell, the man who would later go on to create both the iPod
and the iPhone. Although General Magic’s idea was truly
innovative, it was at least a decade ahead of its time, which is why the company eventually
went bust. Andy never gave up on the idea of the smartphone,
however, and in 1999 he and his engineering buddies decided to start their own company
to pursue that dream. What they eventually developed was the Hiptop,
a phone with a keyboard that could wirelessly connecting to the Internet. While not innovative from a hardware standpoint,
the Hiptop was nevertheless a pioneer: You see, back in 2002 mobile phones were still
considered mostly a business tool, and nobody had made any serious effort to market them
to teenagers. The Hiptop’s design was the perfect blend
of instant messaging, Web access and convenience, but Andy ran into a problem before he could
even start production. Back then the mobile phone industry was almost
exclusively controlled by carrier companies. They were the ultimate gatekeepers for any
phone manufacturer, because without them, phones were basically useless. Carries had power over nearly every aspect
of mobile phones, from how much they would cost to how they would be marketed. The Hiptop seemed like a very risky investment,
so Andy struggled getting any carrier on board. He eventually had to strike an extremely unfavorable
deal with the only company that was even marginally interested, T-Mobile. Not only did they demand a large percentage
of all the sales, they also got to rebrand Andy’s phone, releasing it as the T-Mobile
Sidekick. It was somewhat successful, but it was mostly
used by urban rich kids so it’s popularity was limited and Danger Inc didn’t really
get any public exposure out of it. Nevertheless, the phone did get into the hands
of the right person: Larry Page, the co-founder of Google. Now, back then Google wasn’t nearly as big
as it is today; in fact, it was still behind the likes of AOL Search and Yahoo. That’s why Larry was pleasantly surprised
when he discovered that the default search engine for Andy’s phone, was Google. Larry saw huge potential in the idea of the
smartphone and wanted Google to make one of their own, but he knew that the carriers would
never allow an outsider to steal their profits. Larry felt it was still too early for Google
to challenge the carriers, and so he waited. As luck would have it, over the next three
years, Andy would develop a new business model that could finally end the carrier monopoly. His previous venture, Danger Inc, was like
any regular manufacturer, relying on hardware sales to make its money. This came into direct conflict with carriers,
who wanted their clients to use the same phone for as long as possible to prevent them from
switching to competitors. Andy figured out a brilliant way of ending
this conflict of interest. Instead of relying on hardware sales, he would
give out his software for free, earning money by taking a percentage of the carrier service
fees. Andy knew firsthand just how difficult it
was to be a developer for phone apps back then, so he wanted to make his operating system
open source as well, giving everyone the chance to use it and build applications for it. He combined these two ideas into a new company,
which he called Android, in 2004, and while the rest of the world laughed at his idealism,
Google knew that this was what they had been waiting for. Just a year later, when Android still had
nothing more than a barely-working demo, Google bought the whole company for $50 million. Even then, Google’s motives were clear:
they anticipated the rise of mobile computing and wanted a dedicated platform through which
to distribute their services. Andy and his team were brought along to do
just that, and they even got their own building at the Googleplex. Over the next two years they would develop
their revolutionary idea into a fully functional operating system. But that was just the first step: they still
needed to design a phone the OS would run on and to partner with a carrier to actually
sell it. Finding someone to build the phone was easy
enough, but getting a carrier to willingly give up their control of the phone market
was difficult to say the least. In fact, every single carrier Google contacted
turned them down. Then, on January 9, 2007, Apple unveiled the
iPhone. Unsurprisingly, the Android office was in
chaos the very next day. While they had experimented with touchscreen
technology, nobody had imagined that Apple would be fully integrating it into their phone. Over the next nine months, Andy’s team completely
redesigned their product, adding touchscreen functionality on top if its pre-existing keyboard. The release of the iPhone, however, actually
helped Android. You see, Apple weren’t nearly as determined
to break up the carrier monopoly Andy was so eager to destroy. Steve Jobs had just gone with the flow, signing
an exclusive deal with AT&T to get the iPhone out as fast as possible. But once the other carriers saw just how popular
the iPhone was, they started to panic, fearing that AT&T would come to dominate the smartphone
market thanks to its initial lead. This fear is what eventually convinced T-Mobile
to sell Android’s first phone, the HTC Dream. Unfortunately, it would take Andy’s team
another year before they could finally release it, giving Steve Jobs plenty of time to grab
market share. But Google did not come unprepared. They used this extra time to form an alliance
with various carriers, software developers and manufacturers. Apple’s deal with AT&T convinced everyone
that they had to work together. Steve Jobs threatened to destroy their entire
business models, which made Android’s open source offer much more lucrative. Because Android wasn’t a closed-off system
like iOS, carriers and manufacturers could remain confident that Google wouldn’t abuse
its power over the Android platform. Thus, in November 2007, the Open Handset Alliance
was born. The crusade against Apple would not be easy,
however, and by mid 2009 iOS already held 40% of the smartphone market. A big chunk of its market share came from
the dying SymbianOS, which was the operating system of older phones. In the midst of Symbian’s decline, Android
scored its first big victory: the Motorola Droid. By the time of its release in 2009, the carriers
were so scared of fading into irrelevance that Verizon personally spend $100 million
marketing the Droid as an iPhone-alternative. From then on, the Android OS quickly reached
mass market adoption. Apple barely made an attempt to stop it because
their model of high prices and exclusivity was the polar opposite of the cheapness and
variety of Android. By May 2010 Android had already surpassed
iOS in market share, and by the end of the year it was the world’s most popular mobile
operating system, a title it still holds to this day. Andy oversaw the first 18 versions of Android
and is likely responsible for the tasty trend of naming the different releases after popular
sweets. He did eventually leave Google in 2014. Today he runs his own incubator in Silicon
Valley and also has a billion-dollar smartphone company that just started shipping its first
phone, the Essential PH1, that is so far getting mixed reviews. Even without Andy, Android remains the dominant
mobile operating system on the planet, despite facing sharp criticism from all sides on a
variety of issues. Things like security flaws and malware issues
haven’t hindered Android’s popularity. As of August 2017, Android controls 72.7%
of the mobile phone market, with over 2 billion active users every single month. Right now iOS is the only thing that stands
between it and monopoly, and Android is showing no signs of slowing down. In fact, its latest release, 8.0 Oreo, is
Android’s most ambitious one yet. With an improved notification system, tighter
background process control and a legitimate solution to its fragmentation issue, so far
Oreo is being praised all around. At this point, Android can no longer be called
just a mobile operating system. Besides phones and tablets, Oreo will also
be integrated in cars, watches, TVs, VR headsets and possibly numerous other devices thanks
to a version dedicated to the “Internet of Things”. Suffice to say, things are looking bright
for Android, and considering just how crucial of a part they are in the Google war machine,
they’ll likely remain on top for a long time. Now, the technical innovations that made Android
possible back in the early 2000s aren’t things that are easy to learn. All the science and math that went into creating
Android may seem difficult to get into, but don’t worry! is a great place to learn the
most important knowledge in physics, math and technology in the easiest way possible:
by solving practical exercises. With Brilliant you can dive deep into the
world of algorithms, computer memory, machine learning, and bunch of other fascinating topics. By solving fun puzzles, you will build up
your technical knowledge and problem solving skills in no time! Visit and you’ll
be able to sign up for a free account and to get 20% off your premium subscription,
and who knows, maybe one day you’ll be the one building the next billion-dollar tech
company. Lastly, I want to say thank you to our awesome
patrons on Patreon for supporting us and to you for watching. Don’t forget to follow us on Reddit, Twitter
and Facebook, and as always: stay smart.