The future is mobile and apps, except that it isn't.

There are two charts that capture a lot of the way we think about mobile today. In the first, we see that mobile devices are approaching a majority of traffic, and in the second, that a large proportion of all web traffic (a majority in the USA in this instance) and the vast majority of mobile traffic is coming from apps rather than the web. 

However, if you're not careful you can get quite the wrong impression from these. 

First, look at where people actually use their devices. 

This is a picture that you see in all the relevant data (use of cellular versus wifi data, for example) - most use of 'mobile' devices happens at home or at work, or sitting down in a coffee shop - at any rate, not just while you're walking down the street or queueing at a shop. People use their mobile devices everywhere, and mostly, that actually means when they're sitting down. The fact that the IBM data above, like much 'mobile' data, actually includes tablets, is something of a clue - people obviously use tablets sitting down. But that's true of smartphones too. 

When we talk about designing for mobile use, we tend to talk in terms of building experiences that people can see in brief moments while they glance at their phone, because they're queuing or walking or waiting for a lift or whatever. By extension, that means that 'mobile' can - no, should - be a subset of the full experience. But actually, people do do that but they also, increasingly, spend half an hour burrowing though the web or into an app, while they're sitting at home, even with a laptop in reach. So the mobile experience needs to be complete. That might, paradoxically, mean that your total experience might need to be edited, to fit, but it's dangerous to pick a subset of your offer and put just that on mobile - it might be your only touch point. Conversely, one could argue that in some cases it's the desktop experience that should be a subset of the mobile one. 

Second, about that app share of use. The great majority of app use is of course Facebook and YouTube, and in fact, app use of the internet overall is highly concentrated into a relatively small number of highly successful apps. If one looks at how people use the web on the desktop, though, you see something very similar. Most people have perhaps 10 or 20 web sites that they visit regularly in a conscious, directed way - they type the URL or click a bookmark or (most likely) search for the service name. Everything else they get to though social or search. And on mobile, most people, again, have perhaps 10 or 20 services that they use regularly - except that on a smartphone those are apps. And everything else they get to through search or social - except that social happens as a web view inside the Facebook or Twitter app and so counts as 'app use' as well. 

That is, there's a very fat head to the distribution of use on both mobile and desktop, and on mobile that goes to apps while on the desktop it generally remains within the web browser. Apps unbundle the top services into their own apps. But the dynamic for everything else has changed less - it's still on the web, mostly. As I wrote here, if people have a relationship with your service such that they'll want to put your icon on the home screen - if they'll make a conscious choice to go to you - then you should have an app as well as a website. If you're in that category then everything has changed relative to the desktop internet. But if not, then the web, search and social are still most of the story. Hence, one of the interesting trends at the moment is the attempt to bridge the web with native, non-web experiences. We see that with Google Now and Facebook Messenger (desktop sites where you place an order while signed into Facebook can send messages to you in Messenger) and with a lot of what Google is thinking with Chrome. That's not really here just yet, though. 

Mobile interaction models

The interaction model for the desktop internet was pretty much settled 15 years ago. It turned out that the answer was a web browser. Stand-alone apps such as Pointcast were a mostly blind alley, and while apps persisted for email and IM, and for very specific things like music, the words ‘web’ and ‘internet’ became effectively synonymous to anyone non-technical. Over time we added Ajax and better search and better social, but everything really happened inside the browser.

In mobile this is quite different: nothing is settled. We have the web and apps and of course app stores, and then we have many complications - voice, in-app payments, web apps, hybrid apps, widgets, push notifications, social messaging apps, Google Now and Siri. Then there’s the hardware layer - images, barcodes, NFC, bluetooth, location, motion sensors etc. Innovative and disruptive new interaction models can very often find a route to market, far more easily than they could on the desktop internet. Sometimes, they scale to a hundred million users in a year to two. And we have more and more waves of innovation coming, with things like local wireless from Apple and deep linking to within apps from Android, and a very fast-evolving social messaging space, and more things in 2014 and beyond.

So, we can actually have a pretty limited idea of what the dominant interaction models will be in 5 years. 

(There is a dream, of course, that all these nasty choices and options will go away and we can go back to the nice, simple, limited web, but that doesn’t seem very likely just yet.) 

One of the big changes here is the removal of monopolies. If the web is not the only interaction model then web search loses power as a discovery and acquisition channel. And in parallel Facebook’s desktop monopoly on social has not transferred to mobile and it seemly unlikely that it ever will (I wrote about the reasons for this here). So both of the key channels on the desktop are smaller and less crucial, and also work significantly differently, and are pretty poor at driving some key types of engagement, now that you’re not just looking for a click on a link. This changes lots of things, and creates lots of new opportunities.  

The puzzle for Google is how it brings its vast, decade-old machine learning project to bear on this new complexity of data and behaviour. The obvious problem is that data and behaviour within apps are effectively dark matter that it can’t track (hence the deep-linking initiative in Android). But this is balanced by much richer data collection. Your Android phone feeds it with data all the time - where you are, what you look at, where you go after you search and what you did the day before. The challenge is finding the right ways to collate and present that data - Google Now is one example but probably not the only one. The search box and the page of results is just one possible interface to that machine-learning project - what does Google look like after the search box?

Social faces a different set of challenges. It seems to me that on mobile Facebook will never have the near monopoly that it briefly enjoyed on the desktop - smartphones remove most of the frictional barriers that keep you on one social network. But mobile social more broadly is a vast opportunity. With web search no longer the dominant channel, social, on a far more social device than the PC, has an open door to push at. Tencent announced that the first 5 games that it launched with Wechat integration, starting in August, have had 576m registered users. Mobile social is an engagement, interaction and distribution channel, and it appears to be much richer, and probably much bigger, than social was on the desktop. 

If this is the end to near-monopolies in acquisition and discovery, it’s also interesting to think about it as the end to monocultures. If the interaction model shifts away from web search, that change makes different models and different types of behaviour possible. In turn, one might ask - what models and companies and behaviours were precluded by Google on the web? What good ideas didn’t work because of the way Google did search and the way Facebook did social? How did that monoculture shape things, and how does that change now? 

What does Google need from Android?

The 'Android has problems' narrative is very clearly established (as established, of course, as the 'Android is selling in vast numbers' narrative). There's the fragmentation by OS version, the fragmentation by hardware, the consistently lower engagement and monetisation, and of course the financial weakness of all the branded OEMs except Samsung, which has an equally unhealthy (for Google) 45-50% or so of Android device sales.

However, it is far from clear to me that problems for Android developers and OEMs are the same as problems for Google.

As I see it, Google really has three strategies for Android, as it has developed over time. 

First, there was the publicly stated objective; to make sure that Google was not somehow shut out from the mobile internet by a dominant OS provider that chose to exclude it. Originally (i.e. pre-iPhone) this fear was directed at Microsoft; subsequently it may also have been consciously directed at Apple. 

Android has been a complete and unambiguous success on this front: it is extremely hard to see how any one company could now control the mobile OS market at all, let alone try to exclude Google. (The exception, of course, is China, which I will return to.)

Second, whether deliberate or not, Android has had the effect of hugely increasing the number of people with access to the mobile internet. Just as Wintel 25 years ago powered an army of cheap PC 'clone' makers churning out tens of millions of cheap commodity PCs, Android and a small group of mobile chip companies (mainly Qualcomm, EMP, Mediatek, Spreadtrum) have enabled a flood of cheap commodity smartphones and tablets. Do a search on Alibaba for 'Android 2.3' to see what I mean - the entry price for an Android smartphone is now $45 wholesale, with wifi tablets not much more and a vast range of other devices (ersatz netbooks, in-car PCs and DVD players, set-top-boxes and lots else besides) following on behind. 

These devices in turn are percolating out to emerging markets around the world and to prepay customers everywhere, quite apart from the relatively small numbers of people in developed markets buying relatively high-end devices like Samsung's Galaxy S3 (which made up under 10% of Android device sales in 2012). All of those devices represent more people and more time online, and that means search, which means Google web search and revenue for Google. 

On this front too Android has been a huge success, and many of the criticisms of Android as an ecosystem are of limited relevance to Google. A forked, fragmented, Android 2.2 phone in Jakarta with no Google services on it still accesses the web (if it has a data plan, of course) and drives search volumes, and it is still a great product for a labourer with $50 to spend. The decline of HTC matters little compared to that. Even the dominance of Android sales by Samsung, though arguably unhealthy, doesn't fundamentally threaten these strategic gains so long as the 'cheap Chinese' are providing a flood of alternatives. 

Equally, iPhones, which have around 20% of the smartphone market, do almost all of their web search (outside China) on Google. Given the fact that $650 phones tend to be bought by higher-end consumers than $100 or $300 phones, it is quite possible that iPhones generate more advertising revenue for Google than all Android phones combined. 

Then, however, we come to the third strategy.

An Android device, properly signed into a Google account and running all the Google Apps, generates an endless stream of little bits of 'signalling' information, way beyond what Google gets from a desktop search user even if they're using Chrome. It knows where you live and work, how you commute - and which phone numbers on web ads you dial. Unlike a web browser, you are probably always signed in to Google, so all of your interactions with Search, Maps and anything else can be linked together. (This, of course, is also the main purpose of Google Plus.) 

Google Now is just one manifestation of this: doing useful things like telling you that your meeting will take 45 minutes to get to because there's heavy traffic, so you should leave now.  But this value flows both ways: Google is giving you useful titbits, but it is also mining far more data than it would get from a PC user - data to improve search relevance and advertising relevance. 

In other words, Android, like Plus, allows Google to tie searches and advertising to individual people and places. In the long term, the data that Google gets from Android users is probably just as important as Pagerank in understanding intent and relevance in search. 

Hence, the real structural benefit to Google from Android now comes from the understanding it gives of actual users, and the threat comes from devices that do not provide this data - even if, like the iPhone, they do provide plenty of search traffic. 

Obviously, Google's access to this data on non-Android platforms is pretty partial, but the problem also applies to significant parts of the Android base. In China the problem is near-absolute. Google services are mostly blocked anyway, almost all Android phones ship with few or no Google services installed (i.e. they are based on the open source AOSP version of Android) and Google Play, where it is installed, appears to have a very low share of actual app installs. Hence, Google gets close to zero practical benefit from the explosive growth of Android there. There is a similar issue in other emerging markets - a significant portion of those $45 handsets skimp on Google apps just as they skimp on IMEI numbers. 

The clearest expression of this is in tablets. Google gets no data from a Kindle Fire, only web search traffic. More importantly, at scale, it gets no data from many of the generic Chinese Android tablets that are starting to well out of China at $100 or less. These devices are like dark matter: everyone suspects there are a lot of them, but no-one quite knows (publicly) just how many. I've seen credible people claim it could be well over a hundred million units in 2013. Possibly much more. How many of these devices will have Google Play? How many users will install Google Maps? How many will come with a third-party web browser (from Tencent, say), one or two of the dozens of major Android app stores operating in China, or Amazon's app store? 

Someone (sadly, I forget who*) described Android to me as an unguided missile: very powerful but spiralling semi-randomly with no clarity on where it would land. There is the fragmentation issue, and the weakness of most of the OEMs. There is the threat of Amazon or Samsung forking the platform. But there is also the threat that an increasing number of Android devices might have no more connection to Google than does an iPhone. 

To put that another way, Google's penetration of Android is as important as Android's penetration of the handset market. 

*Update: it was originally a comment on Asymco - thanks Horace.