Google's Android revenue $31 billion over OS's entire lifetime, Oracle lawyer says

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The Android operating system has reportedly generated $31 billion in revenues for Google since it first launched in 2008, creating $22 billion in profits largely from mobile advertising.




The information was revealed at a court hearing last week by a lawyer for Oracle, which is suing Google on the accusation that it used Java to develop Android without paying for it, according to Bloomberg. In a more recent filing, Google protested the lawyer's disclosure, arguing that it was based on confidentially shared internal documents and that parts of the public transcript of the hearing should be redacted and sealed.

The transcript in fact disappeared from electronic court records on Thursday afternoon without any sign of a ruling on Google's request.

Google makes most of its Android-based revenue from mobile ads, or from a cut of app sales on Google Play. The company does sell branded phones and tablets, but these are developed in cooperation with third-party hardware makers and are often deliberately sold at a lower profit margin as showcase devices. Most Android hardware revenue is generated outside of Google.

The new data indicates that Apple's iPhone revenues from the September quarter alone (about $32.2 billion) surpassed what Android has made over its entire lifespan. The two revenue streams are very different however, and more apt points of comparison would be iAd and the App Store, if iAd were Apple's primary business instead of a shrinking sideline.
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Comments

  • Reply 1 of 56
    Funny to see people complaining (various forums) about this (the Oracle lawyer publicly speaking details that were supposed to be confidential).

    Yet when Samsung lawyers did the same with Apple (making a statement to the media that shouldn't have been made) it was OK.

    Just shows that hypocrisy continues to reign supreme.
    jdunysjony0cali
  • Reply 2 of 56
    gatorguygatorguy Posts: 24,213member
    Funny to see people complaining (various forums) about this (the Oracle lawyer publicly speaking details that were supposed to be confidential).

    Yet when Samsung lawyers did the same with Apple (making a statement to the media that shouldn't have been made) it was OK.

    Just shows that hypocrisy continues to reign supreme.
     ?? I don't recall anyone saying the Samsung instance was OK. Confidential should mean exactly that, don't you agree? 

    Anyway, the important takeaway is that Google doesn't get rich from Android according to the leak. Of course the leak doesn't explain how the figure was arrived at AFAIK. I think articles like this one are guessing how Oracle arrived at it and the period covered, but not entirely certain. It would not shock me at all to find Oracle actually overstated it since it benefits them to do so. 

    In any event I would not be surprised if Google would have made a different choice knowing what they do now. When the decision was made to use the API's as an organizer (that's the only code Oracle is claiming) it was Sun who controlled it. While they might not have been overjoyed at the way Google used Java they also at least publicly had no complaints about it and in fact congratulated them on Android, welcoming them to the Java platform. I imagine most code creators at the time did not believe a license was needed for API's. Some still don't believe they do. 

    So a couple years go by and here comes Oracle to scoop up Sun. They have a different view on it, monetization plans for Java that Sun never intended when they created it.  In essence nothing was "stolen" from Oracle. When Sun created and owned it it Google's use was at least begrudgingly acceptable. (Mr guess is the relationship Schmidt had with them but it's just that, a guess). Oracle suspected they knew what they were buying even if Google did not. Smart guy. 

    Had they anticipated that someone else might someday buy up the IP and more aggressively use it as a money-maker I believe Google would have taken a license to begin with whether they thought they needed one or not back in the day. Hindsight is 20-20. IMHO Google will end up paying a $B or more for their oversight, tho out-of-court would be my guess. 
    edited January 2016 gwydioncnocbuistaticx57
  • Reply 3 of 56
    The Android operating system has reportedly generated $31 billion in revenues for Google since it first launched in 2008, creating $22 billion in profits largely from mobile advertising.




    The information was revealed at a court hearing last week by a lawyer for Oracle, which is suing Google on the accusation that it used Java to develop Android without paying for it, according to Bloomberg. In a more recent filing, Google protested the lawyer's disclosure, arguing that it was based on confidentially shared internal documents and that parts of the public transcript of the hearing should be redacted and sealed.

    The transcript in fact disappeared from electronic court records on Thursday afternoon without any sign of a ruling on Google's request.

    Google makes most of its Android-based revenue from mobile ads, or from a cut of app sales on Google Play. The company does sell branded phones and tablets, but these are developed in cooperation with third-party hardware makers and are often deliberately sold at a lower profit margin as showcase devices. Most Android hardware revenue is generated outside of Google.

    The new data indicates that Apple's iPhone revenues from the September quarter alone (about $32.2 billion) surpassed what Android has made over its entire lifespan. The two revenue streams are very different however, and more apt points of comparison would be iAd and the App Store, if iAd were Apple's primary business instead of a shrinking sideline.
    Big deal, Apple generates that kind of profit in one quarter.
    mwhite
  • Reply 4 of 56
    Funny to see people complaining (various forums) about this (the Oracle lawyer publicly speaking details that were supposed to be confidential).

    Yet when Samsung lawyers did the same with Apple (making a statement to the media that shouldn't have been made) it was OK.

    Just shows that hypocrisy continues to reign supreme.
    You have a point.  What gets me is that Google in fact does understand and value privacy.  It's just MY privacy that they don't give a damn about!
    diplicationjdunyspalominecalibrakken
  • Reply 5 of 56
    gwydiongwydion Posts: 1,083member
    sog35 said:
    Talk about a one trick pony. Looks like all of Google's future revenue growth is dependent of iPhone.

    Android grow has stalled.
    Desktop search is shrinking every year.
    Only iOS is growing.

    Yet Wall Street gives Google a PE of 30 while giving Apple a PE of sub 7 sans cash.

    So what is worse?

    Apple who Wall Street says is a one trick pony with iPhone?
    Or a company like Google who relies on a company like Apple who is a so called one-trick pony?

    If Apple ever pulls the plug on iOS Google search its over. Google would instantly lose 80% of their revenue growth. So how the HELL does Wall Street view Google as 4x more safe of an investment than Apple?

    Your constyant bashing of Tim Cook and comments like this makes you a parody of yourself


    Funny to see people complaining (various forums) about this (the Oracle lawyer publicly speaking details that were supposed to be confidential).

    Yet when Samsung lawyers did the same with Apple (making a statement to the media that shouldn't have been made) it was OK.

    Just shows that hypocrisy continues to reign supreme.
    You have a point.  What gets me is that Google in fact does understand and value privacy.  It's just MY privacy that they don't give a damn about!

    And how they don't give a damm about it?
    edited January 2016 mwhite
  • Reply 6 of 56
    kpluckkpluck Posts: 500member
    horvatic said:
    Big deal, Apple generates that kind of profit in one quarter.
    On something they give away for free?
    edited January 2016
  • Reply 7 of 56
    gatorguygatorguy Posts: 24,213member
    sog35 said:
    FACT: Android sales have been going down
    FACT: Desktop search has been decreasing 5-15% each year for a decade
    FACT: iOS mobile revenue makes up the bulk of Google's online advertising

    Having those facts in mind it's obvious that any future revenue growth from Google will come from the growth of iOS ads.

    Yet Wall Street views Google as a hyper growth company with a 30 PE.
    When Google is literally a Tim Cook decision from having 90% of its future growth killed off.
    Tim Cook could literally remove Google as the default search from iOS tomorrow.

    Google would instantly lose 70% of its mobile advertising.
    Google would instantly lose 90% of its future revenue growth.

    Yet Wall Street thinks Google is 4x safer investment than Apple. Ridiculous.

    For Apple to have shrinking revenues literally TENS OF MILLIONS of people would have to change their mind about a device they use every single day.
    For Google to have shrinking revenues Tim Cook would just have to turn off a switch.
    1. Haven't Google Android device sales have been going up (tho slowing)? It's the overall worldwide market share that has gone down a couple of points. Ridiculous it was supposedly over 80% anyway but that's a different discussion.
    2. You might be correct. Haven't looked.
    3. Nope. Mobile is still a secondary revenue source for Google.  
    revenant
  • Reply 8 of 56
    zimmiezimmie Posts: 651member
    Google spent $12.5 billion on Motorola Mobility in mid-2012. They sold off the non-phone parts for $2.35 billion later in 2012, then the phone parts to Lenovo in early 2014 for $2.91 billion. That's a $7.24 billion loss right there. Is that somehow not banked to/against Android?
    palominebadmonk
  • Reply 9 of 56
    gatorguygatorguy Posts: 24,213member
    zimmie said:
    Google spent $12.5 billion on Motorola Mobility in mid-2012. They sold off the non-phone parts for $2.35 billion later in 2012, then the phone parts to Lenovo in early 2014 for $2.91 billion. That's a $7.24 billion loss right there. Is that somehow not banked to/against Android?
    You've forgotten a few parts (Motorola cash, retained tax write-offs, etc.) so at the end of the day some projected Google to have "lost" around $5B on the deal. But even that does not take into account the 17000 patents plus additional pending patents applied for. Obviously those have a value (Apple paid billions themselves for far fewer patents) so depending on who's doing the calculations they lost a couple $B or made several hundred million. 

    It can be assumed that Google is making some licensing money on those patents since royalties coming in went up nearly a $Billion dollars in the year after they purchased Moto, and Google kept the IP after selling off the other parts. 

    With or without Android Google would still have needed a bucket-load of IP if they were to avoid some of the lawsuit silliness that went around the past 6 years. Where's there's billions in profit the attorneys are never far behind. Now they have one of the largest patent troves in the world, which almost certainly has slowed the rate of patent lawsuits against them. 
    edited January 2016 techloverrevenant
  • Reply 10 of 56
    gatorguygatorguy Posts: 24,213member
    sog35 said:
    gatorguy said:
    zimmie said:
    Google spent $12.5 billion on Motorola Mobility in mid-2012. They sold off the non-phone parts for $2.35 billion later in 2012, then the phone parts to Lenovo in early 2014 for $2.91 billion. That's a $7.24 billion loss right there. Is that somehow not banked to/against Android?
    You've forgotten a few parts (Motorola cash, retained tax write-offs, etc.) so at the end of the day some projected Google to have "lost" around $5B on the deal. But even that does not take into account the 17000 patents plus additional pending patents applied for. Obviously those have a value (Apple paid billions themselves for far fewer patents) so depending on who's doing the calculations they lost a couple $B or made several hundred million. 

    It can be assumed that Google is making some licensing money on those patents since royalties coming in went up nearly a $Billion dollars in the year after they purchased Moto, and Google kept the IP after selling off the other parts. 
    But you are ignoring opportunity costs of the acquisition.

    One of the main events that stemmed from the Motorola acquistion was Samsung feeling like they were stabbed in the back by Google. Samsung has since then made a stronger push to develop their own OS. In fact all their new watches run on Tizen instead of Android. Purchasing Motorola has created a rift between Samsung and Google that may never fully heal. That alone could cost Google BILLIONS
    Please, Samsung has always been about what is best for them. They are no more a partner of Google's than they are Apple's. There's no lost opportunity cost. And losing them billions in the first place? LOL. Google barely makes a profit from Android to begin with, and no Samsung services have gained any traction replacing Google ones so Google doesn't lose out there either. Your repeated "opportunity cost" posts hold no water in this case IMO. 
    edited January 2016 gwydiontechloverrevenant
  • Reply 11 of 56
    rob53rob53 Posts: 3,251member
    sog35 said:
    Also don't forget Ad-blockers that became official with iOS. Tim Cook could easily make Ad-block a default and destroy Google's only growth market.
    Websites are fighting ad-blockers like never before. I dislike Forbes but since I use AdBlock I can't get in to read anything without disabling it. Unfortunately Google will continue to receive ad income as long as websites continue to fight back. I've tried using AdBlock's bypass mechanism but haven't been able to get it to work on the Forbes site. I see more of these electronic magazines going back to the legacy subscription process to stay afloat. People are used to getting information for free (even if that information is tainted or flat out lies), don't like advertisements (I treat them the same as junk mail, which immediately goes into recycling), and are unwilling (for the most part) to pay for anything anymore. Maybe this revolution (ad-blocking) will get rid of a lot of the junk news sites, cleaning up the web so we might be able to actually trust some of what's being reported. I know, wishful thinking.
    wetlander
  • Reply 12 of 56
    sog35 said:
    FACT: Android sales have been going down
    FACT: Desktop search has been decreasing 5-15% each year for a decade
    FACT: iOS mobile revenue makes up the bulk of Google's online advertising
    Here's a fact: computer/mobile usage growth isn't slowing down, but hardware replacement is. Consider advertising revenue is tied to usage & hardware revenue is tied to replacement cycle, which company is in the better position?
    singularitytechlover
  • Reply 13 of 56
    larryalarrya Posts: 606member
    gatorguy said:
    Funny to see people complaining (various forums) about this (the Oracle lawyer publicly speaking details that were supposed to be confidential).

    Yet when Samsung lawyers did the same with Apple (making a statement to the media that shouldn't have been made) it was OK.

    Just shows that hypocrisy continues to reign supreme.
     ?? I don't recall anyone saying the Samsung instance was OK. Confidential should mean exactly that, don't you agree? 

    Anyway, the important takeaway is that Google doesn't get rich from Android according to the leak. Of course the leak doesn't explain how the figure was arrived at AFAIK. I think articles like this one are guessing how Oracle arrived at it and the period covered, but not entirely certain. It would not shock me at all to find Oracle actually overstated it since it benefits them to do so. 

    In any event I would not be surprised if Google would have made a different choice knowing what they do now. When the decision was made to use the API's as an organizer (that's the only code Oracle is claiming) it was Sun who controlled it. While they might not have been overjoyed at the way Google used Java they also at least publicly had no complaints about it and in fact congratulated them on Android, welcoming them to the Java platform. I imagine most code creators at the time did not believe a license was needed for API's. Some still don't believe they do. 

    So a couple years go by and here comes Oracle to scoop up Sun. They have a different view on it, monetization plans for Java that Sun never intended when they created it.  In essence nothing was "stolen" from Oracle. When Sun created and owned it it Google's use was at least begrudgingly acceptable. (Mr guess is the relationship Schmidt had with them but it's just that, a guess). Oracle suspected they knew what they were buying even if Google did not. Smart guy. 

    Had they anticipated that someone else might someday buy up the IP and more aggressively use it as a money-maker I believe Google would have taken a license to begin with whether they thought they needed one or not back in the day. Hindsight is 20-20. IMHO Google will end up paying a $B or more for their oversight, tho out-of-court would be my guess. 
    No, we already know about the leaked memo where the engineers couldn't find a better approach and suggested taking a license   
    diplicationbrakken
  • Reply 14 of 56
    gatorguygatorguy Posts: 24,213member
    sog35 said:

    gatorguy said:
    sog35 said:
    But you are ignoring opportunity costs of the acquisition.

    One of the main events that stemmed from the Motorola acquistion was Samsung feeling like they were stabbed in the back by Google. Samsung has since then made a stronger push to develop their own OS. In fact all their new watches run on Tizen instead of Android. Purchasing Motorola has created a rift between Samsung and Google that may never fully heal. That alone could cost Google BILLIONS
    Please, Samsung has always been about what is best for them. They are no more a partner of Google's than they are Apple's. There's no lost opportunity cost. And losing them billions in the first place? LOL. Google barely makes a profit from Android to begin with, and no Samsung services have gained any traction replacing Google ones so Google doesn't lose out there either. Your repeated "opportunity cost" posts hold no water in this case IMO. 
    Of course there is opportunity costs. Google has profit margins of 25-30%.  Google is losing out on those profit margins by wasting time on trying to be a hardware builder with Motorola. I don't see how you can say with a straight face that wasting literally MILLIONS of hours on the acquistion/operations/sale of Motorola did not involve opportunity costs. Imagine if Google bought Facebook or Tesla instead of Motorolla?  In 2010 Facebook was valued at only $10 billion, Tesla at less than $5 billion. That is what I mean by opportunity cost. They could have spent that $12 billion on something much more valuable. 

    You can laugh at Samsung's OS/services but we shall see a couple of years. Bottom line is Samsung was Android's answer to the iPhone. And what did Google do? They stabbed them in the back by competing DIRECTLY with them. Instead of HELPING Samsung build a better OS to compete with iOS they backstabbed them.  Absolutely foolish and idiotic. 
    They could buy Tesla (they would not be interested in Facebook anymore than Apple is) and snatch up Twitter too and still have $Billions laying around in the bank doing nothing but collecting interest (Sound familiar?). Buying Moto didn't preclude them buying anyone else. Still no lost opportunity sir. Sorry. 
    edited January 2016
  • Reply 15 of 56
    MacProMacPro Posts: 19,727member
    Google should have to forfeit every penny they've made out of Android.  The entire OS is part stolen IP from Apple and part based on stolen tech from Oracle.  Then add on damages.
    diplicationSpamSandwichpalominecalitallest skil
  • Reply 16 of 56
    gatorguygatorguy Posts: 24,213member
    Google should have to forfeit every penny they've made out of Android.  The entire OS is part stolen IP from Apple (Which Apple doesn't claim but whatever) and part based on tech the new owner of it claims is used without license stolen tech from Oracle

    revenant
  • Reply 17 of 56
    williamhwilliamh Posts: 1,033member
    sog35 said:

    Having those facts in mind it's obvious that any future revenue growth from Google will come from the growth of iOS ads.

    I don't think the situation for Google is quite that dire, but I agree with your overall point.   Apple is doing very well and I think they will continue to do very well.  The stock price doesn't appear to reflect my optimism.  

    t think part of it is due to Google advertising being a business with low overhead and where Google is well entrenched.  Google doesn't depend on hardware sales, while Apple does.  Apple makes great money on hardware but it is a highly competitive business and consumers are fickle. Apple could be overtaken by a better OS or hardware, could fail to plan adequately and have too much inventory of some undesirable product (there's reason for concern on this - so many sales on Apple Watch and iPad over the holidays) , they could lose patent infringement lawsuits, lose critical staff, they could suffer a massive data breach (heck, they have EVERYBODY's data - credit cards and much more), or the products could just become uncool and not get taken up by consumers and enterprise.  Apple does great.  Hell, I am typing on a Macbook Pro, wearing an Apple Watch, sitting next to an iMac and Time Capsule, and have an iPhone in my pocket.  I love the stuff.  But look at history - lots of highly successful and profitable companies are not even memories anymore for reasons like those I listed.  

    Google, on the other hand, could simply stop doing something of the seemingly unrelated stuff they spend money developing and continue to collect ad money. They can go to hell as far as I'm concerned, but I don't think they will.

    There's a lot of fear and skepticism built into the current AAPL price, so we'll see if the upcoming financial results change any minds.  Given the lousy market conditions, I don't expect much.  Over the long run, I think Apple will do great, so hang in there!
    gatorguy
  • Reply 18 of 56
    gatorguygatorguy Posts: 24,213member
    sog35 said:
    gatorguy said:
    sog35 said:

    Of course there is opportunity costs. Google has profit margins of 25-30%.  Google is losing out on those profit margins by wasting time on trying to be a hardware builder with Motorola. I don't see how you can say with a straight face that wasting literally MILLIONS of hours on the acquistion/operations/sale of Motorola did not involve opportunity costs. Imagine if Google bought Facebook or Tesla instead of Motorolla?  In 2010 Facebook was valued at only $10 billion, Tesla at less than $5 billion. That is what I mean by opportunity cost. They could have spent that $12 billion on something much more valuable. 

    You can laugh at Samsung's OS/services but we shall see a couple of years. Bottom line is Samsung was Android's answer to the iPhone. And what did Google do? They stabbed them in the back by competing DIRECTLY with them. Instead of HELPING Samsung build a better OS to compete with iOS they backstabbed them.  Absolutely foolish and idiotic. 
    They could buy Tesla (they would not be interested in Facebook anymore than Apple is) and snatch up Twitter too and still have $Billions laying around in the bank doing nothing but collecting interest (Sound familiar?). Buying Moto didn't preclude them buying anyone else. Still no lost opportunity sir. Sorry. 
    You sir, don't know the definition of opportunity cost.

    op·por·tu·ni·ty cost
    noun
    ECONOMICS
    1. the loss of potential gain from other alternatives when one alternative is chosen.
    I know exactly what it is. What you don't seem to grasp is that buying Moto didn't come with a lost opportunity cost. It did not keep Google from spending any other money that had lying around nor did it endanger their "partnership with Samsung" . They have the same lost "opportunity cost" that Apple does. There's billions laying around at both companies.  Either one could probably buy nearly anything they want (Apple even more so than Google of course), but neither has found a better use for it yet than investments and bank interest. 
    revenant
  • Reply 19 of 56
    gatorguygatorguy Posts: 24,213member

    sog35 said:
    gatorguy said:
    Google should have to forfeit every penny they've made out of Android.  The entire OS is part stolen IP from Apple (Which Apple doesn't claim but whatever) and part based on tech the new owner of it claims is used without license stolen tech from Oracle. 

    Uh, Steve Jobs said Android was a stolen product. You know Thermonucleuar?

    "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this," the late CEO famously said.
    Steve Jobs said a lot of things. Apple doesn't have qualms about suing companies when they feel aggrieved. NOT suing Google should say more than an angry outburst from Mr. Jobs. And no it's not because Google doesn't make money from Android. That doesn't preclude Apple from getting untold billions from them if they could prove their case. Profits from the "theft" aren't necessary to get damage awards. 
    edited January 2016
  • Reply 20 of 56
    sog35 said:
    FACT: Android sales have been going down
    FACT: Desktop search has been decreasing 5-15% each year for a decade
    FACT: iOS mobile revenue makes up the bulk of Google's online advertising

    Having those facts in mind it's obvious that any future revenue growth from Google will come from the growth of iOS ads.

    Yet Wall Street views Google as a hyper growth company with a 30 PE.
    When Google is literally a Tim Cook decision from having 90% of its future growth killed off.
    Tim Cook could literally remove Google as the default search from iOS tomorrow.

    Google would instantly lose 70% of its mobile advertising.
    Google would instantly lose 90% of its future revenue growth.

    Yet Wall Street thinks Google is 4x safer investment than Apple. Ridiculous.

    For Apple to have shrinking revenues literally TENS OF MILLIONS of people would have to change their mind about a device they use every single day.
    For Google to have shrinking revenues Tim Cook would just have to turn off a switch.

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