Thomas White Global Investing
Global Players

Global Players

August 2011

Andy Rubin, Senior Vice President of Mobile, Google, the U.S.

Andy Rubin

Image Credit: Joi on Flickr under a Creative Commons license

“This is the most fun I have ever had.”

— Andy Rubin on developing Android.

A mischievous act early in his career seems to define his role today. While working at Apple in the late 80s, Andy Rubin reportedly reprogrammed the office telephone system to make it appear as if the chief executive was calling to offer stock grants to the company’s engineers! The prank raised the hackles of Apple’s IT department. Curiously, though, more than two decades since that incident, Rubin apparently remains much the same for the Apple establishment — a source of anxiety.

After all, one of his most famous innovations — Google’s Android mobile operating system (OS) — poses the biggest challenge to Apple in the global smartphone and tablet markets today. In fact, Android, which Google provides free to nearly 40 mobile handset makers, has emerged as the world’s most widely used mobile OS. Rubin, senior vice president of Mobile at Google now, recently tweeted that around 500,000 Android devices are being activated every day, and the Android market is growing 4.4% a week. What’s more, according to digital marketing intelligence provider comScore’s latest survey, the Android software runs on 40.1% of the smartphones America uses now, substantially more than the 26.6% that belong to Apple. But that’s not all. Given its reach and popularity, Android is widely perceived to be not just one of the key drivers of Google’s own search engine and digital advertising business, but also the torchbearer of dramatic changes in mobile computing.

Given the success of Android, it is no surprise that Rubin is now seen as a legend in the technology community. His views on competitors, the smartphone market, and the future of mobile computing are followed closely by technology publications and bloggers. Also part of the Silicon Valley chatter is his fondness for building unusual gizmos — like the retina scanner on his front door, the robotic helicopters flying around in his backyard, and the automated mallet-and-gong doorbell in his foyer. The widely published news that Rubin shared with his entire team the multi-million-dollar personal bonus he earned when Google shipped its first Android phone completes the image of a maverick innovator who every technology enthusiast wants to know about.

Nevertheless, it is only now after recent mega purchases of patents have drawn attention to the intense competition in the smartphone market that the world outside the technology community has started taking note of Andy Rubin.

Looking at his early life, it is not difficult to surmise that he could not possibly have grown up to be anything other than the technology pioneer he is now. The son of the owner of a direct-marketing firm, Rubin grew up in Chappaqua, N.Y. He developed an early interest in computers and electronics while tinkering with the numerous gadgets his father stored in his bedroom. Rubin Sr. used to attach marketing catalogues of gadgets to the credit card bills of prospective consumers and, as Rubin recalls in a newspaper article, after the products were photographed to go in the marketing catalogues, they ended up in his room.

After completing his Bachelor of Science degree in the mid-80s, Andy Rubin worked as engineer in several cutting-edge technology firms, including Apple, as well as others before eventually founding a startup called Danger, Inc. with his engineer friends in 1999. Danger is known to have given the world Sidekick, a hand-held device that had Internet and cellphone capability and was the size of a bar of soap.

This is more than just a device and more than just an operating system. It’s what Google does — giving people access to information and figuring out new ways to organize that information to make it useful for people.”

— Andy Rubin on the relevance of Android.

But for Rubin, this primitive smartphone turned out to be a turning point. While struggling to generate funds for another startup called Android, Inc. he founded in 2003, Rubin caught the attention of Google founders Sergey Brin and Larry Page because they were great fans of the Sidekick. Google acquired Android, Inc. in 2005, and the rest, as the cliché goes, is history.

For all the excitement surrounding it, the Android is, The Daily Beast notes, a “tiny piece of software, made up of 11 million lines of code, and equivalent to just 200 megabytes of space or about 40 MP3 songs.” Rubin and his team of engineers, who joined Google as part of the acquisition, began developing the Android as a mobile OS that would facilitate the use of various applications on a smartphone. But this was pretty much the only thing the world knew about the Android project in the years following the acquisition. All other aspects of the project, including what Google planned to do with the Android business, were cloaked in secrecy. So guarded was Google about Android R&D that a New York Times reporter, who visited Google offices in late 2007, recalls seeing large signs restricting access to Rubin’s laboratory. In fact, it was on Rubin’s insistence that Google began changing the way it organized itself as a business. The search engine giant, which until recently considered all segments of its operations as one entity, has started treating the Android project as a separate business unit.

The details of what happened behind the closed doors of Rubin’s laboratory in those days is anybody’s guess, but it is clear now that Google management as well as the Android team made two crucial decisions about the software — that it would be given free to mobile handset manufacturers and that the technology community at large would be invited to create it through an open-source platform. These two policies proved to be a lifeline for handset makers around the world in mid-2007 when Apple launched the iPhone and changed the smartphone market forever. The pioneer it has always been, Apple gave consumers the taste of a sophisticated mobile OS that could run complicated software applications or apps. As iPhone sales surged, handset makers like Samsung, HTC, and Motorola, who had always been more focused on their hardware designs, realized the futility of trying to create their own OS on short notice and scampered to join Google’s “open handset alliance,” a collaboration to build Android-run handsets. Over the past two years, the Android OS has continued to improve. This and Android’s flexibility owing to its open-source platform have allowed around 40 handset makers to embrace it easily. It has also helped that the software is still being offered free to handset manufacturers.

Thus, today, the global smartphone market is a largely bipolar world, with Apple forming one pole and handset makers depending on Android representing the other. Handset makers who use their own OS, such as Research in Motion, or those that depend on Microsoft’s Windows Phone 7 OS comprise a notable but currently smaller pocket of influence in this market. While Apple has been growing its share of the market through newer and more sophisticated versions of the iPhone, Android-reliant handsets have been drawing consumers owing to the growing number of Apps available on Android phones and relatively lower prices.

So severe is the rivalry in the smartphone market that it has unleashed a parallel competition for hoarding patents. As the Financial Times says, a typical smartphone involves about 250,000 patents, often in overlapping areas. Given this situation, players in the mobile handset market have been rushing to buy large caches of patents from struggling telecommunications firms in order to not just amass intellectual property but also protect their businesses from patent-related lawsuits. Google’s recent purchase of Motorola Mobility in a bid to snap up around 17,000 patents as a protection for Android is a case in point.

The purchase, which cost $12.5 billion, has also put the spotlight on the increasing relevance of Android in Google’s primary search engine and digital advertising business. Given that the Android license does not cost anything now, Google has always maintained that Android’s importance is tied to the growing significance of mobile computing. According to Google management, as computing rapidly shifts from the computer and laptop monitor to the mobile screen, each additional Android user will mean one more viewer of Google’s online advertisements and one more user of Google services.

Nevertheless, the July acquisition of Motorola Mobility has sparked off speculation that the search engine firm may finally launch a phone designed, developed, and manufactured in its own plants, just as Apple does. But whether Google will actually launch a phone at the cost of competing with its Android alliance partners remains to be seen.

Meanwhile, Rubin has been basking in the glory of his creation. Recently asked to choose between developing Android and everything else he has done in his life, Rubin did not hesitate to choose his Android exploits: “This is the most fun I have ever had.” Clearly, the man may have started his career with a prank, but he’s being taken seriously now.





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