Amazon has abandoned its fight against Google over smartphones, shifting the battleground to new devices like smart TVs and speakers, despite a push by European regulators to bring more competition to the handset market.
Brussels last week pointed to Amazon as a potential rival to Google on smartphones, as it slapped a €4.3bn fine on the search giant over its Android mobile software. Google’s tactics had blocked a number of large hardware makers in the past from selling devices carrying Amazon’s Fire operating system, according to EU regulators.
However, Amazon dropped a bid to bring its Fire operating system to more handsets several years ago and has no plans to return, according to people familiar with the company’s plans.
The attempt to license out its software in competition to Google involved tablets rather than smartphones, according to two people familiar with the effort. Amazon was trying to promote a class of ultra low-cost tablets as entertainment devices, for video and games, while also acting as a storefront for its ecommerce services.
The fading prospects for renewed competition on Android smartphones have prompted warnings that Google would now try to use the same tactics that enabled it to achieve a strong position in handsets to other markets.
The search company, which owns the YouTube video streaming app, is already trying to shut out competitors in smart TVs, said Thomas Vinje, a lawyer who represents FairSearch, the organisation of Google competitors that led the Android complaint in Brussels.
Google’s grip on digital advertising on desktop and mobile phones has left media companies worried that it will find a way to extend its dominance to the TV set, squeezing out rival operating systems like WebOS and Samsung’s Tizen as well as independent services like Roku.
Google and Amazon are selling competing gadgets that connect users’ TVs to the internet — the former has developed Chromecast devices, while the latter has the Fire TV product.
Amazon typically uses its own hardware to open new markets — such as Fire tablets, the Kindle ebook reader and the Echo smart speaker — though its own line of Fire smartphones failed.
After proving there is demand for a new device, it would rather license its software to other companies to give it wider reach, as it has done successfully with the Alexa voice service behind the Echo, according to one person familiar with its thinking.
There is little incentive for Amazon to make a fresh attempt to take on Android, said Carolina Milanesi, analyst at Creative Strategies. The dominance of Google’s search engine and its Play store, which carries far more apps, means that any Amazon handset would still have to act as a showcase for Google services, reducing the incentives for Amazon to try to break into the market, she said.
Google’s long-running efforts to gain a strong foothold on TVs have yet to bear fruit. The company’s main weapons — its search engine and app store — have turned out to be of little use in the living room, said Ms Milanesi. “We go to the TV to watch content,” she said. Amazon’s Fire TV is seen as a greater competitive threat than Google’s Android, according to an official at one rival smart TV company.
The dominance of Google’s search engine has also yet to give it an edge against Amazon on smart speakers and other voice-activated devices, where the ecommerce company has cemented its early lead by licensing its Alexa service to a large number of other hardware makers. Users aren’t able to scan a set of search results on a voice device, reducing Google’s main competitive advantage, said Ms Milanesi.