Huawei had a plan B. Huawei has been banned by the Trump administration and Google is going to stop delivering and maintaining its versions of Android. However, the Chinese company had foreseen this kind of problems and had been developing its own smartphone operative system for a while. The Huawei operative system is code-called Hong Meng and is scheduled to be released sometime between this fall and the beginning of next year. It is based on the open source version of Android and is rumored to be faster than Google’s supported version of Android.

Huawei knows that it is a difficult endeavor to launch smartphones in the West without the Google Apps (Youtube, Google Maps…) bundled with the Android version from Mountain View. Its strategy will therefore be to increase its market share in China from 25 to 50%.

However, Huawei isn’t the only company thinking in the same terms. Enter Samsung and its own version of Android: Tizen. It has been around for a while and Samsung has used it as a bargain tool against Google for years. Samsung already uses Tizen as the operative system in its line of Smart TVs.

Having the most critical part of your solution in the hands of another company’s strategy and the mood of its stakeholders is usually a bad idea.

Google, of course, recognizes this. The strategy of launching Android as an open source operative system secured rapid and wide penetration among smartphone makers and killed Nokia in the process. However, it also implied a risk in the long run. In the internet economy the winner takes it all. Market shares tend thus to concentrate around them, leaving all other players with nothing but a painful history of red ink. It definitely has happened in the smartphone industry, a bad negotiation stand for Google.

Do you want me to hold a speech on innovation and technology for your employees or customers? Do you have a concrete issue to discuss?

Source: IDC

As a result, the search giant has been developing its own proprietary OS: Project Fuchsia. In principle, this OS is aimed to giving developers the possibility to create software both for smartphones and Chrome-based laptops. However, it is undeniable that such a new OS would give Google a new power in the smartphone market. I such scenario, it would be logical that Mountain View would eventually abandon the support of Android, leaving smartphone makers with the only option of Fuchsia as OS and thus surrendering all power to Google.

Open innovation is a mesmerizing but dangerous idea if you don’t know what you are doing.

So, on the one hand the biggest smartphone makers are developing their own OS, trying to become independent from Google. They know that leaving the most critical part of your solution in the hands of another company’s strategy and the mood of its stakeholders is usually a bad idea. However, they will also need to dedicate resources to it and will contribute to the fragmentation of the mobile OS universe, which already is a problem for developers and users alike.

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On the other hand, Google is rushing to launch its Fuchsia OS in order to regain control over the smartphone manufacturers. Nevertheless, it may be too late as the most relevant ones have already developed theirs.

All this brings some interesting points to remember when pushing the strategic agenda of corporate innovation.

  • When developing new solutions, products and services, never let a market- dominant third party control a critical part of it. If you must do, start developing your own alternative asap and commit to it.
  • When distributing through third parties keep in mind that your distribution partners may change their mind. They may lose interest in your product, They may include a competitor in their portfolio. They may create their own competitor.
  • Therefore, never have a sole distributor unless absolutely necessary. Agree sales objectives and penalties if not achieved. Be sure that the distributors have a reasonable gross margin on your product or service to keep them interested.
  • Open innovation may be a good idea. However, be aware of which parts of your new solution are so critical that should be proprietary. If no part is critical, you may be developing a loser product. Open innovation is a mesmerizing but dangerous idea if you don’t know what you are doing.

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