Behind the ‘Internet of Things’ Is Android—and It’s Everywhere

Behind the ‘Internet of Things’ Is Android—and It’s Everywhere

By Ashlee Vance on May 30, 2013

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Ken Oyadomari’s work space at NASA Ames Research Center in Mountain View, Calif., looks like a triage tent for smartphones. Parts from dozens of disassembled devices are strewn on workbenches. A small team of young engineers picks through the electronic carnage, carefully extracting playing card-size motherboards—the microprocessing heart of most computers—that will be repurposed as the brains of spacecraft no bigger than a softball. Satellites usually cost millions of dollars to build and launch. The price of Oyadomari’s nanosats, as they’ve become known, is around $15,000 and dropping. He expects them to be affordable for high school science classes, individual hobbyists, or anyone who wants to perform science experiments in space. A big reason nanosats are so small and cheap: They run on Google’s (GOOG) Android operating system, familiar to anyone who’s shopped for a smartphone or tablet. It’s the No. 1 mobile OS by a wide margin; Android handsets outsell Apple’s (AAPL) iPhones globally by about 4 to 1. Impressive as those numbers are, they actually understate Android’s prevalence, because increasingly it’s the operating system behind just about anything with a computer chip. Along with Oyadomari’s nanosats, three of which recently went into orbit, Android runs espresso makers, video game consoles, refrigerators, rifles that post video to Facebook (FB), and robotic harvesters for farms.

Android is becoming the standard operating system for the “Internet of things”—Silicon Valley’s voguish term for the expanding interconnectedness of smart devices, ranging from sensors in your shoe to jet engine monitors. As each of these devices hits the market, Google further outflanks Apple and Microsoft (MSFT) as the dominant software player in a connected world.Android’s risen so fast in part because Google gives away the software to device makers and developers. Google is counting on making money from ads and other services on Android phones and tablets. The software is also open-source: Anyone can tinker with the code and use it in any gadget they want. The NASA engineers fine-tuned the operating system to require less power, letting their tiny satellites run for days on a handful of batteries. “If we can have satellites that are really small and really cheap, it will be interesting to see what some guy in his garage will be able to do with them,” says Oyadomari.

Google acquired Android Inc. in 2005. The search giant took the software—a version of Linux, itself an open-source operating system popular with data centers and geeks—and streamlined it. That improved power consumption; all things being equal, the fewer things a computer chip has to do to accomplish a task, the less electricity it uses. Google also gave the software a more accessible interface and added touch functions. Critics scoffed at the notion of Android getting much traction in the handset market. Yet its status as a free, open alternative to Apple, BlackBerry (BBRY), and Microsoft eventually attracted enough handset manufacturers—Samsung Electronics (005930) being the largest—for it to become the top mobile OS by 2011.

Google isn’t the only tech company to introduce its own minimalist, Linux-based operating system. Years ago, Intel (INTC)developed a version of Linux for mobile called Moblin, while Nokia (NOK) built another version called Maemo. Palm’s WebOS also had Linux at its core. As usually happens with operating systems, such as Microsoft Windows on PCs in the 1990s, tech companies coalesced around one product. For just about everything that isn’t a server or a PC, the winner is Android.

Jim Zemlin, executive director of the nonprofit Linux Foundation, says Android has conquered the device market from the bottom up. The operating system ran on 75 percent of the smartphones—162 million units—shipped during the first quarter of this year, according to the research firm IDC. While iPhones and iPads come in very few versions and only from Apple, Android-powered mobile hardware of all shapes and sizes and brands has flooded the marketplace. The companies that build components have had to scramble to make sure everything they make functions well with all those gadgets. The result is a huge and growing number of hardware makers and software companies becoming expert in all things Android. “Every screen variant, mobile chip, and sensor known to man has been tuned to work with Android,” Zemlin says. “There’s this network effect, so that now anyone who wants to make a custom product can take Android and morph it into anything.”

 

Zemlin points to SAIC Motor (600104), a Chinese car company, as a case study. With a team of about six software developers, SAIC developed an Android infotainment system for its cars. “I ran into them at this trade show where they were placed next to all these other carmakers with massive software teams,” Zemlin says. “They said, ‘We just have six dudes and Android.’ ”

Philip DesAutels, the vice president for technology at Xively, a just-launched cloud computing service that simplifies the work needed to get a device to transmit data, has studied the Internet of things for years. He says there are five times as many downloads of Xively’s Android-specific software as there are of its software made for Apple’s iOS. His favorite product: an Android-based agricultural irrigation system where a network of tiny, waterproof computers in the field regulates water valves. “With Android, you get something that is power-efficient, it’s easy for developers to do the user interface and touch controls, and it’s easy to get data in and out,” DesAutels says. “There’s just a bigger community behind it than with anything else.”

Android’s rise is bad for Microsoft, which has been releasing a no-frills operating system of its own since 1996. Windows Embedded, as it’s known these days, is in Ford cars, NCR cash registers, and other products. But just as it did with smartphones and tablets, Microsoft seems to have mistimed and miscalculated its approach. “We have zero requests for Microsoft,” DesAutels says. He adds that he’s hearing from plenty of companies that want to make smart pedometers, Net-connected LED lighting, and other devices that work with iPhones and iPads. Chances are those peripherals will run on Android or something even simpler, DesAutels says, because Apple seems uninterested in letting iOS run non-Apple products. Apple declined to comment. Kevin Dallas, who runs the Windows Emedded business, says Microsoft has more mature and sophisticated technology: “The No. 1 commercial platform today is Windows Embedded.”

Andy Rubin, Google’s longtime Android chief, can claim much of the credit for the software’s success. On his own dime, he set up an incubator in Los Altos, Calif., where he let friends work on projects. Rubin told one group that Google had received tons of interest around Android from the car industry but didn’t plan on pursuing deals. Soon enough, four guys founded the startup CloudCar, which is building an infotainment system for cars that should go on sale this year.

The bottom line: After taking over the mobile world, Android is becoming the standard operating system for the Internet of things.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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