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Several media reports suggest the U.S. government has developed a plan to break up Alphabet Inc. ( NASDAQ: GOOGL ). A federal court decided that Alphabet's Google is a monopoly. The decision will be appealed, but the risk Alphabet will lose rests on its ability to argue that Google’s market share does not matter. That is a tough sell. Google dominates two large tech segments: search and operating systems. While Google dominates search with a market share of over 80%, Android has about 70% of OS installations worldwide, more than double Apple’s iOS.
According to The New York Times description of Justice Department deliberations , “They are discussing various proposals, including breaking off parts of Google, such as its Chrome browser or Android smartphone operating system, two of the people said.”
While the Android mobile operating system is not a large revenue producer, it does bring in some licensing revenue. Additionally, its Play Store competes with Apple’s App Store, another revenue source. Perhaps most importantly, Android includes Google products like Gmail and Search in its suite of products. That means that Android has Google’s major apps “preinstalled.”
The experts at Android Authority wrote, “Android organically drives users to many other Google services, including search, YouTube, and Gmail.” The loss of Android as part of Google’s ability to dominate the smartphone industry would disappear.
Alphabet has tried to expand Android’s footprint further by selling hardware. Its Pixel smartphones have just gotten an upgrade. The new Pixel 9 has four versions. One has a folding screen. It also has Google’s newest artificial intelligence features, including the Gemini AI assistant.
If the government is successful with an Alphabet breakup, a standalone Android company may be the most significant part of the process.
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