Dual OS products are not going anywhere
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Electronics makers may seem to have free rein to design the devices they sell. But behind the scenes, software makers such as Google and Microsoft exert a firm push and pull.
Case in point is Asustek's decision to indefinitely postpone sales of a tablet that runs both Google's Android and Microsoft's Windows operating systems, as reported in The Wall Street Journal Friday.
The incident illustrates how Google's and Microsoft's influence over manufacturers extends beyond product development. The software giants can put the kibosh on products even after they have been announced to the public.
The Asustek tablet, the Transformer Book Duet TD300, had already been introduced in a big way. Intel's chief executive Brian Krzanich had shown the device during his keynote speech at the Consumer Electronics Show in January.
A similar eleventh-hour product cancelation took place in September 2012. Journalists in Shanghai arrived for the launch of a phone developed by Acer and Alibaba, only to be told it had been canceled. Alibaba later said that Acer suspended the launch after Google threatened to terminate its "Android-related cooperation and other technology licensing" with Acer. Google said Alibaba's Aliyun operating system was an "Android fork" and that Acer would break its licensing agreement with Google by using it, a claim that Alibaba contested.
Manufacturers that wanted access to Google's search engine, YouTube and its vast store of apps have long had to sign stringent agreements with Google. European antitrust authorities are currently examining if the company's practices conflict with European regulations.
Strict contracts are one way to shepherd manufacturers. Another is money.
Microsoft and Intel supply large chunks of computer makers' marketing budgets, and manufacturers who go against their wishes risk jeopardizing the funding, people familiar with the matter said. If this marketing support was removed, it would be crippling for manufacturers, especially many Asian ones who allocate relatively little of their own dollars for marketing.
As for Asustek, it has made a name for itself by being first to unveil new types of products, including a smartphone that docks into a tablet, and a tablet with a detachable keyboard. But as the Transformer Book Duet TD300 shows, being an early adopter can also come with risks.
Google declined to comment. A Microsoft spokesman said the company "will continue to invest with OEMs [original equipment manufacturers] to promote best- in-class OEM and Microsoft experiences to our joint customers."
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