Microsoft is reportedly about to invest in Cyanogen, a startup that builds and maintains its own version of Android that is separate from Google’s.
According to the Wall Street Journal, Microsoft will be a minority investor in a $US70 million round that values Cyanogen in the hundreds of millions.
The investment may seem odd, given that Microsoft has its own mobile platform, Windows Phone, and is making a renewed push for smartphones with Windows 10, which will come out in the next year or so. But there are a couple reasons why it makes sense.
First, Microsoft is being a little mischievous here, encouraging the kind of chaos that Android is already suffering.
Android is the world’s most popular smartphone operating system by a long way, with about 80% of the market. But there are different flavours of Android, and not all of them are under Google’s control.
If a company wants to use the Android brand on a phone, they have to use Google’s version. It has links to various Google services, plus a bunch of other features, and Google updates it regularly. For instance, the latest version, Lollipop, uses Google’s “Material Design,” which makes icons flatter and makes Android look more like Google web sites.
Google also releases the core of Android under an open source licence. Anybody is free to take that core and modify or “fork” it, then build on top of it with no links to Google services or other restrictions. Amazon has based its entire Fire lineup on a forked version of Android, and a bunch of smartphone makers in China — including OnePlus — and other countries do the same thing.
All these different versions of Android are a real problem for Google, because it means that (a.) not every Android phone promotes Google’s online services and the ads that run on those services, which is where Google makes almost all its money, and (b.) developers have a hard time keeping up with all the different versions of Android out there, which gives them one reason to build for Apple’s iOS platform first.
Google would like to bring Android under control, and has been moving more services out of the core and into the Google-approved version. By investing in Cyanogen, Microsoft makes it a little harder for Google to achieve this goal.
The second reason: Microsoft needs to keep developers interested in its platforms, as Windows is no longer dominant like it used to be. One way it’s been encouraging developers is by making it easier for traditional Microsoft developers to build apps for non-Windows devices — for instance, last year it invested in a company called Xamarin, which lets Microsoft developers move their apps over to iOS and Android fairly easily.
By investing in Cyanogen, Microsoft may be able to influence the direction of Cyanogen’s version of Android, making it easier for Microsoft developers to keep up.