Google: The Android Everyone's Looking For -- Heard on the Street

More than two billion people now use Google's Android mobile operating system, which is remarkable considering how long it takes for the company's latest innovations to get into most of their hands.

Many of those innovations were on display Wednesday as Google kicked off its annual I/O developers conference. Under parent company Alphabet Inc., Google has invested billions of dollars to inject artificial intelligence into its global network. That in turn allows the company to add features like computer vision to mobile devices, along with the ability to support demanding applications like virtual and augmented reality.

But while Android powered 85% of smartphones sold globally last year, according to IDC, its dessert-themed updates take their sweet time to spread. The most recent version dubbed Nougat went into wide release in August but currently runs on only 7% of Android devices. Such fragmentation has long been an issue given that Google doesn't manufacture most Android devices.

The company is rightly trying to speed up that process. A new effort called Project Treble is designed to speed up the process by providing more of the basic software that chip makers and handset designers need to update devices. That may help more users take advantage earlier of the latest updates. The newest version, currently dubbed Android O, went into beta release Wednesday and should see its full release later this summer.

A less fragmented market could help Google boost the return from its Android investment. Like arch-rival Apple Inc., Google generates revenue from the sale of mobile apps and content. The segment that contains this business totaled revenue of $11.1 billion for the trailing 12-month period ended March 31 -- up 47% year over year. But that segment also contains a number of Google's other businesses, such as its fast-growing cloud service, and trails the $26.5 billion in service revenue Apple reported for the same period.

Keeping more Android users current should boost Google's ability to both upsell content and services, and generate more effective advertising, thus better serving the company's prime money maker.

For Google's investors, that would be a pretty sweet deal.

Write to Dan Gallagher at

(END) Dow Jones Newswires

May 17, 2017 17:34 ET (21:34 GMT)