Should Alphabet charge for Android?

Android is the most popular smartphone operating system in the world which occupies 80% of the entire smartphone market (the other 20% is mainly occupied by the Apple's operating system). Alphabet, the developer of Android, makes Android a free and open operating system that is available for all smartphone makers to use; meanwhile, some smartphone makers amend Android operating system to make their own style Android operating system. Android is so popular because it is free and smartphone makers do not need to pay for using the operating system. However, Alphabet implies that it will charge for Android after it is fined over Android for being anti-competitive by the European Union. Alphabet CEO Sundar Pichai said: "So far, the Android business model has meant that we haven't had to charge phone makers for our technology. But we are concerned that today's decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms."

If smartphone makers are charged by Alphabet for using Android, they will have two options: either they develop their own operating systems, or they pay and continue using Android. As long as the cost of developing a new operating system is higher than the cost of paying for using Android, most smartphone makers will choose to stick to Android. Moreover, when the users have already been used to using the Android operating system, it is difficult for them to switch to other operating systems. Apple's smartphones are expensive but Apple has a very loyal user group because many of the users are used to using the iOS operating system. When Alphabet believes its Android system has a large number of loyal consumers, to charge for Android can help Alphabet earn additional revenues; therefore, in this case, Alphabet should charge for its operating system and be the Microsoft in the smartphone market.