Android Returns Cost Carriers $2 Billion AnnuallyAndroid Returns Cost Carriers $2 Billion Annually

In only three years, Android has gone from being nonexistent to becoming the dominant platform, surpassing iOS and BlackBerry in recent months. The platform has had a rocky road on the product development front, as a number of lawsuits have been filed against device makers. That has added a substantial expense to a platform that costs nothing to acquire and use.

Now comes a report that once the devices are sold, carriers are incurring additional, higher-than-expected charges, in the form of up to $2 billion per year for returns and repairs due to hardware issues.

Wireless "experience management" firm WDS released the results of its study of over 600,000 tech support calls to operators. The number one issue cited was hardware problems with Android phones, a problem escalated by platform fragmentation. Android hardware issues made up 14% of the call volume, which is double the rate for iPhone's iOS platform. BlackBerry had an even lower rate than iOS, at 6%.

Apple and RIM have fully integrated ecosystems. The hardware and software, including drivers, are written and designed by the same company. Android, on the other hand, is the complete opposite. First you have a platform written by Google. Then you have dozens of manufacturers that not only make different handsets, they also modify the base platform to suit their needs. This is magnified by multiple versions of Android to start with. Today, Honeycomb makes up about 30% of the Android market, Froyo about 45%, and Eclair about 25%.

Android is fully open. Google has little or no say in what hardware makers do with the platform, and this may be the reason why hardware issues are so high. Microsoft's Windows Phone also has multiple manufacturers, but it has much tighter restrictions in the licensing agreement on what can and cannot be done by device makers. This set of rules keeps its failure rate lower than Android, though not as low as the integrated platforms like iOS and BlackBerry.

This higher hardware fault rate translates directly into returns. Software issues can often be fixed over the phone with the worst case scenario being a user has to perform a hard reset that wipes all data from the phone and restore it to factory defaults. Once a hardware issue happens, though, it involves a repair or return, and that costs far more than a phone call.

A number of hardware issues were tracked, including the microphone, camera, speaker, casing, battery, and display. While Android didn't have the worst performance in every category, it tended to be on the higher end of the spectrum in failures. Notable exceptions were speaker issues, where Apple iOS had the worst performance by far; button issues, where BlackBerry was the runaway champ; and displays, where Windows Phones were far more prone to failure.

Much digital ink has been spilled on platform fragmentation for Android and the problems it causes for developers. It now appears that it has a measurable cost for carriers, as well. It is doubtful this issue will change much in the way of device sales, but carriers now have a more realistic view of the true cost of the platform. That could impact marketing dollars and device pricing in the future.