It is not that simple. Ad industry has a lot of money and I personally find nothing wrong with ads as such. We can argue about targeting but that's a different topic. StackOverflow does ads and they seem to really go well with the page. Even Apple tried coming into the market with iAd.

After all, ads earn them revenue. You can have product differentiation where your devices don't have to necessarily earn by ads. A very good example of this is Amazon. They have two versions of Kindle, with the ad free version costing more.

All I'm saying is that Google earns X from selling phones, Y from ads. Apple earns Z from selling phones, and 0 from ads.

GP is claiming that Apple is doing better in the phone space, because Z>X. But the appropriate comparison is not Z vs. X, but (Z+0) vs. (X+Y).

Yeah, my point was that only. You can either charge the user upfront or you can earn money with ads as the user uses the platform.

For high end devices, maybe some of the services could have been considered paid off for before and could have skipped ads. That way, even Google gets 'Z' from phones.

Amazon has a lock on the kindle store, enforced DRM, and a subscription program. That's more like iOS than Android in strategy.

Very well could have been Google's strategy in high end devices as well with charging upfront for few services in the cost of the phone itself.

This just cuts into privacy as a marketing point for iPhone.

How exactly would Google have done that as a software company and not a hardware company?

By giving it out almost-free to OEMs, Google solidified the majority marketshare as the cost leader. That is much more strategic than dumping capex into manufacturing against an already established quality brand.