The Google Phone: Blockbuster or Bust? 12 comments
Sam Gustin
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Today, T-Mobile will announce the first Google (GOOG)-branded mobile phone, which features the search giant's mobile operating system, called Android.
Will the Google Phone be a blockbuster -- or just a bust? My answer: neither. The new phone -- manufactured by Taiwanese cell-phone maker HTC -- won't make major inroads in the cell phone market, and it certainly won't pose an imminent threat to Apple's (AAPL) iPhone or Research in Motion's (RIMM) BlackBerry.
But that's not Google's point, at least in the short term. Instead, Google's mission here is bigger than a flashy new device. The company is hoping Android will point in a new direction for the mobile phone market -- an open environment where customers can mix and match devices and software.
Last year, when Google unveiled Android, company chief executive Eric Schmidt called the effort "more ambitious than any single 'Google Phone.'"
"Our vision is that the powerful platform we're unveiling will power thousands of different phone models," Schmidt said, adding that the company hopes to "shape a new computing environment that will change the way people access and share information in the future."
Google is positioning itself against Apple, which has bet on the iPhone's "locked" handset model -- available only through AT&T (T). In contrast, Google has championed an "open" model, not only by basing Android on open-source technology, but also in its successful effort to open up the 700Mhz wireless spectrum auctioned off by the F.C.C.
Although Google did not win the highly coveted C block wireless spectrum, the company did win F.C.C. approval of two "open access" provisions that require the winner of the spectrum -- Verizon Wireless (VZ) -- to allow consumers on its network to mix and match handsets and applications.
As it makes its first steps into the cellphone market, Google's emphasis on the long-term is prudent, because the company hasn't really proved itself in any other area besides its core Web advertising business -- with the possible exception of YouTube, which dominates online video, but has yet to fashion a profitable revenue stream.
In web search advertising, Google is king, and has made an enormous amount of money during its reign. But from Google Checkout -- its online payment system, to Google Docs -- its Web-based software suite, to Google Chrome -- its new Web browser, the company has not delivered a product as vastly superior to the competition as its iconic search engine and the advertising system it built to capitalize on it.
Don't expect that to change today.
Like Chrome, Android is less about a major new market entrant, and more about a proof-of-concept test that highlights the direction Google would like to see the market go. In both cases, the company has championed an open-source model favored by its founders that is meant to wrest control of the market from dominant players -- Microsoft (MSFT), which makes the market-leading Internet Explorer Web browser, and Apple, which makes the hottest mobile phone on the planet.
There will be a lot of heat and light about the Google Phone today, but just like Chrome, this is not about a new gadget, it's about the future of mobile software.
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This article has 12 comments:
Hopefully the phone companies will be smart enought to understand that they will be commodities if they allow GOOG to gain a foothold.
If Google gets is phone OS running a lot of phones where will that leave NOK Iphone ATT Verizon?
Perhaps it will leave them selling airtime and tech only. Will brands grossly debased and hidden underneath a goog OS and range of "Skins". With goog pulling all the profit from ads, and the phone companies left scratching thier heads and wondering how they can compete with free phone calls for viewing and clicking through. Perhaps oops I will stop there, I just thought of a new model for phone companies.....
Keeping the interface is core to keeping customers , otherwise you are just selling access.
In a nutshell Goog wants wants to be the Windows of phones.
One may argue that Apple also (of necessity) gets data about you. The difference here, however, is that
1- Google has a tradition of policies that make me leery of them, and
2- In the end, apple is a hardware/software company and not particularly interested in making money off your data (especially if it would jeopardize their core biz by bad publicity). Google, on the other hand, LIVES by data - your personal data. OH yes - I do use google for search, but never will I get a gmail account.
The second issue is this - Google gets its money back from advertising. Are people really going to want a phone that is so tied in to advertising? I am not sure to what extent it will be evident, but it could quickly become a sore point.Anything that diminishes the user experience is not going to fly!
(disclosure: long apple)
You wrote, "Google is positioning itself against Apple, which has bet on the iPhone's "locked" handset model -- available only through AT&T (T). In contrast, Google has championed an "open" model, not only by basing Android on open-source technology, but also in its successful effort to open up the 700Mhz wireless spectrum auctioned off by the F.C.C."
This is so wrong. Google is aligning with Apple in a loose WebKit alliance supporting webstandards, against MS and proprietary ones. You do realize that Android and Chrome are built on WebKit. Adobe Air is also built on WebKit. Nokia's S60 is also built on WebKit. Safari is also built on WebKit. Guess who makes WebKit?
Yep, you guessed it, Apple. Apple makes the rendering engine, powering all of those browsers and browser-based Apps. Apple released WebKit back to the open-source community.
For years Apple became an "also present" in computer sales because of their insistence upon total control of everything to do with their product. Meanwhile Microsoft and the pc prospered in a market in which anyone could sell everything.
I hope Apple is not about to lock themselves out again from a market in which they have an early lead.
Gary Krakow loves the gPhone but he tends to hate the iPhone. Heck he even thinks that the new Storm is faster than the iPhone. I think this is all just chatter. Apple has had a year and a quarter to refine their phone which is why it is Apple phone software 2.1. All the others are 1.0 phones. Who wants to beta test the Gphone or the Storm when the Apple phone has been revised with a second model and about 6 software updates. Not me. Sticking with the original iPhone for now.
1) Google touts open platform for all and then ties itself to an exclusive with fairly one tenth the coverage of its major competitor (in this case Apple), not counting unknown deals for other countries (where Apple is already well-established).
2) Apple has already sold 5 million iphones in Q3 and is well on track to exceed this in Q4, regardless of any perceived economic downturn whether domestically or abroad.
3) The current market instability will hopefully get resolved once Congress gets off its collective tuchuss and gives Messrs Paulsen and Bernanke what they need to restore investor confidence (and thanks to Mr. Buffett for his move today). at which point everyone who bought Apple between $120 and $130 is gonna be ecstatic with the results when the stock goes right back to $180 to $190 where it rightfully belongs (and beyond).
i just don't see it happening.