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Google phone is a reality - cat's out of the bag

I have been intrigued with Google's strategy of extending their reach to cell phones. I have written a couple of posts about the topic already. In the first post, I wondered if Google was thinking of leveraging their GoogleTalk application to provide instant messaging and VOIP services on cellphones and partnering with wireless carriers. In the second post, I suggested, but dismissed as unlikely, the idea that Google might offer what I dubbed the "gPhone". It is clear that I was not nearly bold enough in my predictions.

Today's much quoted article in the Wall Street Journal ("Google Pushes Tailored Phones To Win Lucrative Ad Market") confirms that Google is indeed looking at bringing a phone to market.

In fact, there has been considerable work done on prototypes and specifications have been developed encompassing hardware and software -- Google software, of course.

There are two important aspects to this: open platforms and open access.

Google, to their credit, is taking the path where they are offering the specifications to multiple carriers as opposed to trying to sell a handset and forcing carriers to adopt it. Offering the specifications allows carriers to customize their offerings, tailor them to their own network technology and, more importantly, it provides a flexible platform for innovation that will not lock the carriers or consumers into a particular form factor or set of features. On the other hand, if a carrier doesn't want to invest in developing a device from the specifications, they can use the hardware Google has developed essentially as is. Google wins on both counts.

Secondly, Google is an advocate for wide open Internet access from mobile devices. They have come out strongly against the limitations some carriers have imposed on which web sites cell phone users are allowed visit. Though the Google phones will come loaded with Google software, you can bet there will be no limitations on which sites users can visit. Google is positioning itself to serve ads on mobile phones. Unless a user can click on an ad and actually get to the advertiser's site, Google won't be able to charge for those ads. As a result, open Internet access is a benefit for both Google and consumers.

These two themes are what drove Google's interactions with the FCC in regard to bidding on the 700MHz wireless spectrum. The "openness" argument that Google was making in announcing the possibility of their joining the bidding served to bring attention to exactly the kind of environment Google is looking for in order to launch their mobile initiatives. The FCC's decision in favor of "openness" makes Google's success likely, at least in that part of the spectrum. As for existing wireless networks, Google's success will be dependent on their negotiating ability as they try to put agreements together with the various wireless carriers.

As a final nod to consumers, I hope Google aims for a significantly lower price point than that of the Apple iPhone. Not all of us want to spend $499 for a phone, even if it does have enhanced Internet access.

Google is reportedly not seeking licensing fees from carriers or hardware manufacturers. I wonder, though, how much the carriers will want to charge Google for the privilege of serving ads over their networks?


Bob said…
Google shouldn't need to charge so much for the phones -- they gain by having customers USE the phone (and view Google ads), not just buy it. Therefore the traditional highly-subsidized phone model makes sense for Google, whereas for Apple it makes less sense.

I would expect a gPhone to be more internet-centric though, rather than a hybrid phone/media player like the iPhone. Google gains from iPhones too of course, so it doesn't need to directly compete.

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