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What would Google’s self branded smart-phones mean for Google, its eco-system, its partners, competitors and Consumers?

Posted in Applications and User Interfaces, Mobile Devices and Company Updates by Manas Ganguly on November 18, 2009

A report by Northeast securities analyst, Ashok Kumar has caught onto the fancies of the Tech Bloggers world. The idea and the question is: What if Google makes and markets self branded smart-phone?

Kumar spoke on Google’s plans: ”Google is expected to launch a self-branded smart-phone by year end followed by netbook early next year. In its smart-phone push, Google is expected to embrace the retail channel at the expenses of carrier with the intent of greater account control. It will embed the same iteration of Android as the Motorola Droid. The hardware, featuring Qualcomm baseband, is expected to be competitive with Motorola’s offering.

Google is also expected to launch a branded netbook, again embedding Qualcomm Snapdragon, early next year. Thus far, Linux has not been able to get a toehold in the netbook segment. But the Chrome OS could be the tipping point.”

 

The report was half substantiated by Gigaom’s comments saying sources of its own that contend Google has been interested in developing its own Android phone

Essentially the rumor (which is all that we have at this time), speaks about Google’s tie up with smart-phone OEM for a Qualcomm -powered device running the Android 2.0 Éclair. The netbook would be designed in coordination with Quanta and would be Qualcomm Snapdragon powered. It will sport the Chrome OS. This then would be Google’s first effort at devices and the thought leading up-to its foray into devices is that Google intends to take control of its phone experience and is not confident that the current lot of smart-phone makers can make devices that explore the full suite of Google services.

Ashok Kumar also suggests that Google will not sell their phones via carriers, and instead will come unlocked to take any carrier, and will be sold directly in retail stores.

Why?

Intending to take control of its phone experience. While it would like to more tightly integrate its online services with a phone, Google is concerned that HTC, Samsung and others would regard a self-branded device as an unfair advantage. Google is apparently in talks with a Chinese company who will be manufacturing both the mobile handset and the netbook. It is not entirely too difficult for any company to make a phone these days, as long as they get at least one part right. Android and its suite of Google services hold a great promise (and challenge to the Apple OS) but Google needs a device as sophisticated as the iPhone to be taken seriously. Google already has all the data they need and they have the software too. So commissioning another company to make the handset according to their specifications does sound like the next logical step.

Pros

Delivering Android better: Microsoft has never turned Windows Mobile into anything, in part, because the hardware has not been anything special. Google thinks it can do better and, perhaps, suspects that handset manufacturers are not as smart as Google, which wrote the Android OS and created services the phone will run. This is the “Motorola, Nokia, etc., are clueless” part of the argument.

Game changing move: The Open handset will go down extremely well with consumers who often have to tie themselves into lengthy contracts with mobile phone carriers or go to the hassle of unlocking a phone so that it can be used on another network.

Keeping Apple on its toes: Google does release its own phone. Aside from the wealth of iPhone apps, the iPhone’s greatest advantage over the competition is the sheer seamlessness of its integration of hardware device and the iTunes-related services. Many companies try to ape Apple’s level of hardware-software-service integration, and very few even come close. The Android eco-system Google Smartphone combination may be the best bet yet to challenge the iPhone eco-system. It will surely keep Apple on its toes.

Cons

Selling Direct: The cost of the handset would be a big consideration. After all smart-phones do sell the volumes they sell because of heavy operator subsidies. Secondly, it might also have the effect of undermining the carriers and manufacturers who have till now been promoting, subsidizing and selling Android phones.

Partners turn competitors: Google will be making themselves a competitor against many of those who have served as partners in the past. Google is make huge strides in getting manufacturers to develop devices for its Android platform. Creating a handset of its own — making itself a competitor rather than a partner and facilitator — could conceivably hamper those efforts. Manufacturer support for the Android OS diminish if Google itself starts making and selling phones

Loss in focus of its core proposition: One important part of the ecosystem would be to have a set of well-functioning applications (an office productivity suite, for example). Google is mostly leaving applications development for Android to third parties (applications which run in the browser like Google Docs being the notable exception). At the rate things are going, we don’t see enough of these third parties developing applications for Android netbooks in the next 12 months. Google would be better off concentrating on building music and app stores, modeled after Apple. Those are Apple’s no-so-secret weapons and until Google can really compete, there is nothing to stop the iPhone.

Antitrust issues: Google is now so dominant in search that a revived American antitrust division is already making noises. They already have the choice of Android or Chrome for mobile internet devices and now, if they are able to make headways into the netbook industry they’ll make the Microsoft of old look modest.

End Lines: Going forward

Maybe the smart-phone marks the decline of the wireless hardware vendor and rise of the OS and applications provider. The iPhone seems to prove this. Maybe the only company that can make Android a hit in the marketplace is Google itself, by selling hardware it designs. That is the principle argument in favor of Google and its smart-phone efforts. The way Google handles its relationships with its current partners will be crucial to future relationships. Alternately, perhaps Google will get into the handset business and the other handset companies will run away from the Googl eco-system, leaving Google alone with a loser phone and a not-very-exciting ecosystem on the edge of extinction. Almost like Microsoft, but for different reasons. Google may aspire to walk the middle path. A Google-made Android phone would further intensify competition between the Google and Apple.

References:

http://bx.businessweek.com/google-phone-t-mobile-g1/view?url=http%3A%2F%2Fnotes.kateva.org%2F2009%2F10%2Fgoogle-branded-netbook-is-coming-in.html

 http://www.geekwithlaptop.com/google-netbook-and-phone-coming-out-soon

http://digital.venturebeat.com/2009/01/01/android-netbooks-on-their-way-likely-by-2010/

http://www.mediamughals.com/News/1/7/Article/3911/Google_launches_first_Android_netbook__developing_Google_branded_smartphone.htm

http://notes.kateva.org/2009/02/when-will-google-20-sell-branded.html http://netbook-expert.com/tag/google-branded-netbook/

http://www.pcworld.com/article/174068/a_phone_that_google_can_call_its_own.html?loomia_ow=t0:s0:a41:g26:r34:c0.001306:b28447923:z0

http://www.pcworld.com/businesscenter/article/174099/if_google_sells_a_smartphone_cagey_or_crazy.html

 

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