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Google's Phone Keeps Everybody Talking
Google is characteristically silent, but rumors
about the "Gphone" have people talking.
According to Forbes Magazine, Google plans to
enter the smart-phone market with a high-end handset
subsidized by targeted advertising.
Brian
Caulfield,
the article’s author, suggests that Google’s
ad-supported mobile phones may best fit consumers in
emerging economies. An effective advertising model
could reduce the price of the handset and/or
service, appealing to this price-sensitive market.
Caulfield points out that a mass-market approach
fits Google’s business model, and suggests China
Mobile and Orange are possible partners.
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Google certainly knows how to monetize
advertising volume, but a foray into hardware would
put the company well outside its comfort zone. While
Google has entered partnerships in the past, it has
never been as dependent on those partners as it
would be with telecommunications partners in this
new scenario. A phone with a great user interface
and cool applications may get the market’s
attention, but the ability to scale will be largely
in the hands of Google’s partners. Google’s strength
is its ability to abandon traditional business
models. A mobile phone that makes money on something
other than voice or data transmission may
fundamentally disrupt the market, but is Google in
the best position to capitalize on the opportunity?
An ad-based revenue model presents an opportunity
for a host of other technology players.
Yahoo! and
AOL are also chasing emerging-market eyeballs
through acquisitions and partnerships that integrate
their services with newer handsets. Larger phone manufacturers and operators are
exploring an ad-based interface, trying to secure
revenues without giving too much away to content
providers. Microsoft software is available on 140
mobile phone models, so it has well-established ties
in the telecommunications industry. Perhaps a
(long-rumored)
partnership between Yahoo! and Microsoft
would pave the way for an ad-based mobile OS.
Ultimately, the winner in this race will be the
company that offers the most compelling deal to
developing-country operators without losing focus on
the real opportunity - access to two billion
eyeballs.
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