Miguel Helft reported yesterday in the NY Times about the rather fuzzy business rationale behind Google’s persistently rumored mobile phone project (frequently dubbed the “gphone”). Google’s creation of a Linux-based operating system for cell phones would presumably further the spread of Google mobile advertising for some sort of dubious payoff, but there are some apparent strategic goals including new competition for Microsoft’s Windows Mobile operating system business.
In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows Mobile from Microsoft and other operating systems, which are built into phones sold by many manufacturers. And unlike Microsoft, Google is not expected to charge phone makers a licensing fee for the software.
“The essential point is that Google’s strategy is to lead the creation of an open-source competitor to Windows Mobile,” said one industry executive, who did not want his name used because his company has had contacts with Google. “They will put it in the open-source world and take the economics out of the Windows Mobile business.”
Fair enough, but if Google can develop a mobile OS for free in order to profit from advertising, so can Microsoft if it is such a swell business plan.
In any case, Linux for mobiles isn’t exactly a new idea (e.g. the LiMo Foundation) and it’s not entirely clear what Google brings to the table that wasn’t already there. More importantly, Google is an outsider to the cell phone biz and their motives are suspect to the very folks they need to play:
Some believe another major goal of the phone project is to loosen the control of carriers over the software and services that are available on their networks.
“Google’s agenda is to disaggregate carriers,” said Dan Olschwang, the chief executive of JumpTap, a start-up that provides search and advertising services to several mobile phone operators.
Some carriers, especially in the United States, are likely to give Google a cool reception. Companies like Verizon Wireless and AT&T have spent billions of dollars building and upgrading their networks, establishing relationships with customers, subsidizing handsets and creating their own mobile Internet portals. Now they want to make sure those investments pay off, in part, through mobile advertising, and they see Google and other search engines, who are after the same ad dollars, as competitors.
Frankly, the cell phone business is like one of those saloon brawls in old Western movies where everybody seems to be socking everyone else and generally tearing up the joint. Now Google walks in like the dude in the fancy duds. It should be amusing.