Google Phone – why?

So the rumors keep flying that Google will make a phone. Let’s assume that it is true then the question is really why? Well, I guess it is really the same reason Microsoft got into the mobile business: for many markets PCs will not be the default (or even an optional) device. So if a large part of the world’s population are going to be using phones instead of (or in addition to) PCs *and* if Google has no presence on these devices, then it would lose a significant revenue opportunity and potentially enable competition like Microsoft to get back into the ad game.

So then the question becomes, could Google achieve the same thing by just partnering with the likely suspects in the mobile space? Perhaps but the mobile space is pretty complicated eco-system with many constituents (carriers, device vendors, OS vendors, governments, consumers) battling to be the top of the heap. Getting something revolutionary done in this space while partnering is very hard to do. Apple has, of course, launched the iPhone which is interesting but really has not done very much to change the business model (at least so it appears). So this really leaves Google with a tremendous opportunity: change the business model in the mobile space. This would be the really revolutionary part of Google’s phone if they choose this path.

There are some compelling reasons for consumers to want a Google phone, namely:

  • search
  • gmail (if you are already a user)
  • maps & navigation

Google Talk could be part of the bargain but from a consumer perspective, the phone just needs to work as a phone. If that means that somehow Google Talk is part of the equation that is fine but it cannot mean that the quality of service is worse.

So can Google revolutionize the mobile phone business by introducing a new business model? It will be interesting to see what happens. Obviously ads could pay for part of the bill but I am not sure there is enough money there. I guess an analysis is in order. The second part of the equation is that the phone just has to work. People have some patience for PCs working in their idiosyncratic ways. I think they have less patience with gadgets that are not compelling from usage standpoint. So if they offered a phone that had voice, mail, search, IM, maps & navigation that also put the mobile business models on their head, I think they may be on to something. But it just has to work and be a compelling piece of consumer electronics. Remember phones are becoming fashion items so killer functionality will not be enough.


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