Comments on: So the Google Phone Is Real http://gigaom.com/2009/12/12/new-google-phone/ Sat, 11 Feb 2012 06:01:09 +0000 hourly 1 http://wordpress.com/ By: murat http://gigaom.com/2009/12/12/new-google-phone/#comment-233122 Wed, 23 Dec 2009 00:58:35 +0000 http://gigaom.wordpress.com/?p=85951#comment-233122 Number 1 google :)

]]> By: Derek Kerton http://gigaom.com/2009/12/12/new-google-phone/#comment-233121 Fri, 18 Dec 2009 01:41:37 +0000 http://gigaom.wordpress.com/?p=85951#comment-233121 Sam

With all due respect…WTF?

Google cannot offer a phone for free or near free. Google cannot offer phone service for free or near free. There is no Santa Claus, either, so stop dreaming of getting something just because you wish for it.

Google makes money off ads. Correct. They can subsidize devices or service with ads. Also true. They could even get revenue shares in the future by steering people towards Brick and Mortar businesses. But to be a profitable company, the ad revenue needs to exceed the subsidy. In offering a top-flight smartphone for free, Google would have a ~$500 subsidy to recoup. That’s a @#$@ of a lot of ads.

Google is a big success on the web because they use relatively cheap processors and storage, and serve billions of page views and ads. Each page view, on average, has a tremendously low cost to provide, and also a small revenue component. By keeping the costs so low, and the ad revenue slightly higher, in volume the ads drive a fantastically profitable operation.

You’ll note that Google does not pay for your PC in the above-mentioned successful model. You’ll not that Google does not pay for your ISP connection in that model either. Together, this makes the model highly scalable, in that they can serve millions of users with the same infrastructure and negligible marginal costs. If Google needed to supply each user with a $500 marginal cost device…um…do you think that might affect a high-volume business?

Now, while in the current web world, Google does not provide your ISP service, you propose they will do so for cellular service, but at a much cheaper rate. How do you suggest Google provide a near-free cellular service without any spectrum, nor any cellular infrastructure assets in any country? To have any impact on cellular rates, for now at least, in each nation Google would need to become an MVNO, or partner with an existing carrier as a channel. In either model, Google would have little ability to reduce market subscription rates. No carrier will slash market prices at Google’s behest, and as an MVNO Google could subsidize calling plans, but the underlying network operator will still charge standard wholesale rates? Can Google recoup $50 a month of subscription subsidies with their ads? Every month? From every user? And can they do that at the same time as they need to recoup the $500 subsidy for the device?!!

So, yeah, Google can alter the playing field if they so choose, and in significant ways. But not the way you’re expecting, and certainly not to that extent.

Derek Kerton
http://www.kertongroup.com

]]> By: Derek Kerton http://gigaom.com/2009/12/12/new-google-phone/#comment-233120 Fri, 18 Dec 2009 01:05:57 +0000 http://gigaom.wordpress.com/?p=85951#comment-233120 Really? You think US consumers have a preference for CDMA over GSM?

I think they don’t have a clue what those acronyms stand for…if they can even identify them as cellular technologies.

Or do you just mean they will stick with Verizon?

]]> By: Brian S Hall http://gigaom.com/2009/12/12/new-google-phone/#comment-233119 Wed, 16 Dec 2009 01:45:33 +0000 http://gigaom.wordpress.com/?p=85951#comment-233119 “Doing it for the employees…” That would be like Tiger Woods saying he needs to put family first.
I think this is a smart move by Google because search and ad is (obviously) so vital to the company and this is quickly porting from desktop to smartphone.

My take here:
http://brianshall.com/content/smartphone-computer-googles-smart-move-making-their-own-mobile-phone-goog

]]> By: Shervin Bain http://gigaom.com/2009/12/12/new-google-phone/#comment-233118 Mon, 14 Dec 2009 19:43:31 +0000 http://gigaom.wordpress.com/?p=85951#comment-233118 Intriguing… Now all they need is a service that allows you to make calls… oh wait… Google Talk… I guess Google is moving up the ranks to Disney status in the world domination market!

]]> By: courtney benson http://gigaom.com/2009/12/12/new-google-phone/#comment-233117 Mon, 14 Dec 2009 17:23:08 +0000 http://gigaom.wordpress.com/?p=85951#comment-233117 Sam – you are so right on! The carriers who want to flood us with advertising in addition to paying for usage will have to duck for cover as I doubt anyone will want to pay for poor service, ads and lack of privacy.

]]> By: Gerald http://gigaom.com/2009/12/12/new-google-phone/#comment-233116 Mon, 14 Dec 2009 16:31:34 +0000 http://gigaom.wordpress.com/?p=85951#comment-233116 Cost difference between a Touch and an iPhone? Support. I would imagine the support costs for a cell phone are much higher than an mp3 player.

]]> By: Ian Betteridge http://gigaom.com/2009/12/12/new-google-phone/#comment-233115 Mon, 14 Dec 2009 15:48:05 +0000 http://gigaom.wordpress.com/?p=85951#comment-233115 How would selling a phone retail cut data charges? Or, given that you wouldn’t be tied into a contract, why would it cut handset costs?

]]> By: odeiocalor http://gigaom.com/2009/12/12/new-google-phone/#comment-233114 Mon, 14 Dec 2009 14:11:35 +0000 http://gigaom.wordpress.com/?p=85951#comment-233114 So the dog is out of the cage…
Just think people could calm down with the iKiller thing..
}For a while its just a phone, and to kill a phone that is so saturated in the market is not that easy i would say.
Lets wait’n see

]]> By: Mrigank http://gigaom.com/2009/12/12/new-google-phone/#comment-233113 Mon, 14 Dec 2009 12:26:38 +0000 http://gigaom.wordpress.com/?p=85951#comment-233113 Poor strategy / loose strategic thinking comes to mind.

  1. Google now not only has MS against it – but also the handset mfrs.
  2. There is a tipping effect. Google has been walking a fine line, and this one should make the CEO of Ericsson / Nokia think: There is a push on Google voice, and now Google phone. What next? Google networks? In fact I would be on the phone speaking with my counterparts at Motorola / Samsung / Verizon / others to stall Google / Android
  3. Google doesn’t really have the skill sets for a retail play. They are an online play – not a distribution company.

My $0.02.

M

]]> By: thepenks http://gigaom.com/2009/12/12/new-google-phone/#comment-233112 Mon, 14 Dec 2009 03:19:18 +0000 http://gigaom.wordpress.com/?p=85951#comment-233112 hmm… i’m just interest how fast google chrome… but, this phone look great i think..

]]> By: PT http://gigaom.com/2009/12/12/new-google-phone/#comment-233111 Mon, 14 Dec 2009 02:58:17 +0000 http://gigaom.wordpress.com/?p=85951#comment-233111 It’s going to be cool to have a Google branded phone. And even better if Google goes retail direct and cuts those hefty data charges and handset prices from traditional operators. A good thing to look forward to.

]]> By: Srini Dharmaji http://gigaom.com/2009/12/12/new-google-phone/#comment-233110 Sun, 13 Dec 2009 16:53:32 +0000 http://gigaom.wordpress.com/?p=85951#comment-233110 This is nothing short of a war cry to carriers ! It is not Apple they are after, but to make the mobile phone a commodity similar to the PC, where anyone can buy a mobile phone from retail store, get a 4G (WiMax or LTE) subscription and there you go ! Activate Google Voice (must have been pre-installed on the phone) and why do you need a carrier ? Only issue with this strategy is how soon 4G coverage would be ubiquitous with good nationwide coverage? Makes me wonder why Google did not participate in the recent round of Clearwire funding. Hmmmm….

]]> By: gbp http://gigaom.com/2009/12/12/new-google-phone/#comment-233109 Sun, 13 Dec 2009 16:10:13 +0000 http://gigaom.wordpress.com/?p=85951#comment-233109 Om,
Why are you( and folks) excited ?
Its another Android phone. Plain simple.
Besides the rumored specs look “OKAY”.
Google might give input to the hardware design but its still made by HTC. I would seriously consider Google made phone if they have their own in-house hardware division.

]]> By: Chris K http://gigaom.com/2009/12/12/new-google-phone/#comment-233108 Sun, 13 Dec 2009 15:50:08 +0000 http://gigaom.wordpress.com/?p=85951#comment-233108 Google should have just bought Palm. They have what looks likes a decent hardware/software platform, but they could use some re-branding and deeper pockets.

I agree this news won’t make Motorola and Verizon all warm and fuzzy inside even though the Droid is CDMA-only.

And I agree it sounds like confirmation of Apple’s, RIM’s and Palm’s hardware&software business model to me.

]]> By: Ian Betteridge http://gigaom.com/2009/12/12/new-google-phone/#comment-233107 Sun, 13 Dec 2009 09:46:53 +0000 http://gigaom.wordpress.com/?p=85951#comment-233107 @AS – It’s ironic that you ding me for making assumptions, while making far more wild ones yourself! :)

Does it cost more to define a phone than a piece of software? Hell yes, particularly if there’s innovation in the hardware! Designing hardware isn’t cheap. Second, even if Google had paid for all the design costs, that cost would either have to get passed on to the consumer or paid for by Google – and if Google was paying for it, it would need a business case to do so. Why should it pay for hardware design? Where’s the profit for it?

The anti-trust issue wouldn’t be anything to do with apps. The strongest part of anti-trust law is about preventing companies using a monopoly in one market – in this case, ads – to muscle its way into another market. While you can subsidize new product lines, you have to be very, very careful doing it. Doing it when there’s no actual revenue for you in the new business line is very dangerous territory.

To put it another way, if Google was going into selling phones to make a profit from selling phones, it might be OK. If it’s subsidizing phones to increase its market dominance in advertising, it could be in real trouble.

Think back to Microsoft/DoJ: The turning point was its release of IE, a free product that was designed to shore up its dominance in operating systems. If Google were to release a phone designed to shore up its dominance in online services, it would be in trouble.

]]>