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MoComment: Google Should Follow Apple, Not Disney

What is Google (NSDQ: GOOG) thinking? I’m not being facetious, I really want to know… The company has a lot of mobile services available, and there are quite a few indications that it’s working on its own handset. Add to that its expressed interest in bidding for spectrum in the upcoming FCC auction, and the sum of the components pretty much comes to MVNO. Maybe two years ago that seemed like a good idea, but the untimely demise of three major content-focussed MVNOs in the past year has to be giving Google second thoughts. However, there is another business model coming to the fore, pioneered by Apple (NSDQ: AAPL).

Virtual MVNO: Quite a few commentators have referred to the iPhone as an MVNO, for example this commentary from Analysis analyst Avi Greengart at RCRNews: “Like an MVNO, Apple doesn

6 Responses to “MoComment: Google Should Follow Apple, Not Disney”

  1. Google's stock took a hit when they hired a few more people a few months back. Imagine what hit it would take if they spend billions, and hire tens of thousands of employees to run a national wireless carrier, starting with zero subscribers? It took the current wireless industry 20 years, from home plans, to national plans, from a few subscribers to hundreds of millions. Google need sto buy a carrier with customers and operations already in place if they are serious, like T-mobile or AllTel. You cannot start from scratch in this hyper competitive industry. You need millions of customers just to make your rate plans competitive. (Not every customer Verizon makes $$ from, but out of 60 million, they can hedge their bets and offer unlimited N&W;and M2M plans to all of them)

  2. tapster

    yep, but we're not talking about an MVNO. This is a new opportunity utilizing a new spectrum, for a completely new mobile network. I don't really disagree with many of your points (apart from aligning my comment with this idiotic administration that is).
    Agreed, it's absolutely a massive challenge, but I don't see anyone else with anywhere near the capabilities to do this.
    I just think comparing this opportunity with the failures of ampd/espn/disney/helio (oops, preemptively added helio for those reading in a few months) is off track

  3. Not to distract the conversation, but the case against Saddam was a "slam dunk" too and look at the trouble it got us into ;) Comparatively, there is a lot of data showing that nothing related to launching an MVNO is a 'slam dunk'. Can it be done? Just maybe…but it has to be meticulously planned out and carried forward by the right company, with a clear and long term commitment and the resources to support that commitment. Google fits that description but still lacks the know-how of running the nuts and bolts of a carrier operation. I might start by dipping my toe into the water by launching a phone(s) distributed across multiple carriers and focusing on core competencies, as Tapster has acknowledged for Google is "services company".

    As brillaint and successful as Google's track record is, they are not infallible and an MVNO (or more accurately MNO) would be an enormous challenge, even for them.

  4. tapster

    I have to disagree here to a large extent. the 700mhz spectrum affords a unique opportunity that fits Google's DNA exceptionally well. Apple is a hardware company, which is why the iphone model fits them (although not sure what Virtual Mobile Virtual Network Operator can mean :)
    This doesn't apply to Google in the slightest. They are a services company, and as such wouldn't be able to operate under the constraints of current carrier infrastructure and layers of bureaucracy
    Looking at Ampd and ESPN both suffered from abysmal management, arrogant in the case of the former, plain dumb in the case of the latter.
    For Google to scoop up the new spectrum and launch their own service would be a slam dunk in my opinion

  5. Amen James, Amen.

    Amp'd, ESPN, Disney (and whatever MVNO drops nexts) have all shown that straying from core competancies and thinking you can run a carrier business is an unnecessary and foolish risk. Like Apple, Google would be well received by carriers. If they could deliver a killer device like the iPhone, leverage the best networks (not the lesser ones like the iPhone runs on) and concentrate on the "add-ons" (especially those supported by Ads) they would have a great shot at success. I should also add that having devices at all the major carriers (I love the iPhone but will not go through the girations necessary to switch carriers), AND coming out the gate with competitive pricing would greatly enhance that success.

    Hindsight being 20/20, Google has LOTS of case studies that show the pitfalls and missteps; if they do not get arrogant ,the mobile world could be their oyster.