Google's Endgame for Mobile — Alleviating Misery?

[qi:gigaom_icon_google-android] While users’ mobile experience has improved considerably in just the last 2-3 years, in many ways, the industry is still in its infancy. Despite numerous positive developments — Apple’s iPhone and App Store representing the two most prominent examples — in a few years, we will undoubtedly look back on 2009 and recognize that much of the innovation was yet to come.

Of course, a number of large, established companies — notably Apple, but also Intel, Qualcomm and Google, as well as numerous startups — are working feverishly to bring new mobile technologies to market. As reflected in initiatives such as OHA (Open Handset Alliance), Android and Chrome, Google believes that mobile is the next big thing and is intent on capitalizing on opportunities in mobile, much as it did in the early stages of the Internet.

Check out our latest GigaOM Pro report, “Google’s Mobile Strategy” (subscription required). We will also be discussing this topic as part of a free Research Roundtable Webinar on Aug. 27, 2009. Register here.

The scope of the company’s vision and the scale of its efforts uniquely position it to challenge the status quo, accelerate innovation and boost mobile access.

But isn’t the current rate of innovation sufficient? Three recent stories suggest not:

  • More and more consumers are dropping their landlines and becoming “CPO” (cell phone only) — in fact, roughly one in four households in the U.S. are now CPO. Dramatizing the significance of this trend, The Economist observed that “at the current rate, the last cord will be cut sometime in 2025.”
  • An April 2009 Pew Research study found that about one in five individuals surveyed had accessed the Internet on their mobile phone “the day before,” a number that had nearly doubled in less than a year and a half.
  • Despite these two developments, usability guru Jakob Nielsen, citing a study conducted by his firm with mobile users, concluded that “the mobile user experience is miserable” and likened it to the Internet circa 1994.

While significant changes are occurring, Eric Schmidt, CEO of Google, got it right when he observed two years ago that “consumers deserve more…innovation than they have in today’s wireless world.” Why is Google in a unique position to lead mobile innovation? The following suggest the capabilities and momentum that the company is building:

  • Android OS for mobile devices — After a slow start, Google’s Android is gaining favor among OEMs. Just last month, HTC announced that more than half of its devices will be built around the OS, and for good reason. Android eliminates the license cost and, compared with other operating systems, offers programming efficiencies that significantly reduce the cost of handsets.
  • Web-based mobile apps — While the merits of competing mobile app platforms are hotly debated, Google is committed to enabling and supporting web-based apps and cloud-based computing, leveraging its Gears platform, Chrome browser, and other assets it has developed.
  • Google Apps — Earlier this year, Google Maps passed Mapquest in online share of visits (all platforms, not just mobile). By enhancing map views and offering advertisers a variety of options — leading one industry observer to coin the term “mapvertising” — Google has demonstrated its ability to monetize yet another platform, one that is critical to mobile users. Early adopters are touting Google Voice as indispensable, albeit controversial.
  • Speech recognition — Though normally associated with text-based search queries, with Goog411 and speech-enabled web search Google is developing one of the largest, most robust speech platforms in the world. As a recent GigaOM Pro report (subscription required) argued, speech represents the next UI (user interface) for mobile.

Looking beyond these examples, only a handful of companies — including IBM, Amazon, Google, and a few others — have the capacity and ability to store and process in real-time massive quantities of data. Combined with its cloud computing platform, Google is well-positioned to develop innovative mobile services, from language instruction to analytics for location-based data, location-aware advertising, and more.

Time will tell, of course, whether the search giant will succeed in mobile on the scale suggested above. And to be sure, its strategy is not without critics. Some skeptics cast doubt on Google’s ability to bring new products and services to market. Others express concern that too much power is being concentrated in the hands of one company, which despite Google’s mantra of “Don’t be evil,” is a legitimate issue.

Despite these concerns, the company has demonstrated its ability to develop or acquire capabilities and monetize new business models. As Google and others introduce potentially disruptive innovations — such as Google Voice — opportunities will emerge. As a brand-new GigaOM Pro report (sub required) elaborates on, incumbents that are complacent and rely on conventional strategies are apt to miss out.

Phil Hendrix is the founder and director of the Institute for Mobile Markets Research and a member of the GigaOM Analyst Network. His complete discussion of this topic is available in the latest GigaOM Pro report, “Google’s Mobile Strategy” (subscription required). He will also be discussing this topic as part of a free Research Roundtable Webinar on Aug. 27, 2009. Register here.


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