Who has the most to lose because of the Google Phone

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“Google is expected to hold a press conference on Monday to unveil the project, which is expected to incorporate software from the Linux world into a mobile platform code-named Android that’s designed to run on phones, according to sources familiar with Google’s plans. A software development kit for what’s being called “a complete mobile-phone software stack” is believed to be in the works and will be released relatively soon thereafter, the sources said. It’s not exactly clear what kind of software will come as part of that stack, but it’s said to include everything you need to run a phone.” – CNET

Another key point will be how such an operating system, full of data applications, might increase data traffic. Data use on phones is already exploding, driving up revenue for carriers. Increasing that traffic is a top priority for them.”

The smart phone market is expected to grow from 114 Million in 2007 to
300+Million by 2010. Most “basic phones” are going to be replaced by
smart phones. – Nytimes

According to a Forbes article on Nokia, there are over 1+ billion cell phone subscribers in the world and another 300 million+ expected (mostly in Asia) by 2010. In India where literacy rates are not the highest, the phone in its pure for for voice communication is and will continue to be the killer application for the next generation of buyers.

If you look at the Americas, EMEA and some advanced parts of Asia (Japan, Korea, etc.) data is the driver – whether its video, games, text messaging. The “smart phone” market is a relatively small part of the entire mobile phone handset market.

Google’s going for the advanced consumer market (versus corporate where Blackberry rules) with their GPhone OS launch is my belief. If you segment the cell phone buyer into a tangible set of user types:
Forbes

Detailed smart phone segmentation shows that there are several ways to slice this market.

1. By geography (Americas, Europe, Asia, etc.)
2. By primary usage pattern (Voice, text message, music, videos, games, email, etc.)
3. By user frequency (casual user, intense data user, intense voice user etc.)
4. User profile: business, home (consumer), professional, etc.

I am sure there are other segmentation models, but these are primary.

1. Apple at it core has aimed the initial iPod for the advanced Americas (and Europe), for usage patterns that are mostly voice and music and a person that is an intense user – most likely either professional or consumer, NOT business. Its lack of keyboard and poor integration with Microsoft Exchange (currently) makes it a poor choice for businesses that already have investments in Exchange.

2. Google on the other hand is going to get the most traction with a more global footprint (since they have a lot more carriers and handset makers involved) with a primary usage pattern for data (web surfing, etc.) and for most likely an intense user at that. I suspect the user profile would be a professional also. So the introduction of the Google phone is most likely going to hurt Nokia and the “rest” of the crew – Motorola and other (see 5)

3. Blackberry is trying to address multiple segments but primarily the data intense user whether its business or professional. Its the best for the business user for data. Most businesses already like Blackberry, because it addresses the key issues of security, email access and integration into enterprise technologies.

4. Microsoft has its hands on all pies, but great in nothing.

5. The rest: Samsung, Motorola, Palm, etc. are going for the mass segments is my sense. Basic phone, camera, etc. aimed at the consumer. Not for the smart phone (yet) and even if they do they’re not good at it.

6. Nokia like Microsoft is aiming everywhere, but since they are the incumbent, they can afford to have options everywhere.

So back to the Google phone.

I think most corporate business users still want email integration to Microsoft Exchange. Any linux based phone OS is not going to have the best support for that – Blackberry’s going to be ok.

Since Google’s trying to crack the smart phone for the masses market, the ones most likely to lose because of that are the fringe players – I suspect Motorola to further lose and either get acquired (by a small niche carrier – Alltel, Metro PCS) to be part of an end-to-end offering.

I think target iPhone is mis-leading. They are not after the same market segment currently.

What do you think?

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