Android: Has the wireless market misread Google’s greatest threat?
Amidst this week’s market turmoil, T-Mobile and Google announced the first Google phone based on Google’s Android platform. All the articles this past week, including The Wall Street Journal and The New York Times (An iPhone Rival Open to Whims) missed a very important point.
Most of the press is looking at the Android platform and sees a challenge mostly to the other platforms, such as Symbian and Microsoft’s Window’s Mobile platform, both of which run on most phones worldwide. Only the iPhone has broken through and it only accounts for 2.8 percent of the market.
From the war game we ran this past March (The Battle for the Wireless Internet) with teams representing the carriers, chip/handset companies, and investment groups, Android will certainly threaten the other platform companies, such as Microsoft and Symbian. That’s clear.
The other, more subtle threat – and the one the press seemed to miss, the one that the war game clarified – is the larger one handset companies and carriers alike will face. It’s the threat Cloud Computing presents to the handset companies. Cloud computing, as represented by Google, can mimic the complicated and high-priced features embedded in phone hardware (for which consumers pay a premium) and moves those features to the Cloud. Calendars – email, video applications, mapping technology, and so on. Instead of a Nokia or an Apple building complex phones with chipsets that support a multitude of complicated programs resident on a sophisticated miniature computer, known as a smart phone, Google wants the Android platform to become that gateway to the Cloud where all these services will exist, mostly for free (supported by search advertising). This is where Android will prove its greatest threat.
T-Mobile is near the bottom of the phone carrier heap in the US market which is likely why T-Mobile welcomed joining forces with Google. You won’t see other carriers, such as AT&T (Apple’s iPhone partner anyway) or Verizon connecting with Android anytime soon unless they are forced to do so, kicking and screaming.
Right now Android is a novelty but if it does gain momentum by working with various wireless carriers as it has with T-Mobile, it can devalue smart phones, such as those produced by Palm, Apple, Samsung, and Nokia, as well as the platforms they currently use.
