October 2007 Archives

Rumors are flying that the do-no-evilers over at Google are getting ready to launch the much-speculated-upon ‘Gphone’—or at least the software and services needed for such a phone to function. The rumor-mill flames were fanned by a Wall Street Journal article this morning, which quoted “people familiar with the matter” as saying that a Gphone software unveiling will be coming soon.

 

According to the Wall Street Journal’s report, Google’s goal with its allegedly upcoming release is to “make applications and services as accessible on cellphones as they are on the Internet.” Rich Tehrani predicted in a blog post earlier today that it’s unlikely Gphone can be any more wow-worthy than Apple’s iPhone.

 

“Somehow I have trouble believing Google will have a device anywhere near as useful as Apple’s iPhone,” Tehrani wrote. “In addition, I think the audience attracted to a Gphone are already iPhone users.”

 

The Wall Street Journal article hinted, however, that in developing its version of the mobile phone, Google is taking on a much bigger mission than simply wowing consumers with cool and useful features: the company’s “do no evil” focus on openness and universal information access means it is in for a tough fight against the established dynamic of the U.S. cellphone industry, in which service providers (carriers) have ‘considerable clout,’ controlling distribution of phones through retail stores.

 

“Google is trying to loosen the grip wireless carriers have over the software and services consumers can access on cellphones,” Wall Street Journal said in its report.

 

That’s quite a noble mission, and just the sort of gargantum task that Google would take on. I wish the company luck.

 

Wall Street Journal said that within a fortnight, Google will be releasing software and services designed to enable handset manufacturers to develop and release their own Google-powered phones by the middle of 2008. The company allegedly is in talks with various manufacturers, both in the U.S. and abroad, regarding the production of Gphone devices. Which companies? Speculation is that the list includes HTC and LG Electronics.

 

Partnerships with wireless carriers are also in the works, Wall Street Journal said. Which ones? Most likely are T-Mobile (the U.S. arm of Deutsche Telekom AG) in the U.S. and Orange SA and 3 U.K. in Europe.

 

Not too surprisingly, Wall Street Journal said Gphone will tie together a variety of Google applications and services, including Google Maps, a search engine, Gmail and YouTube. The company reportedly is aiming to have the phone software (including the OS) be completely open so independent software developers can build their own Gphone applications.

 

All I can say is, we live in exciting times. Stay tuned.

If you live in the U.S. and Europe and feel as if every person you know (including yourself) owns and uses a cellphone, you’re right on. A new report out this month from Pyramid Research confirms the suspicion that the mobile phone markets in “First World” economies are pretty saturated.

 

According to Pyramid Research, at the end of 2006 there were almost 2.8 billion subscribers to mobile services around the world, translating to an overall penetration rate of 44 percent. In rich economies like Western Europe, the penetration rate exceeded 100 percent. But in emerging markets like Africa and Southeast Asia, penetration averaged less than 20 percent.

 

Pyramid Research also said in its report, The Next Billion: How Emerging Markets are Shaping the Mobile Industry, that another billion mobile subscriptions are forecasted by year-end 2009. Since most people in the developed world already have at least one such subscription, about 85 percent of this projected growth will come from emerging markets.

 

The question is, what happens when everyone in the world (or at least, all except those literally starving) has a cellphone? How will service providers and vendors keep growing their revenues when the global market is saturated? Well, there’s Moore’s Law to ensure that new and better phones and services are needed to replace the ones already purchased.

 

And if that fails, there are the untapped markets of the moon and Mars.

One of the bigger stories in the mobile space this week is the case of a New York woman who’s suing Apple for $1 million because of the way the company handled recent price cuts and changes to its iPhone and iPod product lines.

 

Dongmei Li, the woman who filed the suite, is p-oed because she bought a 4GB model of iPhone in July, and now her phone is obsolete; 68 days after iPhone’s launch in the U.S., Apple cut the price of the 8 GB iPhone from $599 to $399 and phased out the 4GB model.

 

Li claims that Apple’s actions represent “price discrimination, underselling, discrimination in rebates, deceptive action and other wrongdoings,” Times Online said in a Tuesday report. Li also thinks that Apple was wrong to lower the price because market conditions didn’t make the change necessary.

 

I have two comments about this. First, I think the whole lawsuit is silly. Maybe the price-cuts and product line changes happened more quickly than expected, but come on! Technology changes at a breakneck speed, and anyone buying a gadget expecting it will still be cutting edge a few months or a year down the road is out of touch with market realities.

 

Sometimes the changes happen faster than anticipated, but they will occur and at that point the owner has to decide if the product purchased still has use or if it’s time for another upgrade. End of story.

 

Second, the amount Li is suing Apple for seems rather puny. I’m not a legal expert, so perhaps there are restrictions that I’m not aware of, but it seems to me that $1 million is just a drop in the bucket for Apple. I mean, the company finished last fiscal year (ended Sept. 30, 2006) with $10 billion in cash, and pulled in $818 million net profits during the third quarter of 2007 alone. I hardly see how a $1 million lawsuit will garner much real attention from anyone but bloggers like myself who jump to write about any “juicy” bit of wireless news.

 

What do you think—is Li justified in her lawsuit or just insignificant?