The Mobile Internet Report Key Themes*

The Google Phone –
Potential to Disrupt Existing Smartphone Market
On 12/14/09, Google indicated it would begin selling its own Android phone (possibly
manufactured by HTC, according to media reports). We think Google has a good shot at
share gains from other players (excluding Apple) in the smartphone market. Consider the
factors in Google's favor: 1) in the USA, many AT&T iPhone customers have complained
about AT&T's 3G network quality; 2) while the iPhone is an impressive product, it's
relatively homogeneous; 3) while the email / Windows syncing on BlackBerries is worldclass,
RIM's app selection + user experience is not; and 4) owing to the large mobile usage
data set from early iPhone users, we have a good sense of what mobile consumers want.
Now, if you are Google, what would you do Maybe something like what Dell Computer did
in the 1980s / 1990s, when it broke the mold of the PC market: 1) sell devices directly; 2)
build-to-order; 3) offer extreme customization - You want a blue phone, a red phone You
want enterprise apps You want Wi-Fi only because you are always in a hot spot and you
are on a low budget You want travel apps because you feel like you live on airplanes
You want cellular coverage optimized for 200-mile radius around Peoria, Illinois You want
whatever; and you offer these via a NikeID-type web site with 24x7 phone
support...customize your phone (and your carrier) and 'Your Name Here" phone arrives at
your door - and your software is stored in the cloud and is accessible by simply signing into
your Google account.
We don't know exactly what Google's up to, and it is facing very tough competition, but we
do know that in epic battles like the one that's developing around the mobile Internet...with
the best and brightest in the hunt...this is a war game and the smartest players are trying to
find the holes and stay / get ahead on the field.
Source: Engadget, TechCrunch. 190