Perspective: The Achilles' heel in Google's phone plan

Can Google grovel?

Probably not well, at least not initially, and that could become a major problem in its plans to create a cell phone platform that will compete with Microsoft, Research In Motion, and Apple. Technically, a subsidiary called Android will oversee the project, but it's an appendage of the big G.

The problem is that Android (and by extension Google) will inherently be in a subservient position to the carriers and cell phone makers. The carriers own the direct contracts with the customer. The carriers and the handset makers as the customers, meanwhile, can pick and choose which software layers to include in their phones. Most likely, they will work with all of the big platforms and chronically play them off against one another.

Being stuck in that sort of sales beauty contest is no fun. You have to laugh at a prospective customer's jokes, travel at a moment's notice, and go into minute and dull detail as to why your particular widget remains superior while your "strong alliance partners" pretend to listen. When retail prices get compressed, the software and component makers feel the pain too.

There's a whole tribe of people out there who live this lifestyle. They travel the country with a deck of PowerPoint slides and a collection of $5 Starbucks gift cards. If Johnny Cash were alive, he'd write folks songs about them.

There's a whole tribe of people out there who live this lifestyle. They travel the country with a deck of PowerPoint slides and a collection of $5 Starbucks gift cards. If Johnny Cash were alive, he'd write folks songs about them.

Contrast that with the extravagant, youthful lifestyle to be had at the Google headquarters in Mountain View, Calif. They go to meetings on Hippity Hops. Former Secretary of State Madeleine Albright will speak to Googlers at lunch--and then personally toss a Caesar salad for them in the Google cafeteria. Thursday is Bring your Ocelot to Work Day!

Granted, Google does currently have sales representatives that crisscross the country, but the balance of power is tilted in favor of the search giant. They get to visit Fortune 500 companies, or even small outfits, to inform them how they can optimize their pages for Google's search engine.

The relationship will be reversed for the Androids. They will have to listen to project managers from Pantech (the South Korean handset maker) or SingTel complain about how the Android interface does something funny with the number of nits of light that emerge from the screen, or that the Google/Android badge should be smaller and below their own logo.

At some point, the Google Android will mention that he speaks three languages and got a Ph.D. in molecular biology from Harvard University. Fists will soon fly soon.

Some companies thrive in this environment. Chips based around designs from ARM, the U.K.-based chip designers, sit inside around 98 percent of the phones in the world today. But ARM also bends over backward to placate its customers.

The second big problem is that Microsoft is exceptionally good at corporate diplomacy, as strange as that may sound. Although the company has a reputation for being pushy and demanding, it knows what motivates people and can structure deals in a way that gets others to do its bidding. You can become rich by making us wealthy--that's been the nub of Microsoft's business plan since the beginning.

A CEO at a software company once called the Microsoft contracts "intelligent entanglements" because he, as well as anyone else he knew, never fully figured out all of the implications of the contracts until three weeks after they were signed.

In his case, the company found itself shifting more of its business toward Microsoft to gain lucrative bonuses. In some ways, Bill Gates, an avid card player, is the Otto von Bismarck of his day.

Google might be good at this. Who knows? Android has already signed up an impressive list of partners. The brand has resonance, and what Google has achieved in the past 10 years is truly astounding.

But to date, it's been a solo act.

Biography
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas. He has worked as an attorney, travel writer and sidewalk hawker for a time share resort, among other occupations.

More Perspectives

[cnorth3]

Skeptical

Google is a nightmare in contract negotiations. Their "one-size-<br />fits-all" approach means that they expect a Fortune 500 company <br />to do business with them on the same terms as a 15-year-old <br />blogger. As they expand their product offerings, Google will have <br />to drop their oh-gee-whiz-aren't we-cool naïveté and start acting <br />like grownups.

[Penguinisto]

Not necessarily - here's how they can pull it off:

If they pick the smallest US carrier with the largest coverage for its size (like, say, Cricket), then contract with small but eager manufacturers to make and ship the phones, they could have a pretty solid start. <br /><br />Feed both carrier and manufacturer quite a bit of cash to help them along initially, and use the network as a proving ground for anything coming down the pike. <br /><br />I mentioned Cricket specifically for a reason - no contracts, flat rate fees, fairly decent coverage in quite a number of US cities, and a somewhat known brand. No cell phone contracts would fit in very well with Google's motto of "Do no Evil".<br /><br />If they grow enough this way, then Verizon/ATT/Sprint/T-Mobile will either be forced to modify their practices and play ball, or they may (or may not) begin to feel the pain insofar as their positions in the US mobile market. Of course we can all expect the usual lobbying and instant 'patent' lawsuits, but if it's done right, there may not be anything the big telcos can do about it.<br /><br />Google has the dough. Cricket has somewhat decent coverage, and can use the cash injection to grow substantially. <br /><br />Then again, who knows?<br /><br />/P

[mukindoggy]

Don't be EVIL

As long as they don't plugin ad words to their apps i will be happy. <br />Fantastic article.

[ColdMast]

Google's goal is simple:

imitate the leader<br /><br />Symbian OS<br /><a class="jive-link-external" href="http://en.wikipedia.org/wiki/Symbian_OS" target="_newWindow">http://en.wikipedia.org/wiki/Symbian_OS</a><br /><br />and offer it as an alternative to MS WinCE

[t8]

Actually no

Do better than the leader.<br /><br />E.g., <br /><br />Open Source &#38; API<br />Open platform<br />Free platform<br />Access to web services<br /><br />That is what Android offers and Nokia doesn't.

[jackrambo]

Corporate Tap Dance

Perhaps I missed something, but didn't Google manage to clandestinely spearhead the formation of an impressive alliance between 34 corporate giants, while most of the pundits were holding their breath awaiting nothing more than a Gphone?<br /><br />That accomplishment suggests to me that they've mastered the corporate tap dance...but I'd be surprised if theirs were PowerPoint slides.

[mathiastck]

mobile alliances are plentiful

The Open Handset Alliance seems like a necessary step for Google's take on a Linux/Java phone. However their are a loooooooooooooooooot of similar alliances. Most of those partners are also partners with sun, in J2ME, a competiting product to Android. They also work with Microsoft on Windows Mobile. It's tough to reproduce the success of the RAZR, the Iphone, those individual handsets which spike in salse. Most players just try to deliver on all the major verticals, and they hope for a piece of the pie on the next big thing.

[winstein]

One word: 3DO

3DO was a gaming platform that noone wants to build. It was a good idea on paper for the electronic companies who wants to profit from building the games system but don't want to pay the high cost of license fees to Nintendo or Sega. The focus should be on what the consumers want, not what the platform can do, or how much it costs.

[zboot]

NO - Pushing the limits of technology should trump consumer wants

It makes no sense to kowtow to consumer wants when you can instead push the envelope on what is possible. With the amount of money google is making elsewhere, they can afford the 5-10 years lag between the what the consumer wants now and the consumer figuring out what's best for them later. It never makes sense to me to curtail innovation to make a quick buck.

[gurfrip]

*Can Goolge, Inc grovel?, Better Learn Fast

The company [http://Google, Inc.|http://Google, Inc.] is wholly out of control without ethical compass...<br /><br />Dear MSN Investor:<br /> <br />You would be doing a public service to begin to indicate to Intellectual Property community of Inventors, Programmers, Artists and other Creative Professionals the implications of CEO and Founding Principals involved in [http://the Google, Inc. Intellectual Property Theft Ring|http://the Google, Inc. Intellectual Property Theft Ring].<br /> <br />Stealing from others in not a way to induce share price to increase equity compensation as is the practice of Google, Inc. senior management including Founders Brin and Page. [http://the Google, Inc. Intellectual Property Theft Ring|http://the Google, Inc. Intellectual Property Theft Ring] is now the subject of an infringment lawsuit on their core system by Vinson &#38; Elkins - It appears Dr Brin and Dr. Page 'borrowed' a large [or all] of the system on which Google, Inc. is based. Further that this practice of ("taking without paying, a common RUSSIAN MOB PRACTICE") has become the principal practice behind all of Google, Inc.'s public successes.<br /> <br />I need not remind I am the creator of You Tube, the Gurfrip patent (respected by microsoft infringed on recently by Yahoo widget and iGoogle, inc.) My case has been in the US Justice Department and has been rulled back to lower court by the US Supreme Court.<br /> <br />It is high time the public be duly *WARNED* about Google, Inc.'s misdeeds regarding Intellectual Property Rights and the *organized taking of Intellectual Property Rights* by [http://the Google, Inc. Intellectual Property Theft Ring|http://the Google, Inc. Intellectual Property Theft Ring].<br /> <br />Dr.'s Brin &#38; Page would be well advised to discontinue their ethically ungrounded practices before they damage the entire American System of Intellectual Property Rights through their organized system for theft and conversion of the rights of others to increase their founding principal's and CEO's Compensation (stock sales are well documented).<br /> <br />To leave the public unwarned to these practices is inappropriate at this time.<br /><br />*a good ant*<br /><br />Best regards,<br /> <br />-humility loves company, join me - waters fine.<br />jimmy/JAMES - genius<br />Internet Tycoon<br /><br />James Reginald Harris, Jr., Inventor &#38; CEO<br />GURFRIP SystemZ<br />Global Utility Restructure For Relative Intelligent Process<br />Managing Principal<br />TMCG - The Monte Carlo Group

[joeychips]

gPhone Happy Dance

Thanks for bringing up some good points on the road ahead. I think that people underrate the incredible amount of diplomacy it takes for Microsoft to negotiate having their OS in so much hardware. I know a few executives at Microsoft and they really are incredibly bright, fair and tactful workers. Have a look at an image of the lighter side of Android at <a class="jive-link-external" href="http://joechiappetta.blogspot.com/2007/11/gphone-first-look.html" target="_newWindow">http://joechiappetta.blogspot.com/2007/11/gphone-first-look.html</a>

[The_Decider]

Google

The Achilles heel is that Google is evil. They think they own everything and everyone.<br /><br />Really, who wants Google monitoring your phone calls so it can give you ads?<br /><br />Sooner or later, the shortsighted people who use GMail and the other assorted Google branded spyware are going to regret it.

[t8]

Actually no

The day that Google use their customers data to the detriment of their customers is the day that Google lose their customers.<br /><br />I actually do not think Google is that stupid, but I do think Microsoft is that stupid.<br /><br />What gain is it to them to steal or snoop on some info and lose their whole business in the process.<br /><br />Not worth the risk. They have too much to lose by doing evil.<br /><br />Whereas Microsoft's money comes from Windows and Office, so they have much less to lose by being evil with your data.<br /><br />Whether you like it or not, the future is wireless and mobile accessing online services and data.<br /><br />Clunky hard drives are so 20th century anyway.

[disco-legend-zeke]

GOOGLE has the right model.

If the carriers get too greedy, GOOGLE can bypass them entirely.<br /><br />Although its foolish to auction off the public's bandwidth, at least one of the bidders, GOOGLE, understands an open platform...<br /><br />Carriers that cooperate will get a smaller slice of their pie, and watch the pie grow geometrically<br /><br />Those that hoard their cherries will see the pie crumble away as open platform devices start replacing single purpose devices that work ONLY on their network.. <br /><br />The "cell phone" has seen its day, the high end user is gonna carry a mini laptop, pocket sized only if you buy clothes with media pockets. The voice communications subset is just a tiny wireless earset.<br /><br />Once Wi-Fi becones ubiqutous, vonage handsets will suffice for most of the population.<br /><br />The rest will be looking for the hottest feature set... something GOOGLE should have no trouble providing.

[jrm125]

here's the thing

While I agree innovation should trump making money (that's certainly the ideal) unfortunately this isn't proper business sense. Companies are in it for the money, not to push the limits of what humanity can achieve. Sad truth.

[Quemannn]

Upstream Initiative

Nokia seems to take an upstream initiative in a bid to secure a pre-emptive position in mobile platform wars. Nokia's upstream initiative goes ahead of mobile carriers and handset makers 'cause Navteq is in their hand with their objective firmly set on LDS(Location-Based Services)and cross-platform. This upstream initiative seems impressive.