Open Handset Alliance: Google Gets Serious About Mobile - InformationWeek

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04:29 PM
J. Gerry Purdy
J. Gerry Purdy

Open Handset Alliance: Google Gets Serious About Mobile

You really have to admire Andy Rubin, Director of Mobile Platforms at Google. He's worked at Apple then General Magic then WebTV and most recently founded Danger.

You really have to admire Andy Rubin, Director of Mobile Platforms at Google. He's worked at Apple then General Magic then WebTV and most recently founded Danger.Each of Andy's career moves involved developing software that was ahead of what users were experiencing at that time. I remember how I loved MagicCap, the OS behind the General Magic platform. It included real-world graphics of an office desktop, allowed for auto updating of contacts between users and, via TeleScript, a way to communicate over networks to get loads of data using devices that embedded the platform. Then, the Internet became a craze over night, and TeleScript and MagicCap were replaced by the browser and open Internet Protocol. Over night, General Magic had the rug pulled out from under them.

At Danger, Andy took the lessons learned about the Internet and built an entire mobile experience assuming the Internet and wireless communications were sitting underneath it. The Sidekick has been sold by T-Mobile for a number of years and provides the youth segment (16-25 years old) with a friendly but totally closed system. Devices are made by Sharp but the software, while working well, is totally managed by Danger. There are only a few partners that are working directly under the covers with Danger. Growth was limited because the platform didn't encouraged third parties to easily and openly add applications.

So, Andy learns more: you need to create a wonderful platform on top of wireless networks and provide easy access to the Internet but you also need to make the platform completely open so that any software developer can create an application that will work on any device built using the platform. Andy loves robots so he gets to work building the new, open platform called Android.

Google acquires Android and knows how to build advertising into the Internet search experience and wants to monetize the mobile world as well. But, in order to bring Android to market, Google had to form an industry alliance that would allow others to make devices and just about any software developer to build applications on top of Android. This way Google's mighty monetization engine could drive value out of millions of users on Android-powered cell phones.

Traditional wireless networks have been 'walled gardens' for years. Some like T-Mobile have been more aggressive in opening up access to their network so that anyone could write an application that would run on that network, while other carriers have not.

Fast forward a couple of years and Android is taking final form and is ready to have partners begin developing software for this new mobile platform. Google announced on Monday the highlights of Android and 34 initial partners of the Open Handset Alliance (OHA) that will build devices and applications based on Android.

This is very similar to the Microsoft model except for one big difference: Microsoft gets their revenue from licensing their platforms to handset makers whereas Google gets its revenue from advertising on Android-based devices.

Google will give away Android but make recurring revenue from an open ecosystem in which advertising drives revenues.

Thus, in one broad stroke, Google becomes a major player in the mobile and wireless industry even though it's around a year away from the first product coming to market. Google's Android is not, however, without major challenges including:

• How good will the user experience be on Android? • Will hardware partners be able to make cool devices? • Will there be enough users to monetize advertising? • How will the pieces all fit together? • Will the devices run on Verizon and AT&T even if they are not members of the OHA?

I expect GPS will be installed on all devices since SiRF is one of the founding members of OHA. That's very important because it means that location based advertising will be implemented from the beginning thus making advertising more relevant to those advertising. For example, if I search for ATMs and the system knows my exact location, the system can provide the names of the ATMs nearest to where I'm located.

Another major factor is the upcoming 700MHz auction. If Google bids with T-Mobile (an OHA member), then they will have a nationwide network in which they can offer very attractive (free?) cell phone services and make money via advertising.

I don't think the entire story is out there yet. I'm cautiously optimistic but there's still a lot that must happen for this to be successful. Does it negatively affect Apple? Apple isn't going to give up their iPhone OS to run Android, but it might accelerate Apple to open up their platform so that more software, services and even handset partners come to market. Thus, there's no reason Apple couldn't team with Yahoo to create a similar open ecosystem.

One thing you can count on: the OHA is real and will definitely affect the mobile and wireless industry for many years to come. It's a bit like being told that your entire family has decided to pitch in and buy you a wonderful Christmas present for next year. It's a long wait, but you have positive anticipation.

Kudos to Google and the initial members of the OHA. Bring us great devices, user experiences and attractively priced services and users will come. This raises the bar for the industry again just as Apple did with the iPhone earlier this year.

Gerry Purdy is VP & Chief Analyst, Mobile & Wireless Communications, for Frost & Sullivan. He is a guest blogger with Over The Air.

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