Each Time I See Google's Android Pitch I Like It Less and Less

by: Dean Bubley November 24, 2008 | about stocks: AAPL / DT / GOOG / T    

Dean Bubley

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I've seen various pitches from Google (GOOG) about mobile. In particular, I've seen several Android presentations over the last year. Each one looks less convincing than the last. I've just been watching Rich Miner speaking at the Open Mobile Summit, and although the developer story looks fairly well-articulated, I just think that some of the wider back-story about mobile looks tired, and the assumptions and world-view seem too simplistic.

One slide seemed to suggest that hardware cost as a % of handset bill-of-materials is falling, making the software cost more important as a way of driving down overall costs. Really? That was the prevailing thinking four years ago, but since then we've entered a world of QWERTY keypads, 480x800 touch screens, 16GB of memory, 8MP cameras and multiple radios.

Another slide trotted out the usual tired array of irrelevant statistics about 3bn mobile users vs 1bn PCs, and the stereotypical myth about people in developing markets only accessing the Internet on a phone.

It's possible that Google really does know how the industry works (Google Maps on mobile is fantastic, after all), but for some reason has not updated its messaging, and tries to paint too primitive a picture for reasons best known to its communications department.

Having played with the T-Mobile (Unit of German telecommunications provider Deutsche Telekom AG (DT)) G1 a bit, and canvassed opinion from a few knowledgeable users, it seems to be what I'd class as a 7-out-10 device. Not bad, but nothing like the leap forward of the Apple (AAPL) iPhone. A bit clunky, and although the network speed was impressive on HSUPA, I felt the user experience was quite frustrating and counter-intuitive. And certainly not what you'd call a sexy device - sitting in a bar playing with it a few days after launch, there certainly wasn't anyone coming over and going "Oh wow, is that the new Google phone? Can I see it?"

It will also be interesting to see how it fares for T-Mo and other operators in terms of support costs, because of the branding and lack of direct consumer support from Google. One theme coming out of this conference has been the worry among U.S. market players that they will end up wearing the costs of supporting users, when they download random applications to their phones and they don't work. (Or even if the built-in functions are poorly performing).

Yesterday, an AT&T (T) representative said that they'd not experienced people calling their customer support hotlines about iPhone software questions - because it was clear to users that the software (and AppStore) was Apple's. But Rich Miner essentially took the opposite stance, and said that any problems with Android phones or user experience fall to the carrier or OEM to fix.

It will be interesting to see the relative costs - AT&T (T) subsidy on iPhone, vs T-Mobile support costs on the G1.

Disclosure: None

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This article has 7 comments:

  •  
    Nov 24 07:59 AM
    Good article. Very interesting and practical for people like me who like to invest in tech and mobile communications but who are not steeped in background or technical knowledge.

    Android may turn out to be a reasonable platform because of the developer advantages, but my perception of Google is that they are too self-satisfied with the profit gusher from search/advertising to make this really what it could be. Some of their apps will be fantastic and creative, but the whole will be less than the sum of the parts. And, like you alluded, unless they get world-class design help in making a really neat device, their Taiwanese partner engineers will just keep cranking out one brick after another. No one except a techie will even know that it's a Google phone and not the free (with contract) Kyocera from the Phone Pagoda at the mall.

    Thanks again.
    Reply | Link to Comment
  •  
    Nov 24 09:26 AM
    the real cost of the phone is the network access(infrastructure)... the software is marginal to that. Looks for changes in network technologies or topologies to shift what is actually a shrinking and rapidly commodified business. A good software radio, open roaming protocols eventually rolled out on a localized basis, Wimax etc. could radically shift the cost structure. bits is bits. A more interesting wireless play is Google's move O3B. A Bigger human impact than android potentially.
    Reply | Link to Comment
  •  
    Nov 24 10:23 AM
    A lot of PC nimrods thought Google's phone would play out against Apple's original product the same way MS stole Apple's Mac OS bacon.

    There are some problems with this though. First of all, the Google phone is not a product any normal person would want. That is a big problem. Secondly, it is APPLE that has the reputation as being a great computer manufacturer, not Google. Google is respected, but this is not going to carry into the device arena. People are not so stupid as to be able to look at the two devices and see which one is clearly better--the iPhone.

    Microsoft took much of the GUI computer market (which quickly became the entire market) because they had firstly the IBM name to stand behind, and from that point on, they had more development.

    Finally, Apple is light years ahead of the Google-phone in terms of the availability of software.
    Reply | Link to Comment
  •  
    Nov 24 10:56 AM
    Google is behaving precisely like a software company. Google (and Symbian) makes the software as a set of libraries, customers (handset builders) take the software and use them on their handsets. Just like we would buy Windows and install it on our box at home.

    Can this work out great in the future? Definitely, if Google continues to innovate and improve just like Apple, Microsoft, IBM, HP all improve and ship new operating systems over time. OF course, the handset makers must continue to improve their offering as well.

    Google then is doing what Microsoft did on OS by being the handset OS supplier. Google tries to use the "cheaper" model Microsoft utilizes and also tries the "platform-indepen... approach so that ANdroid is cheap and can theoretically go on any handset. All the problems and rewards associated with shipping an OS on a computer will occur similarly on shipping an OS dedicated to a handset.

    Does it mean that Andriod is the next DOS? A Mac OS "market killer"? No, not this time. Does it mean that Android handsets will be the next cheap "PC"? A Mac "market killer"? No, not this time; not with the iPhone.

    This time, Apple has the AppStore so that developers by the thousands can easily and quickly develop software for the iPhone. It is still unclear how I can develop an application for Andriod and sell my effort easily.

    This time, the Apple touch technology is being patented heavily so, unlike Gates' Microsoft, Google cannot just "lift" or "steal" the interface. There is no complete repeat of the "Windows" fiasco that resulted in an Apple law suit against MSFT and eventually settled when MSFT paid Apple.

    This time, there is no hordes of first-time PC business users buying cheap boxes rushing to Android, they are already heavily seduced by the dominant RIMM before iPhone arrived. This time, iPhone and Android-based sets are relatively new kids on the block. This time, Apple is rapidly setting up to support business environment by supporting Exchange. Business users, except for their dislike for ATT, have fewer reasons to resist iPhone except for their IT's inability to adapt quickly. IT tends to value stability over innovative improvements.

    The scenario this time around is very different for AAPL. We are witnessing the beginning of the mobile computing revolution started by the iPhone. Nokia has yet to respond, RIMM just now responding, Android is a new player and Palm is cutting head-counts. It is still early to pronounce winners or dominant players. If anything, RIMM and Nokia are still dominant until their numbers drop.

    I just want to toss this out there for those who may not know AAPL history and have not been involved in developing, shipping and marketing and supporting OS and its associated products.
    Reply | Link to Comment
  •  
    Nov 24 12:51 PM
    i work with a lot of teens and they ALL hope they get either the iPhone or Touch for the holidays. no matter where i go, people want to see my iPhone. nothing, so far, really matches the iPhone and i'm sure Apple is working hard to make sure it stays that way...it's not like they're not going to innovate anymore.
    and it's an interesting observation about the AT & T stores...i hadn't thought about it..but any place with an Apple store will get walkins with questions about the iphone people have already purchased...leading to more purchases, and AT & T won't have to deal with it.
    Reply | Link to Comment
  •  
    Nov 25 02:04 AM
    Does Google even have a Customer Service department? I use Grandcentral, which was bought by Google, and there's no way to contact Google if you have a problem. Their forums are virtually useless, and unmonitored. I couldn't update the list of phones I wanted my GC number to call for a week.

    On Google's finance forums, the level of spam is horrific. Try searching for some of Sumer's posts. They are vile, and yet, Google keeps letting this person post. I understand 1st Amendment rights, but this person is seriously deranged. Is anyone monitoring Google's finance forums?

    Gmail goes offline every once in a while, with little comment from Google.

    Does the fact that everything they release is "beta" give them carte blanche to not provide any customer support?

    If they take this hands-off approach to Android apps, they are going to have a big problem.
    Reply | Link to Comment
  •  
    Dec 01 11:38 PM
    Google is going to need another network other than T-mobile if they are serious about entering this market....
    Reply | Link to Comment
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