Yesterday we wrote about the soon to launch Google Phone, a Google branded Android phone that we believe will hit the market in early 2010.
Lots of people are saying there’s no way Google will enter the phone market directly and compete with all these handset manufacturers who have bet on Android. Daring Fireball, PC World and IntoMobile are among the doubters. And a lot of people are pointing to a Tom Krazit/CNET article last month that quoted Google’s Andy Rubin: “We’re not making hardware…We’re enabling other people to build hardware,” and “Rubin, vice president of engineering for Android at Google, scoffed at the notion that the company would “compete with its customers” by releasing its own phone.”
Normally I’d just point to the fact that many companies deny the existence of products until the day they announce them. Apple scoffed at the notion that they’d ever build a phone until they announced the iPhone, for example. The last thing Google wants is a lot of confusion among handset manufacturers just when those manufacturers are putting the finishing touches on their own Android phones.
But there may be another way Google will argue that they aren’t “competing with customers” by launching their own device – technically, it may not be a phone.
The Google Phone may be a data only, VoIP driven device. And Google may be lining up at least AT&T to provide those data services for the Google Phone, says one person we spoke with today.
Users could still make calls just like a normal phone, of course. The calls would just be over the data service instead. In fact, this is the exact vision Google proposed back in 2007 when they were bidding on the FCC auctions for the 700MHz spectrum.
Google can even issue phone numbers to users via Google Voice. In fact, I’ve already ported my mobile number to Google Voice, and Google has plans to roll out that feature more broadly. Google Voice can also handle the VoIP function for the phone.
Are AT&T and the other carriers interested? Our source says AT&T is already bidding for the business, and may be willing to sell data to Google, with certain conditions, for $20/month. The carriers won’t love this, at all. But they’d be dumb to let their competitors take the business instead. Our guess is at least the U.S. GSM carriers, TMobile and AT&T, would support the phone.
Our sources at AT&T have confirmed that they’ll sell data-only plans to customers who bring in BlackBerry and Windows devices, and strip out the voice plan. They won’t do this with all devices – you can’t get a data only plan on the iPhone, for example. But AT&T is open to data-only customer relationships.
Will the Google Phone be data/VoIP only? Right now we only have one thin source for this. But we’re continuing to dig.
Who will control ‘net neutrality’ here.
Google. They’re getting very close to the point where, in terms of strategy if not hard cash, they’ve beaten Microsoft. I’ve spoken to MS insiders who are deeply worried about it – and the rest of us should have a think about it too, for the reason you highlighted. Google are about to be in a position where they control a vast tract of Internet infrastructure at the point of access. Search, advertising, analytics, mobile web: all theirs.
Of course, this is because they’ve produced some of the best apps and infrastructure out there. Companies like Microsoft were asleep at the wheel. But it remains to be seen how their strategy transpires; will the consumer be better off once this all plays out, or will we be left with another uber-corporation dictating our computing experience?
The ball is in their court. Now who will come first, consumers or shareholders???
Hi,
Learn from the master:
“Everyone hates a monopoly, until they own one”
The webtards and the mainstream media ignorants have bought into the “Don’t be evil” spin, and let it go completely un-challenged at least until a few years ago.
Every new google product hyped ad nauseam across the world to maximise mind-share as if Google was a benevolent not-for-profit at the cost of actual news, information and competitive plurality.
The developer community have acquiesced t the point where google thinks it can now release its own operating system and programming language.
Google has played the magician – while everyone was still pointing at the old incumbants, who had to play things more traditionally and everyone was dogmatically paranoid about them, it’s got govt.’s to change policies, and directed the whole internets thinking.
Now those final foundations are being put in place, between the OS, The cloud and Mobile, welcome to your Google Skynet (worse than Murdoch) future.
Yours kindly,
Shakir Razak
P.s.
If the current Android manufacturers haven’t got the brain-cells to figure out how things will develop, then they might well deserve all they get, but what do people think will happen when search does hit organic-growth maturity, and the company is already ensconced in the digital eco-system of our lives, and it never truly really cared for its partners interests in the first place, where will it get further growth from?
…and yet they make, what, 97% of their revenue from ads? How in the world has somebody not gone after this achilles heel yet?
It’s amusing to see competitors get distracted and try to match Google app-for-app and service-for-service.
Follow the money. Slice that fat bastard up.
Um… and how to you go after their ad business?
I have discovered a marvelous proof of how to destroy Google’s ad business, but unfortunately this comment is too small to contain it.
heh +1
1. Form an alliance of the 20% of publishers who produce 80% of page views generated by their content.
2. Get this alliance to take their content off Google.
3. Get paid for access to this content by competing search engines who’ll have the content.
What? As if it’s impossible? Why try? Just give up?
Are you French?
For starters, collusion. Any competitor could get away with some dirty pool while Google maintains their monopoly.
MSFT could pull something like they do with cash-back on search, but with advertisers. They have deep enough pockets to pull it off. It would have been better to start earlier when Google’s wallet was a little lighter though. I think this might be similar to what Easy (below) is driving at…
But maybe it’s less about going after their ad business as much as it is attempting to make it more and more of a commodity to decrease the rate of return and make it less and less profitable.
I think one of the keys to Google’s success is that they’ve chosen to compete with Microsoft in an area where MS has had a long standing monopoly. Google has used their web apps and developer community to attack MS on two fronts:
MS’s non standardization of Internet Explorer, and the Office Suite
MS isn’t even close to hurting Google’s own monopoly cash cow. The think about Google’s “monopoly” though, is that although search has extremely high barriers of entry, customers can easily switch from one product to the next. MS has always depended on vendor lock-in to maintain their customers, whether the company realized it or not.
I think Google’s strategy with their own web apps is that customers with the ability to quickly abandon your product will give you the most accurate feedback about your product’s capabilities and its weak points.
Now they are going to have a whole other class of devices to act as platforms for web apps. Because they make the best web apps, they will benefit.
Largest google products (other than ads) are still Search, Email, and Maps. Non of which were ever *really* owned by microsoft.
In your exuberance, I think you miss the other side of the coin. While “MS isn’t even close to hurting Google’s own monopoly cash cow,” The same is true the other way around, and Google isn’t even close to hurting Microsoft’s own monopoly cash cow either. Google can make all the spreadsheet, word processor, and mail web apps they want, I have yet to see the single bit of evidence any of that is actually hurting Microsoft’s sales of Windows or Office.
In reality, neither company is competing with the other in any appreciative way on either of their core businesses, except in their minds. Microsoft’s idea that Bing is going to unseat Google is no more Quixotic than Google’s idea that a Chrome OS is somehow going to pose a huge threat to Windows. Sure, Android looks set to slaughter Windows Mobile, but neither company actually makes any of their profits off of either of those OSs.
It is great for us consumers that they loath each other, and are working hard to compete and poach each other’s talent, but in reality, they probably would have a lot more to gain by working together than they do in this pitched battle to chew around the periphery of each other’s markets.
Android isn’t there to make money. It’s there to ensure Google can get its apps like Maps for Navigation on to handsets with access to the networks. Google’s business is selling advertising, and everything else is merely a means to that end: http://www.reviewsreviewed.co.uk/index.php/mobileblog/Network-operators-beware.-Google-will-eat-your-lunch.html
Consequently I very much doubt that Google will sell their “own-brand” handset. However this could be a reader of some description with VoIP abilities, hence the purchase of Gizmo5(?), and perhaps available on Clearwire?
Good post.
I would especially like to compliment you for not saying ‘they are going to have a whole “NOTHER” class’ as we all know that “nother” is not a word.
This would be uber cool. Like the Skype phone (http://www.skype.com/intl/en/allfeatures/3skypephone/) but more functionality.
Yeah, but is this going to suffer from the limited service area problem? I don’t believe VOIP can work effectively over EDGE, as such, if they go with ATT you had better not travel out of dense urban areas very often.
I would be excited if this was with Verizon. Even if it isn’t, I might be persuaded to do this if it is really only $20 a month. For that amount I could get a backup pay as you go phone and forward my google voice calls to it when I travel to see my parents in rural Tucson.
That was $20/mo to Google, not to the end user. Figure on something more like the $60/mo that’s currently standard for 5GB data-only plans, perhaps a bit less if Google wants to play shark.
Doing voice over a wireless packet-switched network is not efficient, even for modern well-built-out 3G networks like those of the operator ‘3′ in Europe.
Case-in-point, the Skypephone uses circuit-switching (ie. a regular phone call) to handle the ‘last mile’ from a Skype-enabled server to the phone.
Mike, you’re usually right but I think this one is off.
A VOIP phone suits Google’s model the best. Data only services are the future of mobile networks. If Google leaves the adoption of such phones to the mercy of phone manufacturers or network operators, that day may never come. Networks refuse to become just dumbpipes for data. Google is not entering hardware business nor are they competing with phone manufactuters. As Rubin said they are just enabling them to make hardware – in this case a VOIP only phone. Just as they worked closely (& secretly) with HTC & Motorola now they are working with someother partner for this device.
Not sure why VOIP couldn’t work well over EDGE. When some friends were living in Palau for a year, I would regularly have audio Skype chats with them, and they were on a dial-up connection. It worked fine.
Probably because of Gphone, Google is participating in 3g spectrum bid in india: http://www.pluggd.in/google-to-participate-in-india-wimax-3g-auction-297/
I agree. A direct competitor to Skype would the smart way to go. Google Voice hasn’t reached its full potential, being able to place calls out from within the service on wireless (WiFi, Bluetooth & etc.) phone would be more attractive to more customers.
And why would at&t let high end devices with super low ARPU ($20??) onto their network if they do the same or more than their $119+ plans (unlimited calling and SMS)?
Makes no sense whatsoever, especially considering how their data network already can’t handle their high ARPU customers.
Quick correction Mike: It’s IntoMobile, not InfoMobile
apologies. fixed.
I’m all for a phone like this from Google as long as it’s NOT on AT&T’s data network. AT&T can’t keep up with the current data demands of their existing customers. I can’t imagine adding more, data intense devices to an already overloaded system.
Thank you. I think this was the obvious question. You think that Google would have learned from Apple and considered a stronger network. I thought Google and Verizon were working closely?
Voice calls use the same bandwidth as data. Less voice calls + more data calls = net data difference of ZERO.
That’s not quite true. You not only have the digitized voice payload but also an address on every packet. The real problem though is the airlink. The protocols currently in use, be it UMTS (AT&T) or EVDO (Verizon&SPRINT) were designed specifically for high speed throughput. You have to give up something to get something and in this case the trade off is reliability. While the pure data user doesn’t care about momentary stops and starts, the occasional latency etc., it is very annoying and will not be tolerated by voice users. Regardless of what Google has planned, IMO it won’t be a workable reality until LTE is a reality.
Wow that would be the coolest things ever. I am a strong believer that cell phones are not for talking anymore.
the mobile web in everybodies pocket combined with location based technology cell phones are “locator devices” more than anything else.
technically i consider a mobile device with voip connectivity a phone.
Wow. The bottleneck in smartphones and mobile Internet at the moment does seem to be the carriers – this would be a very bold move, and sends a “we don’t need you” message to the phone companies. There’s also a very compelling customer argument in there: would Google-to-Google VOIP calls be free?
But at the same time, I’m getting more and more worried about Google owning the ranch. The Internet needs to be free and open; I would be much more comfortable with some kind of open, decentralised VOIP network that any handset manufacturer / software vendor / network could join into. That would certainly be the best thing for the Internet and for consumers in the long run; of course, it might not be for Google’s shareholders.
I have Google voice. It is free to call any us phone number (calling minutes is used). Even calling Canada is free (uses minutes). Calling international is charged but a whole cheaper than standard.
But the product described here is completely diff. It uses only data.
You know that google would put android on these devices, don’t you? That means that you can run whatever voip software and service that you like. There’s a nice one called SIPDROID that lets you, RIGHT NOW, do exactly what is being suggested — kill the phone plan and run all your calls (using a 3rd party SIP provider) over data.
Mike,
Any idea when google is going to let people other than cool bloggers port their number? I am really exited about the idea of porting my number.
Thanks.
I’m not a cool blogger and I’ve ported my number. It asked me if I wanted to when I signed up a couple months ago.
None of the people I know with Google Voice accounts, myself included, were given that option. Google certainly takes the official line that it is a feature they want to provide in the future, but not one they currently provide.
I think you just got lucky and signed up while they were doing a limited test of the feature.
http://googleblog.blogspot.com/2009/10/use-google-voice-with-your-existing.html
I think it is pretty widespread. Then again, I had GrandCentral for a while before Google Voice.
This is an absolute DEFINITE.
Google sees the market share that Apple has (and is in the process of squandering), and can clearly do better.
Google Voice shows functionality and the demand for it is there.
Android shows that a mobile OS can be legit.
Why not get into the hardware sector, combine every component above, and run the table?
Google mobile device, pulling from the cloud, using white space bandwidth for data, or if possible, WiFi to do true VOIP over Google Voice.
All the pieces are there, just a matter of when.
White space! Just what I was thinking.
I was thinking white space, too. It’s the only thing that really makes sense given what I’d have to think is complete reluctance on the part of carriers let alone the carriers’ own limitations.
People do seem to have forgotten that they got approved devices for white space through the FCC.
However, this also leads me to believe that it will be some sort of specialized phone like VOIP rather than what we think of a cell phone today. But would the recent purchase of Gizmo5 offer enough time to launch in early 2010? I mean, c’mon. That would be immensely fast in the world of take-overs and mergers. Aside from which, Google is notorious for years of beta.
No way! First you would need to launch white space cellular network in several markets (and not long thereafter, nationwide) before launching any devices. Also, the technology needs to be standarized. If only to make the networks and devices interoperable. And then you need to create tha ASICs for the devices. This process takes years!
No way that anyone is doing a huge launch of a white space commercial consumer device in the next year or two!
Either they launch it on 3G (WCDMA if they want to go world wide) now or if they are really bold, they wait a little and launch it as one if the first LTE-devices out there.
This is odd considering spotty AT&T 3G coverage. I VOIP over 2G is not really practical.
Sure it is… as long as you use a decent audio encoding to keep the bandwidth at something sensible… i.e. G729
Thats Where Cisco Exp In Streaming Data Wifi Video Come In Thay Put The You In Youtube
I hope they do not tie this to AT&T. That is the primary reason I did not get an iPhone. I wish these companies would stop being small minded about trying to force the new economy into the old fixtures. Just sell the phone and let me decide who I want to use as a provider.
Knowing Google, I doubt that they’ll tie it to any particular carrier. They’ll probably allow many carriers to serve the phone.
I, for one, welcome our new Google overlords.
+1
Only for a little while
Sometimes it’s weird..
http://voipbusiness28.blogspot.com/
if they released a data only device (text/web/mail), i’d just drop my phone account in a minute and install skype on it.
half of my monthly iphone cost is for the lowest available minute plan for 450 minutes. on average per month i use 30-45. no thank you att.
Arrington,
Will the Google phone also use some sort of Mesh networking?
That would be absolutely awesome if the devices could mesh in a way to only use multiple wifi spots. Unfortunately, I can see a lot of people not wanting to share “My Internet” with “That guy”, who wants to make a call.
That’s quite a logical move from Google.
However, if you look at the bigger picture, you will realize that it has been expected for a while, from Skype getting freedom in order to gain competitiveness against Skype, Free getting into the 3G market in France, and so on and so on…
I wrote a piece about it a few weeks ago, do you agree with it? http://bit.ly/orqZG
squish, crunch, splat
This sounds like EXACTLY what I’ve been wanting. I want to lose my home phone and port my number to Google Voice. Then I want to carry around one single smart phone, preferably Android. I have super lousy cell phone reception at my home on all carriers, and I have no desire to reward them for that with a nice fat $100 a month contract. I would be interested in a hotspot@home wifi/femtocell thing like T-Mobile offers – but none of their good phones works with it! So get one pure data smartphone that works over WiFi or a cell data connection. Now that would actually be a fair transaction for $30 a month.
Look, cell phone service is great and all that, but way overpriced, and the contracts are byzantine and onerous and very much anti-consumer. Google is probably the only force with enough heft to bring about a more equitable and reasonable mobile phone/data marketplace.
In 2007, February, two skinny guys from Google appeared in the France Telecom R&D lab in South San Francisco, with a phone mock-up.
I was not in the meeting. Nothing happened. they must have found out the SSFO FT Lab is for software and enterprise R&D (and nothingware, one level below vaporware, and follow-ware, where the labs engineers work on things that are already well underway in other, faster, smarter companies) and the FT Boston, Lyon and New York labs are where Telecom hardware business is conducted.
I knew signing away for the 2 year contract to get the DROID was a bad idea.
4 Words: Thirty day trial period!
Nah, I think that as great as Google’s products are, they are always in a “perpetual beta” status. And for something as important as phone service, it’s better some other tech geek is the guinea pig to sort out the details.
It’s like comparing Android 1.0 to Android 2.0. A year makes a HUGE difference. You couldn’t even conceive of a phone like the Droid last year.
That’s a great point, Jeff. I do love my Droid. I don’t love being locked into a contract. Something’s gotta give, eventually! When it does – I want to be on board to support the movement.
Now that I read about it seems kinda obvious, huh?
It’s just a matter of time until all players ditch voice calls so who better to lead the pack than Google?
This is what I want but I DO NOT see it happening soon, especially with AT&T. Wasn’t it a month or two ago their public squabble with Google to the FCC over Google Voice?
The revolution I was hoping for 2 years ago with Apple didn’t happen, releasing hardware sim free and downward pressure on smartphone prices (without contract). And I will gladly switch to Android if they pull that off on data only prices (<$30/month).
A communication device with Google Voice and Google Wave built in would be more futuristic than thou.
I’m testing Google Wave now, and although it is buggy, but the potential is enormous. With Google Wave’s real-time typing and video chat, the mythical Google Phone is Hollywood sci-fi coming true.
until it can fry my egg sunny-side down, i’m not sold
Sign me in, I would buy it in a second.
Why don’t they take it a step farther and get into the ISP business, can you imagine 8mb/sec free ad-based internet? That would shake the whole industry to its foundation.
Agree, one link in the chain is to reduce the cost of getting internet service itself. Telecommunications companies and other IT companies are dinosaurs waiting to die off. Crunch, squish, splat.
This is great news. As an iPhone user I cannot wait to shed the shackes that bind me to that device. The iphone is beautiful for sure and I love it because it is the best device out there right now. But I find the walled garden that Steve Jobs wants me to live in a bit confining.
I use Fring in conjunction with Gizmo5 and Google Voice. I have removed the Sim card from the iPhone and have cancelled my AT&T cellular account. I use a Mi-Fi from Verizon to give me wi-fi access where ever I am. I have constructed a truly world phone.
The only problem is that Apple decreed that the iPhone OS will not allow multitasking. Apparently someone at Apple decided that we little simpletons cannot be entrusted with the awesome responsibility of determining for ourselves when we have too many apps open, thus depleting the phone battery faster.
What an arrogant attitude from Apple. If they would allow multitasking I could keep Fring open all the time and this would allow me to have the perfect phone. Right now, I keep Fring open most of the time in order to receive and make calls and must relinquish phone functionality if I want to do any other tasks.
This is why the future belongs to Android. Multitasking is a must. I am so looking forward to the Google phone, it’s embarassing. In my opinion there is not a shred of doubt that there will be a Google phone and it will be data only. This is why Google bought Gizmo5 the other day. The pieces of the puzzle are coming together nicely.
You can use Backgrounder to keep Fring open all the time…
i thought if you jailbreak the phone you can do all that too, atleast that is what an iphone loving friend of mine said he did.
I can tell y’all right now that sight unseen…..S O L D ! !
Really?! AT&T… REALLY?!
That’s as far as i got in the article….makes a ton of sense, lets build a data only device and put it on a crippled network only to have massive consumer backlash. My iPhone is now a doorstop (seriously) and haven’t looked back since picking up an Android phone and switching networks. If they’re seriously considering a DATA based phone on AT&T its going to be massive fail right out of the gate.
I was wondering if this could be the direction of the Google Phone. However, I am very skeptical that they will get any of the cellular providers to allow a data only plan for the Google Phone to utilize. This seems like a great idea once Google gets WiFi everywhere, but that certainly won’t be happening by early next year.
This would be super awesome but I don’t see any of the US carriers jumping on board. The voice plan is more than 50% of their revenue – why would they let you use a phone on their network that had VoIP and lose such a big chunk of money? I just don’ see it happening. If there’s one constant in life, it’s that telco companies are greedy mother fuckers.
T-Mobile and AT&T both offer data-only plans right now. Why would they refuse to offer a product they already do?
Yes, but what will likely happen is this;
They will force you to pay DOUBLE for the data-only plan, making up the difference.
This change is inevitable. What this process allows is for it to be done while leaving the telcos in a position of still retaining a little control.
This actually makes more sense and would be less likely to upset their competitors and would dramtically increase the possible market for Google Voice.
But are people still willing to give up so much for a data only limited device and it won’t likely be allowed by the FTC as it can’t make emergency calls on the more reliable voice networks when required.
AT&T want more data, they can’t even cope with what they have atm with iPhone but they want it all, this one seems doomed to fail!
There is no reason that a VOIP phone can’t utilize the e911 system in the United States. With a GPS in the unit Google could setup their service to get an exact location and pass that along to 911 and also use that to determine which area the 911 call should be placed to.
I believe you are correct thought that if the Google phone is unable to make 911 calls I doubt it will get approval from the FCC, nor will it get approval from myself. I want any phone in my possession to be able to be utilized easily by anyone to call 911.
Doesn’t use any more data. Less voice calls = more bandwidth available to be used by data calls.
No emergency calls? What kind of drugs are you on?
Voice networks more reliable? Maybe if your data device is a BLACKBERRY, but that isn’t what we’re talking about.
I would be interested to know how such VoIP plan would work abroad (roaming). Usually, roaming voice is cheaper than roaming data…
I want a VoIP mobile, but I still want a “decent” roaming plan. I known there no such thing as decent roaming plan, it looks more like plain robbery, but at least I don’t want it to be worst than what it is already!
One of my biggest interrogation would be about sound quality. I know that you can have an amazing voice quality over IP (e.g. Skype). But on a spotty IP network (3G) like AT&T, how is it going to translate ? I hope it will improve compare to the current quality we have for voice on AT&T network. It is amazing how we got tolerant to bad sound quality with mobile phone. Can’t wait to see the quality of sound being used by marketing. It is 21st century, and quality is worst than our old land lines.
Also, hopefully, the emergency numbers (e.g. 911) wont be a brake to the deployment of such VoIP solution.