The cat’s out of the bag. Google is creating an operating system for mobile phones, according to mainstream news media. A phone OS would make sense for the search & paid advertising giant (after all Google is a software company), but it doesn’t make sense for Google to branch out into making phones, right ? Wrong – and there’s three good reasons for a Google phone.
Beyond the gossip and rumours, details on Google’s mobile phone OS has hit the mainstream media. According to the NY times:
“In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows Mobile from Microsoft and other operating systems, which are built into phones sold by many manufacturers. And unlike Microsoft, Google is not expected to charge phone makers a licensing fee for the software.”
So why would it make sense for the Google software company to branch out into making actual phones ? There are three good reasons:
1. To seed the market Google needs to scale its mobile platform if it is to have any relevance to advertisers. Google can do that by seeding the market with its own phone, hoping that others will follow.
2. To create a reference platform Google creates a commercial proof-of-concept phone that is robust and cheap enough to produce, so that it forms an enticing proposition for any ODM (or even OEM) who wants to use the Google software and service platform. (as in ‘look, we did it, and so can you’). A Google-phone would not only be a proof of concept, but also a proof of viability, cost of ownership and sugar candy for ODMs and OEMs who want to get into the mobile service business (basically, everyone who doesn’t have Nokia’s operating profit margins).
3. To set pricing and marketing norms A good platform strategy player needs to also introduce a product that runs on top of the platform; this is vital constituent of a platform strategy depending on product complementors, so as to set a precedent and the norms for product pricing and marketing. (for case studies see HBR article: With Friends Like These, The Art of Managing Complementors)
(updated: there’s actually a fourth reason) 4. To productise the Linux-based software stack According to the same NY Times article, Google’s software stack is based on open source Linux. As experience shows, open source projects cannot be productised without the help of a commercial sponsor. What a sponsor adds is not necessarily money, but commitiment and disciplined drive to move from a beta-state software to a finished, tested, working product. While individual contributors to open source software care about scratching their own particular ‘itches’, commercial sponsors usually care about productising the software in a form that works out of the box, with zero amount of tinkering. In the case of Google’s Linux-based software stack, hardware integration, testing and quality assurance is essential in order to move the open source stack from ‘in a working condition’ to a ‘ready to integrate’ status. A Google phone would provide this needed much productisation and finishing touches to the open source software stack.
A Google-phone would make a lot of sense indeed.