Wak Oentoenk

When you work in consumer electronics, one of the rules that gets drilled into you very early on is that you never do anything to disrupt the holiday selling season. In the US, the month between Thanksgiving and the end of the year can account for three months' worth of sales, if not more. During that time, you don't change prices, you don't alter your ad campaigns, and most of all you don't ever say anything about future products, because that might cause customers to hesitate before making a holiday purchase.

So the CEO of ATT, giving a speech this week in Silicon Valley of all places, says that a 3G version of the iPhone is in the works:

"Has Jobs announced that? I don't think he's announced that, but you'll have it next year."

Not only does he spill the beans, but he acknowledges that Apple hasn't announced it and then talks about it anyway (link). The next day the story is carried by the AP, MSNBC, the Times of London, Wall Street Journal, Bloomberg, the SJ Mercury News (which had the version of the quote above), and 318 other publications according to Google.

In the US, the assessment from a lot of commentators is that this won't have much impact because the iPhone is so popular anyway. Maybe, I guess, although the iPhone isn't sold out, so any loss in sales is still a loss. But in Europe, I think it could be a big problem. iPhone sales there are not going great to begin with, and folks in Europe are generally much more conscious of 3G vs. 2G issues. The acknowledgment that a 3G iPhone is coming could cause a lot of people to hesitate before buying.

If AT&T competed directly with Orange, O2, and T-Mobile Germany, I'd be tempted to speculate that they made the announcement on purpose to hurt the competition. But they don't, so I suspect this is just a case of a CEO who wanted to show that he's not controlled by Steve Jobs but instead demonstrated that he doesn't understand consumer electronics.

More than half of the traffic to this weblog comes from outside the US, so there are times when I feel obligated (and a little embarrassed) to explain how the mobile market works here. This is one of those moments.

Verizon, the largest US mobile carrier, made headlines in the US today by announcing that by the end of 2008 it's going to make its network available to any device and any application that the user chooses to install (link).

This will seem remarkable to people living in GSM countries where it's normal to choose any device you want. But in the US, it's an unusual idea. Here mobile usage is split between GSM and CDMA. GSM phones have SIM cards, which technically allow you to switch your account to any phone you want. But in practice, almost no users are willing to give up the several hundred dollar subsidy for buying a phone and service plan together, so they only choose phones that come through the operator.

Things are even more restrictive in the CDMA space, where there are no SIM cards. If you buy a Verizon phone, it can only be used with a Verizon account. Same thing for Sprint.

So Verizon's announcement is a nice change, on the face of it. It's also something of a pleasant shock, since Verizon has the reputation of being the most conservative and controlling US operator. But the announcement's actual impact on the market is going to depend on several questions that Verizon hasn't answered yet:

--How will open access be implemented? Verizon says it's going to define a process by which phones can be certified to work on its network. That could be routine or it could turn into a huge barrier to entry. We also don't know how a user's account will be switched between phones. Is Verizon planning to start installing SIM cards in its phones (something that has been done with CDMA in China)? If not, will you have to take the phone to a Verizon store to get it activated? How much will that cost?

Verizon apparently said something about doing activation through a toll-free number, which could be cool.

--How will the service be priced? Verizon's service plans include recovery of the several hundred dollar subsidy for hardware. You pay for the subsidy as part of your monthly bill. Since Verizon doesn't have to recover a subsidy cost on its open access phones, there's about $10 or more a month that it could pass along to consumers in the form of lower bills.

If Verizon doesn't price the open service lower, what happens to the extra money? Does Verizon pocket it? Or will they offer some sort of rebate on purchase of open access phones?

The answer to this one is critical. The US GSM carriers are technically open, but the subsidy prevents significant sales of alternate phones. If Verizon pockets the subsidy money, very few people will take advantage of the open service. The whole thing could turn out to be a PR gesture rather than a genuine change.

But in the hope that Verizon wants it to be more, here's what they ought to do:

--Make the monthly cost of the open plan lower than a traditional service plan, reflecting the absence of a subsidy.
--Make the handset certification process simple and low cost.
--Make it easy for users to switch their account to a new phone (preferably via a SIM card or website or that 800 number, so they don't have to come to a store).

That's an announcement I'd stand up and cheer for.


Impact on the industry

Until we hear the answers to the questions above, it's impossible to guess how impactful this announcement will be. The most important factor may be how the other US operators react. The best result would be if they start competing with each other to see who can make their network more open. If that dynamic takes hold, competitive forces might drive them to really open up even if they don't intend to.

By now I assume you've read about Amazon's Kindle e-book device. I think it's interesting and important, but more for its business infrastructure than for the device itself. And I'm not at all sure that it'll be a commercial success, unless it gets a lot more content quickly.


What they announced

Kindle's hardware is a lot like that of the Sony and Iliad e-book readers. I won't bother repeating all of the specs; you can find a good summary on Engadget here and here and in a lengthy Newsweek essay here.

The industrial design of the device looks uninspiring to me. It's made of white plastic, a color scheme that most people associate with ease of use, low price, and limited features. Considering Amazon's strong emphasis on ease of use in its announcement today, I guess the color makes sense, but it's at odds with the $399 price.

I haven't touched a Kindle yet, so maybe it looks nicer in person. But in the photographs its sloping edges and slant-key keyboard do nothing for me. It looks a bit like a badly-carved wedge of Parmesan cheese. There are a total of 54 buttons, controls, and keys on the face of the device, so naturally it looks cluttered. There's virtually none of the lust-inducing elegance of the iPhone; the design screams "utilitarian."

"Is it just me or is that thing one hell of an ugly thing to walk around with?" --Comment posted to Newsweek's article on the Kindle

The design is not necessarily a bad thing; the device is going to live or die based on its usefulness, not its looks. But the lack of a lust factor makes people much more willing to nit-pick its features and price. So far Kindle is rated 2.5 out of 5 stars on Amazon's own website, with most of the negative ratings coming from people who have never even touched the device.


Clever wireless, vulnerable business model

Interesting use of the network. Things get a lot more elegant when you look at the services attached to Kindle. Amazon has built in a radio that talks to Sprint's EVDO data network. Wireless is used to deliver almost all content to the device (except for MP3 files, which sync via a USB cable). This is both attractive and disturbing.

The attractive part is that Amazon can pre-test each Kindle device to make sure they connect to the Sprint network before they get shipped to the customer. This is a huge advantage over WiFi. One of the dirty little secrets of WiFi is that non-PCs often have a lot of trouble connecting to WiFi routers in homes and offices. I don't know why this happens, but I suspect it's because the router vendors test their hardware mostly against PCs, and never find the bugs in connecting to other devices. Trouble-shooting a Kindle that couldn't find the network would be a nightmare, and Amazon has bypassed the whole issue by leaving WiFi out of the device.

I also like Amazon's decision not to hit its users with a monthly fee to access the network. Instead, the charges are embedded in the cost of downloaded content. This means that users who buy a lot of content will be subsidizing the ones who read only a little, but Amazon has hidden the charges so well that I don't think anyone will notice. Kindle makes the wireless network do what it should do: Disappear.

I have two worries about the use of EVDO. The first is that if someone lives outside of network coverage (like at my house) their Kindle won't work properly. I would have preferred to see WiFi included as a backup. The second problem is that because Amazon has to pay for that wireless connection, it has to tax virtually any information transmitted to the device. You can load documents onto the device by sending it an e-mail, but you'll pay 10 cents for every message. That doesn't sound like much, but it's annoying to have to pay anything at all for something that's normally free.

Likewise weblogs: You have to pay $1-2 per month for every weblog that you want delivered to your device. That's understandable if you look at Amazon's expenses, but it's astonishing for something that's free on a PC. What's worse, the most enthusiastic readers -- the people most likely to buy Kindle -- are the people likely to be scanning 20 blogs a day. They won't pay $20-$40 a month just to read blogs.

One workaround would be to subscribe to an e-mail blog aggregator like Feed Blitz and have it send a daily digest to your Kindle. That'll presumably cost 10 cents a day -- $3 a month, for unlimited blogs. That is, assuming Amazon doesn't put a size limit on the messages sent to Kindle.

The relatively closed nature of Kindle has led to some angry commentary on ebook enthusiast sites that you'd expect to cheer the product. For an example, there's an essay on Mobile Read here.


Self-publishing: Nice idea, but...

I was delighted to see that Amazon is allowing authors to self-publish e-books for the Kindle. You just submit them to the Amazon Digital Text Platform, set the suggested price, and Amazon adds them to its catalog (link).

The catch is that Amazon pays you only 35% of the suggested price of the book (link). They keep 65% -- for the amazing service of adding your book to their catalog (basically, they shift some bits around on a server). And by the way, if there is any bad debt, Amazon doesn't pay you any royalties at all on that sale, even though they're the ones who failed to collect.

By comparison, Apple takes 30% of iTunes revenue, and NTT DoCoMo takes about 11% of revenue from content and apps sold over its network.



I'd love to hear from the folks at Amazon if there's a reasonable business justification for keeping such a huge cut of self-publishing revenue, but I think it's probably for two reasons:

--Amazon is greedy, and/or

--They don't want to completely undercut the royalty structure of print publishers (who typically pay up to 15% royalties on a printed book)

Either way, Amazon's royalty structure is outrageous. And it won't last. One of the most important aspects of electronic publishing is its ability to change the wretched economic structure of the industry so authors get the majority of the revenue for their work (I've written about the economics of it here). The change is inevitable, and if Amazon tries to hold its current royalty structure it'll eventually just drive people to other e-book platforms that don't rip off authors.


Will it succeed? It's the content, dummy.

All of the issues covered above will affect the success of Kindle, but ultimately the sales of an ebook reader depend on having a huge library of reasonably priced content -- books and periodicals. Lack of sufficient books is what killed the last generation of ebook readers, Rocket eBook and Softbook (I worked at Softbook for a short while, so I saw the situation there first hand).

Judged by that standard, Kindle is off to a surprisingly mediocre start. There are some promising signs. For example, people don't like paying hardcover prices for intangible ebooks, so Amazon is pricing current best-sellers at $9.99, compared to about $15-$16 for hardcover. There are hints in some articles that Amazon is even subsidizing some books to hit this price. The price difference isn't big enough to make people buy Kindle, but it helps to overcome resistance. Good move.

The problem is in the library of other books. Or I should say the non-library. There are supposedly about 90,000 books available for Kindle currently, which sounds like a lot but actually makes for a poor selection. To get an idea of what was available, I took a quick look at the titles available from several prominent science fiction authors -- Niven, Brin, Asimov, Simak, Vinge, etc. (hey, I work in the tech industry, that's what I read). The selection is quite bad -- for many authors, the only Kindle editions are their second-rate books. Or there are a bunch of individual short stories available for 99 cents each, but not most of the novels. I strongly suspect that Amazon is counting each of those short stories as one of the 90,000 "books," because they are all labeled as books in the website. If true, that means the actual number of real books for the device has been heavily exaggerated.

Try the test yourself -- go to the search page here and type in your favorite author's name. Let me know what you find. Maybe fields other than science fiction have a better selection. I hope so.

There's nothing that makes an ebook customer angrier than paying $400 for a device and then finding that most of the things they want to read on it are not available. The iPod succeeded even though a lot of songs were missing from iTunes at first -- but remember that people could rip their own CD collections, and install MP3s for free. Amazon doesn't have a base of content that its users can shift to the reader, and it charges money for any document transferred to the device. So it has to fill the library on its own, quickly.

I think Amazon has a lot of work to do here.

I'm intrigued that about 16 newspapers and magazines are available for Kindle. Unlike books, newspapers and magazines are viewed as disposable, so people are less resistant to buying them electronically. And getting instant delivery of a weekly magazine is a significant advantage over waiting a few days for it to appear in the mail.

Judging by Amazon's price to receive the San Jose Mercury News (Silicon Valley's Incredible Shrinking Newspaper) on Kindle, prices are about 40% less than print subscription. That's not bad. What I don't know is whether the Kindle editions of the papers and magazines will be the full text of the print version, or just excerpts. If anything's left out, people will be turned off.

Amazon must get a critical mass of content -- meaning a lot more magazines and newspapers, and rapid growth in books. If it can do that, Kindle may finally jump-start the ebook industry. It won't explode overnight, but Amazon has a long history of forcing its investors to wait years for the full payoff on investments. If Amazon can maintain that patience, I think it Kindle has a chance.

But I sure hope they make the next version of it look nicer.

I was stunned today when I saw the press release from Access Company saying that they're giving away a beta version of the Garnet emulator for Nokia's N-series Linux tablets (link).

The Garnet emulator lets you to run most Palm OS applications. So in layman's terms, Access is giving away Palm OS for use on any N-series tablet.

I hadn't previously heard any hints from Access about offering Garnet for other platforms. I thought it was only supposed to be available with Access Linux.

I got excited by the announcement, figuring maybe Access had realized that the real innovation is going to come in the applications layer, not the core OS plumbing. I imagined all sorts of scenarios for what they might be planning:

--How about porting Garnet to some other Linux implementations. Hmm, what comes to mind? Maybe Google's Android? Access would need cooperation from Google in order for the emulator to talk directly to Linux. Would Google help with that?

--There is a need in the market for a mobile application environment that's truly "write once, run anywhere." Might Access intend to use Garnet to compete with Java? That would involve porting Garnet to operating systems other than Linux. How about Windows Mobile and Symbian? How about the iPhone?

--There are several ways Access could make money from this:

• Give away the emulator in beta but charge for the final version.
• Give away the emulator on N-series but charge for it on other platforms.
• Give away the emulator everywhere and make money by selling support software and bundling a software store and taking a cut of the purchase fees for apps (a derivative of the iMode and Acrobat models).

Intrigued by the possibilities, I talked to folks at Access. They shot down most of my speculation. As it was explained to me, this is a tactical move. By porting Garnet to the Nokia tablets they can get some testing for the emulator, and also give a "more interesting ongoing proposition for current developers." (It says something about the momentum for your OS when you feel the installed base of Nokia Linux tablets is an attractive developer target, but I guess you take what you can get.)

Access might try to put the emulator on other standard Linux implementations, but they're very busy working on software for licensees they can't talk about yet, and don't have time to port to anything else, including Android.

That's a shame. In my opinion, there's more of a market for Garnet on other platforms than there is for a Linux phone OS now that Google is giving one away.

But Access believes Google's nonstandard approach to Java and Linux is not going to go down well with the mobile development community. They said Android faces big challenges and a likely backlash.

Okay. I guess only time will tell whether that's justified self-confidence or denial of reality.

Meanwhile, I'll go play with Garnet on my Nokia tablet and wonder about what might have been.

Google today released a lot more details on its Android mobile operating system, including the software development kit. It looks like it would be fun to write apps for Android. The most interesting news is that Android puts a heavy emphasis on component software, encouraging developers to create software modules that can be shared with other developers and reused across applications. It's similar in spirit to what happened with mashups in the web apps world, although the technology involved is quite different.

If the developers follow through, this could make Android a very attractive and flexible development environment.

Google is offering $10 million in prizes to the best Android applications. That's an astonishing amount of money for the mobile apps space, where developers are used to living on stale bread with an occasional beef jerky chaser. For comparison, $10 million is probably more than the total marketing program budget in my last year at PalmSource.

It must be nice to work at a company that has limitless financial resources.

The price also says something about Google's business strategy for Android: Collect a lot of compelling applications that will generate user demand for Android phones. I think they can get the apps, but whether those will generate user demand remains to be seen. Having a big apps base didn't help us as much as you'd expect at PalmSource.

The other interesting news is that this is an entirely Java-based development environment, with a lot of extensions provided by Google for things like multimedia and font management. Although Android is based on Linux, as far as I can tell it's being used strictly as plumbing; the applications can't access it directly (at least not in this version). Data exchange between apps, and application access to phone features, can be locked out by the operator or handset manufacturer.

This should make Android a pretty secure operating system, although it won't be much fun for developers who like to mess around with the low levels of an OS.

Can Android become a standalone runtime? The reliance on Java raises the possibility that the Android applications layer could be ported to other operating systems. I think this would be a pretty cool strategy for Google, as it would enable it to drive the applications experience on a lot of different phones. But it wouldn't be a lightweight layer -- Google has built a huge amount of middleware on top of Linux that would probably have to be ported as well. Unless Google designed the Android apps layer to be portable, something they haven't mentioned, I think the port would be pretty difficult.

Some other tidbits about the OS:

--Features supported in the OS include a built-in browser, 2D and 3D graphics, SQLite database, video and audio playback, GSM, Bluetooth, WiFi, 3G wireless, camera, compass, GPS, and accelerometer (if the appropriate hardware is included in the phone). That's a pretty standard feature list.

--There's also a set of optional APIs that can be excluded by an operator or handset manufacturer. They include mapping APIs and peer to peer messaging between phones. Google positioned the peer messaging as a way to let two users play checkers, but you could also use it to create an instant messaging application that bypasses SMS. I'll be interested to see if any operators allow it on their networks.

--The development environment is a plug-in to Eclipse, another standard approach. The SDK includes an emulator so you can test your apps before the hardware ships. That's essential, since Android phones are about a year away.

--Core apps included with the OS include mail, SMS, calendar, browser, contacts, and maps. The mapping app is the only unusual one.

--There is support for multitasking threads, and an application can run in the background (this should enable things like MP3 playback while you're browsing).

--Each application runs in a separate Linux process. This helps with security. Apps remain running until they're no longer needed and the system decides that it wants their memory. This feature seemed slightly weird. Windows Mobile also tends to leave code running until the space is needed, and that has resulted in performance and stability problems. Presumably Android will handle things better.

The other thing Google warns you about is that if your application doesn't use the proper calls to explain what it's doing, the OS may assume it's not important and shut it off arbitrarily. That can also happen to a properly-written application if the system runs low on memory. This is kind of spooky, and could result in lost user data, especially if the user loads up a lot of applications.

Call me old fashioned, but I prefer applications that quit only when I push the quit button.

--The security model is heavily sandboxed (meaning applications are isolated from each other). To reach outside the sandbox (to exchange data with another app, read the address book, or access the phone's features), applications have to ask permission at the time they are installed. Permissions are based on "trusted authorities and interaction with the user." In other words, an operator or handset vendor can lock them down, and if not then the user will be asked to grant permission. Users will not be asked again when the application is run; if permission was not granted at install, the app will just fail. I believe this is going to be a serious support problem -- it means the same application may work on a phone when it's on one network, but may not work on that same phone on another network. Good luck explaining that to the user.

Google may be counting on user complaints to force the operators to turn on permissions.

--The user interface needs work. Google says it's still working on the final user interface for Android, and that's a good thing. Engadget nicely posted a bunch of screen shots from the current interface today, and they have problems (link).

The first thing that bothers me is the icon carousel at the bottom of the screen.



I think it's a great design, but it's awfully reminiscent of the interface in Yahoo Go. Maybe that's just a coincidence, but Google lately has shown a disturbingly Microsoftian tendency to borrow ideas from others.

The overall interface design is relatively clean, at least compared to the overdesigned clutter that you see on a lot of smartphones. But it's optimized to look pretty on a computer screen rather than be usable on a real-world phone.

The giveaway is contrast. Most computers are used indoors, in a room with moderate lighting. By comparison, mobile phones are used in all sorts of settings, including outdoors in bright sunlight. In those conditions, subtle differences in contrast between text and background can easily be lost. For a good example, check out the screen shot below:



Looks nice on your computer, huh? But let's reduce that screen image to about what it would be on a real phone:



Already the text gets hard to read. Now take your computer outside into the direct sunlight. Go ahead, I'll wait for you to get back...

Done already? What you saw is that the words "Call Back," "Done," and so on pretty much disappeared because they're written in dark gray on a black background. You can find a lot of other examples like this in the Google screen shots.

A recommendation to everyone who creates phone interfaces: White on black. Black on white. Large fonts. It may not be the most beautiful design, but at least people will be able to use it.


What it means to the industry. I continue to think that the ultimate success of Android will depend on the creativity of the devices built on it, and we can't judge that until those devices ship. But in the meantime, I'll be very interested to see what sort of applications appear. Google can definitely excite developers, especially when it shovels money at them. This is an immediate challenge to Microsoft and especially Symbian, which has struggled to get developers to work with its very complex native APIs. The more that Android sucks up developer activity, the harder it will be for other platforms to get developer support. Android is a much cleaner design than older platforms like Symbian, and the component development model might drive the rapid creation of a lot of interesting applications.

Will Android be limited to the mobile space? That's the other key question. There's nothing in the Android development model that limits it to mobile phones, and in fact Google says openly that it's appropriate for use on all sorts of devices. Let's wait a few years for the Android applications base to mature. If it does well, we might eventually see Android devices that seek to directly challenge PCs.

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PS: Thanks to Ubiquitous Thoughts for featuring last week's post on the Android announcement in the latest Carnival of the Mobilists.

The bottom line: Google is now an OS company.

The fact that Google's recently-announced OS products are aimed at mobile devices and social networking sites is interesting, and I'll talk about the impact of that below. But it's secondary. I think the big, really important change is that Google has now jumped with both feet into the middle of the operating system world. That potentially has huge implications for the industry.

The impact will depend a lot on how Google follows up. If it pours substantial energy and resources into its OS offerings, it will be extremely bad news for Microsoft and other companies trying to charge money for their own platforms. On the other hand, if Google doesn't make a serious long-term commitment, it will embarrass itself deeply. This isn't like launching a new web application -- an OS has to be complete, and it has to work properly in version 1, or there won't be a version 2.


What they announced

It's kind of ironic. For years after Google became a prominent web company, people speculated about whether or when it would create its own OS. The logic was that Microsoft has its own OS, and Google was challenging Microsoft, so Google would create its own OS too. But then as the years went by and it didn't happen, people moved on to other subjects. The speculation died out. But one of my rules about the tech industry is that "obvious" things happen only after everyone in the industry has written them off. So I guess Google was due.

The company has been creeping toward the OS space for a while. Google Gadgets is an API to create small applications that run in web pages, and Google Gears is code that lets web apps run offline, making it easier for them to challenge desktop applications. But they were both relatively low-profile (or as low profile as anything Google ever does). But in the last couple of weeks, Google made two much more assertive announcements:

--OpenSocial is an effort to create a shared platform for applications that can be embedded within social websites (link).

--The Open Handset Alliance is an effort to create a shared platform powering mobile devices (link).

Although they're aimed at very different parts of the industry, they're both efforts to create a standard platform where there was fragmentation; and they're both alliances of numerous companies, with Google providing most of the code and the marketing glue. I think there's a recurring theme here.


Details on the Open Handset Alliance

Open Social was covered very heavily when it was announced a couple of weeks ago, so I won't recap it all here. If you want more details, Marc Andreessen did an enthusiastic commentary about it on his weblog (link).

The OHA announcement was today, and I want to call out some highlights:

--It's built around a Linux implementation called Android. Android will be free of charge and open source, licensed under terms that allow companies to use it in products without contributing back any of their own code to the public. This will probably annoy a lot of open source fans, but it's important for adoption of the OS, as many companies thinking about working with Linux worry that they will accidentally obligate themselves to give away their own source code.

--Google is creating a suite of applications that will be bundled with Android, but they can be replaced freely by companies that want to bundle other apps, according to Michael Gartenberg (link). There is a lot of speculation, though, that if you bundle the Google apps you'll get a subsidy from Google. The folks over at Skydeck estimate the subsidy could be about $50 per device (link). That might not sound like huge money to you and me, but keep in mind that mobile phone companies routinely turn backflips to squeeze 25 cents out of the cost of a phone. When you sell millions of phones a year, it adds up.

--A huge list of companies participated in the announcement. That's not as impressive as it sounds; when you have a well-known brand, a lot of companies will do a joint press release with you just for the publicity value. But a few stood out:

Hardware vendors. Samsung, Motorola, LG, and HTC all endorsed the OS. HTC and LG gave particularly enthusiastic quotes. The first three companies have all been playing with Linux for some time, so I wasn't surprised. But HTC is another matter -- it is the most innovative Windows Mobile licensee, and Microsoft must be very disturbed to see it blowing kisses at Google.

(A side comment on Motorola: For a company that said it wanted to consolidate down on a small number of platforms, Motorola is behaving strangely -- it jumped all over Symbian a couple of weeks ago, and now is supporting Android as well. I think it has now endorsed more mobile operating systems than any other handset vendor.)

Operators. Participants in the announcement included NTT DoCoMo (a long-time Linux lover), KDDI, China Mobile, T-Mobile, Telecom Italia, Telefonica, and Sprint. That's a very nice geographic spread, and ensures enough operator interest to make the handset vendors invest.

--Google claims all Android applications will have the same level of access to data on the phone. That's pretty interesting -- most smartphone platforms have been moving toward a multiple-level approach in which you need more rigorous security certification in order to access some features of the phone. I'll be interested to see how the security model on Android works.

--We'll get technical information on the OS November 12, and the first phones based on Android should ship in the second half of 2008.

--Although Android's first focus is mobile phones, the New York Times reports that it can be used in other consumer devices as well (link).


What it means to the mobile industry

It all depends on the quality of Google's work and the depth of its commitment. If Android has technical or performance problems, it could sink like a stone. If it doesn't have enough drivers or has poor technical support, the handset vendors will avoid it. If the developers can't create good applications, users won't want it. This is a very different business for Google -- handset vendors and operators will not tolerate the sloppy, indifferent technical support that Google provides for its consumer web apps.

If, on the other hand, Google's platform really works and the company invests in it, I think it could have some very important impacts.

Impact on Windows Mobile: Ugliness. The handset companies endorsing Android are also Microsoft's most prominent mobile licensees. I doubt any of them are planning to completely abandon Microsoft (they don't want to be captive to any single OS vendor), but any effort they put into Android is effort that doesn't go into Windows Mobile. So this is ominous.

The whole mobile thing just hasn't worked out the way Microsoft planned. First it couldn't get the big handset brands to license its software, so it focused on signing phone clone vendors in Asia, thinking it could use them to pull down the big guys. But Nokia and the other big brands used their volume and manufacturing skill to beat the daylights out of the small cloners.

Now Google is coming after the market with an OS that's completely free, and may even be subsidized. This will put huge financial pressure on not just Windows Mobile, but all of Windows CE. Even if Microsoft can hold share, its prospects of ever making good money in the sub-PC space look increasingly remote.

Impact on Access: Ugly ugliness. How do you sell your own version of Linux when the world's biggest Internet company is giving one away? I don't know.

Impact on Symbian: Hard to judge. Symbian is the preferred OS of Nokia. As long as Nokia continues to use Symbian, it stays in business. The question is how much it'll grow. After years of painful effort, Symbian just managed to get increased endorsements from Motorola and Samsung. Now Google is messing with both of them. Japan has been a very important growth market for Symbian, now Android is endorsed by both DoCoMo and KDDI. All of that must feel very uncomfortable. If nothing else, it's likely to produce pressure on Symbian to lower its prices. And Symbian should be asking what happens if Android turns out to be everything Google promises -- a free OS that lets handset vendors create great phones easily. It's not fun competing against a free product that's been subsidized by one of the richest companies in the world (just ask Netscape).

Maybe if Symbian agrees to enable Google services on its platform it can get the same subsidies as Android does. It's worth asking. If not, maybe Symbian should be looking for other places where it can add value in the mobile ecosystem.

Impact on mobile developers: Potentially great. Mobile developers have suffered terribly from two things: They have to work through operators to get their applications to market, and they have to rewrite their applications dozens of times for different phones. If Android produces a single consistent Java environment for mobile applications, that would be a big win. And if it can open up the distribution channels for mobile apps, that would be great as well. We don't have enough details to judge either outcome yet, and the app distribution one depends on business arrangements that may be outside Google's control.

Impact on Apple, RIM, and Palm: Probably none at all. A lot of the coverage of Android is positioning it as some sort of challenger to iPhone and RIM.

I don't buy it.

Apple, RIM, and Palm all make integrated systems in which the software and hardware are coordinated together to solve a user problem. Android, by contrast, is only an operating system. It's plumbing, not the whole house. Unless Google's handset licensees magically develop the ability to design for users -- a feat equivalent to a giraffe sprouting wings -- their products won't be any better as systems solutions than they are today. The OS hasn't been the thing holding them back, and changing OS won't alter the situation.

Android puts interesting financial pressure on Microsoft, but it doesn't directly solve any compelling user problems. If it eventually drives a great base of mobile applications, that might eventually be attractive to some users. But in that case the systems vendors could just add a copy of Google's application runtime (it's open source, they can grab it anytime they want). Or they could host their devices on Google's plumbing. Palm and RIM might both benefit if they could transfer engineers away from core OS and toward adding value that's visible to users.


Impact on the tech industry: This isn't just about mobile phones

I have no access to Google's internal thinking, but even if it sincerely believes it's only doing a mobile phone OS, I don't think it can or will stop there. Technology products often develop a momentum of their own, no matter what was intended at the start. The lines between the computing and mobile worlds are breaking down already, and if Google creates an attractive software platform that's free of charge, that platform will inevitably get sucked into other types of devices. I'm not saying that Android is going to end up in PCs, but if it's functional and well supported I think it could end up running on just about everything else that has a screen.

Besides, if you look across all of the recent Google announcements, I think it's clear that Google has a larger agenda: It wants to break down walled gardens, because they interfere with Google's ability to deliver its services. It has even developed a standard methodology for attacking them: Create a consortium so you don't look like a bully, and fund an "open" alternative to whatever is in the way. They are doing it to Facebook, and they're doing it to Windows Mobile. Google doesn't even have to make money from the consortium, as long as it clears the ground for its services to grow.

Take a lesson from evolutionary history. The most successful animals are not those that adapt to the environment; they are the ones that reshape the environment to match their needs. I think that's what Google is doing. It's going to use open source and alliances to suck the profitability out of anybody who creates a proprietary island that it can't target.

It'll be interesting to see if and how Google applies this principle to the upcoming frequency auction in the US.

Or to anyone else who gets in its way.

Photo by Toby Ord. License information here.

[Edited to fix a typo; I apologize if you get a second copy in your feed.]

This week's Carnival of the Mobilists comes just after Halloween, a holiday when (at least in the US) people are disguised in costumes and kids fantasize about all the great candy they're going to get.

In the spirit of the holiday, Google has been keeping its mobile plans in disguise, and many of the Mobilist authors are speculating about the candy we'll get from them:

Skydeck makes some very interesting predictions about what the Google phone OS will do, and how much Google will subsidize it. I especially like the financial analysis.

In the second part of a three-part post, Abshishek Tiwari speculates about the services that might be included in a Google phone.

John at Nellymoser gives a long discussion of Apple and Google's efforts to open up the mobile ecosystem.


Other goodies in the bag...

Taptology does a nice job of comparing the buzz-building skills of Nokia and Apple to the buzz-killing behavior of Motorola and SonyEricsson.

Barry at StayGoLinks argues that the mobile web will take off when voice can be used as an interface to it, and gives a nice roundup of some recent voice-related technology announcements. Barry, I hope you're right. But speaking as a frustrated (non)user of Dragon Naturally Speaking, I'm not holding my breath.

Tarek Speaks Mobile enthusiastically reviews the new update to the Nokia N95, and says Motorola could learn something from it.

C Enrique Ortiz discusses the US mobile industry and the power of the operators.

Mob Happy rolls out a mobile version of its site, and discusses the traffic that resulted.

Xellular Identity reviews the various pricing and service plan options for ringback tones around the world. I had no idea there was so much diversity.

Vision Mobile gives a very detailed discussion of efforts to make mobile phone software customizable and flexible. It's an excellent overview.

Should schoolchildren in New York who perform well in class be given free cellphones and prepaid minutes as a reward? Yes, says Judy at Golden Swamp. She reviews the controversial proposal in New York and gives some interesting thoughts on the potential use of mobile phones in education, based on her own experiences.

Post of the Week. It was a hard choice. Although Vision Mobile's post is very detailed and worthy of consideration, I chose Golden Swamp as the Post of the Week because it gave me an interesting new perspective.

Next week the Carnival will be at Ubiquitous Thoughts.

There is so much happening in the Web world that I went into this year's annual O'Reilly Web 2.0 event hoping it would be like Aladdin's Cave of Wonders--full of bright shiny new companies that did amazing things, each more enticing than the last.

Instead, the conference was more like a United Nations conference, full of important people talking about important issues, but not a lot of surprise or dazzlement. The name "summit" really does fit. That’s not the fault of the folks at O'Reilly; their conference has just grown in stature so much that it attracts CEOs from huge companies as speakers. By definition those people are very careful about what they say, and don't make major announcement at an industry conference.

So while it was interesting to see people like the CEO of AT&T, we didn't necessarily learn a lot. But there were a couple of highlights worth passing along…

The full article is on the Rubicon Consulting web site, here. There's no registration required. From a mobile perspective, the highlight (or lowlight) is a quote from VC Ram Shriram on what a mobile software company has to do in order to get funded.