Google Phone Not a Threat to iPhone
figure 1: Gene Munster. Gene, I didn't mean to treat you bad.
The Google mobile phone operating system known as Android has been getting a lot of press lately, and one of the more interesting angles I've seen in the past few days is that Android isn't meant to compete with the Apple iPhone. Gene Munster, an oft-quoted analyst at Piper Jaffray with plenty to say about the iPhone, thinks that the iPhone is aimed at a much higher market than any phones built with Google's Android.
"We believe Google is working with, not against, Apple in the mobile world."They do share a key executive, Eric Schmidt, who sits on the board at Apple and is chief executive at Google. It's unlikely that the two companies would allow a massive conflict of interest like that. I (unfairly?) made fun of Gene Munster in the past for posting wildly optimistic sales estimates of the iPhone, but he's probably right about this one. Google's use of webkit as the browser on Android reinforces Apple, and by the time Android phones are actually released, iPhones will be even farther ahead in terms of features -- Android doesn't even support wi-fi or bluetooth yet. It could easily be that Apple is trying to grab the high-end customers and Android is aiming for everyone else.
p> It can tough to position a software product with the masses when it doesn't cost anything. In a lot of people's minds, this is true: no cost = worthless. But it's that same quality makes it attractive to handset makers, it allows them to push prices down. Multiple handset makers shipping multiple phones with one operating system (like Windows Mobile) tend to push prices down, since those handset makers compete with each other. If those same handset makers can shop a Google phone to carriers at less cost than they could make a Windows Mobile phone, it becomes attractive to them. It becomes attractive to carriers, since they don't have to do as much work to brand all of those featurephones with weird RTOS operating systems, they just have to brand Android once, and they don't have to share their intellectual property with anyone.