It won’t be wrong to call Google the new age Microsoft. Back in 90s, companies used to feel the heat (and eventually die) if they came to know that Microsoft is also working on the same concept as theirs.
History repeats itself and the subtle proof can be seen in the recent $11 billion erosion of Apple’s market cap.
What’s the story?
Google is (supposedly) building Google phone and if rumors are to be believed, Google will offer that for free. Considering all this, Apple cut the price of iPhone by $200 (read Steve Jobs’ open letter). Resistance came from pioneers who felt penalized about being an early adopter of iPhone. After initial hiccups. Steve jobs finally decided to payback $100 to early adopters. The entire episode left Apple fans in a bad taste.
And the result? Riot. Apart from PR disaster, Apple’s shares hit southwards and trimmed the market cap by 11 billion dollars!
An interesting piece of calculation : There have been somewhere between 500,000 and 1 million iPhones sold. Multiply that by $100 and you get $50M to $100M. How could the stock market penalize Apple $11 Billion dollars? (source)
This of course means that Apple is not selling as many iPhones as expected, and as BusinessWeek calls it – “We now know the market-value of nine weeks of iHipness.'” Or it probably the rise of “GHippiness“?
More about Google Phone:
The only way Google can make a mark in the already crowded handset business, is by giving away Google Phone for free. Imagine paying no money for the handset, no money for the in-built apps – and all you’ve gotta do is allow Google to push contextual ads!
Google did this with Gmail and Google phone will just follow the white rabbit.
Technical spec of Google Phone: [source: EndGadget]
- Google phone will run on linux, JVM OS, and will support Java apps.
- Google phone will use a new browser (probably based on the WebKit core, which iPhone browser uses too) – which will have “pan-and-browse” capability
- The UI will be much simpler (“..prototype had a small QWERTY keyboard, like a Treo or a BlackBerry, rather than relying on a touch-screen, as the iPhone does.” – source)
With the launch of Google Phone, Google will add too many enemies. Though the core of all these gutsy step is driven by it’s dominance in search & advertising business – Google will face stiff competition in the days to come (one example).
Don’t you think that Google is spreading itself thin by entering into all possible businesses? Apart from Google search, none of their products are numero uno (in their respective domain?)- which of course raises questions on their ability to market new products.
Moreover, isn’t it interesting that Google is trying to get into Handset business (and compete against Nokia); and on the other hand, Nokia is trying to get into Internet services business (with the launch of OVI)? – Now that’s what I call convergence of communication medium. What do you think?