Will Google Free the mobile Phone?
Marty Manley
Google is about to become your phone company. Indeed, if current technology pans out, Google won’t charge you much if anything for your phone, which may serve nicely as your computer and your TV.
As of tonight Google stock trades at $700/share making it the fifth most valuable company in the United States. Google is not only bigger than the entire US Auto industry, not only bigger than all but four other companies (Exxon, GE, ATT, and Microsoft — and it seems quite possible that it will surpass the last two), but it is bigger than all other large Internet companies combined.
The combined revenue of eBay, Yahoo, Amazon, MySpace, and Facebook is twice as big as Google’s. Together, these companies are worth $160 billion. Google is worth $216 billion. Why? Because Google makes a lot of money. They earned $4 billion on $14 billion in revenue and together, the other major internet companies earned only a third of that.
Indeed, compared with some of these companies, Google seems underpriced. A share of Amazon stock today trades at more than 100 times earnings (Amazon stock is so expensive that you pay $100 to own a dollar of their profits). eBay trades at an astonishing 366 times earnings (thanks to the Skype write-down). Yahoo’s P/E is 61. Google trades at 54 times earnings — a bargain!
Om Malik at GigaOm, who follows the G-phone, believes that Google will announce their much anticipated phone this month and that it will run a highly optimized Mobile Linux with a development kit (tools for programmers) and a highly optimized JVM (meaning that it will run a lot of Java applications day one). Almost every major handset maker, with the exception of the dismal Nokia, are bringing out devices with Google Mobile OS on it and Sony, Samsung and T-Mobile’s USA division and Bharti Airtel, one of India’s largest cellular carriers are the operators most closely involved.
Combine that with Eric Schmidt’s statement last August that Google would probably bid on the 700 Mhz cell spectrum that is coming up for auction and you see a very interesting business emerging: ad supported phones, books, mobile video, music, etc.
But who wants to read or watch a movie on a tiny phone screen? Answer: they won’t be tiny much longer. Qualcomm has announced e-paper that can show color video. ePaper’s main advantage is that it is bi-stable, meaning that once it has been switched to a state, it holds that state without requiring more electrical current. As a result, they use considerably less power. These features make them ideal for applications such as signs and electronic books, including Sony’s eBook reader. But because they are very thin, these screens can also roll up inside phones like a window shade. Science fiction? Probably, but it seems like a cool idea.
Same issue of TR carries news of a massive leap in cell phone storage technologies.
A new type of memory technology could lead to thumb drives or digital-camera memory cards that store a terabyte of information–more than most hard drives hold today. The first examples of the new technology, which could also slash energy consumption by more than 99 percent, could be on the market within 18 months.
“It’s a radically new technology,” says Michael Kozicki, a professor of electrical engineering at the University of Arizona, whose group is one of several working on a version of the new memory. “If it really works as well as everybody thinks it could, it could genuinely revolutionize the memory and storage industry.”
The new type of memory, called programmable-metallization-cell (PMC) memory, or nano-ionic memory, has been under development at the University of Arizona and at companies such as Sony and IBM. It’s one of a new generation of experimental technologies that are bidding to replace hard drives, the nonvolatile “flash” memory used in portable electronics, and the dynamic random-access memory (DRAM) in personal computers. The first ionic-memory prototypes were far too slow for practical use. But recently, researchers have demonstrated that materials structured at the nanoscale could yield ionic-memory devices that are much faster. Nano-ionic memory is significantly faster than flash memory, and the speed of some experimental cells has rivaled that of DRAM, which is orders of magnitude faster than flash.
Final piece of the puzzle: OpenSocial a set of APIs released by Google today and endorsed by essentially the entire social networking world: MySpace, Six Apart, Salesforce, LinkedIn, Ning, Hi5, Plaxo, Friendster, Viadeo and Oracle all announced that they would support the new standard. What is different about OpenSocial is that APIs are really two way. Not only can Flickr sponsor a community of interest but a community of interest can embed Flickr aps once they use OpenSocial APIs. Historically social computing has been a black hole: what goes on Facebook, for example, never comes off. Google doesn’t care about this, since they make money on internet traffic regardless of whether it is flowing to an app or a community or away from it.
So now I’ve got a G-phone with free, Java-based aps. I am on a G3 speed wireless network owned by Google. My phone has a large pull out screen for books, movies, TV, or night courses. It has a friggin’ terabyte of storage, so it holds a whole lot of lectures, songs, movies, and books. I can plug in to a variety of applications and communities that I configure as I like. The entire thing is ad-supported or I can pay Google for the ads to go away. My PC works the same way.
Forget Facebook and the $100 PC — massively useful phones/computers are will soon be available free or close to it. Microsoft’s desktop franchise is in a great deal of trouble. Wireless operators, among the most despised companies in America, are in a lot of trouble. And Google will become a very, very large company.
I am going to enjoy this. A lot.
Marty Manley
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