OHA – Google forays into wireless domain

OHA (Open Handset Alliance) is a body setup by Google along with some operators, semiconductor vendors and handset companies to develop a new mobile platform. Through this body, Google has developed Android, an OS having Linux kernel bundled with a web browser and a user interface and few other applications. As such, there’s nothing “open” about this platform, it follows Apache Software License that allows closed source redistribution. But the best part is that this platform is shipped free and hence will result in cheaper handsets.

It may take some time for Google to compete against the likes of Microsoft and Apple in PC operating system, but through OHA, its certainly posing a commendable competition to the big guns of mobile operating systems such as Symbian, Windows Mobile, Palm OS, etc. It must be already giving them sleepless nights !!!

But Google’s entry into the wireless space could actually be a boon for the telecom industry as a whole. Google's apps would induce more customers to subscribe to the high-speed wireless Internet services such as HSXPA or 1X EVDO. This could inturn revive the currently dwindling ARPU (Average Revenue Per User) rates & hence result in more money to all those involved in the telecom value chain.
Furthermore, the bandwidth guzzling apps such as YouTube.com, etc could make it necessary for the faster adaptation of 4G technologies.

Now, if the package that requires years and millions of $$ to develop is sold for free, how are Google and its partners going to get back their investment? To get to the answer, we need to understand how Google revolutionized fixed Internet domain through advertisement revenues based business model. Google will be implementing a similar strategy in wireless Internet too. Infact, the searches done over mobiles are more localized and specific due to which Google can charge more to the advertising companies.

Here are the strengths of OHA:

1) the Google brand name. I think this OHA’s biggest USP. Google has become a household name today. Its killer apps such as YoutTube, Google docs and not to mention the Google search have revolutionized the way people use the Internet. Now, if the company comes out with a wireless Internet product, there’s no doubt that its gonna be a runaway hit.

2) Its free and hence cheaper. Hence there will be more customers going for handsets having Android.

Here are a few challenges that could be of concern to the OHA members:

1) most mobile manufacturers have strategically aligned with OS developers and hence they may resist the penetration of Andriod. For instance, the market leader, Nokia (40% market share) is using Linux for its high-end phones, while Sony Ericsson (8% market share) is using its in-house UIQ platform. The other dominant players: Motorola, Samsung, LG are already part of the OHA. It should be noted that these other players are more dominating in the high-end category.

2) The important tier-1 mobile service providers see the entry of Google to the wireless space as a threat to their domination. AT&T and Vodafone have not joined the OHA and may support OHA’s competition. Google is trying to woo the SPs by allowing to share a portion of ad revenues with them.

All said and done, as an end user, I welcome Google’s entry into the handset domain & expect some cool stuff from it in the years to come.

www.openhandsetalliance.com

http://www.youtube.com/watch?v=6rYozIZOgDk