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Google's Open Handset Alliance and t...   Apparently That Groupe Bull Nastines...
Nov 6 2007 10:00AM EST

The Opening for Google Phone

While interviewing Kodak CEO Antonio Perez on Friday, he trotted out the old adage that people don't buy a quarter-inch drill -- what they're really buying is a quarter-inch hole. He also noted that any entity that is wildly successful gets, as he put it, "decadent."

Both apply to the opportunity for Google's Open Handset Alliance.

Here are three statements about cell phones today:

1. Now that they are essential, the monthly bills cost us more than most of us want to pay -- or think we should have to pay. A family of four with two teenage kids is now funding four cell phones with a lot of minutes and hefty text messaging capabilities -- no doubt to the tune of a couple hundred dollars a month.

2. We're all becoming aware that cell phones are artificially handicapped. We're boxed into certain offerings. We can't rip a song from a CD and use it as a ring tone. Can't just buy a new handset and easily switch to use it. Etc., etc.

3. There is no great love for or loyalty to any carrier.

Add those up, and you get both the things Perez talked about. You get a wireless carrier industry that is largely pretty decadent, thanks to limited competition and rocketing growth. It feels like it can charge consumers high prices for sub-par products and get away with it. And you get consumers realizing that they don't necessarily want a Motorola or Nokia phone on a Verizon or AT&T network -- they want a device that does all the mobile things they want it to do.

So like the film camera industry in the late-1990s, the incumbents have left a hole big enough to drive a Google through.

BTW -- those Verizon ads about "the network" are so wrongheaded. Think how much you're paying to employ all those folks. If you could lay off two-thirds of them, have a network that was a little less "reliable," but paid far less for it -- wouldn't that be a tempting offering?



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